# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	fiscal	year	ended	December	31,	2009

Commission	file	number	1-9924

# Citigroup	Inc.

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware (State	or	other	jurisdiction	of incorporation	or	organization)

399	Park	Avenue,	New	York,	NY (Address	of	principal	executive	offices)

Registrant's	telephone	number,	including	area	code:	(212)	559-1000

Securities	registered	pursuant	to	Section	12(b)	of	the	Act:	See	Exhibit	99.02

Securities	registered	pursuant	to	Section	12(g)	of	the	Act:	none

Indicate	by	check	mark	if	the	Registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.		X		Yes		¨		No

Indicate	by	check	mark	if	the	Registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.		¨		Yes		X		No

Indicate	by	check	mark	whether	the	Registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934 during	the	preceding	12	months	(or	for	such	shorter	period	that	the	Registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing

requirements	for	the	past	90	days.		X		Yes		¨		No

Indicate	by	check	mark	whether	the	Registrant	has	submitted	electronically	and	posted	on	its	corporate	Web	site,	if	any,	every	Interactive	Data	File	required

to	be	submitted	and	posted	pursuant	to	Rule	405	of	Regulation	S-T	(§232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that

the	Registrant	was	required	to	submit	and	post	such	files).			X		Yes		¨		No

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	(§229.405	of	this	chapter)	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.		¨

Indicate	by	check	mark	whether	the	Registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer	or	a	smaller	reporting	company.	See	the definitions	of	"large	accelerated	filer,"	"accelerated	filer,"	and	"smaller	reporting	company"	in	Rule	12b-2	of	the	Exchange	Act.

X		Large	accelerated	filer

¨		Accelerated	filer

¨		Non-accelerated	filer

¨		Smaller	reporting	company

(Do	not	check	if	a	smaller	reporting	company)

Indicate	by	check	mark	whether	the	Registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).		¨		Yes		X		No

The	aggregate	market	value	of	Citigroup	Inc.	common	stock	held	by	non-affiliates	of	Citigroup	Inc.	on	June	30,	2009	was	approximately	$16.3	billion.

Documents	Incorporated	by	Reference:	Portions	of	the	Registrant's	Proxy	Statement	for	the	annual	meeting	of	stockholders	scheduled	to	be	held	on	April	20, 2010,	are	incorporated	by	reference	in	this	Form	10-K	in	response	to	Items	10,	11,	12,	13	and	14	of	Part	III.

# 10-K CROSS-REFERENCE INDEX

This	Annual	Report	on	Form	10-K	incorporates	the	requirements	of	the	accounting	profession	and	the	Securities	and	Exchange	Commission,	including	a	comprehensive explanation	of	2009	results.

** See "Executive Compensation—The Personnel and Compensation Committee Report," "Compensation Discussion and Analysis" and "Compensation Tables" in the Proxy Statement, incorporated herein by reference.

*** See "About the Annual Meeting," "Stock Ownership" and "Proposal 3: Approval of Citigroup 2010 Stock Incentive Plan" in the Proxy Statement, incorporated herein by reference.

**** See "Corporate Governance—Director Independence," "Certain Transactions and Relationships, Compensation Committee Interlocks and Insider Participation," "Indebtedness," "Proposal 1: Election of Directors" and "Executive Compensation" in the Proxy Statement, incorporated herein by reference.

***** See "Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm" in the Proxy Statement, incorporated herein by reference.

# CITIGROUP'S 2009 ANNUAL REPORT ON FORM 10-K

| OVERVIEW | 4 |
| :--- | :--- |
| CITIGROUP SEGMENTS AND REGIONS | 5 |
| MANAGEMENT'S DISCUSSION AND ANALYSIS |  |
| \t\t\t\t\t\t\tOF FINANCIAL CONDITION AND RESULTS |  |
| \t\t\t\t\t\t\tOF OPERATIONS | 7 |
| EXECUTIVE SUMMARY | 7 |
| \t\t\t\t\t\t\t2010\tBusiness\tOutlook | 11 |
| RESULTS OF OPERATIONS | 13 |
| FIVE-YEAR SUMMARY OF SELECTED |  |
| \t\t\t\t\t\t\tFINANCIAL DATA | 13 |
| SEGMENT, BUSINESS AND PRODUCT— |  |
| \t\t\t\t\t\t\tINCOME (LOSS) AND REVENUES | 14 |
| \t\t\t\t\t\t\tCitigroup\tIncome\t(Loss) | 14 |
| \t\t\t\t\t\t\tCitigroup\tRevenues | 15 |
| CITICORP | 16 |
| \t\t\t\t\t\t\tRegional Consumer Banking | 17 |
| \t\t\t\t\t\t\tNorth\tAmerica\tRegional\tConsumer\tBanking | 18 |
| \t\t\t\t\t\t\tEMEA\tRegional\tConsumer\tBanking | 20 |
| \t\t\t\t\t\t\tLatin\tAmerica\tRegional\tConsumer\tBanking | 22 |
| \t\t\t\t\t\t\tAsia\tRegional\tConsumer\tBanking | 24 |
| \t\t\t\t\t\t\tInstitutional Clients Group | 26 |
| \t\t\t\t\t\t\tSecurities\tand\tBanking | 27 |
| \t\t\t\t\t\t\tTransaction\tServices | 29 |
| CITI HOLDINGS | 30 |
| \t\t\t\t\t\t\tBrokerage\tand\tAsset\tManagement | 31 |
| \t\t\t\t\t\t\tLocal\tConsumer\tLending | 32 |
| \t\t\t\t\t\t\tSpecial\tAsset\tPool | 35 |
| CORPORATE/OTHER | 38 |
| BALANCE SHEET REVIEW | 39 |
| \t\t\t\t\t\t\tSegment\tBalance\tSheet\tat\tDecember\t31,\t2009 | 42 |
| CAPITAL RESOURCES AND LIQUIDITY | 43 |
| \t\t\t\t\t\t\tCapital\tResources | 43 |
| \t\t\t\t\t\t\tFunding\tand\tLiquidity | 48 |
| OFF-BALANCE-SHEET ARRANGEMENTS | 52 |
| CONTRACTUAL OBLIGATIONS | 53 |
| RISK FACTORS | 54 |
| MANAGING GLOBAL RISK | 61 |
| \t\t\t\t\t\t\tRisk\tManagement—Overview | 61 |
| \t\t\t\t\t\t\tRisk\tAggregation\tand\tStress\tTesting | 62 |
| \t\t\t\t\t\t\tRisk\tCapital | 62 |
| \t\t\t\t\t\t\tCredit\tRisk | 63 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tLoan\tand\tCredit\tOverview | 63 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\t2010\tCredit\tOutlook | 63 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tLoans\tOutstanding | 64 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tDetails\tof\tCredit\tLoss\tExperience | 65 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tNon-Accrual\tAssets | 66 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tForegone\tInterest\tRevenue\ton\tLoans | 68 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tCorporate\tLoans | 68 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tConsumer\tLoan\tDelinquency\tAmounts\tand\tRatios | 70 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tConsumer\tLoan\tNet\tCredit\tLosses\tand\tRatios | 71 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tConsumer\tLoan\tModification\tPrograms | 72 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tU.S.\tConsumer\tLending | 73 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tCorporate\tLoan\tDetails\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tU.S.\tSubprime-Related\tDirect\tExposure\tin\tCiti\tHoldings— | 82 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tSpecial\tAsset\tPool | 85 |

| Direct	Exposure	to	Monolines | 87 |
| :--- | :--- |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tHighly\tLeveraged\tFinancial\tTransactions | 88 |
| \t\t\t\t\t\t\tMarket\tRisk | 89 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tAverage\tBalances\tand\tInterest\tRates—Assets | 94 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tAverage\tBalances\tand\tInterest\tRates—Liabilities\tand |  |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tEquity,\tand\tNet\tInterest\tRevenue | 95 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tAnalysis\tof\tChanges\tin\tInterest\tRevenue | 96 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tAnalysis\tof\tChanges\tin\tInterest\tExpense\tand\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tNet\tInterest\tRevenue | 97 |
| \t\t\t\t\t\t\tOperational\tRisk | 98 |
| \t\t\t\t\t\t\tCountry\tand\tFFIEC\tCross-Border\tRisk\tManagement\tProcess | 99 |
| \t\t\t\t\t\t\tCountry\tand\tCross-Border\tRisk | 99 |
| DERIVATIVES | 100 |
| PENSION AND POSTRETIREMENT PLANS\nSIGNIFICANT ACCOUNTING POLICIES AND | 103 |
| \t\t\t\t\t\t\tSIGNIFICANT ESTIMATES | 105 |
| \t\t\t\t\t\t\tValuations\tof\tFinancial\tInstruments | 105 |
| \t\t\t\t\t\t\tAllowance\tfor\tCredit\tLosses | 107 |
| \t\t\t\t\t\t\tSecuritizations | 107 |
| \t\t\t\t\t\t\tGoodwill | 110 |
| \t\t\t\t\t\t\tIncome\tTaxes | 112 |
| \t\t\t\t\t\t\tLegal\tReserves\n\t\t\t\t\t\t\tAccounting\tChanges\tand\tFuture\tApplication\tof | 113 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tAccounting\tStandards | 113 |
| FORWARD-LOOKING INFORMATION | 114 |
| CONTROLS AND PROCEDURES | 115 |
| MANAGEMENT'S REPORT ON INTERNAL |  |
| \t\t\t\t\t\t\tCONTROL OVER FINANCIAL REPORTING | 116 |
| REPORT OF INDEPENDENT REGISTERED\n\t\t\t\t\t\t\tPUBLIC ACCOUNTING FIRM—INTERNAL |  |
| \t\t\t\t\t\t\tCONTROL OVER FINANCIAL REPORTING | 117 |
| REPORT OF INDEPENDENT REGISTERED\n\t\t\t\t\t\t\tPUBLIC ACCOUNTING FIRM— |  |
| \t\t\t\t\t\t\tCONSOLIDATED FINANCIAL STATEMENTS | 118 |
| FINANCIAL STATEMENTS AND NOTES TABLE |  |
| \t\t\t\t\t\t\tOF CONTENTS | 119 |
| CONSOLIDATED FINANCIAL STATEMENTS\nNOTES TO CONSOLIDATED FINANCIAL | 120 |
| \t\t\t\t\t\t\tSTATEMENTS | 126 |
| FINANCIAL DATA SUPPLEMENT (Unaudited) | 258 |
| \t\t\t\t\t\t\tRatios | 258 |
| \t\t\t\t\t\t\tAverage\tDeposit\tLiabilities\tin\tOffices\tOutside\tthe\tU.S.\n\t\t\t\t\t\t\tMaturity\tProfile\tof\tTime\tDeposits\t($100,000\tor\tmore) | 258 |
| \tin\tU.S.\tOffices | 258 |
| \t\t\t\t\t\t\tShort-Term\tand\tOther\tBorrowings | 258 |
| SUPERVISION AND REGULATION | 259 |
| CUSTOMERS | 261 |
| COMPETITION | 262 |
| PROPERTIES | 262 |
| LEGAL PROCEEDINGS | 263 |
| UNREGISTERED SALES OF EQUITY;\n\t\t\t\t\t\t\tPURCHASES OF EQUITY SECURITIES;\n\t\t\t\t\t\t\tDIVIDENDS | 267 |
| CORPORATE INFORMATION | 270 |
| CITIGROUP BOARD OF DIRECTORS | 272 |

# OVERVIEW

Citigroup's	history	dates	back	to	the	founding	of	Citibank	in	1812.	Citigroup's original	corporate	predecessor	was	incorporated	in	1988	under	the	laws	of	the State	of	Delaware.	Following	a	series	of	transactions	over	a	number	of	years, Citigroup	Inc.	was	formed	in	1998	upon	the	merger	of	Citicorp	and	Travelers Group	Inc.

					Citigroup	is	now	a	global	diversified	financial	services	holding	company whose	businesses	provide	consumers,	corporations,	governments	and	institutions with	a	broad	range	of	financial	products	and	services.	Citi	has	approximately 200	million	customer	accounts	and	does	business	in	more	than	140	countries. 					Citigroup	currently	operates,	for	management	reporting	purposes,	via	two primary	business	segments:	Citicorp,	consisting	of	our	Regional	Consumer Banking	businesses	and	Institutional	Clients	Group;	and	Citi	Holdings, consisting	of	our	Brokerage	and	Asset	Management	and	Local	Consumer

Lending	businesses,	and	a	Special	Asset	Pool.	There	is	also	a	third	segment, Corporate/Other.	For	a	further	description	of	the	business	segments	and	the products	and	services	they	provide,	see	"Citigroup	Segments"	below, "Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of Operations"	and	Note	4	to	the	Consolidated	Financial	Statements.

					Throughout	this	report,	"Citigroup"	and	"Citi"	refer	to	Citigroup	Inc.	and	its consolidated	subsidiaries.

# 					As	described	above,	Citigroup	is	managed	pursuant	to	the	following	segments:

					*Note:	See	"Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations—Results	of	Operations—Citi	Holdings"	for	a	discussion	of certain	assets,	totaling	approximately	$61	billion,	that	will	be	moved	from	Citi	Holdings	to	Citicorp	during	the	first	quarter	of	2010.

# 					The	following	are	the	four	regions	in	which	Citigroup	operates.	The	regional	results	are	fully	reflected	in	the	segment	results	above.

(1) Asia includes Japan, Latin America includes Mexico, and North America comprises the U.S., Canada and Puerto Rico.

# OVERVIEW (Continued)

On	December	23,	2009,	Citigroup	repaid	$20	billion	of	trust	preferred	securities held	by	the	U.S.	Treasury	under	the	U.S.	government's	Troubled	Asset	Relief Program	(TARP)	and	exited	from	the	loss-sharing	agreement,	which	covered	a specified	pool	of	assets,	with	the	U.S.	Treasury,	FDIC	and	the	Federal	Reserve Bank	of	New	York.	In	connection	with	the	exiting	from	the	loss-sharing agreement,	$1.8	billion	of	the	approximately	$7.1	billion	of	additional	trust preferred	securities	held	by	the	U.S.	Treasury	and	FDIC	was	cancelled.	As	a result	of	the	repayment	of	TARP	and	the	exit	from	the	loss-sharing	agreement, effective	in	2010,	Citi	is	no	longer	deemed	to	be	a	beneficiary	of	"exceptional financial	assistance"	under	TARP.

	Following	these	transactions,	as	of	December	31,	2009	(i)	the	U.S.	Treasury continued	to	hold	approximately	7.7	billion	shares,	or	approximately	27%,	of Citi's	common	stock,	(ii)	the	U.S.	Treasury	and	FDIC	continue	to	hold	an aggregate	of	approximately	$5.3	billion	of	Citi's	trust	preferred	securities,	and (iii)	the	U.S.	Treasury	continues	to	hold	three	warrants	exercisable	for	an aggregate	of	approximately	465.1	million	shares	of	Citi's	common	stock.	See "Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of Operations—Executive	Summary—Repayment	of	TARP	and	Exit	from	Loss- Sharing	Agreement;	Common	and	Preferred	Stock	Activities"	for	additional information.

	Additional	information	about	Citigroup	is	available	on	the	company's	Web site	at	www.citigroup.com.	Citigroup's	recent	annual	reports	on	Form	10-K, quarterly	reports	on	Form	10-Q,	current	reports	on	Form	8-K,	as	well	as	its	other filings	with	the	Securities	and	Exchange	Commission	(SEC)	are	available	free	of charge	through	the	Web	site	by	clicking	on	the	"Investors"	page	and	selecting "All	SEC	Filings."	The	SEC	Web	site	also	contains	reports,	proxy	and information	statements,	and	other	information	regarding	Citi,	at	www.sec.gov.

# 	Please	see	"Risk	Factors"	below	for	a	discussion	of	certain	risks	and uncertainties	that	could	materially	impact	Citigroup's	financial	condition and	results	of	operations.

	Certain	reclassifications	have	been	made	to	the	prior	periods'	financial statements	to	conform	to	the	current	period's	presentation.

# MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

# EXECUTIVE SUMMARY

# Introduction

Citigroup	is	a	global	diversified	financial	services	holding	company	whose businesses	provide	consumers,	corporations,	governments	and	institutions	with	a broad	range	of	financial	products	and	services,	including	consumer	banking, credit	cards,	corporate	and	investment	banking,	securities	brokerage	and	wealth management.	Citigroup	has	approximately	200	million	customer	accounts	and does	business	in	more	than	140	countries.

	In	response	to	the	dramatic	and	profound	changes	in	the	market environment	that	became	increasingly	apparent	through	2008,	in	early	2009, Citigroup	decided	to	increase	the	focus	on	its	core	businesses	and	reorganized into	three	business	segments	for	management	and	reporting	purposes:	Citicorp (Regional	Consumer	Banking	and	Institutional	Clients	Group);	Citi	Holdings (Brokerage	and	Asset	Management,	Local	Consumer	Lending,	and	Special	Asset Pool);	and	Corporate/Other	(Treasury,	corporate	expenses).	Citi	believes	the realignment	allows	it	to	enhance	the	capabilities	and	performance	of	Citigroup's core	assets,	through	Citicorp,	as	well	as	to	tighten	its	focus	on	risk	management and	reduce	and	realize	value	from	its	non-core	assets,	through	Citi	Holdings. 	Citigroup	reported	a	net	loss	for	2009	of	$1.6	billion,	as	compared	to	a $27.7	billion	loss	in	2008.	Diluted	EPS	was	a	loss	of	$0.80	per	share	in	2009, versus	a	loss	of	$5.63	per	share	in	2008,	and	net	revenue	was	$80.3	billion	in 2009,	versus	$51.6	billion	in	2008.	Net	interest	revenue	declined	by	$4.8	billion to	$48.9	billion	in	2009,	generally	as	a	result	of	lower	average	interest-earning assets,	as	the	company	continued	its	focus	on	de-risking	its	balance	sheet	and decreasing	its	total	assets.	Non-interest	revenues	improved	by	approximately $33.5	billion	to	$31.4	billion	in	2009,	primarily	due	to	lower	negative	revenue marks	in	2009.	The	decrease	in	net	loss	from	year	to	year	was	primarily attributable	to	lower	revenue	marks	in	2009	compared	with	2008	(a	pretax	loss	of $3.4	billion	in	2009	versus	a	pretax	loss	of	$38.5	billion	in	2008),	the	$11.1 billion	pretax	Smith	Barney	gain	on	sale	recorded	in	the	second	quarter	of	2009 and	a	$1.4	billion	pretax	gain	related	to	the	exchange	offers	recognized	in	the third	quarter	of	2009.	Partially	offsetting	these	items	were	increasing	credit	loss provisions	during	the	year	and	a	$10.1	billion	pretax	loss	associated	with	the repayment	of	TARP	and	the	exit	from	the	loss-sharing	agreement	with	the	U.S. government.	Additionally,	2008	included	a	$9.6	billion	pretax	goodwill impairment,	a	$0.9	billion	pretax	impairment	related	to	Nikko	Asset Management,	and	$3.3	billion	pretax	of	restructuring/repositioning	charges. Continued	strength	of	the	core	Citi	franchise	was	demonstrated	by

strong	revenues	in	Securities	and	Banking	(S&B)	(up	23%	from	2008	levels, excluding	credit	value	adjustments	(CVA))	and	continued	stability	in	both	the retail	and	institutional	deposit	bases.	At	December	31,	2009,	total	deposits	were $836	billion,	up	8%	from	December	31,	2008.

	Despite	very	difficult	market	and	economic	conditions,	Citicorp	remained profitable	with	$14.8	billion	in	income	from	continuing	operations	in	2009 versus	$6.2	billion	in	2008,	reflecting	the	strength	of	the	underlying	franchise, continued	client	focus,	cost	management	and	strengthened	risk	management. Citi	Holdings	recorded	a	loss	of	$8.2	billion	in	2009	versus	a	$36.0	billion	loss	in 2008	as	substantial	reductions	in	negative	revenue	marks,	cost	cuts	and	the	Smith Barney	gain	more	than	offset	continued	increases	in	credit	costs	within	Local Consumer	Lending.	The	gain	related	to	the	exchange	offers	and	loss	associated with	TARP	repayment	and	exiting	the	loss-sharing	agreement	was	recorded	in Corporate/Other.

	Citigroup's	2009	financial	results	include	the	impact	of	18	divestitures completed	in	2009,	including	Smith	Barney,	Nikko	Cordial	Securities	and	Nikko Asset	Management,	and	19	divestitures	completed	in	2008,	including	Citi's German	retail	banking	operations,	CitiCapital	and	Redecard.	These	divestitures were	completed	in	accordance	with	Citi's	strategy	of	exiting	non-core	businesses, while	optimizing	value	for	shareholders.

	Citi's	effective	tax	rate	on	continuing	operations	in	2009	was	86%,	versus 39%	in	2008.	The	tax	provision	reflected	a	benefit	arising	from	a	higher proportion	of	income	earned	and	indefinitely	reinvested	in	countries	with relatively	lower	tax	rates,	which	accounted	for	26	percentage	points	of	the differential	between	the	federal	statutory	tax	rate	and	Citi's	effective	tax	rate	in 2009,	as	well	as	a	higher	proportion	of	income	from	tax-advantaged	sources.

# Repayment of TARP and Exit from Loss-Sharing Agreement; Common and Preferred Stock Activities

# Background

In	October	and	December	2008,	Citigroup	raised	$25	billion	and	$20	billion, respectively,	through	the	sale	of	preferred	stock	and	warrants	to	purchase common	stock	to	the	U.S.	Treasury	as	part	of	TARP.	In	January	2009,	Citi issued	approximately	$7.1	billion	of	preferred	stock	to	the	U.S.	Treasury	and FDIC,	as	well	as	a	warrant	to	purchase	common	stock	to	the	U.S.	Treasury,	as consideration	for	the	loss-sharing	agreement	with	the	U.S.	Treasury,	FDIC	and the	Federal	Reserve	Bank	of	New	York	covering	a	specified	pool	of	Citigroup assets.

	Pursuant	to	Citigroup's	exchange	offers	consummated	in	July	2009,	the	$25 billion	of	TARP	preferred	stock	issued	to	the	U.S.	Treasury	in	October	2008	was exchanged	for	approximately	7.7	billion	shares	of	Citigroup	common	stock.	At the	same	time,	the	$20	billion	of	TARP	preferred	stock	issued	to	the	U.S. Treasury	in	December	2008	and	the	approximately	$7.1	billion	of

preferred	stock	issued	to	the	U.S.	Treasury	and	FDIC	as	consideration	for	the loss-sharing	agreement	were	exchanged	for	trust	preferred	securities.	Prior	to	the exchange	of	the	preferred	stock	held	by	the	U.S.	government	pursuant	to	the exchange	offers,	Citigroup	paid	the	U.S.	government	approximately	$2.2	billion in	preferred	dividends	on	its	investment	in	Citi,	and	has	subsequently	paid approximately	$800	million	in	interest	on	the	trust	preferred	securities issued	pursuant	to	the	exchange	offers.

# Repayment	of	TARP	and	Exit	from	loss-sharing	agreement

On	December	23,	2009,	Citigroup	repaid	the	$20	billion	of	TARP	trust	preferred securities	held	by	the	U.S.	Treasury	and	exited	the	loss-sharing	agreement.	In connection	with	the	exit	of	the	loss-sharing	agreement,	$1.8	billion	of	the	trust preferred	securities	held	by	the	U.S.	Treasury	out	of	the	approximately	$7.1 billion	of	trust	preferred	securities	issued	in	consideration	for	such	agreement	to the	U.S.	Treasury	and	FDIC	was	cancelled.

	In	connection	with	the	repayment	of	TARP	in	December	2009,	Citigroup raised	an	aggregate	of	approximately	$20.3	billion	in	common	equity.		On December	22,	2009	Citigroup	issued	$17.0	billion	of	common	stock,	or approximately	5.4	billion	shares,	and	$3.5	billion	of	tangible	equity	units	(T- DECs)	of	which	approximately	$2.8	billion	was	recorded	as	common	equity	and $0.7	billion	was	recorded	as	long-term	debt.	On	December	29,	2009,	Citigroup raised	an	additional	approximate	$0.6	billion	of	common	stock,	or	approximately 185	million	shares,	pursuant	to	exercise	of	the	underwriters'	overallotment option.	In	addition,	in	January	2010,	Citigroup	issued	$1.7	billion	of	common stock	equivalents	to	its	employees	in	lieu	of	cash	compensation	they	would	have otherwise	received.	Subject	to	shareholder	approval	at	Citi's	annual	shareholder meeting	scheduled	to	be	held	on	April	20,	2010,	the	common	stock	equivalents will	be	converted	into	common	stock.

	Following	the	repayment	of	TARP	and	exit	from	the	loss-sharing agreement,	as	of	December	31,	2009,	the	U.S.	Treasury	continues	to	hold approximately	7.7	billion	shares,	or	approximately	27.0%,	of	Citi's	common stock,	not	including	the	exercise	of	the	warrants	issued	to	the	U.S.	Treasury	that remain	outstanding,	as	described	below.	The	U.S.	Treasury	has	indicated	that	it intends	to	sell	its	holding	in	Citi	common	stock	in	2010,	subject	to	a	90-day lock-up	period	expiring	on	March	16,	2010.	In	addition,	the	U.S.	Treasury	and FDIC	continue	to	hold	an	aggregate	of	approximately	$5.3	billion	of	the	trust preferred	securities	originally	issued	by	Citi	as	consideration	for	the	loss-sharing agreement.

	As	a	result	of	Citi's	repayment	of	the	$20	billion	of	TARP	trust	preferred securities	and	the	exit	of	the	loss-sharing	agreement,	effective	in	2010,	Citi	is	no longer	deemed	to	be	a	beneficiary	of	"exceptional	financial	assistance"	under TARP.

# Common	stock	warrants	issued	to	the	U.S.	Treasury

The	three	warrants	issued	to	the	U.S.	Treasury	as	part	of	TARP	and	the	loss- sharing	agreement	remain	outstanding	as	of	December	31,	2009	following	Citi's repayment	of	TARP	and	exit	from	the	loss-sharing	agreement.

	Each	of	the	warrants	has	a	term	of	10	years	from	the	date	of	issuance.	The warrant	issued	to	the	U.S.	Treasury	in	October	2008	has	an	exercise	price	of $17.85	per	share	and	is	exercisable	for	approximately	210.1	million	shares	of common	stock.	The	warrant	issued	to	the	U.S.	Treasury	in	December	2008	has an	exercise	price	of	$10.61	per	share	and	is	exercisable	for	approximately	188.5 million	shares	of	common	stock.	The	warrant	issued	to	the	U.S.	Treasury	as	part of	the	loss-sharing	agreement	in	January	2009	also	has	an	exercise	price	of $10.61	and	is	exercisable	for	approximately	66.5	million	shares	of	common stock.

	The	following	table	summarizes	Citigroup's	issuances,	exchanges	and	repayments	of	preferred	and	common	stock	and	trust	preferred	securities	during	2008	and 2009:

|  |  |  | Common stock | Citigroup |
| :--- | :--- | :--- | :--- | :--- |
|  |  |  | and additional | common stock |
| In millions of dollars, shares in millions |  | Preferred stock | paid-in capital | outstanding |
|  | \t\t\tBalance, December 31, 2007 | $— | $18,062 | 4,995 |
| First quarter 2008 | Issuance of $12.5 billion of convertible preferred stock |  |  |  |
|  | in a private offering, $3.2 billion of convertible |  |  |  |
|  | preferred stock in a public offering, and $3.7 billion |  |  |  |
|  | \t\t\t\t\t\t\tof non-convertible preferred stock in public |  |  |  |
|  | \t\t\t\t\t\t\tofferings | 19,384 | — | — |
|  | Issuance\tof\tshares\tfor\tNikko\tCordial\tacquisition | — | (3,485) | 175 |
|  | Other activity (primarily employee benefit plans) | — | (3,391) | — |
| Second quarter 2008 | Issuance of shares for Nikko Cordial acquisition | — | (15) | — |
|  | Issuance of $8.0 billion of preferred stock in a public |  |  |  |
|  | \t\t\t\t\t\t\toffering and $4.9 billion of common stock | 8,040 | 4,911 | 194 |
|  | Other\tactivity\t(primarily\temployee\tbenefit\tplans) | — | 569 | — |
| Third\tquarter\t2008 | Other\tactivity\t(primarily\temployee\tbenefit\tplans) | — | 290 | — |
| Fourth quarter 2008 | Issuance of $45 billion of preferred stock and warrants |  |  |  |
|  | \t\t\t\t\t\t\tunder TARP | 43,203 | 1,797 | — |
|  | Preferred stock Series H discount accretion | 37 | — | — |
|  | Other activity (primarily employee benefit plans) | — | 484 | 86 |
|  | Balance, December 31, 2008 | $70,664 | $19,222 | 5,450 |
| First quarter 2009 | U.S. government loss-sharing agreement; issuance of |  |  |  |
|  | \t\t\t\t\t\t\t$7.1 billion of preferred stock and warrants | 3,530 | 88 | — |
|  | Reset of convertible preferred stock conversion price | — | 1,285 | — |
|  | Preferred stock Series H discount accretion | 52 | — | — |
|  | Other activity (primarily employee benefit plans) | — | (4,013) | 63 |
|  | Balance, end of period | $74,246 | $16,582 | 5,513 |
| Second quarter 2009 | Preferred stock Series H discount accretion | 55 | — | — |
|  | Other activity (primarily employee benefit plans) | — | 138 | (5) |
|  | Balance, end of period | $74,301 | $16,720 | 5,508 |
| Third quarter 2009 (1) | Exchange offers: |  |  |  |
|  | \t\t\t\t\t\t\tPrivate investors | (12,500) | 21,839 | 3,846 |
|  | \t\t\t\t\t\t\tPublic investors—convertible preferred stock | (3,146) | 5,136 | 823 |
|  | \t\t\t\t\t\t\tPublic investors—non-convertible preferred stock | (11,465) | 9,149 | 3,351 |
|  | \t\t\t\t\t\t\tPublic investors—trust preferred securities | — | 4,532 | 1,660 |
|  | \t\t\t\t\t\t\tU.S. government matching of private exchange offer | (11,924) | 10,653 | 3,846 |
|  | \t\t\t\t\t\t\tU.S. government matching of public exchange offer | (11,926) | 10,654 | 3,846 |
|  | U.S. government TARP preferred stock converted to |  |  |  |
|  | trust preferred securities | (19,514) | — | — |
|  | \t\t\t\t\t\t\tPreferred stock held by U.S. Treasury and FDIC related |  |  |  |
|  | to loss-sharing agreement (converted to trust preferred securities) | (3,530) | — | — |
|  | Preferred stock Series H discount accretion | 16 | — | — |
|  | Other activity (primarily employee benefit plans) | — | 349 | (16) |
|  | Balance, end of period | $312 | $79,032 | 22,864 |
| Fourth quarter 2009 | Issuance of new common equity and tangible equity units (T-DECs) pursuant |  |  |  |
|  | \t\t\t\t\t\t\tto repayment of TARP and exiting of loss-sharing agreement | — | 20,298 | 5,582 |
|  | Other activity (primarily employee benefit plans) | — | (902) | 37 |
|  | Balance, December 31, 2009 | $312 | $98,428 | 28,483 |

(1) In addition to the U.S. government exchanges, pursuant to the exchange offers, private holders of approximately $12.5 billion aggregate liquidation value of Citi preferred stock exchanged such preferred stock for approximately 3.8 billion shares of Citi common stock. In addition, public holders of approximately $20.3 billion aggregate liquidation value of Citi preferred stock and trust preferred securities exchanged such securities for approximately 5.8 billion shares of Citi common stock.

# Business Environment

The	business	environment	for	financial	services	firms	continued	to	be challenging	in	2009,	particularly	for	firms	with	significant	exposure	to	consumer credit.	U.S.	unemployment	reached	10.1%,	GDP	continued	to	contract	through the	second	quarter,	housing	markets	remained	weak,	and	personal	and	business bankruptcies	increased.	These	factors	drove	substantial	increases	in	credit	costs across	consumer	and	corporate	portfolios.	Credit	spreads	continued	to	widen earlier	in	the	year,	driving	further	declines	in	the	value	of	credit-sensitive financial	instruments.	Equity	markets	were	also	very	weak	during	early	2009.	At its	low	point	in	March	2009,	the	S&P	500	had	declined	55%	from	December	31, 2007	levels.

	While	these	trends	were	negative	for	the	economy	and	the	financial	services industry	as	a	whole,	they	were	accompanied	by	very	high	levels	of	volatility	and wide	spreads	within	fixed	income	markets	during	the	first	quarter	of	2009,	which provided	substantial	trading	opportunities.	As	a	result,	fixed	income	capital markets	businesses	achieved	high	levels	of	revenue	and	profitability	during	the first	quarter,	offsetting	some	of	the	substantial	credit	losses	incurred	in consumer-oriented	businesses,	including	mortgages	and	cards. 	Beginning	in	late	2008,	significant	U.S.	government	actions	were implemented	to	help	stabilize	the	U.S.	economy	and	restore	confidence	in	the capital	markets.	The	U.S.	government	had	available	over	$700	billion	to	invest	in financial	institutions,	including	$45	billion	in	Citi,	through	TARP.	In	early	2009, a	$787	billion	stimulus	bill	was	signed	into	law.	A	number	of	additional programs	helped	further	stimulate	demand	in	2009,	including	the	U.S. government's	first-time	home	buyer	credit	programs.	The	U.S.	government	also directly	supported	the	capital	markets	through	various	programs,	including	the Term	Asset-Backed	Securities	Loan	Facility	(TALF)	and	the	Temporary Liquidity	Guarantee	Program	(TLGP),	and	through	substantial	direct	purchases of	mortgage-backed	securities.	These	actions,	combined	with	continued accommodative	monetary	policy	on	the	part	of	the	Federal	Reserve	Board, helped	keep	home	mortgage	rates	near	historic	lows	and	worked	to	facilitate	the continued	flow	of	credit	to	consumers.

	Late	in	2009,	some	early	positive	economic	signs	were	observed.	U.S.	GDP growth	was	positive	in	the	third	and	fourth	quarters.	The	S&P	500	finished	the year	up	23%	from	December	31,	2008,	and	up	67%	from	the	trough	level	in March	2009,	though	still	down	24%	from	December	31,	2007.	Credit	spreads, while	still	elevated,	tightened	significantly	from	peak	levels	in	the	early	part	of 2009.	In	the	second	half	of	the	year,	Citi	began	to	observe	some	very	early	signs of	stabilization	and,	in	some	areas,	moderation	in	U.S.	consumer	credit	trends	as net	credit	losses	declined	sequentially	during	the	third	and	fourth	quarters, though	remaining	quite	elevated.	In	addition,

improving	economic	and	market	trends	led	to	relatively	stronger	advisory	and equity	underwriting	volumes	in	the	fourth	quarter.	On	the	other	hand,	lower levels	of	market	volatility	and	volumes	resulted	in	diminished	trading opportunities,	which	led	to	significant	sequential	declines	in	S&B	revenues	in	the second	half	of	the	year.	In	certain	key	markets	in	Asia	and	Latin	America, improvement	in	the	labor	markets	and	overall	economic	recovery	was	earlier, and	somewhat	stronger,	than	that	observed	in	the	U.S.	Citi	observed	improving credit	trends	in	key	markets	including	South	Korea,	Mexico,	Australia, Singapore	and	India,	driven	by	improving	economic	conditions	as	well	as	Citi's loss	mitigation	efforts.	Further,	while	EMEA	continued	to	be	affected	by	a challenging	economic	environment,	labor	markets	began	to	show	some improvement,	particularly	in	Russia	and	Turkey,	and	there	were	some	early	signs of	financial	stability	returning	to	some	of	Citi's	key	markets	in	the	region. 	While	some	economic	and	market	improvements	were	observed	in	late 2009,	Citi	remains	cautious,	particularly	with	respect	to	its	North	American businesses,	as	U.S.	unemployment	remains	high	at	10.0%	as	of	December	31, 2009,	and	housing	markets	remain	relatively	weak.	In	addition,	there	remains significant	uncertainty	regarding	the	pace	of	economic	recovery	and	the	impact of	the	U.S.	government's	unwinding	of	its	extensive	economic	and	market supports,	which	may	accelerate	in	2010.	See	"2010	Business	Outlook"	below.

# Citigroup's Actions in Response to Market Challenges

During	2009,	Citigroup	sought	to	respond	to	market	challenges	and	the	profound changes	in	the	market	environment—changes	in	funding	markets,	operating models	and	client	needs—including:

# Citi	restructured	into	two	primary	operating	segments—Citicorp	and	Citi Holdings.

As	described	above,	Citicorp	comprises	Citi's	core	franchise,	while	Citi Holdings	consists	of	non-core	businesses	and	assets	that	Citi	intends	to	exit	as quickly	as	practicable	while	seeking	to	optimize	value	for	shareholders.

# Citigroup	continued	to	reduce	operating	expenses	and	headcount.

Citi's	ongoing	operating	expenses	in	the	fourth	quarter	of	2009	totaled	$12.3 billion,	down	from	$15.1	billion	(excluding	the	goodwill	impairment	charge)	in the	fourth	quarter	of	2008	and	$15.7	billion	in	the	fourth	quarter	of	2007.	The decline	in	expenses	was	primarily	driven	by	divestitures	and	re-engineering efforts.	In	addition,	Citi	reduced	headcount	by	over	100,000	to	approximately 265,000	at	December	31,	2009,	compared	to	375,000	at	peak	levels	in	2007.

# Citigroup	strengthened	its	balance	sheet.

# Citi	increased	its	common	capital	ratios.

Citi	significantly	increased	its	Tier	1	Common	and	Tangible	Common Equity	(TCE)	ratios	during	2009,	primarily	as	a	result	of	its	exchange offers	completed	in	the	third	quarter	of	2009.	At	December	31,	2009, Citi's	Tier	1	Common	ratio	was	9.6%	and	its	TCE	ratio	was	10.9%, compared	to	2.3%	and	3.1%	at	December	31,	2008,	respectively.	In addition,	Citi's	Tier	1	Capital	ratio	was	11.7%	at	December	31,	2009. Tier	1	Common	and	related	ratios	are	measures	used	and	relied	on	by U.S.	banking	regulators;	however,	Tier	1	Common,	TCE	and	related ratios	are	non-GAAP	financial	measures	for	SEC	purposes.	See "Capital	Resources	and	Liquidity—Capital	Resources"	for	additional information	on	these	measures.

# Citi	improved	its	liquidity	position.

Citigroup	lengthened	the	maturity	structure	of	its	liabilities,	increased balances	of	cash	and	highly	liquid	securities,	continued	to	grow	its deposit	base,	raised	substantial	equity	capital	and	reduced	illiquid assets,	primarily	in	Citi	Holdings.	As	a	result,	structural	liquidity (defined	as	deposits,	long-term	debt	and	equity	as	a	percentage	of total	assets)	grew	to	73%	as	of	December	31,	2009,	compared	to	66% at	December	31,	2008	and	63%	at	December	31,	2007.	Citigroup	had $193	billion	of	cash	and	deposits	with	banks	as	of	December	31, 2009.	Citi	currently	anticipates	issuing	less	than	$15	billion	of Citigroup-level	long-term	debt	in	2010	(down	from	$85	billion	in 2009)	due	to	its	current	strong	liquidity	position	and	anticipated	asset reductions	within	Citi	Holdings.

Citi	continued	to	de-risk	and	decrease	the	amount	of	its	total	assets. Citi's	total	assets	were	approximately	$1.86	trillion	as	of	December 31,	2009,	down	from	approximately	$1.94	trillion	at	December	31, 2008	and	$2.19	trillion	at	December	31,	2007.	Consistent	with	Citi's strategy,	Citi	Holdings	now	represents	less	than	30%	of	Citi's	total assets	as	of	December	31,	2009,	compared	to	41%	at	the	start	of	2008. While	Citi	made	progress	in	de-risking	and	decreasing	total	assets, particularly	in	Citi	Holdings,	these	actions,	together	with	an expansion	of	the	Company's	loss	mitigation	efforts	and	declining yields	in	the	trading	book,	resulted	in	a	9%	reduction	in	net	interest revenue	in	2009	versus	2008	and	a	decrease	in	Citi's	net	interest margin	(NIM)	to	2.65%	at	December	31,	2009	compared	to	3.26%	at December	31,	2008.

# Citigroup	increased	its	allowance	for	loan	losses.

During	2009,	Citi	added	a	net	build	of	$8.0	billion	to	its	allowance	for	loan losses.	The	allowance	for	loan	losses	was	$36	billion	at	December	31,	2009,	or 6.1%	of	loans,	compared	to	$29.6	billion,	or	4.3%	of	loans,	at	year-end	2008. With	the	adoption	of	SFAS	166	and	167	in	the	first	quarter	of	2010,	loan	loss reserves	would	have	been	$49.4	billion,	or	6.6%	of	loans,	each	as	of	December 31,	2009	and	based	on	current	estimates.	The	consumer	loan	loss	reserve	was $28.4	billion	at	December	31,	2009,	representing	14.1	months	of	concurrent charge-off	coverage,	versus	13.1	months	at	December	31,	2008.

# Citi	began	to	make	selected	investments	in	its	core	businesses.

Within	Regional	Consumer	Banking,	Citi	began	making	selected	investments	in its	core	businesses	in	the	latter	part	of	2009.	For	example,	in	Asia,	Citi	invested in	new	customer	acquisition	in	the	emerging	affluent	segment	and	in	card	usage promotion.	In	Latin	America,	Citi	invested	in	card	account	acquisition,	with	a focus	on	higher-quality	new	accounts,	consistent	with	portfolio	repositioning objectives.	Citigroup	also	continued	to	invest	in	consumer	banking	technology, for	example,	in	banking	products	in	markets	such	as	Singapore,	Hong	Kong	and South	Korea,	where	mobile	phones	and	mobile	banking	have	intersected	in	ways not	yet	seen	in	the	U.S.	Within	Transaction	Services,	Citi	continued	to	invest	in technology	to	support	its	global	network,	including	its	investor	services	suite	of products,	prepaid	and	commercial	cards	offerings	and	launch	of	a	new	front	end online	banking	technology	that	provides	a	diverse	set	of	functionality	beyond traditional	transaction	management	and	reporting.	These	and	similar	investments have	increased,	and	will	likely	continue	to	increase,	Citi's	operating	expenses.

# 2010 BUSINESS OUTLOOK

While	showing	signs	of	improvement,	the	macroeconomic	environment	going into	2010	remains	challenging,	with	U.S.	unemployment	still	elevated.	The	U.S. government	has	indicated	its	intention	to	continue	scaling	back	programs	put	in place	to	support	the	market	during	2008	and	2009.	The	impact	of	the	U.S. government's	exit	from	many	of	these	programs	is	a	source	of	uncertainty	in 2010,	as	is	the	future	course	of	monetary	policy.	In	addition,	the	potential	impact of	new	laws	and	regulations	(e.g.,	The	Credit	Card	Accountability	Responsibility and	Disclosure	Act	of	2009	(CARD	Act)),	potential	new	capital	standards,	and other	legislative	and	regulatory	initiatives	is	a	source	of	significant	additional uncertainty	regarding	the	business	and	market	environment.

	Citigroup	is	maintaining	a	cautious	stance	in	light	of	this	uncertain	market environment	and	continued	macroeconomic	headwinds.	As	it	enters	2010,	Citi	is focused	on	maintaining	high	levels	of	capital	and	liquidity,	rigorous	risk management	practices	and	cost	discipline.	In	Citi	Holdings,	Citi	will	continue	to focus	on	reducing	assets,	which	could	result	in	lower	revenues	and	operating expenses	in	2010.	In	Citicorp,	the	focus	will	remain	on	serving	the	company's core	institutional,	corporate	and	retail	client	base	in	the	U.S.	and	around	the world.	Citi	will	continue	to	focus	on	credit	loss	mitigation	and	expense	control, and	may	continue	to	invest	in	areas	such	as	Asia	and	Latin	America,	where economic	recovery	and	growth	appear	to	be	taking	hold.	Operating	expenses may	grow	modestly	in	Citicorp	in	2010,	as	a	portion	of	the	cost	reductions achieved	in	Citi	Holdings	is	re-invested	in	the	core	franchise.

	Credit	costs	will	likely	remain	a	significant	driver	of	Citigroup's	results	in 2010,	particularly	in	North	America,	where	credit	trends	will	largely	depend	on the	broader	macroeconomic	environment,	as	well	as	the	impact

of	industry	factors	such	as	CARD	Act	implementation	and	the	outcome	of	the Home	Affordable	Modification	Program	(HAMP)	and	other	loss	mitigation efforts.	See	"Results	of	Operations—Citicorp—North	America	Regional Consumer	Banking,"	"—Citi	Holdings—Local	Consumer	Lending" and		"Managing	Global	Risk—Credit	Risk"	for	additional	information.	Citi expects	U.S.	consumer	net	credit	losses	to	increase	modestly	in	the	first	quarter of	2010	from	fourth	quarter	2009	levels,	due	in	part	to	expected	seasonal patterns,	after	which	there	may	be	some	slight	improvement.	However,	net	credit losses	in	the	second	half	of	2010	will	be	dependent	on	the	macroeconomic environment	and	success	of	the	company's	ongoing	loss	mitigation	efforts. Changes	to	Citigroup's	consumer	loan	loss	reserve	balances	will	continue	to reflect	the	losses	embedded	in	Citi's	consumer	loan	portfolio	due	to	underlying credit	trends	as	well	as	the	impact	of	Citi's	forbearance	programs.	Citi	currently expects	NIM	to	remain	under	pressure	due	to	its	enhanced	liquidity	position	and ongoing	de-risking	of	the	balance	sheet.

# RESULTS OF OPERATIONS

| In millions of dollars, except per-share amounts, ratios and direct staff | 2009 (1) | 2008 | 2007 | 2006 | 2005 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net interest revenue | $48,914\t\t\t\t\t\t\t\t $ | 53,749\t\t\t\t\t\t\t\t $ | 45,389\t\t\t\t\t\t\t\t $ | 37,928\t\t\t\t\t\t\t\t $ | 37,494 |
| Non-interest revenue | 31,371 | (2,150) | 31,911 | 48,399 | 42,583 |
| Revenues, net of interest expense | $80,285 | $51,599 | $77,300 | $86,327 | $80,077 |
| Operating expenses | 47,822 | 69,240 | 58,737 | 50,301 | 43,549 |
| Provisions for credit losses and for benefits and claims | 40,262 | 34,714 | 17,917 | 7,537 | 7,971 |
| Income (loss) from continuing operations before income taxes | $(7,799) | $(52,355) | $646 | $28,489 | $28,557 |
| Income taxes (benefits) | (6,733) | (20,326) | (2,546) | 7,749 | 8,787 |
| Income (loss) from continuing operations | $(1,066) | $(32,029) | $3,192 | $20,740 | $19,770 |
| Income (loss) from discontinued operations, net of taxes (2) | (445) | 4,002 | 708 | 1,087 | 5,417 |
| Cumulative effect of accounting change, net of taxes (3) | — | — | — | — | (49) |
| Net income (loss) before attribution of noncontrolling interests | $(1,511) | $(28,027) | $3,900 | $21,827 | $25,138 |
| Net income (loss) attributable to noncontrolling interests | 95 | (343) | 283 | 289 | 549 |
| Citigroup's net income (loss) | $(1,606) | $(27,684) | $3,617 | $21,538 | $24,589 |
| Earnings per share |  |  |  |  |  |
| Basic: |  |  |  |  |  |
| Income (loss) from continuing operations | $(0.76) | $(6.39) | $0.53 | $4.07 | $3.69 |
| Net income (loss) | (0.80) | (5.63) | 0.68 | 4.29 | 4.74 |
| Diluted: |  |  |  |  |  |
| Income (loss) from continuing operations | $(0.76) | $(6.39) | $0.53 | $4.05 | $3.67 |
| Net income (loss) | (0.80) | (5.63) | 0.67 | 4.27 | 4.71 |
| Dividends declared per common share | $0.01 | $1.12 | $2.16 | $1.96 | $1.76 |
| At December 31 |  |  |  |  |  |
| Total assets | $1,856,646 | $1,938,470 | $2,187,480 | $1,884,167 | $1,493,886 |
| Total deposits | 835,903 | 774,185 | 826,230 | 712,041 | 591,828 |
| Long-term debt | 364,019 | 359,593 | 427,112 | 288,494 | 217,499 |
| Mandatorily redeemable securities of subsidiary trusts | 19,345 | 24,060 | 23,756 | 9,775 | 6,459 |
| Common stockholders' equity | 152,388 | 70,966 | 113,447 | 118,632 | 111,261 |
| Total stockholders' equity | 152,700 | 141,630 | 113,447 | 119,632 | 112,386 |
| Direct staff (in thousands) | 265 | 323 | 375 | 327 | 296 |
| Ratios: |  |  |  |  |  |
| Return on common stockholders' equity (4) | (9.4)% | (28.8)% | 2.9% | 18.8% | 22.4% |
| Return on total stockholders' equity (4) | (1.1) | (20.9) | 3.0 | 18.7 | 22.2 |
| Tier 1 Capital | 11.67% | 11.92% | 7.12% | 8.59% | 8.79% |
| Total Capital | 15.25 | 15.70 | 10.70 | 11.65 | 12.02 |
| Leverage (5) | 6.89 | 6.08 | 4.03 | 5.16 | 5.35 |
| Common stockholders' equity to assets | 8.21% | 3.66% | 5.19% | 6.30% | 7.45% |
| Total stockholders' equity to assets | 8.22 | 7.31 | 5.19 | 6.35 | 7.52 |
| Dividend payout ratio (6) | NM | NM | 322.4 | 45.9 | 37.4 |
| Book value per common share | $5.35 | $13.02 | $22.71 | $24.15 | $22.34 |
| Ratio of earnings to fixed charges and preferred stock dividends | NM | NM | 1.01x | 1.50x | 1.79x |

(1)      On January 1, 2009, Citigroup adopted SFAS No. 160,  Noncontrolling Interests in Consolidated Financial Statements (now ASC 810-10-45-15, Consolidation: Noncontrolling Interest in a Subsidiary), and FSP EITF 03- 6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" (now ASC 260-10-45-59A, Earnings Per Share: Participating Securities and the Two-Class Method). All prior periods have been restated to conform to the current period's presentation.

(2) Discontinued operations for 2005 to 2009 reflect the sale of Nikko Cordial Securities to Sumitomo Mitsui Banking Corporation, the sale of Citigroup's German retail banking operations to Crédit Mutuel, and the sale of CitiCapital's equipment finance unit to General Electric. In addition, discontinued operations for 2005 and 2006 include the operations and associated gain on sale of substantially all of Citigroup's asset management business, the majority of which closed on December 1, 2005. Discontinued operations from 2005 and 2006 also include the operations and associated gain on sale of Citigroup's Travelers Life & Annuity, substantially all of Citigroup's international insurance business and Citigroup's Argentine pension business to MetLife Inc., which closed on July 1, 2005. See Note 3 to the Consolidated Financial Statements.

(3) Accounting change of $(49) million in 2005 represents the adoption of Financial Accounting Standards Board (FASB) Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of SFAS No. 143 (FIN 47) (now ASC 410-20, Asset Retirement and Environmental Obligations: Asset Retirement Obligations).

(4) The return on average common stockholders' equity is calculated using net income less preferred stock dividends divided by average common stockholders' equity. The return on total stockholders' equity is calculated using net income divided by average stockholders' equity.

(5) Tier 1 Capital divided by each year's fourth quarter adjusted average total assets (hereinafter as adjusted average total assets).

(6) Dividends declared per common share as a percentage of net income per diluted share.

NM Not meaningful

# SEGMENT, BUSINESS AND PRODUCT—INCOME (LOSS) AND REVENUES

The	following	tables	show	the	income	(loss)	and	revenues	for	Citigroup	on	a	segment,	business	and	product	view:

# CITIGROUP INCOME (LOSS)

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 vs. 2008 | 2008 vs. 2007 |
| Income (loss) from Continuing Operations |  |  |  |  |  |
| CITICORP |  |  |  |  |  |
| Regional Consumer Banking |  |  |  |  |  |
| North America | $354 | $(1,578) | $1,867 | NM | NM |
| EMEA | (209) | 50 | 96 | NM | (48)% |
| Latin America | 323 | (3,348) | 1,616 | NM | NM |
| Asia | 1,423 | 1,736 | 2,010 | (18)% | (14) |
| Total | $1,891 | $(3,140) | $5,589 | NM | NM |
| Securities and Banking |  |  |  |  |  |
| North America | $2,417 | $2,275 | $1,687 | 6% | 35% |
| EMEA | 3,393 | 656 | 1,595 | NM | (59) |
| Latin America | 1,512 | 1,048 | 1,436 | 44 | (27) |
| Asia | 1,830 | 1,973 | 1,795 | (7) | 10 |
| Total | $9,152 | $5,952 | $6,513 | 54% | (9)% |
| Transaction Services |  |  |  |  |  |
| North America | $615 | $323 | $209 | 90% | 55% |
| EMEA | 1,287 | 1,246 | 816 | 3 | 53 |
| Latin America | 604 | 588 | 463 | 3 | 27 |
| Asia | 1,230 | 1,196 | 968 | 3 | 24 |
| Total | $3,736 | $3,353 | $2,456 | 11% | 37% |
| Institutional Clients Group | $ 12,888 | $9,305 | $8,969 | 39% | 4% |
| Total Citicorp | $ 14,779 | $6,165 | $ 14,558 | NM | (58)% |
| CITI HOLDINGS |  |  |  |  |  |
| Brokerage and Asset Management | $7,107 | $(764) | $1,707 | NM | NM |
| Local Consumer Lending | (10,043) | (8,254) | 1,712 | (22)% | NM |
| Special Asset Pool | (5,303) | (26,994) | (12,111) | 80 | NM |
| Total Citi Holdings | $(8,239) | $(36,012) | $(8,692) | 77% | NM |
| Corporate/Other | $(7,606) | $(2,182) | $(2,674) | NM | 18% |
| Income (loss) from continuing operations | $(1,066) | $(32,029) | $3,192 | 97% | NM |
| Discontinued operations | $(445) | $4,002 | $708 | NM | NM |
| Net income (loss) attributable to noncontrolling interests | 95 | (343) | 283 | NM | NM |
| Citigroup's net income (loss) | $(1,606) | $(27,684) | $3,617 | 94% | NM |

# CITIGROUP REVENUES

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 vs. 2008 | 2008 vs. 2007 |
| CITICORP |  |  |  |  |  |
| Regional Consumer Banking |  |  |  |  |  |
| North America | $7,246 | $7,764 | $9,773 | (7)% | (21)% |
| EMEA | 1,555 | 1,865 | 1,587 | (17) | 18 |
| Latin America | 7,354 | 8,758 | 8,279 | (16) | 6 |
| Asia | 6,616 | 7,287 | 7,004 | (9) | 4 |
| Total | $ 22,771 | $ 25,674 | $ 26,643 | (11)% | (4)% |
| Securities and Banking |  |  |  |  |  |
| North America | $9,400 | $ 10,987 | $8,998 | (14)% | 22% |
| EMEA | 10,035 | 6,006 | 7,756 | 67 | (23) |
| Latin America | 3,411 | 2,369 | 3,161 | 44 | (25) |
| Asia | 4,800 | 5,573 | 5,441 | (14) | 2 |
| Total | $ 27,646 | $ 24,935 | $ 25,356 | 11% | (2)% |
| Transaction Services |  |  |  |  |  |
| North America | $2,526 | $2,161 | $1,646 | 17% | 31% |
| EMEA | 3,389 | 3,677 | 2,999 | (8) | 23 |
| Latin America | 1,373 | 1,439 | 1,199 | (5) | 20 |
| Asia | 2,501 | 2,669 | 2,254 | (6) | 18 |
| Total | $9,789 | $9,946 | $8,098 | (2)% | 23% |
| Institutional Clients Group | $ 37,435 | $ 34,881 | $ 33,454 | 7% | 4% |
| Total Citicorp | $ 60,206 | $ 60,555 | $ 60,097 | (1)% | 1% |
| CITI HOLDINGS |  |  |  |  |  |
| Brokerage and Asset Management | $ 15,135 | $8,423 | $ 10,659 | 80% | (21)% |
| Local Consumer Lending | 19,182 | 24,453 | 26,750 | (22) | (9) |
| Special Asset Pool | (3,682) | (39,574) | (17,896) | 91 | NM |
| Total Citi Holdings | $ 30,635 | $(6,698) | $ 19,513 | NM | NM |
| Corporate/Other | $(10,556) | $(2,258) | $(2,310) | NM | 2% |
| Total net revenues | $ 80,285 | $ 51,599 | $ 77,300 | 56% | (33)% |

# CITICORP

Citicorp	is	the	company's	global	bank	for	consumers	and	businesses	and	represents	Citi's	core	franchise.	Citicorp	is	focused	on	providing	best-in-class	products	and services	to	customers	and	leveraging	Citigroup's	unparalleled	global	network.	Citicorp	is	physically	present	in	nearly	100	countries,	many	for	over	100	years,	and	offers services	in	over	140	countries.	Citi	believes	this	global	network	provides	a	strong	foundation	for	servicing	the	broad	financial	services	needs	of	large	multinational clients	and	for	meeting	the	needs	of	retail,	private	banking	and	commercial	customers	around	the	world.	Citigroup's	global	footprint	provides	coverage	of	the	world's emerging	economies,	which	the	company	believes	represents	a	strong	area	of	growth.	As	discussed	in	the	"Executive	Summary,"	Citicorp	remained	profitable	in	2008 and	2009,	despite	very	difficult	market	conditions.	At	December	31,	2009,	Citicorp	had	approximately	$1.1	trillion	of	assets	and	$731	billion	of	deposits,	representing approximately	60%	of	Citi's	total	assets	and	approximately	90%	of	its	deposits.

	 Citicorp	consists	of	the	following	businesses:	Regional	Consumer	Banking	(which	includes	retail	banking	and	Citi-branded	cards	in	four	regions—North	America,

EMEA,	Latin	America	and	Asia)	and	Institutional	Clients	Group	(which	includes	Securities	and	Banking	and	Transaction	Services).

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 vs. 2008 | 2008 vs. 2007 |
| Net interest revenue | $33,263 | $33,970 | $25,600 | (2)% | 33% |
| Non-interest revenue | 26,943 | 26,585 | 34,497 | 1 | (23) |
| Total revenues, net of interest expense | $60,206 | $60,555 | $60,097 | (1)% | 1% |
| Provisions for credit losses and for benefits and claims |  |  |  |  |  |
| Net credit losses | $6,079 | $4,941 | $2,700 | 23% | 83% |
| Credit reserve build | 2,562 | 3,219 | 1,069 | (20) | NM |
| Provision for loan losses | $8,641 | $8,160 | $3,769 | 6% | NM |
| Provision for benefits and claims | 48 | 6 | 16 | NM | (63)% |
| Provision for unfunded lending commitments | 138 | (191) | 79 | NM | NM |
| Total provisions for credit losses and for benefits and claims | $8,827 | $7,975 | $3,864 | 11% | NM |
| Total operating expenses | $31,725 | $43,533 | $36,437 | (27)% | 19% |
| Income from continuing operations before taxes | $19,654 | $9,047 | $19,796 | NM | (54)% |
| Provisions for income taxes | 4,875 | 2,882 | 5,238 | 69% | (45) |
| Income from continuing operations | $14,779 | $6,165 | $14,558 | NM | (58)% |
| Net income attributable to noncontrolling interests | 68 | 29 | 63 | NM | (54) |
| Citicorp's net income | $14,711 | $6,136 | $14,495 | NM | (58)% |
| Balance sheet data (in billions of dollars) |  |  |  |  |  |
| Total EOP assets | $1,079 | $1,002 | $1,222 | 8% | (18)% |
| Average assets | $1,035 | $1,256 | $1,353 | (18)% | (7)% |
| Total EOP deposits | $731 | $673 | $733 | 9% | (8)% |

# REGIONAL CONSUMER BANKING

Regional	Consumer	Banking	(RCB)	consists	of	Citigroup's	four	regional	consumer	banks	that	provide	traditional	banking	services	to	retail	customers.	RCB	also	contains Citigroup's	branded	cards	business	and	small	commercial	banking	business.	RCB	is	a	globally	diversified	business	with	nearly	4,000	branches	in	39	countries	around	the world.	During	2009,	68%	of	total	RCB	revenues	were	from	outside	North	America.	Additionally,	the	majority	of	international	revenues	and	loans	were	from	emerging economies	in	Asia,	Latin	America,	and	Central	and	Eastern	Europe.	At	year-end	2009,	RCB	had	$213	billion	of	assets	and	$290	billion	of	deposits.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 vs. 2008 | 2008 vs. 2007 |
| Net interest revenue | $15,524 | $16,230 | $13,896 | (4)% | 17% |
| Non-interest revenue | 7,247 | 9,444 | 12,747 | (23) | (26) |
| Total revenues, net of interest expense | $22,771 | $25,674 | $26,643 | (11)% | (4)% |
| Total operating expenses | $14,157 | $22,578 | $15,625 | (37)% | 44% |
| Net credit losses | $5,356 | $4,024 | $2,390 | 33% | 68% |
| Credit reserve build | 1,705 | 2,070 | 902 | (18) | NM |
| Provision for benefits and claims | 48 | 6 | 15 | NM | (60) |
| Provisions for loan losses and for benefits and claims | $7,109 | $6,100 | $3,307 | 17% | 84% |
| Income (loss) from continuing operations before taxes | $1,505 | $ (3,004) | $7,711 | NM | NM |
| Income taxes (benefits) | (386) | 136 | 2,122 | NM | (94)% |
| Income (loss) from continuing operations | $1,891 | $ (3,140) | $5,589 | NM | NM |
| Net income attributable to noncontrolling interests | — | 11 | 18 | (100)% | (39)% |
| Net income (loss) | $1,891 | $ (3,151) | $5,571 | NM | NM |
| Average assets (in billions of dollars) | $196 | $219 | $199 | (11)% | 10% |
| Return on assets | 0.96% | (1.44)% | 2.80% |  |  |
| Average deposits (in billions of dollars) | $271 | $267 | $256 | 1% | 4% |
| Net credit losses as a percentage of average loans | 4.47% | 3.15% | 2.08% |  |  |
| Revenue by business |  |  |  |  |  |
| Retail banking | $12,799 | $13,700 | $12,871 | (7)% | 6% |
| Citi-branded cards | 9,972 | 11,974 | 13,772 | (17) | (13) |
| Total | $22,771 | $25,674 | $26,643 | (11)% | (4)% |
| Income (loss) from continuing operations by business |  |  |  |  |  |
| Retail banking | $2,006 | $ (3,965) | $2,400 | NM | NM |
| Citi-branded cards | (115) | 825 | 3,189 | NM | (74)% |
| Total | $1,891 | $ (3,140) | $5,589 | NM | NM |

# NORTH AMERICA REGIONAL CONSUMER BANKING

North	America	Regional	Consumer	Banking	(NA	RCB)	provides	traditional	banking	and	Citi-branded	card	services	to	retail	customers	and	small	to	mid-size	businesses in	the	U.S.	NA	RCB's	approximately	1,000	retail	bank	branches	and	12	million	retail	customer	accounts	are	largely	concentrated	in	the	greater	metropolitan	areas	of New	York,	Los	Angeles,	San	Francisco,	Chicago,	Miami,	Washington,	D.C.,	Boston,	Philadelphia,	and	the	larger	cities	in	Texas.	At	December	31,	2009,	NA	RCB	had approximately	$7.2	billion	of	retail	banking	loans	and	$143.7	billion	of	deposits.	In	addition,	NA	RCB	had	approximately	23.1	million	Citi-branded	credit	card	accounts, with	$82.7	billion	in	outstanding	loan	balances	on	a	managed	basis.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 vs. 2008 | 2008 vs. 2007 |
| Net interest revenue | $4,559 | $ 3,662 | $3,019 | 24% | 21% |
| Non-interest revenue | 2,687 | 4,102 | 6,754 | (34) | (39) |
| Total revenues, net of interest expense | $7,246 | $ 7,764 | $9,773 | (7)% | (21)% |
| Total operating expenses | $5,359 | $ 8,388 | $6,401 | (36)% | 31% |
| Net credit losses | $1,151 | $615 | $450 | 87% | 37% |
| Credit reserve build/(release) | 446 | 463 | 96 | (4) | NM |
| Provisions for benefits and claims | 48 | 5 | (3) | NM | NM |
| Provision for loan losses and for benefits and claims | $1,645 | $ 1,083 | $543 | 52% | 99% |
| Income (loss) from continuing operations before taxes | 242 | $(1,707) | $2,829 | NM | NM |
| Income taxes (benefits) | (112) | (129) | 962 | 13% | NM |
| Income (loss) from continuing operations | $354 | $(1,578) | $1,867 | NM | NM |
| Net income (loss) attributable to noncontrolling interests | — | — | — | — | — |
| Net income (loss) | $354 | $(1,578) | $1,867 | NM | NM |
| Average assets\t(in billions of dollars) | $34 | $36 | $39 | (6)% | (8)% |
| Average deposits\t(in billions of dollars) | $137 | $123 | $120 | 11% | 3% |
| Net credit losses as a percentage of average loans | 5.84% | 3.60% | 2.68% |  |  |
| Revenue by business |  |  |  |  |  |
| Retail banking | $3,907 | $ 3,770 | $3,301 | 4% | 14% |
| Citi-branded cards | 3,339 | 3,994 | 6,472 | (16) | (38) |
| Total | $7,246 | $ 7,764 | $9,773 | (7)% | (21)% |
| Income (loss) from continuing operations by business |  |  |  |  |  |
| Retail banking | $429 | $(1,788) | $111 | NM | NM |
| Citi-branded cards | (75) | 210 | 1,756 | NM | (88)% |
| Total | $354 | $(1,578) | $1,867 | NM | NM |

Revenues,	net	of	interest	expense	declined	7%,	primarily	reflecting	higher	credit losses	in	the	securitization	trusts,	which	were	offset	by	higher	credit-card- securitization	revenue,	higher	net	interest	margin	in	cards	and	higher	volumes	in retail	banking.

	Net	interest	revenue	was	up	24%,	driven	by	the	impact	of	pricing	actions and	lower	funding	costs	in	Citi-branded	cards,	and	by	higher	deposit	volumes	in retail	banking,	with	average	deposits	up	11%	from	the	prior	year.

	Non-interest	revenue	declined	34%,	driven	by	higher	credit	losses	flowing through	the	securitization	trusts	partially	offset	by	securitization	revenue,	and	by the	absence	of	a	$349	million	gain	on	the	sale	of	Visa	shares	and	a	$170	million gain	from	a	cards	portfolio	sale	in	the	prior	year.

	Operating	expenses	declined	36%	from	the	prior	year.	Excluding	a	2008 goodwill	impairment	charge	of	$2.3	billion,	expenses	were	down	12%	reflecting the	benefits	from	re-engineering	efforts,	lower	marketing	costs,	and	the	absence of	$217	million	in	repositioning	charges	in	the	prior	year	offset	by	the	absence	of a	prior-year	$159	million	Visa	litigation	reserve	release.

	Provisions	for	loan	losses	and	for	benefits	and	claims	increased	$562 million,	or	52%,	primarily	due	to	rising	net	credit	losses	in	both	cards	and	retail banking.	Continued	weakening	of	leading	credit	indicators	and	trends	in	the macroeconomic	environment,	including	rising	unemployment	and	higher bankruptcy	filings,	primarily	drove	higher	credit	costs.	The	cards	managed	net credit	loss	ratio	increased	386	basis	points	to	9.58%,	while	the	retail	banking	net credit	loss	ratio	increased	75	basis	points	to	4.29%	(see	the	"Managed Presentations"	section	below).

Revenues,	net	of	interest	expense	decreased	21%,	driven	by	lower	securitization revenue	and	higher	credit	losses	in	the	securitization	trusts,	which	were	partially offset	by	higher	net	interest	margin	in	cards	and	higher	revenues	in	retail banking.	Lower	securitization	revenue	was	mainly	driven	by	a	write-down	of $1.1	billion	in	the	residual	interest	in	securitized	balances.	The	residual	interest was	primarily	affected	by	deterioration	in	the	projected	credit	loss	assumption used	to	value	the	asset.

	Net	interest	revenue	was	up	21%,	mainly	driven	by	lower	funding	costs. 	Non-interest	revenue	decreased	39%,	primarily	due	to	lower	securitization revenue,	higher	credit	losses	in	the	securitization	trusts,	and	the	absence	of	a $297	million	gain	on	the	sale	of	MasterCard	shares	in	2007.	This	decline	was partially	offset	by	a	$349	million	gain	on	the	sale	of	Visa	shares	and	a	$170 million	gain	from	a	cards	portfolio	sale	in	2008.

	Operating	expenses	increased	31%,	primarily	driven	by	a	$2.3	billion goodwill	impairment	charge	in	2008.	Excluding	the	charge,	expenses	were	down 5%	mainly	reflecting	the	absence	of	a	$292	million	Visa	litigation-related	charge in	2007	and	a	$159	million	Visa	litigation	reserve	release	in	2008,	partially offset	by	$217	million	repositioning	charges	in	2008.

	Provisions	for	loan	losses	and	for	benefits	and	claims	increased	$540 million	driven	by	higher	net	credit	losses,	up	$165	million,	and	a	higher	loan	loss reserve	build,	up	$367	million,	in	both	cards	and	retail	banking.	Higher	credit costs	reflected	a	weakening	of	leading	credit	indicators,	including	the	continued acceleration	in	the	rate	at	which	delinquent	cards	customers	advanced	to	write- off,	as	well	as	trends	in	the	macroeconomic	environment,	including	the	housing market	downturn	and	rising	unemployment.	The	cards	managed	net	credit	loss ratio	increased	191	basis	points	to	5.72%,	while	the	retail	banking	net	credit	loss ratio	increased	14	basis	points	to	3.54%.

# Managed Presentations

Managed-basis	(Managed)	presentations	detail	certain	non-GAAP	financial measures.	Managed	presentations	(applicable	only	to	North	American	branded and	retail	partner	credit	card	operations	in	NA	RCB	and	Citi	Holdings—Local Consumer	Lending,	respectively,	as	there	are	no	deconsolidated	credit	card securitizations	in	any	other	region)	include	results	from	both	the	on-balance- sheet	loans	and	off-balance-sheet	loans,	and	exclude	the	impact	of	credit	card securitizations	activity.	Managed	presentations	assume	that	securitized	loans have	not	been	sold	and	present	the	results	of	the	securitized	loans	in	the	same manner	as	Citigroup's	owned	loans.	Citigroup	believes	that	Managed presentations	are	useful	to	investors	because	they	are	widely	used	by	analysts and	investors	within	the	credit	card	industry.	Managed	presentations	are commonly	used	by	other	companies	within	the	financial	services	industry.	See also	the	"2010	Outlook"	for	NA	RCB	below.

| managed loans | 9.14% | 5.62% | 3.81% |
| :--- | :--- | :--- | :--- |
| Impact from credit card |  |  |  |
| securitizations | 3.30% | 2.02% | 1.13% |
| Net credit losses as a |  |  |  |
| percentage of average loans | 5.84% | 3.60% | 2.68% |

In	2010,	NA	RCB	is	expected	to	continue	to	operate	in	a	challenging	economic and	credit	environment.	Revenues	will	be	affected	by	the	continued	U.S. economic	downturn	that	has	impacted	customer	demand	and	credit	performance, as	well	as	by	legislative	and	regulatory	changes.	Both	retail	banking	and	cards will	continue	to	focus	on	tight	expense	control,	productivity	improvements,	and effective	credit	management.	With	high	levels	of	unemployment	and	bankruptcy filings	in	2010,	net	credit	losses,	delinquencies	and	defaults	are	expected	to remain	at	elevated	levels	during	the	year.

	NA	RCB	results	will	also	continue	to	be	impacted	by	Citi's	continued implementation	of	the	CARD	Act	as	well	as	the	company's	loss	mitigation	and forbearance	programs,	particularly	in	Citi's	card	and	U.S.	mortgage	businesses. The	majority	of	the	provisions	of	the	CARD	Act	will	have	taken	effect	by February	2010.	The	CARD	Act	implementation	began	to	impact	card	revenues in	the	fourth	quarter	of	2009	as	lower	net	interest	rate	revenue	due	to	such implementation	was	partially	mitigated	by	pricing	actions.	Management	within NA	RCB	continues	to	review	and	revise	the	company's	credit	card	business model	to	implement	the	required	changes	of	the	CARD	Act,	and	this	will	likely continue	throughout	2010.	While	management	of	NA	RCB	believes	that	it	can mitigate	a	portion	of	the	impact	of	the	CARD	Act,	Citi	currently	estimates	that the	net	impact	of	the	CARD	Act	on	NA	RCB	revenues	for	2010	could	be	a reduction	of	approximately	$400	to	$600	million.	See	also	"Results	of Operations—Citi	Holdings—Local	Consumer	Lending"	and	"Managing	Global Risk—Credit	Risk"	below.

	In	addition,	on	January	1,	2010,	Citi	adopted	SFAS	No.	166,	Accounting	for Transfers	of	Financial	Assets,	an	Amendment	of	FASB	Statement	No.	140	(SFAS 166)	and	SFAS	No.	167	Amendments	to	FASB	Interpretation	No.	46(R)	(SFAS 167).	These	new	accounting	standards	will	be	applied	prospectively	and	will require	consolidation	of	certain	credit	card	securitization	trusts	and the	elimination	of	sale	accounting	for	transfers	of	credit	card	receivables	to	those trusts.	Under	previous	accounting	standards,	transfers	of	credit	card	receivables to	the	securitization	trusts	were	accounted	for	as	sales.	Consequently,	beginning in	2010,	the	financial	results	of	NA	RCB	will	vary	from	previously	reported financial	results	prepared	under	the	amended	accounting	standards.	See	Note	1 to	the	Consolidated	Financial	Statements	for	a	discussion	of	"Future	Application of	Accounting	Standards"	for	further	detail.

# EMEA REGIONAL CONSUMER BANKING

EMEA	Regional	Consumer	Banking	(EMEA	RCB)	provides	traditional	banking	and	Citi-branded	card	services	to	retail	customers	and	small	to	mid-size	businesses, primarily	in	Central	and	Eastern	Europe,	the	Middle	East	and	Africa.	Western	Europe	retail	banking	is	included	in	Citi	Holdings.	EMEA	RCB	has	repositioned	its business,	shifting	from	a	strategy	of	widespread	distribution	to	a	focused	strategy	concentrating	on	larger	urban	markets	within	the	region.	An	exception	is	Bank Handlowy,	which	has	a	mass	market	presence	in	Poland.	The	countries	in	which	EMEA	RCB	has	the	largest	presence	are	Poland,	Turkey,	Russia	and	the	United	Arab Emirates.	At	December	31,	2009,	EMEA	RCB	had	approximately	341	retail	bank	branches	with	approximately	4.2	million	customer	accounts,	$5.2	billion	in	retail banking	loans	and	$10.1	billion	in	deposits.	In	addition,	the	business	had	approximately	2.7	million	Citi-branded	card	accounts	with	$3.0	billion	in	outstanding	loan balances.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 vs. 2008 | 2008 vs. 2007 |
| Net interest revenue | $979 | $1,269 | $967 | (23)% | 31% |
| Non-interest revenue | 576 | 596 | 620 | (3) | (4) |
| Total revenues, net of interest expense | $1,555 | $1,865 | $1,587 | (17)% | 18% |
| Total operating expenses | $1,094 | $1,500 | $1,265 | (27)% | 19% |
| \t\t\t\t\t\t\tNet credit losses | $487 | $237 | $113 | NM | NM |
| \t\t\t\t\t\t\tCredit reserve build/(release) | 307 | 75 | 96 | NM | (22)% |
| Provisions for loan losses | $794 | $312 | $209 | NM | 49% |
| Income (loss) from continuing operations before taxes | $(333) | $53 | $113 | NM | (53)% |
| Income taxes (benefits) | (124) | 3 | 17 | NM | (82) |
| Income (loss) from continuing operations | $(209) | $50 | $96 | NM | (48)% |
| Net income attributable to noncontrolling interests | — | 12 | 18 | (100)% | (33) |
| Net income (loss) | $(209) | $38 | $78 | NM | (51)% |
| Average assets (in billions of dollars) | $11 | $13 | $10 | (15)% | 30% |
| Return on assets | (1.90)% | 0.29% | 0.78% |  |  |
| Average deposits (in billions of dollars) | $9 | $11 | $9 | (18)% | 22% |
| Net credit losses as a percentage of average loans | 5.81% | 2.48% | 1.56% |  |  |
| Revenue by business |  |  |  |  |  |
| \t\t\t\t\t\t\tRetail banking | $889 | $1,160 | $1,039 | (23)% | 12% |
| \t\t\t\t\t\t\tCiti-branded cards | 666 | 705 | 548 | (6) | 29 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tTotal | $1,555 | $1,865 | $1,587 | (17)% | 18% |
| Income (loss) from continuing operations by business |  |  |  |  |  |
| \t\t\t\t\t\t\tRetail banking | $(179) | $(57) | $(8) | NM | NM |
| \t\t\t\t\t\t\tCiti-branded cards | (30) | 107 | 104 | NM | 3% |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tTotal | $(209) | $50 | $96 | NM | (48)% |

Revenues,	net	of	interest	expense	declined	17%.	More	than	half	of	the	revenue decline	is	attributable	to	the	impact	of	FX	translation.	Other	drivers	included lower	wealth-management	and	lending	revenues	due	to	lower	volumes	and spread	compression	from	credit	tightening	initiatives.	Investment	sales	declined by	26%	due	to	market	conditions	at	the	start	of	the	year	with	assets	under management	increasing	by	9%	by	year	end.

					Net	interest	revenue	was	23%	lower	than	the	prior	year	due	to	external competitive	pressure	on	rates	and	higher	funding	costs,	with	average	loans	for retail	banking	down	18%	and	average	deposits	down	18%.

					Non-interest	revenue	decreased	by	3%,	primarily	due	to	the	impact	of	FX translation.	Excluding	FX	there	was	marginal	growth.

					Operating	expenses	declined	27%,	reflecting	expense	control	actions,	lower marketing	expenses	and	the	impact	of	FX	translation.	Cost	savings	were achieved	by	branch	closures,	headcount	reductions	and	process	re-engineering efforts.

					Provisions	for	loan	losses	increased	$482	million	to	$794	million.	Net	credit losses	increased	from	$237	million	to	$487	million,	while	the	loan	loss	reserve build	increased	from	$75	million	to	$307	million.	Higher	credit	costs	reflected continued	credit	deterioration	across	the	region.

Revenues,	net	of	interest	expense	increased	18%	due	to	growth	in	the	size	of	the portfolio	across	Central	and	Eastern	Europe	and	the	Middle	East.	Investment sales	declined	by	39%	with	assets	under	management	declining	by	42%	as	a result	of	market	conditions	in	the	second	half	of	2008.

					Net	interest	revenue	was	31%	higher	than	the	prior	year	due	to	growth	in	the size	of	the	portfolio	across	Central	and	Eastern	Europe	and	the	Middle	East	and growth	in	revolving	balances.	Average	loans	for	retail	banking	were	up	26%, cards	were	up	49%	and	average	deposits	were	up	22%.

					Non-interest	revenue	decreased	by	4%	due	to	reduced	investment	revenue	as a	result	of	market	conditions.

					Operating	expenses	increased	19%,	reflecting	growth	in	the	portfolio	and repositioning	charges.

					Provisions	for	loan	losses	increased	49%	to	$312	million.	Net	credit	losses increased	from	$113	million	to	$237	million,	while	the	Loan	loss	reserve	build decreased	by	22%	to	$75	million.	Credit	costs	increased	as	a	result	of	market conditions	driving	deterioration	in	the	portfolio.

During	2010,	EMEA	RCB	businesses	are	expected	to	operate	in	an	environment of	continued	challenging	economic	and	credit	conditions.	While	key	business drivers,	including	deposits,	investment	sales	and	card	purchase	sales,	began	to show	some	signs	of	improvement	during	the	latter	part	of	2009,	continued positive	developments,	if	any,	will	depend	on	the	success	of	EMEA	RCB's strategy	of	concentrated	focus	on	larger	urban	markets.	Credit	quality	is currently	anticipated	to	improve	modestly	with	remedial	programs	and	tighter origination	standards	reducing	both	delinquencies	and	credit	losses,	with	some continued	pockets	of	weakness	in	Poland	and	Hungary.	Loan	and	card	volume growth	will	continue	to	be	controlled,	driven	by	tighter	origination	standards.

# LATIN AMERICA REGIONAL CONSUMER BANKING

Latin	America	Regional	Consumer	Banking	(LATAM	RCB)	provides	traditional	banking	and	Citi-branded	card	services	to	retail	customers	and	small	to	mid-size businesses,	with	the	largest	presence	in	Mexico	and	Brazil.	LATAM	RCB	includes	branch	networks	throughout	Latin	America	as	well	as	Banamex,	Mexico's	second largest	bank	with	over	1,700	branches.	At	December	31,	2009,	LATAM	RCB	had	approximately	2,216	retail	branches,	with	16.6	million	customer	accounts,	$18.2 billion	in	retail	banking	loan	balances	and	$41.4	billion	in	deposits.	In	addition,	the	business	had	approximately	12.2	million	Citi-branded	card	accounts	with	$12.2 billion	in	outstanding	loan	balances.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | \t 2007 | \t2009 vs. 2008 | \t2008 vs. 2007 |
| Net interest revenue | \t$5,303 | $ 6,391 | $5,567 | (17)% | 15% |
| Non-interest revenue | 2,051 | 2,367 | 2,712 | (13) | (13) |
| Total revenues, net of interest expense | \t$7,354 | $ 8,758 | $8,279 | (16)% | 6% |
| Total operating expenses | \t$4,232 | $ 8,857 | $4,503 | (52)% | 97% |
| \t\t\t\t\t\t\tNet credit losses | \t$2,435 | $ 2,205 | $1,189 | 10% | 85% |
| \t\t\t\t\t\t\tCredit reserve build/(release) | 458 | 1,116 | 504 | (59) | NM |
| \t\t\t\t\t\t\tProvision for benefits and claims | — | 1 | 18 | (100) | (94) |
| Provisions for loan losses and for benefits and claims | \t$2,893 | $ 3,322 | $1,711 | (13)% | 94% |
| Income (loss) from continuing operations before taxes | \t$229 | $(3,421) | $2,065 | NM | NM |
| Income taxes (benefits) | (94) | (73) | 449 | (29)% | NM |
| Income (loss) from continuing operations | \t$323 | $(3,348) | $1,616 | NM | NM |
| Net income attributable to noncontrolling interests | — | — | 1 | — | (100)% |
| Net income (loss) | \t$323 | $(3,348) | $1,615 | NM | NM |
| Average assets (in billions of dollars) | 61 | $76 | $63 | (20)% | 21% |
| Return on assets | 0.53% | (4.41)% | 2.56% |  |  |
| Average deposits (in billions of dollars) | \t$36 | $40 | $38 | (10)% | 5% |
| Net credit losses as a percentage of average loans | 8.60% | 7.11% | 4.57% |  |  |
| Revenue by business |  |  |  |  |  |
| \t\t\t\t\t\t\tRetail banking | \t$3,872 | $ 4,097 | $3,979 | (5)% | 3% |
| \t\t\t\t\t\t\tCiti-branded cards | 3,482 | 4,661 | 4,300 | (25) | 8 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tTotal | \t$7,354 | $ 8,758 | $8,279 | (16)% | 6% |
| Income (loss) from continuing operations by business |  |  |  |  |  |
| \t\t\t\t\t\t\tRetail banking | \t$547 | $(3,500) | $812 | NM | NM |
| \t\t\t\t\t\t\tCiti-branded cards | (224) | 152 | 804 | NM | (81)% |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tTotal | \t$323 | $(3,348) | $1,616 | NM | NM |

Revenues,	net	of	interest	expense	declined	16%,	driven	by	the	impact	of	FX translation	as	well	as	lower	activity	in	the	branded	cards	business.

					Net	interest	revenue	decreased	17%,	mainly	driven	by	FX	translation	impact as	well	as	lower	volumes	and	spread	compression	in	the	branded	cards	business that	offset	the	growth	in	loans,	deposits	and	investment	products	in	the	retail business.

					Non	interest	revenue	decreased	13%,	driven	also	by	FX	impact	and	lower branded	cards	fee	income	from	lower	customer	activity.

					Operating	expenses	decreased	52%,	primarily	driven	by	the	absence	of	a goodwill	impairment	charge	of	$4.3	billion	in	2008,	the	benefit	associated	with the	FX	impact	and	saves	from	restructuring	actions	implemented	primarily	at	the end	of	2008.	The	$125	million	related	to	2008	restructuring	charges	was	offset by	an	expense	benefit	of	$257	million	related	to	a	legal	vehicle	restructuring	in 2008.	Expenses	increased	slightly	in	the	fourth	quarter	of	2009	primarily	due	to selected	marketing	and	investment	spending.

					Provisions	for	loan	losses	and	for	benefits	and	claims	decreased	13% primarily	reflecting	lower	loan	loss	reserve	builds	as	a	result	of	lower	volumes, improved	portfolio	quality	and	lower	net	credit	losses	in	the	branded	cards portfolio	primarily	in	Mexico	due	to	repositioning	in	the	portfolio.

Revenues,	net	of	interest	expense	increased	6%	compared	to	the	prior	year, associated	with	higher	volumes	and	partially	offset	by	the	extraordinary	gains recorded	in	2007:	a	$235	million	gain	on	the	sale	of	Visa	shares	and	a	$78 million	gain	on	the	sale	of	MasterCard	shares.

					Net	interest	revenue	increased	15%	driven	by	higher	volumes	in	both	the branded	cards	and	retail	businesses.

					Non-interest	revenue	declined,	driven	by	the	2007	Visa	and	MasterCard extraordinary	gains.

					Operating	expenses	growth	of	97%	was	mainly	driven	by	goodwill impairment	of	$4.3	billion	in	2008,	and	to	a	lesser	extent,	restructuring	charges of	$125	million.	Partially	offsetting	these	increases	was	a	$257	million	expense benefit	related	to	a	legal	vehicle	restructuring.

					Provisions	for	loan	losses	and	for	benefits	and	claims	increased	94%, primarily	driven	by	higher	loan	loss	reserve	builds	in	2008	reflecting	portfolio growth	and	market	conditions.

Improving	economic	conditions	across	the	region,	including	the	level	of exchange	rates,	the	credit	environment	and	unemployment	rates,	are	currently expected	to	have	a	positive	impact	on	LATAM	RCB	performance	in	2010. However,	LATAM	RCB	results	will	depend	on	overall	macroeconomic	conditions in	the	region	as	well	as	the	impact	of	loss	mitigation	efforts	and	the	repositioning of	the	portfolio.

					During	the	fourth	quarter	of	2009,	LATAM	RCB	began	to	increase investments	in	card	account	acquisition,	with	a	focus	on	higher-quality	accounts. This	step	may	begin	to	contribute	to	account	and	card	revenue	growth	in	2010. While	the	business	anticipates	continued	selective	marketing	and	investment spending	during	the	year,	management	of	LATAM	RCB	currently	expects	that overall	operating	expenses	will	continue	to	reflect	re-engineering	efforts.

					In	addition,	Mexico's	Ministry	of	Finance	has	publicly	stated	that	the	U.S. government	ownership	stake	in	Citigroup	does	not	violate	Mexican	law	barring indirect	foreign	government	ownership	of	Mexican	affiliate	banks.	The	Mexican Senate	has	asked	the	Mexican	Supreme	Court	to	determine	the	constitutionality of	the	Ministry's	interpretation.	The	Mexican	Supreme	Court	is	considering	and will	issue	a	resolution	on	the	matter.	Neither	Citi,	Banamex	nor	the	U.S. government	is	a	party	to	this	proceeding.

# ASIA REGIONAL CONSUMER BANKING

Asia	Regional	Consumer	Banking	(Asia	RCB)	provides	traditional	banking	and	Citi-branded	card	services	to	retail	customers	and	small	to	mid-size	businesses,	with	the largest	Citi	presence	in	South	Korea,	Australia,	Singapore,	India,	Taiwan,	Malaysia,	Japan	and	Hong	Kong.	At	December	31,	2009,	Asia	RCB	had	approximately	633 retail	branches,	$94.5	billion	in	customer	deposits,	15.8	million	customer	accounts	and	$50.1	billion	in	retail	banking	loans.	In	addition,	the	business	had	approximately 15.1	million	Citi-branded	card	accounts	with	$17.7	billion	in	outstanding	loan	balances	at	December	31,	2009.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | \t2009 vs. 2008 | \t2008 vs. 2007 |
| Net interest revenue | \t$4,683 | $4,908 | $4,343 | (5)% | 13% |
| Non-interest revenue | 1,933 | 2,379 | 2,661 | (19) | (11) |
| Total revenues, net of interest expense | \t$6,616 | $7,287 | $7,004 | (9)% | 4% |
| Total operating expenses | \t$3,472 | $3,833 | $3,456 | (9)% | 11% |
| \t\t\t\t\t\t\tNet credit losses | \t$1,283 | $967 | $638 | 33% | 52% |
| \t\t\t\t\t\t\tCredit reserve build | 494 | 416 | 206 | 19 | NM |
| Provisions for loan losses and for benefits and claims | \t$1,777 | $1,383 | $844 | 28% | 64% |
| Income from continuing operations before taxes | \t$1,367 | $2,071 | $2,704 | (34)% | (23)% |
| Income taxes (benefits) | (56) | 335 | 694 | NM | (52) |
| Income from continuing operations | \t$1,423 | $1,736 | $2,010 | (18)% | (14)% |
| Net (loss) attributable to noncontrolling interests | — | (1) | (1) | 100 | — |
| Net income | \t$1,423 | $1,737 | $2,011 | (18)% | (14)% |
| Average assets (in billions of dollars) | \t$90 | $94 | $88 | (4)% | 7% |
| Return on assets | 1.58% | 1.85% | 2.29% |  |  |
| Average deposits (in billions of dollars) | \t$89 | $93 | $89 | (4)% | 4% |
| Net credit losses as a percentage of average loans | 2.02% | 1.38% | 0.98% |  |  |
| Revenue by business |  |  |  |  |  |
| \t\t\t\t\t\t\tRetail banking | \t$4,131 | $4,673 | $4,552 | (12)% | 3% |
| \t\t\t\t\t\t\tCiti-branded cards | 2,485 | 2,614 | 2,452 | (5) | 7% |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tTotal | \t$6,616 | $7,287 | $7,004 | (9)% | 4% |
| Income from continuing operations by business |  |  |  |  |  |
| \t\t\t\t\t\t\tRetail banking | \t$1,209 | $1,380 | $1,485 | (12)% | (7) |
| \t\t\t\t\t\t\tCiti-branded cards | 214 | 356 | 525 | (40) | (32) |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tTotal | \t$1,423 | $1,736 | $2,010 | (18)% | (14)% |

Revenues,	net	of	interest	expense	declined	9%,	driven	by	the	absence	of	the	gain on	Visa	shares	in	the	prior	year,	lower	investment	product	revenues	and	cards purchase	sales,	lower	spreads,	and	the	impact	of	FX	translation.

					Net	interest	revenue	was	5%	lower	than	the	prior	year.	Average	loans	and deposits	were	down	10%	and	4%,	respectively,	in	each	case	partly	due	to	the impact	of	FX	translation.

					Non-interest	revenue	declined	19%,	primarily	due	to	the	decline	in investment	revenues,	lower	cards	purchase	sales,	the	absence	of	the	gain	on	Visa shares	and	the	impact	of	FX	translation.

					Operating	expenses	declined	9%,	reflecting	the	benefits	of	re-engineering efforts	and	the	impact	of	FX	translation.	Expenses	increased	slightly	in	the	fourth quarter	of	2009	primarily	due	to	selected	marketing	and	investment	spending.

					Provisions	for	loan	losses	and	for	benefits	and	claims	increased	28%,	mainly due	to	the	impact	of	a	higher	credit	reserve	build	and	an	increase	in	net	credit losses	partially	offset	by	the	impact	of	FX	translation.	In	the	first	half	of	the	year, rising	credit	losses	were	particularly	apparent	in	the	portfolios	in	India	and	South Korea.	However,	delinquencies	improved	in	recent	periods	and	net	credit	losses flattened	as	the	region	showed	early	signs	of	economic	recovery	and	increased levels	of	customer	activity.

Revenues,	net	of	interest	expense	increased	4%,	driven	by	higher	cards	purchase sales	and	higher	loan	and	deposit	volumes,	partially	offset	by	lower	gains	on Visa	shares	than	the	prior	year	and	a	47%	decline	in	investment	sales. 					Net	interest	revenue	was	13%	higher	than	the	prior	year	reflecting	higher card	balances,	higher	average	loans	and	deposits,	and	better	spreads.

					Non-interest	revenue	declined	11%,	primarily	due	to	the	lower	gains	on	Visa shares	than	the	prior	year	and	the	decline	in	investment	sales,	partially	offset	by higher	cards	purchase	sales.

					Operating	expenses	increased	11%,	reflecting	higher	business	volume	and restructuring	expenses	in	2008.

					Provisions	for	loan	losses	and	for	benefits	and	claims	increased	64%,	mainly due	to	higher	net	credit	losses	and	higher	credit	reserve	builds,	reflective	of	the overall	economic	environment	in	the	region.

The	2010	performance	of	Asia	RCB	will	continue	to	be	driven	by	improving macroeconomic	conditions	in	the	region,	supported	by	continued	investment spending	in	the	business	and	product	capability.	Asia	RCB	anticipates	continued investment	in	expanded	retail	distribution,	an	enhanced	wealth	management offering	and	increased	expenditure	on	card	promotion	and	account	acquisition, which	could	result	in	an	increase	in	year-on-year	expenses.	While	Asia	RCB currently	expects	credit	trends,	including	declining	net	credit	losses	and improving	delinquencies,	to	continue	in	2010,	credit	trends	in	the	region	will	also be	affected	by	the	pace	of	recovery	in	the	U.S.	and	European	Union.

# INSTITUTIONAL CLIENTS GROUP

Institutional	Clients	Group	(ICG)	includes	Securities	and	Banking	and	Transaction	Services.	ICG	provides	corporate,	institutional	and	high-net-worth	clients	with	a	full range	of	products	and	services,	including	cash	management,	trading,	underwriting,	lending	and	advisory	services,	around	the	world.	ICG's	international	presence	is supported	by	trading	floors	in	approximately	75	countries	and	a	proprietary	network	within	Transaction	Services	in	over	90	countries.	At	December	31,	2009,	ICG	had approximately	$866	billion	of	assets	and	$442	billion	of	deposits.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | \t2009 vs. 2008 | \t2008 vs. 2007 |
| Commissions and fees | \t$2,075 | $2,876 | $3,156 | (28)% | (9)% |
| Administration and other fiduciary fees | 4,964 | 5,413 | 5,014 | (8) | 8 |
| Investment banking | 4,685 | 3,329 | 5,399 | 41 | (38) |
| Principal transactions | 6,001 | 6,544 | 7,012 | (8) | (7) |
| Other | 1,971 | (1,021) | 1,169 | NM | NM |
| \t\t\t\t\t\t\tTotal non-interest revenue | \t$19,696 | $17,141 | $21,750 | 15% | (21)% |
| \t\t\t\t\t\t\tNet interest revenue (including dividends) | 17,739 | 17,740 | 11,704 | — | 52 |
| Total revenues, net of interest expense | \t$37,435 | $34,881 | $33,454 | 7% | 4% |
| Total operating expenses | 17,568 | 20,955 | 20,812 | (16) | 1 |
| \t\t\t\t\t\t\tNet credit losses | 723 | 917 | 310 | (21) | NM |
| \t\t\t\t\t\t\tProvision for unfunded lending commitments | 138 | (191) | 79 | NM | NM |
| \t\t\t\t\t\t\tCredit reserve build | 857 | 1,149 | 167 | (25) | NM |
| \t\t\t\t\t\t\tProvision for benefits and claims | — | — | 1 | — | (100) |
| Provisions for loan losses and benefits and claims | \t$1,718 | $1,875 | $557 | (8)% | NM |
| Income from continuing operations before taxes | \t$18,149 | $12,051 | $12,085 | 51% | — |
| Income taxes | 5,261 | 2,746 | 3,116 | 92 | (12)% |
| Income from continuing operations | \t$12,888 | $9,305 | $8,969 | 39% | 4% |
| Net income attributable to noncontrolling interests | 68 | 18 | 45 | NM | (60) |
| Net income | \t$12,820 | $9,287 | $8,924 | 38% | 4% |
| Average assets (in billions of dollars) | \t$839 | $1,037 | $1,154 | (19)% | (10)% |
| Return on assets | 1.53% | 0.90% | 0.77% |  |  |
| Revenues by region |  |  |  |  |  |
| \t\t\t\t\t\t\tNorth America | \t$11,926 | $13,148 | $10,644 | (9)% | 24% |
| \t\t\t\t\t\t\tEMEA | 13,424 | 9,683 | 10,755 | 39 | (10) |
| \t\t\t\t\t\t\tLatin America | 4,784 | 3,808 | 4,360 | 26 | (13) |
| \t\t\t\t\t\t\tAsia | 7,301 | 8,242 | 7,695 | (11) | 7 |
| Total | \t$37,435 | $34,881 | $33,454 | 7% | 4% |
| Income from continuing operations by region |  |  |  |  |  |
| \t\t\t\t\t\t\tNorth America | \t$3,032 | $2,598 | $1,896 | 17% | 37% |
| \t\t\t\t\t\t\tEMEA | 4,680 | 1,902 | 2,411 | NM | (21) |
| \t\t\t\t\t\t\tLatin America | 2,116 | 1,636 | 1,899 | 29 | (14) |
| \t\t\t\t\t\t\tAsia | 3,060 | 3,169 | 2,763 | (3) | 15 |
| Total | \t$12,888 | $9,305 | $8,969 | 39% | 4% |
| Average loans by region (in billions of dollars) |  |  |  |  |  |
| \t\t\t\t\t\t\tNorth America | \t$45 | $50 | $51 | (10)% | (2)% |
| \t\t\t\t\t\t\tEMEA | 44 | 54 | 56 | (19) | (4) |
| \t\t\t\t\t\t\tLatin America | 21 | 24 | 26 | (13) | (8) |
| \t\t\t\t\t\t\tAsia | 28 | 37 | 38 | (24) | (3) |
| Total | \t$138 | $165 | $171 | (16)% | (4)% |

# SECURITIES AND BANKING

Securities	and	Banking	(S&B)	offers	a	wide	array	of	investment	and	commercial	banking	services	and	products	for	corporations,	governments,	institutional	and	retail investors,	and	ultra-high-net	worth	individuals.	S&B	includes	investment	banking	and	advisory	services,	lending,	debt	and	equity	sales	and	trading,	institutional brokerage,	foreign	exchange,	structured	products,	cash	instruments	and	related	derivatives,	and	private	banking.	S&B	revenue	is	generated	primarily	from	fees	for investment	banking	and	advisory	services,	fees	and	interest	on	loans,	fees	and	spread	on	foreign	exchange,	structured	products,	cash	instruments	and	related	derivatives, income	earned	on	principal	transactions,	and	fees	and	spreads	on	private	banking	services.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | \t2009 vs. 2008 | \t2008 vs. 2007 |
| Net interest revenue | \t$12,088 | $12,255 | $7,450 | (1)% | 64% |
| Non-interest revenue | 15,558 | 12,680 | 17,906 | 23 | (29) |
| Revenues, net of interest expense | \t$27,646 | $24,935 | $25,356 | 11% | (2)% |
| Total operating expenses | 13,053 | 15,799 | 16,178 | (17) | (2) |
| \t\t\t\t\t\t\tNet credit losses | 720 | 899 | 306 | (20) | NM |
| \t\t\t\t\t\t\tProvisions for unfunded lending commitments | 138 | (185) | 79 | NM | NM |
| \t\t\t\t\t\t\tCredit reserve build | 853 | 1,126 | 201 | (24) | NM |
| \t\t\t\t\t\t\tProvisions for benefits and claims | — | — | 1 | — | (100) |
| Provisions for loan losses and benefits and claims | \t$1,711 | $1,840 | $587 | (7)% | NM |
| Income before taxes and noncontrolling interests | \t$12,882 | $7,296 | $8,591 | 77% | (15)% |
| Income taxes | 3,730 | 1,344 | 2,078 | NM | (35) |
| Income from continuing operations | 9,152 | 5,952 | 6,513 | 54 | (9) |
| Net income (loss) attributable to noncontrolling interests | 55 | (13) | 25 | NM | NM |
| Net income | \t$9,097 | $5,965 | $6,488 | 53% | (8)% |
| Average assets (in billions of dollars) | \t$779 | $966 | $1,085 | (19)% | (11)% |
| Return on assets | 1.17% | 0.62% | 0.60% |  |  |
| Revenues by region |  |  |  |  |  |
| \t\t\t\t\t\t\tNorth America | \t$9,400 | $10,987 | $8,998 | (14)% | 22% |
| \t\t\t\t\t\t\tEMEA | 10,035 | 6,006 | 7,756 | 67 | (23) |
| \t\t\t\t\t\t\tLatin America | 3,411 | 2,369 | 3,161 | 44 | (25) |
| \t\t\t\t\t\t\tAsia | 4,800 | 5,573 | 5,441 | (14) | 2 |
| Total revenues | \t$27,646 | $24,935 | $25,356 | 11% | (2)% |
| Net income from continuing operations by region |  |  |  |  |  |
| \t\t\t\t\t\t\tNorth America | \t$2,417 | $2,275 | $1,687 | 6% | 35% |
| \t\t\t\t\t\t\tEMEA | 3,393 | 656 | 1,595 | NM | (59) |
| \t\t\t\t\t\t\tLatin America | 1,512 | 1,048 | 1,436 | 44 | (27) |
| \t\t\t\t\t\t\tAsia | 1,830 | 1,973 | 1,795 | (7) | 10 |
| Total net income from continuing operations | \t$9,152 | $5,952 | $6,513 | 54% | (9)% |
| Securities and Banking revenue details |  |  |  |  |  |
| \t\t\t\t\t\t\tTotal investment banking | \t$4,763 | $3,245 | $5,570 | 47% | (42)% |
| \t\t\t\t\t\t\tLending | (2,153) | 4,220 | 1,814 | NM | NM |
| \t\t\t\t\t\t\tEquity markets | 3,182 | 2,878 | 5,202 | 11 | (45) |
| \t\t\t\t\t\t\tFixed income markets | 21,540 | 14,395 | 11,507 | 50 | 25 |
| \t\t\t\t\t\t\tPrivate bank | 2,054 | 2,309 | 2,473 | (11) | (7) |
| \t\t\t\t\t\t\tOther Securities and Banking | (1,740) | (2,112) | (1,210) | 18 | (75) |
| Total Securities and Banking revenues | \t$27,646 | $24,935 | $25,356 | 11% | (2)% |

Revenues,	net	of	interest	expense	increased	11%	or	$2.7	billion,	as	markets	began to	recover	in	the	early	part	of	2009,	bringing	back	higher	levels	of	volume activity	and	higher	levels	of	liquidity,	which	began	to	decline	again	in	the	third quarter	of	2009.	The	growth	in	revenue	in	the	early	part	of	the	year	was	mainly due	to	a	$7.1	billion	increase	in	fixed	income	markets,	reflecting	strong	trading opportunities	across	all	asset	classes	in	the	first	half	of	2009,	and	a	$1.5	billion increase	in	investment	banking	revenue	primarily	from	increases	in	debt	and equity	underwriting	activities	reflecting	higher	transaction	volumes	from depressed	2008	levels.	These	increases	were	offset	by	a	$6.4	billion	decrease	in lending	revenue	primarily	from	losses	on	credit	default	swap	hedges.	Excluding the	2009	and	2008	CVA	impact,	as	indicated	in	the	table	below,	revenues increased	23%	or	$5.5	billion.

					Operating	expenses	decreased	17%,	or	$2.7	billion.	Excluding	the	2008 repositioning	and	restructuring	charges	and	the	2009	litigation	reserve	release, operating	expenses	declined	11%	or	$1.6	billion,	mainly	as	a	result	of	headcount reductions	and	benefits	from	expense	management.

					Provisions	for	loan	losses	and	for	benefits	and	claims	decreased	7%	or	$129 million,	to	$1.7	billion,	mainly	due	to	lower	credit	reserve	builds	and	net	credit losses,	due	to	an	improved	credit	environment,	particularly	in	the	latter	part	of the	year.

Revenues,	net	of	interest	expense	decreased	2%	or	$0.4	billion	reflecting	the overall	difficult	market	conditions.	Excluding	the	2008	and	2007	CVA	impact, revenues	decreased	3%	or	$0.6	billion.	The	reduction	in	revenue	was	primarily due	to	a	decrease	in	investment	banking	revenue	of	$2.3	billion	to	$3.2	billion, mainly	in	debt	and	equity	underwriting,	reflecting	lower	volumes,	and	a decrease	in	equity	markets	revenue	of	$2.3	billion	to	$2.9	billion	due	to extremely	high	volatility	and	reduced	levels	of	activity.	These	reductions	were offset	by	an	increase	in	fixed	income	markets	of	$2.9	billion	to	$14.4	billion	due to	strong	performance	in	interest	rates	and	currencies,	and	an	increase	in	lending revenue	of	$2.4	billion	to	$4.2	billion	mainly	from	gains	on	credit	default	swap hedges.

					Operating	expenses	decreased	by	2%	or	$0.4	billion.	Excluding	the	2008	and 2007	repositioning	and	restructuring	charges	and	the	2007	litigation	reserve reversal,	operating	expenses	decreased	by	7%	or	$1.1	billion	driven	by headcount	reduction	and	lower	performance-based	incentives.

					Provisions	for	credit	losses	and	for	benefits	and	claims	increased	$1.3	billion to	$1.8	billion	mainly	from	higher	credit	reserve	builds	and	net	credit	losses offset	by	a	lower	provision	for	unfunded	lending	commitments	due	to deterioration	in	the	credit	environment.

# Certain Revenues Impacting Securities and Banking

Items	that	impacted	S&B	revenues	during	2009	and	2008	are	set	forth	in	the table	below.

(2) For these purposes, Alt-A mortgage securities are non-agency residential mortgage- backed securities (RMBS) where (i) the underlying collateral has weighted average FICO scores between 680 and 720 or (ii) for instances where FICO scores are greater than 720, RMBS have 30% or less of the underlying collateral composed of full documentation loans. See "Managing Global Risk—Credit Risk—U.S. Consumer Mortgage Lending."

(3) S&B's commercial real estate exposure is split into three categories of assets: held at fair value; held-to-maturity/held-for-investment; and equity. See "Managing Global Risk— Credit Risk—Exposure to Commercial Real Estate" section for a further discussion.

					In	the	table	above,	2009	includes	a	$330	million	pretax	adjustment	to	the CVA	balance,	which	reduced	pretax	revenues	for	the	year,	reflecting	a	correction of	an	error	related	to	prior	periods.	See	"Significant	Accounting	Policies	and Significant	Estimates"	below	and	Notes	1	and	34	to	the	Consolidated	Financial Statements	for	a	further	discussion	of	this	adjustment.

The	2010	outlook	for	S&B	will	depend	on	the	level	of	client	activity	and	on macroeconomic	conditions,	market	valuations	and	volatility,	interest	rates	and other	market	factors.	Management	of	S&B	currently	expects	to	maintain	client activity	throughout	2010	and	to	operate	in	market	conditions	that	offer	moderate volatility	and	increased	liquidity.

					Operating	expenses	will	benefit	from	continued	re-engineering	and	expense management	initiatives,	but	will	be	offset	by	investments	in	talent	and infrastructure	to	support	growth.

# TRANSACTION SERVICES

Transaction	Services	is	composed	of	Treasury	and	Trade	Solutions	(TTS)	and	Securities	and	Fund	Services	(SFS).	TTS	provides	comprehensive	cash	management	and trade	finance	for	corporations,	financial	institutions	and	public	sector	entities	worldwide.	SFS	provides	custody	and	funds	services	to	investors	such	as	insurance companies	and	mutual	funds,	clearing	services	to	intermediaries	such	as	broker-dealers,	and	depository	and	agency/trust	services	to	multinational	corporations	and governments	globally.	Revenue	is	generated	from	net	interest	revenue	on	deposits	in	TTS	and	SFS,	as	well	as	trade	loans	and	from	fees	for	transaction	processing	and fees	on	assets	under	custody	in	SFS.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | \t2009 vs. 2008 | \t2008 vs. 2007 |
| Net interest revenue | \t$5,651 | $5,485 | $4,254 | 3% | 29% |
| Non-interest revenue | 4,138 | 4,461 | 3,844 | (7) | 16 |
| Total revenues, net of interest expense | \t$9,789 | $9,946 | $8,098 | (2)% | 23% |
| Total operating expenses | 4,515 | 5,156 | 4,634 | (12) | 11 |
| Provisions for credit losses and for benefits and claims | 7 | 35 | (30) | (80) | NM |
| Income before taxes and noncontrolling interests | \t$5,267 | $4,755 | $3,494 | 11% | 36% |
| Income taxes | 1,531 | 1,402 | 1,038 | 9 | 35 |
| Income from continuing operations | 3,736 | 3,353 | 2,456 | 11 | 37 |
| Net income attributable to noncontrolling interests | 13 | 31 | 20 | (58) | 55 |
| Net income | \t$3,723 | $3,322 | $2,436 | 12% | 36% |
| Average assets (in billions of dollars) | \t$60 | $71 | $69 | (15)% | 3% |
| Return on assets | 6.21% | 4.68% | 3.53% |  |  |
| Revenues by region |  |  |  |  |  |
| \t\t\t\t\t\t\tNorth America | \t$2,526 | $2,161 | $1,646 | 17% | 31% |
| \t\t\t\t\t\t\tEMEA | 3,389 | 3,677 | 2,999 | (8) | 23 |
| \t\t\t\t\t\t\tLatin America | 1,373 | 1,439 | 1,199 | (5) | 20 |
| \t\t\t\t\t\t\tAsia | 2,501 | 2,669 | 2,254 | (6) | 18 |
| Total revenues | \t$9,789 | $9,946 | $8,098 | (2)% | 23% |
| Income from continuing operations by region |  |  |  |  |  |
| \t\t\t\t\t\t\tNorth America | \t$615 | $323 | $209 | 90% | 55% |
| \t\t\t\t\t\t\tEMEA | 1,287 | 1,246 | 816 | 3 | 53 |
| \t\t\t\t\t\t\tLatin America | 604 | 588 | 463 | 3 | 27 |
| \t\t\t\t\t\t\tAsia | 1,230 | 1,196 | 968 | 3 | 24 |
| Total net income from continuing operations | \t$3,736 | $3,353 | $2,456 | 11% | 37% |
| Key indicators (in billions of dollars) |  |  |  |  |  |
| Average deposits and other customer liability balances | \t$303 | $280 | $246 | 8% | 14% |
| EOP assets under custody (in trillions of dollars) | 12.1 | 11.0 | 13.1 | 10 | (16) |

Revenues,	net	of	interest	expense	declined	2%	compared	to	2008	as	strong growth	in	balances	was	more	than	offset	by	lower	spreads	driven	by	low	interest rates	globally.

					Average	deposits	and	other	customer	liability	balances	grew	8%,	driven	by strong	growth	in	all	regions.

					Treasury	and	Trade	Solutions	revenues	grew	7%	as	a	result	of	strong	growth in	balances	and	higher	trade	revenues.

					Securities	and	Funds	Services	revenues	declined	18%,	attributable	to reductions	in	asset	valuations	and	volumes.

					Operating	expenses	declined	12%,	mainly	as	a	result	of	headcount	reductions and	successful	execution	of	reengineering	initiatives.

					Cost	of	credit	declined	80%,	which	was	primarily	attributable	to	overall portfolio	management.

					Net	income	increased	12%,	leading	to	a	record	net	income,	with	growth across	all	regions	reflecting	benefits	of	continued	re-engineering	and	expense management	efforts.

Revenues,	net	of	interest	expense	grew	23%	driven	by	new	business	and implementations,	growth	in	customer	liability	balances,	increased	transaction volumes	and	the	impact	of	acquisitions.

					Average	deposits	and	other	customer	liability	balances	grew	14%	driven	by success	of	new	business	growth	and	implementations.

					Treasury	and	Trade	Solutions	revenues	grew	26%	as	a	result	of	strong liability	and	fee	growth	as	well	as	increased	client	penetration.

					Securities	and	Funds	Services	revenues	grew	17%	as	a	result	of	increased assets	under	custody,	volumes	and	liability	balances.

Transaction	Services	business	performance	will	continue	to	be	impacted	in	2010 by	levels	of	interest	rates,	economic	activity,	volatility	in	global	capital	markets, foreign	exchange	and	market	valuations	globally.	Levels	of	client	activity	and client	cash	and	security	flows	are	key	factors	dependent	on	macroeconomic conditions.	Transaction	Services	intends	to	continue	to	invest	in	technology	to support	its	global	network,	as	well	as	investments	to	build	out	its	investor services	suite	of	products	aimed	at	large,	under-penetrated	markets	for	middle and	back	office	outsourcing	among	a	range	of	investors.	These	and	similar investments	could	lead	to	increasing	operating	expenses.

# CITI HOLDINGS

Citi	Holdings	contains	businesses	and	portfolios	of	assets	that	Citigroup	has	determined	are	not	central	to	its	core	Citicorp	business.	These	noncore	businesses	tend	to	be more	asset-intensive	and	reliant	on	wholesale	funding	and	also	may	be	product-driven	rather	than	client-driven.	Citi	intends	to	exit	these	businesses	as	quickly as	practicable	yet	in	an	economically	rational	manner	through	business	divestitures,	portfolio	run-off	and	asset	sales.	Citi	has	made	substantial	progress	divesting	and exiting	businesses	from	Citi	Holdings,	having	completed	15	divestitures	in	2009,	including	Smith	Barney,	Nikko	Cordial	Securities,	Nikko	Asset	Management	Financial Institution	Credit	Card	business	(FI)	and	Diners	Club	North	America.	Citi	Holdings'	assets	have	been	reduced	by	nearly	40%,	or	$351	billion,	from	the	peak	level	of $898	billion	in	the	first	quarter	of	2008	to	$547	billion	at	year-end	2009.	Citi	Holdings'	assets	represented	less	than	30%	of	Citi's	assets	as	of	December	31,	2009.	Asset reductions	from	Citi	Holdings	have	the	combined	benefits	of	further	fortifying	Citigroup's	capital	base,	lowering	risk,	simplifying	the	organization	and	allowing	Citi	to allocate	capital	to	fund	long-term	strategic	businesses.

					Citi	Holdings	consists	of	the	following	businesses:	Brokerage	and	Asset	Management;	Local	Consumer	Lending;	and	Special	Asset	Pool.

					With	Citi's	exit	from	the	loss-sharing	agreement	with	the	U.S.	government	in	December	2009,	the	Company	conducted	a	broad	review	of	the	Citi	Holdings	asset base	to	determine	which	assets	are	strategically	important	to	Citicorp.	As	a	result	of	this	analysis,	approximately	$61	billion	of	assets	will	be	moved	from	Citi	Holdings into	Citicorp	in	the	first	quarter	of	2010.	The	assets	consist	primarily	of	approximately	$34	billion	of	U.S.	mortgages	that	will	be	transferred	to	NA	RCB,	approximately $19	billion	of	commercial	and	corporate	loans	and	securities	related	to	core	Citicorp	clients,	of	which	approximately	$17	billion	will	be	moved	to	S&B	and	the remainder	to	NA	RCB,	and	approximately	$5.0	billion	of	assets	related	to	Citi's	Mexico	asset	management	business	that	will	be	moved	to	LATAM	RCB.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | \t2009 vs. 2008 | \t2008 vs. 2007 |
| Net interest revenue | \t$ 17,314 | $ 22,459 | $ 21,797 | (23)% | 3% |
| Non-interest revenue | 13,321 | (29,157) | (2,284) | NM | NM |
| Total revenues, net of interest expense | \t$ 30,635 | $(6,698) | $ 19,513 | NM | NM |
| Provisions for credit losses and for benefits and claims |  |  |  |  |  |
| Net credit losses | \t$ 24,660 | $ 14,070 | $7,230 | 75% | 95% |
| Credit reserve build | 5,457 | 11,444 | 5,836 | (52) | 96 |
| Provision for loan losses | \t$ 30,117 | $ 25,514 | $ 13,066 | 18% | 95% |
| Provision for benefits and claims | 1,210 | 1,396 | 919 | (13) | 52 |
| Provision for unfunded lending commitments | 109 | (172) | 71 | NM | NM |
| Total provisions for credit losses and for benefits and claims | \t$ 31,436 | $ 26,738 | $ 14,056 | 18% | 90% |
| Total operating expenses | \t$ 14,677 | $ 25,197 | $ 20,487 | (42)% | 23% |
| (Loss) from continuing operations before taxes | \t$(15,478) | $(58,633) | $(15,030) | 74% | NM |
| Benefits for income taxes | (7,239) | (22,621) | (6,338) | 68 | NM |
| Income (loss) from continuing operations | \t$(8,239) | $(36,012) | $(8,692) | 77% | NM |
| Net income attributable to noncontrolling interests | 27 | (372) | 218 | NM | NM |
| Citi Holdings net (loss) | \t$(8,266) | $(35,640) | $(8,910) | 77% | NM |
| Balance sheet data (in billions of dollars) |  |  |  |  |  |
| Total EOP assets | \t$547 | $715 | $888 | (23)% | (19)% |
| Total EOP deposits | \t$92 | $83 | $79 | 11% | 5% |

# BROKERAGE AND ASSET MANAGEMENT

Brokerage	and	Asset	Management	(BAM),	which	constituted	approximately	6%	of	Citi	Holdings	by	assets	as	of	December	31,	2009,	consists	of	Citi's	global	retail brokerage	and	asset	management	businesses.	This	segment	was	substantially	affected	and	reduced	in	size	in	2009	due	to	the	divestitures	of	Smith	Barney	(to	the	Morgan Stanley	Smith	Barney	joint	venture	(MSSB	JV))	and	Nikko	Cordial	Securities.	At	December	31,	2009,	BAM	had	approximately	$35	billion	of	assets,	which	included $26	billion	of	assets	from	the	49%	interest	in	the	MSSB	JV	($13	billion	investment	and	$13	billion	in	loans	associated	with	the	clients	of	the	MSSB	JV)	and	$9	billion	of assets	from	a	diverse	set	of	asset	management	and	insurance	businesses	of	which	approximately	half	will	be	transferred	into	the	LATAM	RCB	during	the	first	quarter	of 2010,	as	discussed	under	"Citi	Holdings"	above.	Morgan	Stanley	has	options	to	purchase	Citi's	remaining	stake	in	the	MSSB	JV	over	three	years	starting	in	2012.	The 2009	results	include	an	$11.1	billion	gain	($6.7	billion	after-tax)	on	the	sale	of	Smith	Barney.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 vs. 2008 | 2008 vs. 2007 |
| Net interest revenue | $432 | $ 1,224 | $908 | (65)% | 35% |
| Non-interest revenue | 14,703 | 7,199 | 9,751 | NM | (26) |
| Total revenues, net of interest expense | $15,135 | $ 8,423 | $10,659 | 80% | (21)% |
| Total operating expenses | $3,350 | $ 9,236 | $7,960 | (64)% | 16% |
| \t\t\t\t\t\t\tNet credit losses | $3 | $10 | $— | (70)% | — |
| \t\t\t\t\t\t\tCredit reserve build/(release) | 36 | 8 | 4 | NM | 100% |
| \t\t\t\t\t\t\tProvision for unfunded lending commitments | (5) | — | — | — | — |
| \t\t\t\t\t\t\tProvision for benefits and claims | $155 | $205 | $154 | (24)% | 33% |
| Provisions for loan losses and for benefits and claims | $189 | $223 | $158 | (15)% | 41% |
| Income (loss) from continuing operations before taxes | $11,596 | $(1,036) | $2,541 | NM | NM |
| Income taxes (benefits) | 4,489 | (272) | 834 | NM | NM |
| Income (loss) from continuing operations | $7,107 | $(764) | $1,707 | NM | NM |
| Net income (loss) attributable to noncontrolling interests | 12 | (179) | 35 | NM | NM |
| Net income (loss) | $7,095 | $(585) | $1,672 | NM | NM |
| EOP assets (in billions of dollars) | $35 | $58 | $56 | (40)% | 4% |
| EOP deposits (in billions of dollars) | 60 | 58 | 46 | 3 | 26 |

Revenues,	net	of	interest	expense	increased	80%	versus	the	prior	year	mainly driven	by	the	$11.1	billion	pretax	gain	on	the	sale	($6.7	billion	after-tax)	on	the MSSB	JV	transaction	in	the	second	quarter	of	2009	and	a	$320	million	pretax gain	on	the	sale	of	the	managed	futures	business	to	the	MSSB	JV	in	the	third quarter	of	2009.	Excluding	these	gains,	revenue	decreased	primarily	due	to	the absence	of	Smith	Barney	from	May	2009	onwards	and	the	absence	of	fourth- quarter	revenue	of	Nikko	Asset	Management,	partially	offset	by	an	improvement in	marks	in	Retail	Alternative	Investments.	Revenues	in	the	prior	year	include	a $347	million	pretax	gain	on	sale	of	CitiStreet	and	charges	related	to	the settlement	of	auction	rate	securities	of	$393	million	pretax.

					Operating	expenses	decreased	64%	from	the	prior	year,	mainly	driven	by	the absence	of	Smith	Barney	and	Nikko	Asset	Management	expenses,	re- engineering	efforts	and	the	absence	of	2008	one-time	expenses	($0.9	billion intangible	impairment,	$0.2	billion	of	restructuring	and	$0.5	billion	of	write- downs	and	other	charges).

					Provisions	for	loan	losses	and	for	benefits	and	claims	decreased	15%	mainly reflecting	a	$50	million	decrease	in	provision	for	benefits	and	claims,	partially offset	by	increased	reserve	builds	of	$28	million.

					Assets	decreased	40%	versus	the	prior	year,	mostly	driven	by	the	sales	of Nikko	Cordial	Securities	and	Nikko	Asset	Management	($25	billion)	and	the managed	futures	business	($1.4	billion),	partially	offset	by	increased	Smith Barney	assets	of	$4	billion.

Revenues,	net	of	interest	expense	decreased	21%	from	the	prior	year	primarily due	to	lower	transactional	and	investment	revenues	in	Smith	Barney,	lower revenues	in	Nikko	Asset	Management	and	higher	markdowns	in	Retail Alternative	Investments.

					Operating	expenses	increased	16%	versus	the	prior	year,	mainly	driven	by	a $0.9	billion	intangible	impairment	in	Nikko	Asset	Management	in	the	fourth quarter	of	2008,	$0.2	billion	of	restructuring	charges	and	$0.5	billion	of	write- downs	and	other	charges.

					Provisions	for	loan	losses	and	for	benefits	and	claims	increased	$65	million compared	to	the	prior	year,	mainly	due	to	a	$52	million	increase	in	provisions	for benefits	and	claims.

					Assets	increased	4%	versus	the	prior	year.

# LOCAL CONSUMER LENDING

Local	Consumer	Lending	(LCL),	which	constituted	approximately	65%	of	Citi	Holdings	by	assets	as	of	December	31,	2009,	includes	a	portion	of	Citigroup's	North American	mortgage	business,	retail	partner	cards,	Western	European	cards	and	retail	banking,	CitiFinancial	North	America,	Primerica,	Student	Loan	Corporation	and other	local	consumer	finance	businesses	globally.	At	December	31,	2009,	LCL	had	$358	billion	of	assets	($317	billion	in	North	America).	About	one-half	of	the	assets	in LCL	as	of	December	31,	2009	consisted	of	U.S.	mortgages	in	the	company's	CitiMortgage	and	CitiFinancial	operations.	The	North	American	assets	consist	of	residential mortgage	loans,	retail	partner	card	loans,	student	loans,	personal	loans,	auto	loans,	commercial	real	estate,	and	other	consumer	loans	and	assets.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | \t2009 vs. 2008 | \t2008 vs. 2007 |
| Net interest revenue | \t$ 13,709 | $ 17,903 | $18,166 | (23)% | (1)% |
| Non-interest revenue | 5,473 | 6,550 | 8,584 | (16) | (24) |
| Total revenues, net of interest expense | \t$ 19,182 | $ 24,453 | $26,750 | (22)% | (9)% |
| Total operating expenses | \t$ 10,431 | $ 14,973 | $11,457 | (30)% | 31% |
| \t\t\t\t\t\t\tNet credit losses | \t$ 19,237 | $ 13,151 | $6,794 | 46% | 94% |
| \t\t\t\t\t\t\tCredit reserve build/(release) | 5,904 | 8,592 | 5,454 | (31) | 58 |
| \t\t\t\t\t\t\tProvision for benefits and claims | 1,055 | 1,191 | 765 | (11) | 56 |
| \t\t\t\t\t\t\tProvision for unfunded lending commitments | 3 | — | — | — | — |
| Provisions for loan losses and for benefits and claims | \t$ 26,199 | $ 22,934 | $13,013 | 14% | 76% |
| Income (loss) from continuing operations before taxes | \t$(17,448) | $(13,454) | $2,280 | (30)% | NM |
| Income taxes (benefits) | (7,405) | (5,200) | 568 | (42) | NM |
| Income (loss) from continuing operations | \t$(10,043) | $(8,254) | $1,712 | (22)% | NM |
| Net income attributable to noncontrolling interests | 32 | 12 | 34 | NM | (65)% |
| Net income (loss) | \t$(10,075) | $(8,266) | $1,678 | (22)% | NM |
| Average assets (in billions of dollars) | \t$390 | $461 | $496 | (15) | (7)% |
| Net credit losses as a percentage of average loans | 5.91% | 3.56% | 1.90% |  |  |

Revenues,	net	of	interest	expense	decreased	22%	versus	the	prior	year,	mostly due	to	lower	net	interest	revenue.	Net	interest	revenue	was	23%	lower	than	the prior	year,	primarily	due	to	lower	balances,	de-risking	of	the	portfolio,	and spread	compression.	Net	interest	revenue	as	a	percentage	of	average	loans decreased	63	basis	points	from	the	prior	year,	primarily	due	to	the	impact	of higher	delinquencies,	interest	write-offs,	loan	modification	programs,	higher FDIC	charges	and	CARD	Act	implementation	(in	the	latter	part	of	2009), partially	offset	by	retail	partner	cards	pricing	actions.	LCL	results	will	continue to	be	impacted	by	the	CARD	Act.	Citi	currently	estimates	that	the	net	impact	on LCL	revenues	for	2010	could	be	a	reduction	of	approximately	$50	to	$150 million.	See	also	"North	America	Regional	Consumer	Banking"	and	"Managing Global	Risk—Credit	Risk"	for	additional	information	on	the	impact	of	the CARD	Act	to	Citi's	credit	card	businesses.	Average	loans	decreased	12%,	with North	America	down	11%	and	international	down	19%.	Non-interest	revenue decreased	$1.1	billion	mostly	driven	by	the	impact	of	higher	credit	losses flowing	through	the	securitization	trusts.

					Operating	expenses	declined	30%	from	the	prior	year,	due	to	lower	volumes and	reductions	from	expense	re-engineering	actions,	and	the	impact	of	goodwill write-offs	of	$3.0	billion	in	the	fourth	quarter	of	2008,	partially	offset	by	higher other	real	estate	owned	and	collection	costs.

							Provisions	for	loan	losses	and	for	benefits	and	claims	increased	14%	versus the	prior	year	reflecting	an	increase	in	net	credit	losses	of	$6.1	billion,partially offset	by	lower	reserve	builds	of	$2.7	billion.	Higher	net	credit	losses	were primarily	driven	by	higher	losses	of	$3.6	billion	in	residential	real	estate	lending, $1.0	billion	in	retail	partner	cards,	and	$0.7	billion	in	international.

					Assets	decreased	$58	billion	versus	the	prior	year,	primarily	driven	by	lower originations,	wind-down	of	specific	businesses,	asset	sales,	divestitures,	write- offs	and	higher	loan	loss	reserve	balances.	Key	divestitures	in	2009	included	the FI	credit	card	business,	Italy	consumer	finance,	Diners	Europe,	Portugal	cards, Norway	consumer,	and	Diners	Club	North	America.

Revenues,	net	of	interest	expense	decreased	9%	versus	the	prior	year,	mostly	due to	lower	Non-interest	revenue.	Net	interest	revenue	declined	1%	versus	the	prior year.	Average	loans	increased	3%;	however,	revenues	declined,	driven	by	lower balances,	de-risking	of	the	portfolio,	and	spread	compression.	Non-interest revenue	decreased	$2	billion,	primarily	due	to	the	impact	of	securitization	in retail	partners	cards	and	the	mark-to-market	on	the	mortgage	servicing	rights asset	and	related	hedge	in	real	estate	lending.

					Operating	expenses	increased	31%,	driven	by	the	impact	of	goodwill	write- offs	of	$3.0	billion	in	the	fourth	quarter	of	2008	and	restructuring	costs. Excluding	one-time	expenses,	expenses	were	slightly	higher	due	to	increased volumes.

					Provisions	for	loan	losses	and	for	benefits	and	claims	increased	76%	versus the	prior	year	reflecting	increased	net	credit	losses	of	$6.4	billion	and	higher reserve	builds	of	$3.1	billion.	Higher	net	credit	losses	were	primarily	driven	by $3.9	billion	in	real	estate	lending	and	$0.8	billion	in	retail	partner	cards. 					Assets	decreased	$65	billion	versus	the	prior	year,	primarily	driven	by	Real Estate	Lending	and	higher	loan	loss	reserve	balances	in	2008.

The	following	is	a	reconciliation	of	Managed-basis	net	credit	losses	in	LCL.	For a	discussion	of	Managed-basis	presentations,	see	North	America	Regional Consumer	Banking.

| average managed loans | 6.60% | 4.00% | 2.25% |
| :--- | :--- | :--- | :--- |
| Impact from credit card securitizations | \t 0.69% | 0.44% | 0.35% |
| Net credit losses as a percentage of |  |  |  |
| \t\t\t\t\t\t\taverage loans | \t 5.91% | 3.56% | 1.90% |

# Certain Details on LCL Loans

The	following	table	provides	additional	information,	as	of	December	31,	2009, regarding	LCL	loan	details.	For	additional	information	on	loans	within	LCL,	see "Managing	Global	Risk—Credit	Risk—Consumer	Loan	Details"	below.

	Composition of loans within Local Consumer Lending as of December 31, 2009

|  | Composition of loans within Local Consumer Lending as of December 31, 2009 | Composition of loans within Local Consumer Lending as of December 31, 2009 | Composition of loans within Local Consumer Lending as of December 31, 2009 |  |
| :--- | :--- | :--- | :--- | :--- |
|  |  | Fourth quarter 2009 | 90+ days |  |
| In billions of dollars | Total loans | net credit loss ratio | past due % | (1) |
| North America |  |  |  |  |
| \t\t\t\t\t\t\tFirst mortgages | $118.2 | 3.51% | 10.93% | 10.93% |
| \t\t\t\t\t\t\tSecond mortgages | 54.2 | 7.00 | 2.96 |  |
| \t\t\t\t\t\t\tStudent | 26.3 | 0.42 | 3.33 |  |
| \t\t\t\t\t\t\tCards (retail partners) | 18.9 | 14.43 | 4.50 |  |
| \t\t\t\t\t\t\tPersonal and other | 18.3 | 10.83 | 3.04 |  |
| \t\t\t\t\t\t\tAuto | 13.8 | 7.80 | 1.96 |  |
| \t\t\t\t\t\t\tCommercial real estate | 10.6 | 3.49 | 3.35 |  |
| Total North America | $260.3 | 5.61% | 6.55% | 6.55% |
| International |  |  |  |  |
| \t\t\t\t\t\t\tEMEA | $23.0 | 6.95% | 4.86% | 4.86% |
| \t\t\t\t\t\t\tAsia | 9.8 | 12.65 | 2.25 |  |
| \t\t\t\t\t\t\tLatin America | 0.3 | 17.25 | 2.16 |  |
| Total international | $33.1 | 8.69% | 4.06% | 4.06% |
| Total | $293.4 | 5.97% | 6.26% | 6.26% |

(1)  Loans 90+ days past due exclude U.S. mortgage loans that are guaranteed by U.S. government-sponsored agencies, since the potential loss predominantly resides with the U.S. agencies. Note: Totals may not sum due to rounding.

# Japan Consumer Finance

Citigroup	continues	to	actively	monitor	a	number	of	matters	involving	its	Japan Consumer	Finance	business,	including	customer	refund	claims	and	defaults,	as well	as	financial	and	legislative,	regulatory,	judicial	and	other	political developments,	relating	to	the	charging	of	"gray	zone"	interest.	Gray	zone	interest represents	interest	at	rates	that	are	legal	but	for	which	claims	may	not	be enforceable.	This	business	has	incurred	and	will	continue	to	face	net	credit	losses and	refunds,	due	in	part	to	the	impact	of	Japanese	consumer	lending	laws	passed in	the	fourth	quarter	of	2006	and	judicial	and	regulatory	actions.	In	addition, legislation	effective	in	2010	will	impose	a	lower	interest	rate	cap	and	lower lending	cap	on	consumer	lending	in	Japan,	which	may	reduce	credit	availability and	increase	potential	claims	and	losses	relating	to	gray	zone	interest.

					Citi	determined	in	2008	to	exit	its	Japanese	Consumer	Finance	business	and has	been	liquidating	its	portfolio	and	otherwise	winding	down	the	business.	Citi continues	to	monitor	and	evaluate	both	currently	and	previously	outstanding accounts	in	its	Japanese	Consumer	Finance	business	and	its	reserves	related thereto.	However,	the	trend	in	the	type,	number	and	amount	of	claims,	and	the potential	full	amount	of	losses	and	their	impact	on	Citi	requires	evaluation	in	a potentially	volatile	environment,	is	subject	to	significant	uncertainties	and continues	to	be	difficult	to	predict.

# SPECIAL ASSET POOL

Special	Asset	Pool	(SAP),	which	constituted	approximately	28%	of	Citi	Holdings	by	assets	as	of	December	31,	2009,	is	a	portfolio	of	securities,	loans	and	other	assets that	Citigroup	intends	to	actively	reduce	over	time	through	asset	sales	and	portfolio	run-off.	At	December	31,	2009,	SAP	had	$154	billion	of	assets.	SAP	assets	have declined	by	$197	billion	or	56%	from	peak	levels	in	2007	reflecting	cumulative	write-downs,	asset	sales	and	portfolio	run-off.	Assets	have	been	reduced	by	$87	billion from	year-ago	levels.	Approximately	60%	of	SAP	assets	are	now	accounted	for	on	an	accrual	basis,	which	has	helped	reduce	income	volatility.

|  |  |  |  | % Change | % Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007\t\t\t\t\t\t2009 vs. 2008\t\t\t\t\t\t2008 vs. 2007 | 2007\t\t\t\t\t\t2009 vs. 2008\t\t\t\t\t\t2008 vs. 2007 | 2007\t\t\t\t\t\t2009 vs. 2008\t\t\t\t\t\t2008 vs. 2007 |
| Net interest revenue | $ 3,173 | $3,332 | $2,723 | (5)% | 22% |
| Non-interest revenue | (6,855) | (42,906) | (20,619) | 84 | NM |
| Revenues, net of interest expense | $(3,682) | $(39,574) | $(17,896) | 91% | NM |
| Total operating expenses | $896 | $988 | $1,070 | (9)% | (8)% |
| Net credit losses | $ 5,420 | $909 | $436 | NM | NM |
| Provision for unfunded lending commitments | 111 | (172) | 71 | NM | NM |
| Credit reserve builds/(release) | (483) | 2,844 | 378 | NM | NM |
| Provisions for credit losses and for benefits and claims | $ 5,048 | $3,581 | $885 | 41% | NM |
| (Loss) from continuing operations before taxes | $(9,626) | $(44,143) | $(19,851) | 78% | NM |
| Income taxes (benefits) | (4,323) | (17,149) | (7,740) | 75 | NM |
| (Loss) from continuing operations | $(5,303) | $(26,994) | $(12,111) | 80% | NM |
| Net income (loss) attributable to noncontrolling interests | (17) | (205) | 149 | 92 | NM |
| Net (loss) | $(5,286) | $(26,789) | $(12,260) | 80% | NM |
| EOP assets (in billions of dollars) | $154 | $241 | $351 | (36)% | (31)% |

Revenues,	net	of	interest	expense	increased	$35.9	billion	in	2009,	primarily	due to	the	absence	of	significant	negative	revenue	marks	occurring	in	the	prior	year. Total	negative	marks	were	$1.9	billion	in	2009	as	compared	to	$38.1	billion	in 2008,	as	described	in	more	detail	below.	Revenue	in	the	current	year	included	a positive	$1.3	billion	CVA	on	derivative	positions,	excluding	monoline	insurers, and	positive	marks	of	$0.8	billion	on	subprime-related	direct	exposures.	These positive	revenues	were	partially	offset	by	negative	revenues	of	$1.5	billion	on Alt-A	mortgages,	$1.3	billion	of	write-downs	on	commercial	real	estate,	and	a negative	$1.6	billion	CVA	on	the	monoline	insurers	and	fair	value	option liabilities.	Revenue	was	also	affected	by	negative	marks	on	private	equity positions	and	write-downs	on	highly	leveraged	finance	commitments.

					Operating	expenses	decreased	9%	in	2009,	mainly	driven	by	lower compensation	and	lower	volumes	and	transaction	expenses,	partially	offset	by costs	associated	with	the	U.S.	government	loss-sharing	agreement,	which	Citi exited	in	the	fourth	quarter	of	2009.

					Provisions	for	credit	losses	and	for	benefits	and	claims	increased	$1.5 billion,	primarily	driven	by	$4.5	billion	in	increased	net	credit	losses,	partially offset	by	a	lower	reserve	build	of	$3.0	billion.

					Assets	declined	36%	versus	the	prior	year,	primarily	driven	by	amortization and	prepayments,	sales,	marks	and	charge-offs.	Asset	sales	during	the	fourth quarter	of	2009	($10	billion)	were	executed	at	or	above	Citi's	marks	generating $800	million	in	pretax	gains	for	the	quarter.

Revenues,	net	of	interest	expense	decreased	$21.7	billion,	primarily	due	to negative	net	revenue	marks.	Revenue	included	$14.3	billion	of	write-downs	on subprime-related	direct	exposures	and	a	negative	$6.8	billion	CVA	related	to	the monoline	insurers	and	derivative	positions.	Revenue	was	also	negatively	affected by	write-downs	on	highly	leveraged	finance	commitments,	Alt-A	mortgage revenue,	write-downs	on	structured	investment	vehicles	and	commercial	real estate,	and	mark-to-market	on	auction	rate	securities.	Total	negative	marks	were $38.1	billion	in	2008	as	compared	to	$20.2	billion	in	2007,	which	are	described in	more	detail	below.

					Operating	expenses	decreased	8%,	mainly	driven	by	lower	compensation	and transaction	expenses.

					Provisions	for	credit	losses	and	for	benefits	and	claims	increased	$2.7 billion,	primarily	due	to	a	$2.2	billion	increase	in	the	reserve	build	and	an increase	in	net	credit	losses	of	$0.5	billion.

					Assets	declined	31%	versus	the	prior	year,	primarily	driven	by	amortization and	prepayments,	sales,	and	marks	and	charge-offs.

The	following	table	provides	details	of	the	composition	of	SAP	assets	as	of	December	31,	2009.

|  | Carrying value |  | Carrying value as % of |
| :--- | :--- | :--- | :--- |
| In billions of dollars | of assets | Face value | face value |
| Securities in AFS/HTM (1) |  |  |  |
| Corporates | $10.3 | $10.6 | 97% |
| Prime and non-U.S. MBS | 15.4 | 19.2 | 80 |
| Auction rate securities | 7.8 | 10.5 | 74 |
| Alt-A mortgages | 8.7 | 16.9 | 51 |
| Other securities (2) | 5.7 | 8.0 | 71 |
| Total securities in AFS/HTM | $47.9 | $65.3 | 73% |
| Loans, leases and letters of credit (LCs) in HFI/HFS (3) |  |  |  |
| Corporates | $20.3 | $22.2 | 91% |
| Commercial real estate (CRE) | 13.5 | 14.4 | 94 |
| Other | 3.4 | 4.1 | 83 |
| Loan loss reserves | (4.1) | NM | NM |
| Total loans, leases and LCs in HFI/HFS | $33.1 | NM | NM |
| Mark-to-market |  |  |  |
| Subprime securities (4) | $7.3 | $18.9 | 39% |
| Other securities (5) | 5.6 | 25.7 | 22 |
| Derivatives | 6.2 | NM | NM |
| Loans, leases and letters of credit | 5.1 | 8.4 | 61 |
| Repurchase agreements | 6.5 | NM | NM |
| Total mark to market | $30.7 | NM | NM |
| Highly leveraged finance commitments | $2.8 | $4.8 | 58% |
| Equities (excludes ARS in AFS) | 11.3 | NM | NM |
| Structured investment vehicles | 16.0 | 20.5 | 78 |
| Monolines | 1.0 | NM | NM |
| Consumer and other (6) | 11.6 | NM | NM |

(1) Available-for-sale (AFS) accounts for approximately one-third of the total. HTM means held-to-maturity.

(2) Includes commercial real estate ($2.1 billion), municipals ($1.1 billion) and asset-backed securities ($1.5 billion).

(3) Held-for-sale (HFS) accounts for approximately $0.9 billion of the total.

(4) This $7.3 billion of assets is reflected in the exposures set forth under "Managing Global Risk—U.S. Subprime-Related Direct Exposure in Citi Holdings—Special Asset Pool."

(5) Includes $1.9 billion of corporate and $0.7 billion of commercial real estate.

(6) Includes $4.6 billion of small business banking and finance loans.

Note: Totals may not sum due to rounding.

# Items Impacting SAP Revenues

The	table	below	provides	additional	information	regarding	the	net	revenue	marks affecting	the	SAP	during	2009	and	2008.

| In millions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Subprime-related direct exposures (1)(2) | $810 | $(14,283) |
| Private equity and equity investments ^(3) | (1,148) | (2,196) |
| Alt-A mortgages (1)(4) | (1,451) | (3,075) |
| Highly leveraged loans and financing commitments ^(5) | (521) | (4,892) |
| Commercial real estate positions (1)(6)(7) | (1,526) | (2,898) |
| Structured investment vehicles' (SIVs) assets | (80) | (3,269) |
| Auction rate securities proprietary positions (8) | (23) | (1,732) |
| CVA related to exposure to monoline insurers | (1,301) | (5,736) |
| CVA on Citi debt liabilities under fair value option | (252) | 233 |
| CVA on derivatives positions, excluding monoline insurers | 1,283 | (1,059) |
| Subtotal | $(4,209) | $(38,907) |
| Accretion on reclassified assets | 1,994 | 190 |
| Total selected revenue items | $(2,215) | $(38,717) |

(2) See "Managing Global Risk—Credit Risk—U.S. Subprime-Related Direct Exposure in Citi Holdings—Special Asset Pool" for a further discussion of the related risk exposures and the associated marks recorded.

(4) For these purposes, Alt-A mortgage securities are non-agency RMBS where (i) the underlying collateral has weighted average FICO scores between 680 and 720 or (ii) for instances where FICO scores are greater than 720, RMBS have 30% or less of the underlying collateral composed of full documentation loans. See "Managing Global Risk —Credit Risk—U.S. Consumer Mortgage Lending."

(5) Net of underwriting fees. See "Managing Global Risk—Credit Risk—Highly Leveraged Financing Transactions" for further discussion.

(6) The aggregate $1,526 million recorded in 2009 is comprised of $1,121 million of losses, net of hedges, on exposures recorded at fair value, $562 million of losses on equity method investments, and $157 million of gains recorded on exposures classified as held-for-investment/held-to-maturity. Citi Holdings' commercial real estate exposure is split into three categories of assets: held at fair value; held-to-maturity/held-for- investment; and equity. See "Managing Global Risk—Credit Risk—Exposure to Commercial Real Estate" for further discussion.

(7) Excludes positions in SIVs. Commercial real estate write-downs above include $182 million in 2009 and $191 million in 2008 recorded in BAM.

(8)  Excludes write-downs of $6 million in 2009 ($16 million loss recorded in SAP; $8 million gain recorded in BAM) and $393 million in 2008 (all recorded in BAM) arising from the ARS legal settlements.

# Credit Valuation Adjustment (CVA) Related to Monoline Insurers

CVA	is	calculated	by	applying	forward	default	probabilities,	which	are	derived using	the	counterparty's	current	credit	spread,	to	the	expected	exposure	profile. The	exposure	primarily	relates	to	hedges	on	super-senior	subprime	exposures that	were	executed	with	various	monoline	insurance	companies.	See	"Managing Global	Risk—Credit	Risk—Direct	Exposure	to	Monolines"	for	further discussion.

# Credit Valuation Adjustment on Citi's Debt Liabilities for Which Citi Has Elected the Fair Value Option

Citi	is	required	to	use	its	own	credit	spreads	in	determining	the	current	value	for its	derivative	liabilities	and	all	other	liabilities	for	which	it	has	elected	the	fair value	option.	When	Citi's	credit	spreads	widen	(deteriorate),	Citi	recognizes	a gain	on	these	liabilities	because	the	value	of	the	liabilities	has	decreased.	When Citi's	credit	spreads	narrow	(improve),	Citi	recognizes	a	loss	on	these	liabilities because	the	value	of	the	liabilities	has	increased.	The	approximately	$252 million	of	losses	recorded	in	SAP	on	its	fair	value	option	liabilities	(excluding derivative	liabilities)	during	2009	was	principally	due	to	the	maturing	of	debt	on which	Citi	has	elected	the	fair	value	option.

# Credit Valuation Adjustment on Derivative Positions, Excluding Monoline Insurers

The	approximately	$1,283	million	net	gain	in	derivative	positions	held	in	SAP during	2009	was	due	to	the	narrowing	spreads	of	Citi's	counterparties	on	its derivative	assets.	See	"Derivatives—Fair	Valuation	Adjustments	for Derivatives"	for	further	discussion.

# Accretion on Reclassified Assets

In	the	fourth	quarter	of	2008,	Citi	Holdings	reclassified	$33.3	billion	of	debt securities	within	SAP	from	trading	securities	to	HTM	investments,	$4.7	billion	of debt	securities	from	trading	securities	to	AFS,	and	$15.7	billion	of	loans	from held-for-sale	to	held-for-investment.	All	assets	were	reclassified	with	an amortized	cost	equal	to	the	fair	value	on	the	date	of	reclassification.	The difference	between	the	amortized	cost	basis	and	the	expected	principal	cash flows	is	treated	as	a	purchase	discount	and	accreted	into	income	over	the remaining	life	of	the	security	or	loan.	All	of	these	reclassified	debt	securities	and loans	are	held	in	SAP.	During	2009,	SAP	recognized	approximately	$1,994 million	of	interest	revenue	from	this	accretion.

# CORPORATE/OTHER

Corporate/Other	includes	global	staff	functions	(includes	finance,	risk,	human	resources,	legal	and	compliance)	and	other	corporate	expense,	global	operations	and technology	(O&T),	residual	Corporate	Treasury	and	Corporate	items.	At	December	31,	2009,	this	segment	had	approximately	$230	billion	of	assets,	consisting primarily	of	the	Company's	liquidity	portfolio,	including	$110	billion	of	cash	and	cash	equivalents.

| In millions of dollars | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Net interest revenue | $(1,663) | $(2,680) | $(2,008) |
| Non-interest revenue | (8,893) | 422 | (302) |
| Total revenues, net of interest expense | $(10,556) | $(2,258) | $(2,310) |
| Total operating expenses | $1,420 | $510 | $ 1,813 |
| Provisions for loan losses and for benefits and claims | (1) | 1 | (3) |
| (Loss) from continuing operations before taxes | $(11,975) | $(2,769) | $(4,120) |
| Income taxes (benefits) | (4,369) | (587) | (1,446) |
| (Loss) from continuing operations | $(7,606) | $(2,182) | $(2,674) |
| Income (loss) from discontinued operations, net of taxes | (445) | 4,002 | 708 |
| Net income (loss) before attribution of noncontrolling interests | $(8,051) | $ 1,820 | $(1,966) |
| Net income attributable to noncontrolling interests | — | — | 2 |
| Net income (loss) | $(8,051) | $ 1,820 | $(1,968) |

Revenues,	net	of	interest	expense	declined,	primarily	due	to	the	pretax	loss	on debt	extinguishment	related	to	the	repayment	of	the	$20	billion	of	TARP	trust preferred	securities	and	the	pretax	loss	in	connection	with	the	exit	from	the	loss- sharing	agreement	with	the	U.S.	government.	Revenues	also	declined,	due	to	the absence	of	the	2008	sale	of	Citigroup	Global	Services	Limited	recorded	in	O&T. This	was	partially	offset	by	a	pretax	gain	related	to	the	exchange	offers,	revenues and	higher	intersegment	eliminations.

					Operating	expenses	increased,	primarily	due	to	intersegment	eliminations and	increases	in	compensation,	partially	offset	by	lower	repositioning	reserves.

Revenues,	net	of	interest	expense	increased	primarily	due	to	the	gain	in	2007	on the	sale	of	certain	corporate-owned	assets	and	higher	intersegment	eliminations, partially	offset	by	improved	Treasury	hedging	activities.

					Operating	expenses	declined,	primarily	due	to	lower	restructuring	charges	in 2008	as	well	as	reductions	in	incentive	compensation	and	benefits	expense.

# BALANCE SHEET REVIEW

|  | December 31, | December 31, | Increase | % |
| :--- | :--- | :--- | :--- | :--- |
| In billions of dollars | 2009 | 2008 | (decrease)\t\t\t\t\t\tChange | (decrease)\t\t\t\t\t\tChange |
| Assets |  |  |  |  |
| Loans, net of unearned income and allowance for loan losses | $555 | $665 | $(110) | (17)% |
| Trading account assets | 343 | 378 | (35) | (9) |
| Federal funds sold and securities borrowed or purchased under agreements to resell | 222 | 184 | 38 | 21 |
| Investments | 306 | 256 | 50 | 20 |
| Other assets | 431 | 455 | (24) | (5) |
| Total assets | $1,857 | $1,938 | $(81) | (4)% |
| Liabilities |  |  |  |  |
| Deposits | $836 | $774 | $62 | 8% |
| Federal funds purchased and securities loaned or sold under agreements to repurchase | 154 | 205 | (51) | (25) |
| Short-term borrowings and long-term debt | 433 | 486 | (53) | (11) |
| Trading account liabilities | 138 | 166 | (28) | (17) |
| Other liabilities | 141 | 163 | (22) | (13) |
| Total liabilities | $1,702 | $1,794 | $(92) | (5)% |
| Stockholders' equity | $155 | $144 | $11 | 8% |
| Total liabilities and stockholders' equity | $1,857 | $1,938 | $(81) | (4)% |

# Loans

Loans	are	an	extension	of	credit	to	individuals,	corporations,	or	government institutions.	Loans	vary	across	regions	and	industries	and	primarily	include credit	cards,	mortgages,	other	real	estate	lending,	personal	loans,	auto	loans, student	loans,	and	corporate	loans.	The	majority	of	loans	are	carried	at	cost	with a	minimal	amount	recorded	at	fair	value.

					Consumer	and	corporate	loans	comprised	72%	and	28%,	respectively,	of Citi's	total	loans	(net	of	unearned	income	and	before	the	allowance	for	loan losses)	as	of	December	31,	2009.

					During	2009,	consumer	loans	(net	of	allowance	for	loan	losses)	decreased	by $64	billion,	or	14%,	primarily	due	to	a:

$33	billion,	or	12%,	decrease	in	mortgage	and	real	estate	loans;	and $17	billion,	or	19%,	decrease	in	credit	card	loans,	mostly	in	the	U.S.

					These	decreases	were	driven	by	tightened	lending	standards	and	credit activity	during	the	year.

					During	2009,	corporate	loans	decreased	$46	billion,	or	22%,	primarily	driven by	a	decrease	of	$21	billion,	or	20%,	in	commercial	and	industrial	loans. 					During	2009,	average	consumer	loans	(net	of	unearned	income)	of	$456 billion	yielded	an	average	rate	of	7.8%,	compared	to	$513	billion	and	8.9%	in the	prior	year.	Average	corporate	loans	of	$190	billion	yielded	an	average	rate of	6.3%	in	2009,	compared	to	$221	billion	and	7.7%	in	the	prior	year.

					For	further	information,	see	"Loans	Outstanding"	under	"Managing	Global Risk—Credit	Risk"	and	Note	17	to	the	Consolidated	Financial	Statements.

# Trading Account Assets (Liabilities)

Trading	account	assets	include	debt	and	marketable	equity	securities, derivatives	in	a	receivable	position,	residual	interests	in	securitizations,	and physical	commodities	inventory.	In	addition,	certain	assets	that	Citigroup	has elected	to	carry	at	fair	value,	such	as	certain	loans	and	purchase	guarantees,	are also	included	in	Trading	account	assets.	Trading	account	liabilities	include securities	sold,	not	yet	purchased	(short	positions)	and	derivatives	in	a	net payable	position	as	well	as	certain	liabilities	that	Citigroup	has	elected	to	carry at	fair	value.

					All	Trading	account	assets	and	Trading	account	liabilities	are	reported	at their	fair	value,	except	for	physical	commodities	inventory	which	is	carried	at the	lower	of	cost	or	market,	with	unrealized	gains	and	losses	recognized	in current	income.

$56	billion,	or	49%,	decrease	in	revaluation	gains	primarily	consisting of	decreases	in	interest	rate	and	foreign	exchange	contracts	as	well	as a	decrease	in	netting	agreements;

$16	billion,	or	30%,	decrease	in	mortgage	loan	securities	driven	by decreased	agency	and	subprime	debt;

$20	billion,	or	172%,	increase	in	U.S.	Treasury	and	federal	agency securities;

$15	billion,	or	27%,	increase	in	foreign	government	securities;	and

$7	billion,	or	9%,	increase	in	corporate	and	other	debt	securities.

$51	billion,	or	44%,	decrease	in	revaluation	losses	primarily	due	to decreases	in	interest	rate,	foreign	exchange	and	equity	contracts	as well	as	a	decrease	in	netting	agreements;	and

$23	billion,	or	45%,	increase	in	securities	sold,	not	yet	purchased,

comprised	of	an	$18	billion	increase	in	debt	securities,	with	U.S.

Treasury	securities	increasing	by	$5	billion.

					In	2009,	average	Trading	account	liabilities	were	$60	billion,	yielding	an average	rate	of	0.5%,	compared	to	$75	billion	and	1.7%	in	the	prior	year.

					For	further	discussion	regarding	Trading	account	assets	and	Trading	account liabilities,	see	Note	15	to	the	Consolidated	Financial	Statements.

# Federal Funds Sold (Purchased) and Securities Borrowed (Loaned) or Purchased (Sold) Under Agreements to Resell (Repurchase)

Federal	funds	sold	and	federal	funds	purchased	consist	of	unsecured	advances	of excess	balances	in	reserve	accounts	held	at	Federal	Reserve	banks.	When Citigroup	advances	federal	funds	to	a	third	party,	it	is	selling	its	excess	reserves. Similarly,	when	Citigroup	receives	federal	funds,	it	is	purchasing	reserves	from	a third	party.	These	interest-bearing	transactions	typically	have	an	original maturity	of	one	business	day.

					Securities	borrowed	and	securities	loaned	are	recorded	at	the	amount	of	cash advanced	or	received,	with	a	minimal	amount	adjusted	for	fair	value.	With respect	to	securities	borrowed,	Citi	pays	cash	collateral	in	an	amount	in	excess	of the	market	value	of	securities	borrowed,	and	receives	excess	in	the	case	of securities	loaned.	Citigroup	monitors	the	market	value	of	securities	borrowed	and loaned	on	a	daily	basis	with	additional	collateral	advanced	or	obtained	as necessary.	Interest	received	or	paid	for	these	transactions	is	recorded	in	interest income	or	interest	expense.

					Securities	purchased	under	agreements	to	resell	and	securities	sold	under agreements	to	repurchase	are	treated	as	collateralized	financing	transactions	and are	primarily	carried	at	fair	value	since	January	1,	2007.	Citigroup's	policy	is	to take	possession	of	securities	purchased	under	agreements	to	resell.	The	market value	of	securities	to	be	repurchased	and	resold	is	monitored,	and	additional collateral	is	obtained	where	appropriate	to	protect	against	credit	exposure. 					During	2009,	the	increase	of	$38	billion,	or	21%,	in	federal	funds	sold	and securities	borrowed	or	purchased	under	agreements	to	resell,	and	the	decrease	of $51	billion,	or	25%,	in	federal	funds	purchased	and	securities	loaned	or	sold under	agreements	to	repurchase	were	primarily	driven	by	Citi's	liquidity management	objective	of	increasing	cash	and	liquid	securities	positions. 					For	further	information	regarding	these	balance	sheet	categories,	see	Note	13 to	the	Consolidated	Financial	Statements.

# Investments

Investments	consist	of	debt	and	equity	securities	that	are	available-for-sale,	debt securities	that	are	held-to-maturity,	non-marketable	equity	securities	that	are carried	at	fair	value,	and	non-marketable	equity	securities	carried	at	cost.	Debt securities	include	bonds,	notes	and	redeemable	preferred	stock,	as	well	as	loan- backed	securities	(such	as	mortgage-backed	securities)	and	other	structured notes.	Marketable	and	non-marketable	equity	securities	carried	at	fair	value include	common	and	nonredeemable	preferred	stock.	These	instruments	provide Citi	with	long-term	investment	opportunities	while	in	most	cases	remaining relatively	liquid.

					Non-marketable	equity	securities	carried	at	cost	primarily	include	equity shares	issued	by	the	Federal	Reserve	Bank	and	the	Federal	Home	Loan	Bank that	Citigroup	is	required	to	hold.

					Investment	securities	classified	as	available-for-sale	are	primarily	carried	at fair	value	with	the	changes	in	fair	value	generally	recognized	in	stockholders' equity	(accumulated	other	comprehensive	income).	Declines	in	fair	value	that	are deemed	other-than-temporary,	as	well	as	gains	and	losses	from	the	sale	of	these investment	securities,	are	recognized	in	current	earnings.	Certain	investments	in non-marketable	equity	securities	and	certain	investments	that	would	otherwise be	accounted	for	using	the	equity	method	are	carried	at	fair	value.	Changes	in fair	value	of	such	investments	are	recorded	in	earnings.	Debt	securities	classified as	held-to-maturity	are	carried	at	cost	unless	a	decline	in	fair	value	below	cost	is deemed	other-than-temporary,	in	which	case	such	a	decline	is	recorded	in current	earnings.

$64	billion	increase	in	available-for-sale	securities	(U.S.	Treasury	and federal	agency	securities,	$30	billion;	foreign	governments,	$22 billion;	and	corporate,	$10	billion);	and

$13	billion	decrease	in	held-to-maturity	securities	(predominantly asset-backed	securities).

					For	further	information	regarding	investments,	see	Note	16	to	the Consolidated	Financial	Statements.

# Other Assets

Other	assets	are	composed	of	cash	and	due	from	banks,	deposits	with	banks, brokerage	receivables,	goodwill,	intangibles,	and	various	other	assets. 					During	2009,	Other	assets	decreased	$24	billion,	or	5%,	due	to	a:

$11	billion	decrease	in	Brokerage	receivables,	driven	by	the	absence of	unsettled	customer	trades	as	markets	have	become	more	liquid; $5	billion	decrease	in	Intangible	assets	and	$2	billion	decrease	in Goodwill,	predominantly	from	the	sale	of	Nikko	Cordial	Securities and	Nikko	Asset	Management	and	the	MSSB	JV	with	Morgan Stanley;

$3	billion	decrease	in	Deposits	with	banks,	from	decreased	deposits with	the	Federal	Reserve	used	to	purchase	highly	liquid	securities;	and $5	billion	decrease	in	various	other	assets.

					For	further	information	regarding	Goodwill	and	Intangible	assets,	see	Note 19	to	the	Consolidated	Financial	Statements.	For	further	discussion	on Brokerage	receivables,	see	Note	14	to	the	Consolidated	Financial	Statements.

# Deposits

Deposits	represent	customer	funds	that	are	payable	on	demand	or	upon	maturity. The	majority	of	deposits	are	carried	at	cost,	with	a	minimal	amount	recorded	at fair	value.	Deposits	can	be	interest-bearing	or	non-interest-bearing.	Interest- bearing	deposits	payable	by	foreign	and	U.S.	domestic	banking	subsidiaries	of Citigroup	comprise	58%	and	28%	of	total	deposits,	respectively,	while	non- interest-bearing	deposits	comprise	5%	and	9%	of	total	deposits,	respectively. 					During	2009,	total	deposits	increased	by	$62	billion,	or	8%.	Total	average deposits	increased	$10	billion	or	1%	during	2009.

					For	more	information	on	deposits,	see	"Capital	Resources	and	Liquidity— Liquidity."

Debt	is	composed	of	both	short-term	and	long-term	borrowings.	It	includes commercial	paper,	borrowings	from	unaffiliated	banks,	senior	notes	(including collateralized	advances	from	the	Federal	Home	Loan	Bank),	subordinated	notes and	trust	preferred	securities.	The	majority	of	debt	is	carried	at	cost,	with approximately	$27	billion	recorded	at	fair	value.

					During	2009,	total	debt	decreased	by	$53	billion,	or	11%,	with	Short-term borrowings	decreasing	by	$58	billion,	or	46%.	Long-term	debt	increased	by only	$5	billion,	or	1%.

					The	decrease	in	Short-term	borrowings	was	due	to	a	decline	of	$39	billion	in other	funds	borrowed	and	$19	billion	in	commercial	paper	primarily	caused	by decreased	need	for	short-term	funding	due	to	excess	liquidity	caused	by increased	deposits	and	a	reduction	in	assets.

compared	to	$83	billion	and	1.7%	in	the	prior	year.

					Average	long-term	debt	outstanding	during	2009	was	$345	billion,	compared to	$348	billion	in	2008,	with	an	average	rate	of	3.6%	and	4.6%,	respectively. 					For	more	information	on	debt,	see	Note	20	to	the	Consolidated	Financial Statements	and	"Capital	Resources	and	Liquidity—Liquidity."

# SEGMENT BALANCE SHEET AT DECEMBER 31, 2009

|  | Regional | Institutional |  |  | Operations |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Consumer | Clients | Subtotal |  | and Consolidating | Total Citigroup |
| In millions of dollars | Banking | Group | Citicorp\t\t\t Citi Holdings | Citicorp\t\t\t Citi Holdings | Eliminations | Consolidated |
| Assets |  |  |  |  |  |  |
| Cash and due from banks | $8,005 | $15,182 | $23,187 | $1,146 | $1,139 | $25,472 |
| Deposits with banks | 8,903 | 44,772 | 53,675 | 4,202 | 109,537 | 167,414 |
| Federal funds sold and securities borrowed or purchased under |  |  |  |  |  |  |
| agreements to resell | 264 | 214,606 | 214,870 | 7,152 | — | 222,022 |
| Brokerage receivables | 179 | 22,693 | 22,872 | 10,762 | — | 33,634 |
| Trading account assets | 13,818 | 293,046 | 306,864 | 42,855 | (6,946) | 342,773 |
| Investments | 34,466 | 107,115 | 141,581 | 86,049 | 78,489 | 306,119 |
| Loans, net of unearned income |  |  |  |  |  |  |
| Consumer | 123,663 | — | 123,663 | 299,887 | 507 | 424,057 |
| Corporate | — | 125,164 | 125,164 | 42,242 | 41 | 167,447 |
| Loans, net of unearned income | $123,663 | $125,164 | $248,827 | $342,129 | $548 | $591,504 |
| Allowance for loan losses | (6,476) | (3,590) | (10,066) | (25,967) | — | (36,033) |
| Total loans, net | $117,187 | $121,574 | $238,761 | $316,162 | $548 | $555,471 |
| Goodwill | 9,593 | 10,357 | 19,950 | 5,442 | — | 25,392 |
| Intangible assets (other than MSRs) | 2,424 | 1,082 | 3,506 | 5,206 | 2 | 8,714 |
| Mortgage servicing rights (MSRs) | — | 70 | 70 | 6,460 | — | 6,530 |
| Other assets | 17,929 | 35,308 | 53,237 | 61,676 | 48,192 | 163,105 |
| Total assets | $212,768 | $865,805 | $1,078,573 | $547,112 | $230,961 | $1,856,646 |
| Liabilities and equity |  |  |  |  |  |  |
| Total deposits | $289,719 | $441,720 | $731,439 | $91,542 | $12,922 | $835,903 |
| Federal funds purchased and securities loaned or sold under |  |  |  |  |  |  |
| agreements to repurchase | 2,347 | 151,530 | 153,877 | 37 | 367 | 154,281 |
| Brokerage payables | 187 | 60,653 | 60,840 | 1 | 5 | 60,846 |
| Trading account liabilities | 26 | 132,377 | 132,403 | 5,109 | — | 137,512 |
| Short-term borrowings | 227 | 30,085 | 30,312 | 4,526 | 34,041 | 68,879 |
| Long-term debt | 1,320 | 85,768 | 87,088 | 30,431 | 246,500 | 364,019 |
| Other liabilities | 62,428 | 143,678 | 206,106 | 75,322 | (201,195) | 80,233 |
| Net inter-segment funding (lending) | (143,486) | (180,006) | (323,492) | 340,144 | (16,652) | — |
| Total Citigroup stockholders' equity | — | — | — | — | $152,700 | $152,700 |
| Noncontrolling interest | — | — | — | — | 2,273 | 2,273 |
| Total equity | — | — | — | — | 154,973 | 154,973 |
| Total liabilities and equity | $212,768 | $865,805 | $1,078,573 | $547,112 | $230,961 | $1,856,646 |

					The	above	supplemental	information	reflects	Citigroup's	consolidated GAAP	balance	sheet	by	reporting	segment	as	of	December	31,	2009.	The respective	segment	information	closely	depicts	the	assets	and	liabilities	managed by	each	segment	as	of	such	date.	While	this	presentation	is	not	defined	by GAAP,	Citi	believes	that	these	non-GAAP	financial	measures	enhance investors'	understanding	of	the	balance	sheet	components	managed	by	the underlying	business	segments,	as	well	as	the	beneficial	interrelationship	of	the asset	and	liability	dynamics	of	the	balance	sheet	components	among	Citi's business	segments.

# CAPITAL RESOURCES AND LIQUIDITY

# CAPITAL RESOURCES

Capital	has	historically	been	generated	by	earnings	from	Citi's	operating businesses.	Citi	may	also	augment	its	capital	through	issuances	of	common stock,	convertible	preferred	stock,	preferred	stock,	equity	issued	through	awards under	employee	benefit	plans,	and,	in	the	case	of	regulatory	capital,	through	the issuance	of	subordinated	debt	underlying	trust	preferred	securities.	In	addition, the	impact	of	future	events	on	Citi's	business	results,	such	as	corporate	and	asset dispositions,	as	well	as	changes	in	accounting	standards,	also	affect	Citi's	capital levels.

					Generally,	capital	is	used	primarily	to	support	assets	in	Citi's	businesses	and to	absorb	market,	credit,	or	operational	losses.	While	capital	may	be	used	for other	purposes,	such	as	to	pay	dividends	or	repurchase	common	stock,	Citi's ability	to	utilize	its	capital	for	these	purposes	is	currently	restricted	due	to	its agreements	with	the	U.S.	government,	generally	for	so	long	as	the	U.S. government	continues	to	hold	Citi's	common	stock	or	trust	preferred	securities. See	also	"Supervision	and	Regulation"	below.

					Citigroup's	capital	management	framework	is	designed	to	ensure	that Citigroup	and	its	principal	subsidiaries	maintain	sufficient	capital	consistent	with Citi's	risk	profile	and	all	applicable	regulatory	standards	and	guidelines,	as	well as	external	rating	agency	considerations.	The	capital	management	process	is centrally	overseen	by	senior	management	and	is	reviewed	at	the	consolidated, legal	entity,	and	country	level.

					Senior	management	is	responsible	for	the	capital	management	process mainly	through	Citigroup's	Finance	and	Asset	and	Liability	Committee (FinALCO),	with	oversight	from	the	Risk	Management	and	Finance	Committee of	Citigroup's	Board	of	Directors.	The	FinALCO	is	composed	of	the	senior-most management	of	Citigroup	for	the	purpose	of	engaging	management	in	decision- making	and	related	discussions	on	capital	and	liquidity	matters.	Among	other things,	FinALCO's	responsibilities	include:	determining	the	financial	structure of	Citigroup	and	its	principal	subsidiaries;	ensuring	that	Citigroup	and	its regulated	entities	are	adequately	capitalized	in	consultation	with	its	regulators; determining	appropriate	asset	levels	and	return	hurdles	for	Citigroup	and individual	businesses;	reviewing	the	funding	and	capital	markets	plan	for Citigroup;	and	monitoring	interest	rate	risk,	corporate	and	bank	liquidity,	and	the impact	of	currency	translation	on	non-U.S.	earnings	and	capital.

# Capital Ratios

Citigroup	is	subject	to	the	risk-based	capital	guidelines	issued	by	the	Federal Reserve	Board.	Historically,	capital	adequacy	has	been	measured,	in	part,	based on	two	risk-based	capital	ratios,	the	Tier	1	Capital	and	Total	Capital	(Tier	1 Capital	+	Tier	2	Capital)	ratios.	Tier	1	Capital	consists	of	the	sum	of	"core capital	elements,"	such	as	qualifying	common	stockholders'	equity,	as	adjusted, qualifying	noncontrolling	interests,	and	qualifying	mandatorily	redeemable securities	of	subsidiary	trusts,	principally	reduced	by	goodwill,	other	disallowed intangible	assets,	and	disallowed	deferred	tax	assets.	Total	Capital	also	includes "supplementary"	Tier	2	Capital	elements,	such	as	qualifying	subordinated	debt and	a	limited	portion	of	the	allowance	for	credit	losses.	Both	measures	of	capital adequacy	are	stated	as	a	percentage	of	risk-weighted	assets.	Further,	in conjunction	with	the	conduct	of	the	2009	Supervisory	Capital	Assessment Program	(SCAP),	U.S.	banking	regulators	developed	a	new	measure	of	capital termed	"Tier	1	Common,"	which	has	been	defined	as	Tier	1	Capital	less	non- common	elements,	including	qualifying	perpetual	preferred	stock,	qualifying noncontrolling	interests,	and	qualifying	mandatorily	redeemable	securities	of subsidiary	trusts.

					Citigroup's	risk-weighted	assets	are	principally	derived	from	application	of the	risk-based	capital	guidelines	related	to	the	measurement	of	credit	risk. Pursuant	to	these	guidelines,	on-balance-sheet	assets	and	the	credit	equivalent amount	of	certain	off-balance-sheet	exposures	(such	as	financial	guarantees, unfunded	lending	commitments,	letters	of	credit,	and	derivatives)	are	assigned	to one	of	several	prescribed	risk-weight	categories	based	upon	the	perceived	credit risk	associated	with	the	obligor,	or	if	relevant,	the	guarantor,	the	nature	of	the collateral,	or	external	credit	ratings.	Risk-weighted	assets	also	incorporate	a measure	for	market	risk	on	covered	trading	account	positions	and	all	foreign exchange	and	commodity	positions	whether	or	not	carried	in	the	trading	account. Excluded	from	risk-weighted	assets	are	any	assets,	such	as	goodwill	and deferred	tax	assets,	to	the	extent	required	to	be	deducted	from	regulatory	capital. See	"Components	of	Capital	Under	Regulatory	Guidelines"	below.

					Citigroup	is	also	subject	to	a	Leverage	ratio	requirement,	a	non-risk-based measure	of	capital	adequacy,	which	is	defined	as	Tier	1	Capital	as	a	percentage of	quarterly	adjusted	average	total	assets.

					To	be	"well	capitalized"	under	federal	bank	regulatory	agency	definitions,	a bank	holding	company	must	have	a	Tier	1	Capital	ratio	of	at	least	6%,	a	Total Capital	ratio	of	at	least	10%,	and	a	Leverage	ratio	of	at	least	3%,	and	not	be subject	to	a	Federal	Reserve	Board	directive	to	maintain	higher	capital	levels. The	following	table	sets	forth	Citigroup's	regulatory	capital	ratios	as	of December	31,	2009	and	December	31,	2008.

# Citigroup Regulatory Capital Ratios

| At year end | 2009						 2008 | 2009						 2008 |
| :--- | :--- | :--- |
| Tier 1 Common | 9.60% | 2.30% |
| Tier 1 Capital | 11.67 | 11.92 |
| Total Capital (Tier 1 Capital and Tier 2 Capital) | 15.25 | 15.70 |
| Leverage | 6.89 | 6.08 |

					As	noted	in	the	table	above,	Citigroup	was	"well	capitalized"	under	the federal	bank	regulatory	agency	definitions	at	year	end	for	both	2009	and	2008.

# Components of Capital Under Regulatory Guidelines

| In millions of dollars at year end |  | 2009 | 2008 (1) |
| :--- | :--- | :--- | :--- |
| Tier 1 Common |  |  |  |
| Citigroup common stockholders' equity |  | $152,388 | $70,966 |
| Less: Net unrealized losses on securities available-for-sale, net of tax (2) |  | (4,347) | (9,647) |
| Less: Accumulated net losses on cash flow hedges, net of tax |  | (3,182) | (5,189) |
| Less: Pension liability adjustment, net of tax\n(3) |  | (3,461) | (2,615) |
| Less: Cumulative effect included in fair value of financial liabilities attributable to the change in own credit worthiness, net of tax | (4) | 760 | 3,391 |
| Less: Disallowed deferred tax assets (5) |  | 26,044 | 23,520 |
| Less: Intangible assets: |  |  |  |
| Goodwill | Goodwill | 25,392 | 27,132 |
| Other disallowed intangible assets |  | 5,899 | 10,607 |
| Other | Other | (788) | (840) |
| Total Tier 1 Common |  | $104,495 | $22,927 |
| Qualifying perpetual preferred stock | Qualifying perpetual preferred stock | $312 | $70,664 |
| Qualifying mandatorily redeemable securities of subsidiary trusts | Qualifying mandatorily redeemable securities of subsidiary trusts | 19,217 | 23,899 |
| Qualifying noncontrolling interests | Qualifying noncontrolling interests | 1,135 | 1,268 |
| Other | Other | 1,875 | — |
| Total Tier 1 Capital | Total Tier 1 Capital | $127,034 | $118,758 |
| Tier 2 Capital |  |  |  |
| Allowance for credit losses (6) |  | $13,934 | $12,806 |
| Qualifying subordinated debt (7) |  | 24,242 | 24,791 |
| Net unrealized pretax gains on available-for-sale equity securities (2) |  | 773 | 43 |
| Total Tier 2 Capital | Total Tier 2 Capital | $38,949 | $37,640 |
| Total Capital (Tier 1 Capital and Tier 2 Capital) | Total Capital (Tier 1 Capital and Tier 2 Capital) | $165,983 | $156,398 |
| Risk-weighted assets (8) |  | $1,088,526 | $996,247 |

(1) Reclassified to conform to the current period presentation.

(2) Tier 1 Capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values, in accordance with risk-based capital guidelines. In arriving at Tier 1 Capital, banking organizations are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax. Banking organizations are permitted to include in Tier 2 Capital up to 45% of net unrealized pretax gains on available-for-sale equity securities with readily determinable fair values.

(3) The Federal Reserve Board granted interim capital relief for the impact of ASC 715-20, Compensation—Retirement Benefits—Defined Benefits Plans (formerly SFAS 158).

(4) The impact of including Citigroup's own credit rating in valuing financial liabilities for which the fair value option has been elected is excluded from Tier 1 Capital, in accordance with risk-based capital guidelines.

(5) Of Citi's approximately $46 billion of net deferred tax assets at December 31, 2009, approximately $15 billion of such assets were includable without limitation in regulatory capital pursuant to risk-based capital guidelines, while approximately $26 billion of such assets exceeded the limitation imposed by these guidelines and, as "disallowed deferred tax assets," were deducted in arriving at Tier 1 Capital. Citigroup's other approximately $5 billion of net deferred tax assets primarily represented approximately $3 billion of deferred tax effects of unrealized gains and losses on available-for-sale debt securities and approximately $2 billion of deferred tax effects of the pension liability adjustment, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines. Citi had approximately $24 billion of disallowed deferred tax assets at December 31, 2008.

(6) Includable up to 1.25% of risk-weighted assets. Any excess allowance is deducted in arriving at risk-weighted assets.

(7) Includes qualifying subordinated debt in an amount not exceeding 50% of Tier 1 Capital.

(8) Includes risk-weighted credit equivalent amounts, net of applicable bilateral netting agreements, of $64.5 billion for interest rate, commodity, and equity derivative contracts, foreign exchange contracts, and credit derivatives as of December 31, 2009, compared with $102.9 billion as of December 31, 2008. Market risk equivalent assets included in risk-weighted assets amounted to $80.8 billion at December 31, 2009 and $101.8 billion at December 31, 2008. Risk-weighted assets also include the effect of certain other off-balance-sheet exposures, such as unused lending commitments and letters of credit, and reflect deductions such as certain intangible assets and any excess allowance for credit losses.

# 2009 Actions Significantly Impacting Citigroup's Capital

Primarily	as	a	result	of	the	preferred	stock	and	trust	preferred	securities	exchange offers	consummated	in	the	third	quarter	of	2009,	and	capital	raised	in	connection with	the	$20	billion	TARP	repayment	as	well	as	the	exiting	of	the	loss-sharing agreement	in	the	fourth	quarter	of	2009,	the	overall	quality	of	Citigroup's	capital was	enhanced,	with	Tier	1	Common	increasing	by	approximately	$82	billion from	December	31,	2008	to	December	31,	2009.	In	addition,	Citigroup's Tangible	Common	Equity	(TCE)	increased	by	approximately	$87	billion	from December	31,	2008	to	December	31,	2009.	Tier	1	Common	and	related	capital adequacy	ratios	are	measures	used	and	relied	upon	by	U.S.	banking	regulators, while	TCE	is	a	capital	adequacy	metric	used	and	relied	upon	by	industry analysts.	However,	both	metrics	and	related	ratios	are	considered	"non-GAAP financial	measures"	for	SEC	purposes.	See	"Capital	Ratios,"	"Components	of Capital	Under	Regulatory	Guidelines,"	and	"Tangible	Common	Equity"	for additional	information	on	these	measures.

# 2009 Actions Significantly Impacting Citigroup's Risk-Weighted Assets

In	the	fourth	quarter	of	2009,	Citigroup	entered	into	an	agreement	to	exit	the loss-sharing	agreement	with	the	U.S.	Treasury,	FDIC,	and	Federal	Reserve	Bank of	New	York,	which	covered	losses	on	a	specifically	designated	portfolio, principally	comprised	of	consumer	assets,	and	initially	valued	at	approximately $301	billion	as	of	November	21,	2008.	Under	the	agreement,	these	designated assets	had	been	risk-weighted	at	20%	for	purposes	of	calculating	Citi's	risk- based	capital	ratios.	With	the	exiting	of	the	agreement,	commencing	December 31,	2009,	Citigroup	discontinued	risk-weighting	these	assets	at	20%.	Rather,	the assets	were	risk-weighted	as	required	in	accordance	with	risk-based	capital guidelines,	as	described	above,	and	consistent	to	that	prior	to	entering	into	the agreement.	The	exiting	of	the	loss-sharing	agreement	increased	Citigroup's	risk- weighted	assets	by	approximately	$136	billion,	and	correspondingly	decreased Citi's	Tier	1	Common,	Tier	1	Capital,	and	Total	Capital	ratios	by	approximately 125	basis	points,	approximately	157	basis	points,	and	approximately	183	basis points,	respectively,	at	December	31,	2009.

					In	addition,	during	the	first	half	of	2009,	all	three	of	Citigroup's	primary credit	card	securitization	trusts—the	Master	Trust,	Omni	Trust,	and	Broadway Trust—had	bonds	placed	on	ratings	watch	with	negative	implications	by	rating agencies.	As	a	result	of	the	ratings	watch	status,	certain	actions	were	taken	by Citi	with	respect	to	each	of	the	trusts.	In	general,	the	actions	subordinated	certain senior	interests	in	the	trust	assets	that	were	retained	by	Citi,	which	effectively placed	these	interests	below	investor	interests	in	terms	of	priority	of	payment. 					As	a	result	of	these	actions,	based	on	the	applicable	regulatory	capital	rules, Citigroup	began	including	the	sold	assets	for	all	three	of	the	credit	card securitization	trusts	in	its	risk-weighted	assets	for	purposes	of	calculating	its risk-based	capital	ratios	during	2009.	The	increase	in	risk-weighted	assets occurred	in	the	quarter	during	2009	in	which	the	respective	actions	took	place. The	effect	of	these	changes	increased	Citigroup's	risk-weighted	assets	by approximately	$82	billion,	and	decreased	Citigroup's	Tier	1	Capital	ratio

by	approximately	100	basis	points	each	as	of	March	31,	2009,	with	respect	to	the Master	and	Omni	Trusts.	The	inclusion	of	the	Broadway	Trust	increased Citigroup's	risk-weighted	assets	by	an	additional	approximate	$900	million	at June	30,	2009.	All	bond	ratings	for	each	of	the	trusts	have	been	affirmed	by	the rating	agencies,	and	no	downgrades	had	occurred	as	of	December	31,	2009.

# 2010 Accounting Changes Significantly Impacting Citigroup's Capital—Elimination of Qualifying Special Purpose Entities (QSPEs) and Changes in the Consolidation Model for Variable Interest Entities (VIEs)

Changes	that	the	FASB	adopted	in	2009	regarding	sales	treatment	for	assets	and consolidation	of	off-balance-sheet	VIEs,	as	promulgated	in	SFAS	166	and	SFAS 167,	respectively,	will	have	a	significant	and	immediate	impact	on	Citigroup's capital	ratios	beginning	in	the	first	quarter	of	2010.	Specifically,	the	pro	forma impact	on	Citigroup's	capital	ratios	of	the	adoption	on	January	1,	2010	of	SFAS 166	and	SFAS	167	(based	on	financial	information	as	of	December	31,	2009) would	be	as	follows:

|  | As reported						Pro forma | As reported						Pro forma | Impact |
| :--- | :--- | :--- | :--- |
| Tier 1 Common | 9.60% | 8.21% | (139) bps |
| Tier 1 Capital | 11.67 | 10.26 | (141) bps |
| Total Capital | 15.25 | 13.82 | (143) bps |
| Leverage | 6.89 | 6.14 | (75) bps |
| TCE (TCE/RWA) | 10.86% | 9.99% | (87) bps |

					For	more	information,	see	Notes	1	and	23	to	the	Consolidated	Financial Statements,	including	"Funding,	Liquidity	Facilities	and	Subordinate	Interests" below.

# Common Stockholders' Equity

Citigroup's	common	stockholders'	equity	increased	during	2009	by	$81.4	billion to	$152.4	billion,	and	represented	8.2%	of	total	assets	as	of	December	31,	2009. Citigroup's	common	stockholders'	equity	was	$71.0	billion,	which	represented 3.7%	of	total	assets,	at	December	31,	2008.

					The	table	below	summarizes	the	change	in	Citigroup's	common stockholders'	equity	during	2009:

(1) Net loss includes a $0.9 billion after-tax gain related to the conversion of trust preferred securities held by public investors into common stock, pursuant to Citi's public and private exchange offers consummated in July 2009 and completed in their entirety in September 2009.

(2) Net loss includes a $6.2 billion after-tax loss associated with the $20 billion TARP repayment as well as the exiting of the loss-sharing agreement in December 2009.

					As	of	December	31,	2009,	approximately	$6.7	billion	of	stock	repurchases remained	under	Citi's	authorized	repurchase	programs.	No	material	repurchases were	made	in	2009	or	2008.	In	addition,	for	so	long	as	the	U.S.	government	holds any	Citigroup	common	stock	or	trust	preferred	securities	acquired	pursuant	to the	preferred	stock	exchange	offers,	Citigroup	has	agreed	not	to	acquire, repurchase,	or	redeem	any	Citigroup	equity	or	trust	preferred	securities,	other than	pursuant	to	administering	its	employee	benefit	plans	or	other	customary exceptions,	or	with	the	consent	of	the	U.S.	government.	See	also	"Supervision and	Regulation."

# Tangible Common Equity

TCE,	as	defined	by	Citigroup,	represents	Common	equity	less	Goodwill	and Intangible	assets	(other	than	Mortgage	Servicing	Rights	(MSRs))	net	of	the related	net	deferred	taxes.	Other	companies	may	calculate	TCE	in	a	manner different	from	that	of	Citigroup.	Citi's	TCE	was	$118.2	billion	and	$31.1	billion at	December	31,	2009	and	2008,	respectively.

					A	reconciliation	of	Citigroup's	total	stockholders'	equity	to	TCE	follows:

| In millions of dollars at year end, except ratios | 2009 | 2008 |
| :--- | :--- | :--- |
| Total Citigroup stockholders' equity | $152,700 | $141,630 |
| Less: |  |  |
| Preferred stock | 312 | 70,664 |
| Common equity | $152,388 | $70,966 |
| Less: |  |  |
| Goodwill | 25,392 | 27,132 |
| Intangible assets (other than MSRs) | 8,714 | 14,159 |
| Related net deferred taxes | 68 | (1,382) |
| Tangible common equity (TCE) | $118,214 | $31,057 |
| Tangible assets |  |  |
| GAAP assets | $1,856,646 | $1,938,470 |
| Less: |  |  |
| Goodwill | 25,392 | 27,132 |
| Intangible assets (other than MSRs) | 8,714 | 14,159 |
| Related deferred tax assets | 386 | 1,285 |
| Tangible assets (TA) | $1,822,154 | $1,895,894 |
| Risk-weighted assets (RWA) | $1,088,526 | $996,247 |
| TCE/TA ratio | 6.49% | 1.64% |
| TCE ratio (TCE/RWA) | 10.86% | 3.12% |

# Capital Resources of Citigroup's Depository Institutions

Citigroup's	U.S.	subsidiary	depository	institutions	are	subject	to	risk-based capital	guidelines	issued	by	their	respective	primary	federal	bank	regulatory agencies,	which	are	similar	to	the	guidelines	of	the	Federal	Reserve	Board.	To	be "well	capitalized"	under	these	regulatory	definitions,	Citigroup's	depository institutions	must	have	a	Tier	1	Capital	ratio	of	at	least	6%,	a	Total	Capital	(Tier 1	Capital	+	Tier	2	Capital)	ratio	of	at	least	10%,	and	a	Leverage	ratio	of	at	least 5%,	and	not	be	subject	to	a	regulatory	directive	to	meet	and	maintain	higher capital	levels.

					At	December	31,	2009,	all	of	Citigroup's	subsidiary	depository	institutions were	"well	capitalized"	under	federal	bank	regulatory	agency	definitions, including	Citigroup's	primary	depository	institution,	Citibank,	N.A.,	as	noted	in the	following	table:

# Citibank, N.A. Components of Capital and Ratios Under Regulatory Guidelines

| In billions of dollars at year end | 2009 | 2008 |
| :--- | :--- | :--- |
| Tier 1 Capital | $96.8 | $71.0 |
| Total Capital (Tier 1 Capital and Tier 2 Capital) | \t 110.6 | 108.4 |
| Tier 1 Capital ratio | 13.16% | 9.94% |
| Total Capital ratio | 15.03 | 15.18 |
| Leverage ratio (1) | 8.31 | 5.82 |

(1) Tier 1 Capital divided by each period's quarterly adjusted average total assets.

					Citibank,	N.A.	had	a	$2.8	billion	net	loss	for	2009.	In	addition,	during	2009, Citibank,	N.A.	received	capital	contributions	from	its	immediate	parent company,	Citicorp,	in	the	amount	of	$33.0	billion.	Total	subordinated	notes issued	to	Citibank,	N.A.'s	immediate	parent	company,	Citicorp,	included	in Citibank,	N.A.'s	Tier	2	Capital	declined	from	$28.2	billion	outstanding	at December	31,	2008	to	$4.0	billion	outstanding	at	December	31,	2009,	reflecting the	redemption	of	$24.2	billion	of	subordinated	notes	during	2009.

						The	following	table	presents	the	estimated	sensitivity	of	Citigroup's	and Citibank,	N.A.'s	capital	ratios	to	changes	of	$100	million	in	Tier	1	Common, Tier	1	Capital,	or	Total	Capital	(numerator),	or	changes	of	$1	billion	in	risk- weighted	assets	or	adjusted	average	total	assets	(denominator)	based	on financial	information	as	of	December	31,	2009.	This	information	is	provided	for the	purpose	of	analyzing	the	impact	that	a	change	in	Citigroup's	and

Citibank,	N.A.'s	financial	position	or	results	of	operations	could	have	on	these ratios.	These	sensitivities	only	consider	a	single	change	to	either	a	component	of capital,	risk-weighted	assets,	or	adjusted	average	total	assets.	Accordingly,	an event	that	affects	more	than	one	factor	may	have	a	larger	basis	point	impact	than is	reflected	in	this	table.

|  |  | Impact of $1 |  | Impact of $1 |  | Impact of $1 |  | billion change |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Impact of $100 | billion change in | Impact of $100 | billion change in | Impact of $100 | billion change in | Impact of $100 | in adjusted |
|  | \t\tmillion change in | risk-weighted\t\t million change | risk-weighted\t\t million change | risk-weighted\t\t million change | risk-weighted\t\t million change | risk-weighted\t\t million change | risk-weighted\t\t million change | average total |
|  | Tier 1 Common | assets | in Tier 1 Capital | assets | in Total Capital | assets | in Tier 1 Capital | assets |
| Citigroup | 0.9 bps | 0.9 bps | 0.9 bps | 1.1 bps | 0.9 bps | 1.4 bps | 0.5 bps | 0.4 bps |
| Citibank, N.A. | — | — | 1.4 bps | 1.8 bps | 1.4 bps | 2.0 bps | 0.9 bps | 0.7 bps |

# Broker-Dealer Subsidiaries

At	December	31,	2009,	Citigroup	Global	Markets	Inc.,	a	broker-dealer registered	with	the	SEC	that	is	an	indirect	wholly	owned	subsidiary	of	Citigroup Global	Markets	Holdings	Inc.,	had	net	capital,	computed	in	accordance	with	the SEC's	net	capital	rule,	of	$10.9	billion,	which	exceeded	the	minimum requirement	by	$10.2	billion.

					In	addition,	certain	of	Citi's	broker-dealer	subsidiaries	are	subject	to regulation	in	the	other	countries	in	which	they	do	business,	including requirements	to	maintain	specified	levels	of	net	capital	or	its	equivalent. Citigroup's	broker-dealer	subsidiaries	were	in	compliance	with	their	capital requirements	at	December	31,	2009.	The	requirements	applicable	to	these subsidiaries	in	the	U.S.	and	other	jurisdictions	may	be	subject	to	political uncertainty	and	potential	change	in	light	of	the	recent	financial	crisis	and regulatory	reform	proposals	currently	being	considered	at	both	the	legislative and	regulatory	levels.

# Regulatory Capital Standards Developments

Citigroup	supports	the	move	to	a	new	set	of	risk-based	capital	standards, published	on	June	26,	2004	(and	subsequently	amended	in	November	2005)	by the	Basel	Committee	on	Banking	Supervision,	consisting	of	central	banks	and bank	supervisors	from	13	countries.	The	international	version	of	the	Basel	II framework	will	allow	Citigroup	to	leverage	internal	risk	models	used	to	measure credit,	operational,	and	market	risk	exposures	to	drive	regulatory	capital calculations.

					On	December	7,	2007,	the	U.S.	banking	regulators	published	the	rules	for large	banks	to	comply	with	Basel	II	in	the	U.S.	These	rules	require	Citigroup,	as a	large	and	internationally	active	bank,	to	comply	with	the	most	advanced	Basel II	approaches	for	calculating	credit	and	operational	risk	capital	requirements. The	U.S.	implementation	timetable	consists	of	a	parallel	calculation	period	under the	current	regulatory	capital	regime	(Basel	I)	and	Basel	II,	starting	anytime between	April	1,	2008	and	April	1,	2010,	followed	by	a	three-year	transition period,	typically	starting	12	months	after	the	beginning	of	parallel	reporting.	U.S. regulators	have	reserved	the	right	to	change	how	Basel	II	is	applied	in	the	U.S. following	a	review	at	the	end	of	the	second	year	of	the	transitional	period,	and	to retain	the	existing	prompt	corrective	action	and	leverage	capital	requirements applicable	to	banking	organizations	in	the	U.S.	Citigroup	intends	to	implement Basel	II	within	the	timeframe	required	by	the	final	rules.	The	Basel	II	(or	its successor)	requirements	are	the	subject	of	political	uncertainty	and	potential tightening	or	other	change	in	light	of	the	recent	financial	crisis	and	regulatory reform	proposals	currently	being	considered	at	both	the	legislative	and regulatory	levels.	See	also	"Risk	Factors."

# FUNDING AND LIQUIDITY

# General

Citigroup's	cash	flows	and	liquidity	needs	are	primarily	generated	within	its operating	subsidiaries.		Exceptions	exist	for	major	corporate	items,	such	as	the TARP	repayment,	and	for	equity	and	certain	long-term	debt	issuances,	which take	place	at	the	Citigroup	corporate	level.		Generally,	Citi's	management	of funding	and	liquidity	is	designed	to	optimize	availability	of	funds	as	needed within	Citi's	legal	and	regulatory	structure.	Various	constraints	limit	certain subsidiaries'	ability	to	pay	dividends	or	otherwise	make	funds	available. Consistent	with	these	constraints,	Citigroup's	primary	objectives	for	funding	and liquidity	management	are	established	by	entity	and	in	aggregate	across	three main	operating	entities,	as	follows:		(i)	Citigroup,	as	the	parent	holding company;	(ii)	banking	subsidiaries;	and	(iii)	non-banking	subsidiaries. 					Citigroup	sources	of	funding	include	deposits,	collateralized	financing transactions	and	a	variety	of	unsecured	short-	and	long-term	instruments, including	federal	funds	purchased,	commercial	paper,	long-term	debt,	trust preferred	securities,	preferred	stock	and	common	stock.

					As	a	result	of	continued	deleveraging,	growth	in	deposits,	term	securitization under	government	and	non-government	programs,	the	issuance	of	long-term debt	under	the	FDIC's	Temporary	Liquidity	Guarantee	Program	(TLGP)	and	the issuance	of	non-guaranteed	debt	(particularly	during	the	latter	part	of	2009), Citigroup	substantially	increased	its	balances	of	cash	and	highly	liquid	securities and	reduced	its	short-term	borrowings	during	2009.

					Citi	has	focused	on	growing	a	geographically	diverse	retail	and	corporate deposit	base	that	stood	at	approximately	$836	billion	as	of	December	31,	2009, up	$62	billion	compared	to	December	31,	2008.	On	a	volume	basis,	deposit increases	occurred	in	Regional	Consumer	Banking,	particularly	in	North America,	and	in	Transaction	Services	due	to	growth	in	all	regions	and	strength	in Treasury	and	Trade	Solutions.	Excluding	the	impact	of	foreign	exchange,	Citi's deposit	base	has	increased	sequentially	over	each	of	the	last	six	quarters.	The deposits	are	diversified	across	products	and	regions,	with	approximately	64% outside	of	the	U.S.		This	diversification	provides	Citi	with	an	important	and	low- cost	source	of	funding.	A	significant	portion	of	these	deposits	has	been,	and	is currently	expected	to	be,	long-term	and	stable	and	is	considered	to	be	core. During	2010,	although	our	deposit	balances	may	be	subject	to	seasonal fluctuations,	we	anticipate	pursuing	modest	deposit	growth	while	concentrating on	widening	spreads.

					At	December	31,	2009,	long-term	debt	and	commercial	paper	outstanding for	Citigroup,	Citigroup	Global	Market	Holdings	Inc.	(CGMHI),	Citigroup Funding	Inc.	(CFI)	and	other	Citigroup	subsidiaries,	collectively,	were	as follows:

(1) Citigroup guarantees all of CFI's debt and CGMHI's publicly issued securities.

(2) At December 31, 2009, approximately $24.1 billion relates to collateralized advances       from the Federal Home Loan Bank.

					The	table	below	details	the	long-term	debt	issuances	of	Citigroup	during	the past	five	quarters.

| In billions of dollars | 4Q08 | 1Q09 | 2Q09 | 3Q09 |  | 4Q09 |  | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Debt issued under |  |  |  |  |  |  |  |  |
| TLGP guarantee | $ 5.8 | $21.9 | $17.0 | $10.0 |  | $10.0 |  | $58.9 |
| Debt issued without |  |  |  |  |  |  |  |  |
| TLGP guarantee:\nCitigroup parent |  |  |  |  |  |  |  |  |
| company/CFI | 0.3 | 2.0 | 7.4 | 12.6 |  | 4.0 | (3) | 26.0 |
| Other Citigroup |  |  |  |  |  |  |  |  |
| subsidiaries | 0.5 | 0.5 | \t 10.1 (1) | 7.9 | (2) | 5.8 | (4) | 24.3 |
| Total | $ 6.6 | $24.4 | $34.5 | $30.5 |  | $19.8 |  | $109.2 |

(1) Includes $8.5 billion issued through the U.S. government-sponsored Department of Education Conduit Facility, and $1 billion issued by Citibank Pty. Ltd. Australia and guaranteed by the Commonwealth of Australia.

(3) Includes $1.9 billion of senior debt issued under remarketing of $1.9 billion of Citigroup trust preferred securities held by the Abu Dhabi Investment Authority (ADIA) to provide funds for settlement of the forward stock purchase contract in March 2010, as provided for by the agreement between Citi and ADIA.

(4) Includes $1.4 billion issued through the U.S. government-sponsored Department of Education Conduit Facility.

					See	Note	20	to	the	Consolidated	Financial	Statements	for	further	detail	on Citigroup's	and	its	affiliates'	long-term	debt	and	commercial	paper	outstanding. Commercial	paper	outstanding	as	of	December	31,	2009	has	decreased	from	$29 billion	as	of	December	31,	2008	to	$10	billion.	In	2010,	commercial	paper	is expected	to	continue	to	be	an	important	source	of	funding	for	Citi,	maintained	at approximately	the	$10	billion	level.

					The	TLGP	expired	on	October	31,	2009	and	Citigroup	and	its	affiliates elected	not	to	participate	in	any	FDIC-approved	extension	of	the	program.	In addition,	as	of	the	end	of	2009,	Citigroup	had	substantially	eliminated 	utilization	of	short-term	government	funding	programs.

					In	addition	to	growing	its	deposit	base	and	engaging	in	long-term	debt funding,	Citi	has	been	actively	building	its	structural	liquidity	by	reducing	total assets.	Total	assets	as	of	December	31,	2009	have	declined	4%	as	compared	to December	31,	2008.	Loans	(net	of	allowance),	which	are	one	of	Citi's	most illiquid	assets,	are	down	$109	billion,	or	approximately	15%.	Deposits	as	a percentage	of	loans	have	increased	to	150%	as	of	December	31,	2009	from 116%	as	of	December	31,	2008.	Structural	liquidity,	defined	as	the

sum	of	deposits,	long-term	debt	and	stockholders'	equity	as	a	percentage	of	total assets,	has	increased	steadily	through	2008	and	2009	and	was	73%	at	December 31,	2009,	as	compared	with	66%	at	December	31,	2008.

# Aggregate	Liquidity	Resources

|  | Parent and broker-dealer | Parent and broker-dealer | Significant bank entities | Significant bank entities |  | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In billions of dollars at year end | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| Cash at major central banks | $10.4 | $49.2 | $105.1 | $74.5 | $115.5 | \t $123.7 |
| Liquid securities and assets pledged at major central banks | 76.4 | 22.8 | 123.6 | 53.8 | 200.0 | 76.6 |
| Total | $86.8 | $72.0 | $228.7 | $128.3 | $315.5 | $200.3 |

					As	noted	in	the	table	above,	Citigroup's	aggregate	liquidity	resources	totaled $315.5	billion	as	of	December	31,	2009,	compared	with	$200.3	billion	as	of December	31,	2008.		As	of	December	31,	2009,	Citigroup's	and	its	affiliates' liquidity	portfolio	and	broker-dealer	"cash	box"	totaled	$86.8	billion	as compared	with	$72.0	billion	at	December	31,	2008.	This	includes	the	liquidity portfolio	and	cash	box	held	in	the	U.S.	as	well	as	government	bonds	held	by Citigroup's	broker-dealer	entities	in	the	United	Kingdom	and	Japan.	Further,	at December	31,	2009,	Citigroup's	bank	subsidiaries	had	an	aggregate	of approximately	$105.1	billion	of	cash	on	deposit	with	major	Central	Banks (including	the	U.S.	Federal	Reserve	Bank	of	New	York,	the	European	Central Bank,	Bank	of	England,	Swiss	National	Bank,	Bank	of	Japan,	the	Monetary Authority	of	Singapore,	and	the	Hong	Kong	Monetary	Authority),	compared with	approximately	$74.5	billion	at	December	31,	2008.	Citigroup's	bank subsidiaries	also	have	significant	additional	liquidity	resources	through unencumbered	highly	liquid	securities	available	for	secured	funding	through private	markets	or	that	are,	or	could	be,	pledged	to	the	major	Central	Banks	and the	U.S.	Federal	Home	Loan	Banks.		The	value	of	these	liquid	securities	was $123.6	billion	at	December	31,	2009	compared	with	$53.8	billion	at	December 31,	2008.	Significant	amounts	of	cash	and	liquid	securities	are	also	available	in other	Citigroup	entities.

					Consistent	with	the	strategic	reconfiguration	of	Citi's	balance	sheet,	the build-up	of	liquidity	resources	and	the	shift	in	focus	on	increasing	structural liabilities,	Citigroup	entered	2010	with	much	of	its	required	long-term	debt funding	already	in	place.	As	a	consequence,	it	is	currently	expected	that	the direct	long-term	funding	requirements	for	Citigroup	and	CFI	in	2010	will	be	$15 billion,	which	is	well	below	the	$39	billion	of	expected	maturities.

# Banking Subsidiaries—Constraints on Supplying Funds

There	are	various	legal	and	regulatory	limitations	on	the	ability	of	Citigroup's subsidiary	depository	institutions	to	pay	dividends,	extend	credit	or	otherwise supply	funds	to	Citigroup	and	its	non-bank	subsidiaries.	In	determining	the declaration	of	dividends,	each	depository	institution	must	also	consider	its	effect on	applicable	risk-based	capital	and	leverage	ratio	requirements,	as	well	as policy	statements	of	the	federal	regulatory	agencies	that	indicate	that	banking organizations	should	generally	pay	dividends	out	of	current	operating	earnings. Citigroup	did	not	receive	any	dividends	from	its	banking	subsidiaries	during 2009.

					Some	of	Citigroup's	non-bank	subsidiaries	have	credit	facilities	with Citigroup's	subsidiary	depository	institutions,	including	Citibank,	N.A. Borrowings	under	these	facilities	must	be	secured	in	accordance	with	Section 23A	of	the	Federal	Reserve	Act.	There	are	various	legal	restrictions	on	the	extent to	which	Citi's	subsidiary	depository	institutions	can	lend	or	extend	credit	to	or engage	in	certain	other	transactions	with	Citigroup	and	certain	of	its	non-bank subsidiaries.	In	general,	transactions	must	be	on	arm's-length	terms	and	be secured	by	designated	amounts	of	specified	collateral.	See	Note	20	to	the Consolidated	Financial	Statements.

# Management of Liquidity

Management	of	liquidity	at	Citigroup	is	the	responsibility	of	the	Treasurer. Citigroup	runs	a	centralized	treasury	model	where	the	overall	balance	sheet	is managed	by	Citigroup	Treasury	through	Global	Franchise	Treasurers	and Regional	Treasurers.		Day-to-day	liquidity	and	funding	are	managed	by treasurers	at	the	country	and	business	level	and	are	monitored	by	Corporate Treasury	and	independent	risk	management.

					A	uniform	liquidity	risk	management	policy	exists	for	Citigroup,	its consolidated	subsidiaries	and	managed	affiliates.	Under	this	policy,	there	is	a single	set	of	standards	for	the	measurement	of	liquidity	risk	in	order	to	ensure consistency	across	businesses,	stability	in	methodologies,	transparency	of	risk, and	establishment	of	appropriate	risk	appetite.

					Liquidity	management	is	overseen	by	the	Board	of	Directors	through	its	Risk Management	and	Finance	Committee	and	by	senior	management	through Citigroup's	Finance	and	Asset	and	Liability	Committee	(FinALCO).	One	of	the objectives	of	the	Risk	Management	and	Finance	Committee	of	Citigroup's	Board of	Directors	as	well	as	the	FinALCO	is	to	monitor	and	review	overall	liquidity policies	and	practices	as	well	as	the	liquidity	and	balance	sheet	positions	of Citigroup	and	its	principal	subsidiaries.	Additionally,	oversight	of	liquidity	is provided	by	Citigroup's	Global	Asset	and	Liability	Committee.	Asset	and Liability	Committees	are	also	established	for	each	region,	country	and/or	major line	of	business.

# MONITORING LIQUIDITY

# Funding and Liquidity Plans

Each	principal	operating	subsidiary	and/or	country	must	prepare	a	Funding	and Liquidity	Plan	for	approval	by	the	Treasurer	and	independent	risk	management. For	significant	entities,	as	defined	by	balance	sheet	size	and	the	liquidity	risk position,	the	Funding	and	Liquidity	Plan	is	prepared	and	approved	on	an	annual basis.	The	Funding	and	Liquidity	Plan	addresses	strategic	liquidity	issues	and establishes	the	parameters	for	identifying,	measuring,	monitoring	and	limiting liquidity	risk	and	sets	forth	key	assumptions	for	liquidity	risk	management.	The Funding	and	Liquidity	Plan	includes	analysis	of	the	balance	sheet,	as	well	as	the economic	and	business	conditions	impacting,	or	potentially	impacting,	the liquidity	of	the	major	operating	subsidiary	and/or	country.	As	part	of	the Funding	and	Liquidity	Plan,	liquidity	limits,	liquidity	ratios,	market	triggers,	and assumptions	for	periodic	stress	tests	are	established	and	approved.

# Risk Tolerance

Citigroup	establishes	its	key	risk	tolerances	based	on	stress	tests	and	a	cash capital	ratio	(as	described	in	"Liquidity	Ratios"	below).	This	framework	requires that	entities	be	self-sufficient	or	net	providers	of	liquidity	in	their	designated stress	tests	and	have	excess	cash	capital.	Aggregate	self	sufficiency	targets	have been	established	for	the	banking	subsidiaries,	Citigroup,	the	parent	holding company,	and	CGMHI	as	well	as	for	individual	entities	as	part	of	their	Funding and	Liquidity	Plans.	In	addition,	an	important	benchmark	for	the	combined Citigroup,	the	parent	holding	company,	and	CGMHI	is	to	maintain	sufficient liquidity	to	meet	all	maturing	obligations	for	a	one-year	period	without	access	to the	unsecured	wholesale	markets.

					Within	this	context,	there	are	a	series	of	tools	used	to	monitor	Citigroup's liquidity	position.		These	include	liquidity	gaps	and	associated	limits,	liquidity ratios,	stress	testing	and	market	triggers,	as	described	below.

# Liquidity Gaps and Limits

Citigroup	uses	a	monitoring	tool	that	measures	potential	funding	gaps	over various	time	horizons	in	a	standard	operating	environment.	The	gap	for	any	given funding	need	represents	the	potential	market	access	required,	or	placements	to the	market	(internal	or	external)	over	designated	tenors.	Limits	establish	risk appetite	for	potential	market	access	in	standard	operating	conditions	and	are monitored	against	the	liquidity	position	on	a	daily	basis.	Limits	are	established based	on	evaluation	of	available	contingent	actions	and	liquidity	vulnerabilities under	designated	stress	scenarios.	While	the	contingent	capacity	places	a	cap	on the	limits,	the	limits	are	also	evaluated	based	on	the	structural	liquidity	of	the balance	sheet,	stability	of	liabilities,	liquidity	of	assets,	depth	of	markets,	the experience	of	management,	size	of	the	balance	sheet,	historical	utilization,	and an	evaluation	of	expected	business	and	funding	strategy.	Limits	are	established such	that	in	stress	scenarios,	entities	are	self-funded	or	net	providers	of	liquidity. Thus,	the	risk	tolerance	for	liquidity	funding	gaps	is	limited	based	on	the capacity	to	cover	the	position	in	a	stressed	environment.	These	limits	are	the	key daily	risk-management	tool	for	Citigroup,	the	parent	holding	company,	and	its banking	subsidiaries.

# Liquidity Ratios

A	series	of	standard	corporate-wide	liquidity	ratios	has	been	established	to monitor	the	structural	elements	of	Citigroup's	liquidity.	One	of	the	key	structural liquidity	measures	is	the	cash	capital	ratio.	Cash	capital	is	a	broader	measure	of the	ability	to	fund	the	structurally	illiquid	portion	of	Citigroup's	balance	sheet than	traditional	measures	such	as	deposits	to	loans	or	core	deposits	to	loans. Cash	capital	measures	the	amount	of	long-term	funding	(>1	year)	available	to fund	illiquid	assets.		Long-term	funding	includes	core	customer	deposits,	long- term	debt	and	equity.	Illiquid	assets	include	loans	(net	of	liquidity	adjustments), illiquid	securities,	securities	haircuts	and	other	assets	(i.e.,	goodwill,	intangibles, fixed	assets,	receivables,	etc.).		Cash	capital	targets	are	established	for	Citigroup, the	parent	holding	company,	CGMHI	and	Citigroup's	aggregate	banking subsidiaries.		In	addition,	each	entity	is	required	to	calculate	a	cash	capital	ratio on	a	monthly	basis.	Benchmarks	must	be	established	and	approved	for	the	cash capital	ratio	as	part	of	the	entities'	Funding	and	Liquidity	plan.		At	December 31,	2009,	the	combined	Citigroup,	the	parent	holding	company,	and	CGMHI,	as well	as	the	aggregate	banking	subsidiaries	had	an	excess	of	cash	capital.	In addition,	as	of	December	31,	2009	the	combined	Citigroup,	the	parent	holding company,	and	CGMHI	maintained	liquidity	to	meet	all	maturing	obligations significantly	in	excess	of		a	one-year	period	without	access	to	the	unsecured wholesale	markets.

# Stress Testing

Simulated	liquidity	stress	testing	is	periodically	performed	for	each	major operating	subsidiary	and/or	country.	Stress	testing	/	scenario	analyses	are intended	to	quantify	the	likely	impact	of	an	event	on	the	balance	sheet	and liquidity	position	and	to	identify	viable	funding	alternatives	that	can	be	utilized in	a	liquidity	event.	A	variety	of	firm-specific	and	market-related	scenarios	are used	at	the	consolidated	level	and	in	individual	countries.	These	scenarios include	assumptions	about	significant	changes	in	key	funding	sources,	credit ratings,	contingent	uses	of	funding,	and	political	and	economic	conditions	in certain	countries.	The	results	of	stress	tests	of	individual	countries	and	operating subsidiaries	are	reviewed	to	ensure	that	each	individual	major	operating subsidiary	or	country	is	either	self-funded	or	a	net	provider	of	liquidity.	In addition,	a	Contingency	Funding	Plan	is	prepared	on	a	periodic	basis	for Citigroup.	The	plan	includes	detailed	policies,	procedures,	roles	and responsibilities,	and	the	results	of	corporate	stress	tests.	The	product	of	these stress	tests	is	a	series	of	alternatives	that	can	be	used	by	the	Treasurer	in	a liquidity	event.

					As	a	result	of	the	recent	financial	crisis,	Citigroup	increased	the	frequency, duration,	and	severity	of	certain	stress	testing,	particularly	related	to	the interconnection	of	idiosyncratic	and	systemic	risk.	Citigroup,	the	parent	holding company,		CGMHI	and	Citigroup's	largest	bank	entities	perform	their	key	stress tests	at	a	minimum	on	a	monthly	basis.	In	addition,	in	conformity	with recommendations	made	by	the	Credit	Risk	Management	Policy	Group,	Citigroup calculates	a	stressed	30-day	maximum	cash	outflow	compared	with	its	liquidity resources	for	some	of	its	key	operating	entities.	This	30-day	maximum	cash outflow	is	performed	on	a	daily	basis.		For	other	entities,	stress	testing	is performed	at	a	minimum	on	a	quarterly	basis.

# Market Triggers

Market	triggers	are	internal	or	external	market	or	economic	factors	that	may imply	a	change	to	market	liquidity	or	Citigroup's	access	to	the	markets. Citigroup	market	triggers	are	monitored	by	the	Treasurer	and	the	head	of	risk architecture	and	are	presented	to	the	FinALCO.

					Appropriate	market	triggers	are	also	established	and	monitored	for	each major	operating	subsidiary	and/or	country.		Local	triggers	are	reviewed	with	the local	country	or	business	Asset	and	Liability	Committee	and	independent	risk management.

# Credit Ratings

Citigroup's	ability	to	access	the	capital	markets	and	other	sources	of	funds,	as well	as	the	cost	of	these	funds	and	its	ability	to	maintain	certain	deposits,	is dependent	on	its	credit	ratings.	The	table	below	indicates	the	current	ratings	for Citigroup.

					As	a	result	of	the	Citigroup	guarantee,	changes	in	ratings	for	Citigroup Funding	Inc.	are	the	same	as	those	of	Citigroup	noted	above.

# Citigroup's Debt Ratings as of December 31, 2009

|  |  | Citigroup Inc. | Citigroup Funding Inc. | Citigroup Funding Inc. | Citibank, N.A. | Citibank, N.A. |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Senior | Commercial | Senior | Commercial | Long- | Short- |
|  | debt | paper | debt | paper | term | term |
| Fitch Ratings | A+ | F1+ | A+ | F1+ | A+ | F1+ |
| Moody's Investors Service | A3 | P-1 | A3 | P-1 | A1 | P-1 |
| Standard & Poor's | A | A-1 | A | A-1 | A+ | A-1 |

					On	February	9,	2010,	S&P	affirmed	the	counterparty	credit	and	debt	ratings of	Citi.	At	the	same	time,	S&P	revised	its	outlook	on	Citi	to	negative	from stable.	This	action	was	the	result	of	S&P's	view	that	there	is	increased uncertainty	about	the	U.S.	government's	willingness	to	provide	extraordinary support	to	a	number	of	systematically	important	financial	institutions.	Outlooks from	both	Moody's	and	Fitch	remained	stable.

					Ratings	downgrades	by	Fitch	Ratings,	Moody's	Investors	Service	or Standard	&	Poor's	have	had	and	could	continue	to	have	material	impacts	on funding	and	liquidity,	and	could	also	have	further	explicit	material	impact	on liquidity	due	to	collateral	triggers	and	other	cash	requirements.	Because	of	the current	credit	ratings	of	Citigroup	Inc.,	a	one-notch	downgrade	of

its	senior	debt/long-term	rating	could	impact	Citigroup	Inc.'s	commercial paper/short-term	rating.	As	of	December	31,	2009,	a	one-notch	downgrade	of the	senior	debt/long-term	rating	of	Citigroup	Inc.,	accompanied	by	a	one-notch downgrade	of	Citigroup	Inc.'s	commercial	paper/short-term	rating,	would	result in	an	approximate	$4.2	billion	funding	requirement	in	the	form	of	collateral	and cash	obligations.	Further,	as	of	December	31,	2009,	a	one-notch	downgrade	of the	senior	debt/long-term	ratings	of	Citibank,	N.A.	would	result	in	an approximate	$4.2	billion	funding	requirement	in	the	form	of	collateral	and	cash obligations.	Because	of	the	current	credit	ratings	of	Citibank,	N.A.,	a	one-notch downgrade	of	its	senior	debt/long-term	rating	is	unlikely	to	have	any	impact	on its	commercial	paper/short-term	rating.

# OFF-BALANCE-SHEET ARRANGEMENTS

Citigroup	and	its	subsidiaries	are	involved	with	several	types	of	off-balance- sheet	arrangements,	including	special	purpose	entities	(SPEs),	primarily	in connection	with	securitization	activities	in	Regional	Consumer	Banking	and Institutional	Clients	Group.	Citigroup	and	its	subsidiaries	use	SPEs	principally to	obtain	liquidity	and	favorable	capital	treatment	by	securitizing	certain	of Citigroup's	financial	assets,	assisting	clients	in	securitizing	their	financial	assets and	creating	investment	products	for	clients.	For	further	information	on	Citi's securitization	activities	and	involvement	in	SPEs,

see	Note	23	to	the	Consolidated	Financial	Statements	and	"Significant Accounting	Policies	and	Significant	Estimates—Securitizations."

					The	following	tables	describe	certain	characteristics	of	assets	owned	by certain	identified	significant	unconsolidated	variable	interest	entities	(VIEs)	as	of December	31,	2009.	These	VIEs	and	Citi's	exposure	to	the	VIEs	are	described	in Note	23	to	the	Consolidated	Financial	Statements.

|  | Total | Weighted |  |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | assets | average |  |  |  |  |  |
| Collateralized debt and loan obligations | (In billions of dollars) | life | A or higher | \t BBB | BB/B | CCC | Unrated |
| Collateralized debt obligations (CDOs) | $19.3 | 3.9 years | 12% | 11% | 16% | 48% | 13% |
| Collateralized loan obligations (CLOs) | $18.8 | 6.8 years | 8% | 5% | 37% | 11% | 39% |

|  | Total						Weighted | Total						Weighted |  |  | Less |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | assets | average |  | AA/Aa1 – | than |
| Municipal securities tender option bond (TOB) trusts | (In billions of dollars) | life | \tAAA/Aaa | AA-/Aa3 | AA-/Aa3 |
| Customer TOB trusts (not consolidated) | $8.5 | 12.2 years | 12% | 85% | 3% |
| Proprietary TOB trusts (consolidated and not consolidated) | $12.3 | \t16.4 years | 7% | 75% | 18% |
| QSPE TOB trusts (not consolidated) | $0.7 | 10.7 years | 89% | 11% | 0% |

					See	"Significant	Accounting	Policies	and	Significant	Estimates—Securitizations"	and	Note	1	to	the	Consolidated	Financial	Statements	for	a	discussion	of	SFAS Nos.	166	and	167,	effective	in	the	first	quarter	of	2010,	and	their	impact	on	Citi.

# CONTRACTUAL OBLIGATIONS

The	following	table	includes	aggregated	information	about	Citigroup's contractual	obligations	that	impact	its	short-	and	long-term	liquidity	and	capital needs.	The	table	includes	information	about	payments	due	under	specified contractual	obligations,	aggregated	by	type	of	contractual	obligation.	It	includes the	maturity	profile	of	Citigroup's	consolidated	long-term	debt,	leases	and	other long-term	liabilities.

					Citigroup's	contractual	obligations	include	purchase	obligations	that	are enforceable	and	legally	binding	for	Citi.	For	the	purposes	of	the	table	below, purchase	obligations	are	included	through	the	termination	date	of	the	respective agreements,	even	if	the	contract	is	renewable.	Many	of	the	purchase	agreements for	goods	or	services	include	clauses	that	would	allow	Citigroup	to	cancel	the agreement	with	specified	notice;	however,	that	impact	is	not	included	in	the table	(unless	Citigroup	has	already	notified	the	counterparty	of	its	intention	to terminate	the	agreement).

					Other	liabilities	reflected	on	Citigroup's	Consolidated	Balance	Sheet	include obligations	for	goods	and	services	that	have	already	been	received,	uncertain	tax positions,	as	well	as	other	long-term	liabilities	that	have	been	incurred	and	will ultimately	be	paid	in	cash.

					Excluded	from	the	following	table	are	obligations	that	are	generally	short- term	in	nature,	including	deposit	liabilities	and	securities	sold	under	agreements to	repurchase.	The	table	also	excludes	certain	insurance	and

investment	contracts	subject	to	mortality	and	morbidity	risks	or	without	defined maturities,	such	that	the	timing	of	payments	and	withdrawals	is	uncertain.	The liabilities	related	to	these	insurance	and	investment	contracts	are	included	on	the Consolidated	Balance	Sheet	as	Insurance	Policy	and	Claims	Reserves, Contractholder	Funds,	and	Separate	and	Variable	Accounts.

					Citigroup's	funding	policy	for	pension	plans	is	generally	to	fund	to	the minimum	amounts	required	by	the	applicable	laws	and	regulations.	At December	31,	2009,	there	were	no	minimum	required	contributions,	and	no contributions	are	currently	planned	for	the	U.S.	pension	plans.	Accordingly,	no amounts	have	been	included	in	the	table	below	for	future	contributions	to	the U.S.	pension	plans.	For	the	non-U.S.	pension	plans,	discretionary	contributions in	2010	are	anticipated	to	be	approximately	$160	million.	The	anticipated	cash contributions	in	2010	related	to	the	non-U.S.	postretirement	benefit	plans	are $72	million.	These	amounts	are	included	in	the	purchase	obligations	in	the	table below.	The	estimated	pension	and	postretirement	plan	contributions	are	subject to	change,	since	contribution	decisions	are	affected	by	various	factors,	such	as market	performance,	regulatory	and	legal	requirements,	and	management's ability	to	change	funding	policy.	For	additional	information	regarding	Citi's retirement	benefit	obligations,	see	Note	9	to	the	Consolidated	Financial Statements.

| In millions of dollars at year end | 2010 | 2011 | 2012 | 2013 | 2014						Thereafter | 2014						Thereafter |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Long-term debt obligations (1) | $47,162 | $59,656 | $69,344 | $28,132 | $34,895 | $124,830 |
| Lease obligations | 1,247 | 1,110 | 1,007 | 900 | 851 | 2,770 |
| Purchase obligations | 1,032 | 446 | 331 | 267 | 258 | 783 |
| Other long-term liabilities reflected on Citi's Consolidated Balance Sheet (2) | 34,218 | 156 | 36 | 35 | 36 | 3,009 |
| Total | $83,659 | $61,368 | $70,718 | $29,334 | $36,040 | $131,392 |

(1) For additional information about long-term debt and trust preferred securities, see Note 20 to the Consolidated Financial Statements.

(2) Relates primarily to accounts payable and accrued expenses included in Other liabilities in Citi's Consolidated Balance Sheet.

# RISK FACTORS

# The	economic	recession	and	disruptions	in	the	global	financial	markets	have adversely	affected,	and	may	continue	to	adversely	affect,	Citigroup's	business and	results	of	operations.

The	financial	services	industry	and	the	capital	markets	have	been,	and	may continue	to	be,	materially	and	adversely	affected	by	the	economic	recession	and disruptions	in	the	global	financial	markets.	These	market	disruptions	were initially	triggered	by	declines	that	impacted	the	value	of	subprime	mortgages, but	spread	to	all	mortgage	and	real	estate	asset	classes,	to	leveraged	bank	loans and	to	nearly	all	asset	classes,	including	equities.	These	market	disruptions resulted	in	significant	write-downs	of	asset	values	by	financial	institutions, including	Citigroup,	causing	many	financial	institutions	to	seek	additional capital,	merge	with	other	financial	institutions	or,	in	some	cases,	go	bankrupt. 					Disruptions	in	the	global	financial	markets	have	also	adversely	affected,	and may	continue	to	adversely	affect,	the	corporate	bond	markets,	equity	markets, debt	and	equity	underwriting,	and	other	elements	of	the	financial	markets.	Such disruptions	have	caused	some	lenders	and	institutional	investors	to	reduce	and, in	some	cases,	cease	to	provide	funding	to	certain	borrowers,	including	other financial	institutions.	Credit	headwinds,	increasingly	volatile	financial	markets and	reduced	levels	of	business	activity	may	continue	to	negatively	impact Citigroup's	business,	capital,	liquidity,	financial	condition	and	results	of operations,	as	well	as	the	trading	price	of	Citigroup	common	stock,	preferred stock	and	debt	securities.

					Moreover,	market	and	economic	disruptions	have	affected,	and	may	continue to	affect,	consumer	confidence	levels,	consumer	spending,	personal	bankruptcy rates,	and	levels	of	incurrence	and	default	on	consumer	debt	and	home	prices, among	other	factors,	in	certain	of	the	markets	in	which	Citigroup	operates.	Any of	these	factors,	along	with	persistently	high	levels	of	unemployment,	may	result in	a	greater	likelihood	of	reduced	client	interaction	or	elevated	delinquencies	on consumer	loans,	particularly	with	respect	to	Citi's	credit	card	and	mortgage programs,	or	other	obligations	to	Citigroup.	This,	in	turn,	could	result	in	a	higher level	of	loan	losses	and	Citi's	allowances	for	credit	losses,	all	of	which	could adversely	affect	Citigroup's	earnings.	While	Citigroup	has	instituted	loss mitigation	programs	to	work	with	distressed	borrowers	and	potentially	mitigate these	effects,	these	programs	are	in	the	early	stages,	and	it	is	uncertain	whether they	will	be	successful.

					In	connection	with	significant	government	and	central	bank	actions	taken	in late	2008	and	in	2009,	the	U.S.	and	global	economies	began	to	see	signs	of stabilization	in	certain	areas,	and	some	early	positive	economic	signs	were observed	in	late	2009.	Despite	these	positive	signs,	there	remains	significant uncertainty	regarding	the	sustainability	and	pace	of	economic	recovery, unemployment	levels,	the	impact	of	the	U.S.	and	other	governments'	unwinding of	their	extensive	economic	and	market	supports,	which	may	accelerate	in	2010, and	Citi's	delinquency	and	credit	loss	trends.

# Previously	enacted	and	potential	future	legislation,	including	legislation	to reform	the	U.S.	financial	regulatory	system,	could	require	Citigroup	to	change certain	of	its	business	practices,	impose	additional	costs	on	Citigroup	or otherwise	adversely	affect	its	businesses.

In	addition	to	previously	enacted	governmental	assistance	programs	designed	to stabilize	and	stimulate	the	U.S.	economy	(including	without	limitation	the Emergency	Economic	Stabilization	Act	of	2008	(EESA)	and	the	American Recovery	and	Reinvestment	Act	of	2009	(ARRA)),	recent	economic,	political and	market	conditions	have	led	to	numerous	proposals	in	the	U.S.	for	changes	in the	regulation	of	the	financial	industry	in	an	effort	to	prevent	future	crises	and	to reform	the	financial	regulatory	system.

					Some	of	these	proposals	have	already	been	adopted.	For	example,	in	May 2009,	the	U.S.	Congress	enacted	the	Credit	Card	Accountability	Responsibility and	Disclosure	Act	of	2009	(CARD	Act),	which,	among	other	things,	restricts certain	credit	card	practices,	requires	expanded	disclosures	to	consumers	and provides	consumers	with	the	right	to	opt	out	of	certain	interest	rate	increases. Complying	with	these	legislative	changes,	as	well	as	the	requirements	of	the amendments	to	Regulation	Z	(Truth	in	Lending)	adopted	by	the	Federal	Reserve Board	and	effective	July	2010,	will	require	Citigroup	to	invest	significant management	attention	and	resources	to	make	the	necessary	disclosure	and system	changes	in	its	U.S.	card	businesses	and	will	affect	the	results	of	such businesses.	See	"Management's	Discussion	and	Analysis	of	Financial	Condition and	Results	of	Operations—North	America	Regional	Consumer	Banking"	above and	"Managing	Global	Risk—Credit	Risk—2010	Credit	Outlook"	and "—North	America	Cards"	below	for	additional	information.

					In	addition,	in	2009,	the	Obama	Administration	released	a	comprehensive plan	for	regulatory	reform	in	the	financial	industry.	The	Administration's	plan calls	for	significant	proposed	structural	reforms	and	new	substantive	regulation across	the	financial	industry,	including,	without	limitation,	requiring	that	broker- dealers	who	provide	investment	advice	about	securities	to	investors	have	the same	fiduciary	obligations	as	registered	investment	advisers;	new	requirements for	the	securitization	market,	including	requiring	a	securitizer	to	retain	a	material economic	interest	in	the	credit	risk	associated	with	the	underlying	securitization; and	additional	regulation	with	respect	to	the	trading	of	over-the-counter derivatives.	In	addition,	the	Administration's	plan	calls	for	increased	scrutiny and	regulation,	including	potentially	heightened	capital	requirements,	for	any financial	institution	whose	combination	of	size,	leverage	and	interconnectedness could	pose	a	threat	to	market-wide	financial	stability	if	it	failed.	This	is sometimes	referred	to	as	"systemic	risk"	and	may	adversely	affect	Citigroup,	as well	as	the	financial	intermediaries	with	which	it	interacts	on	a	daily	basis	such as	clearing	agencies,	clearing	houses,	banks,	securities	firms	and	exchanges.

					The	House	Financial	Services	Committee	began	considering	legislation based	on	the	Administration's	proposal,	and	in	December	2009,	the	U.S.	House of	Representatives	passed	the	Wall	Street	Reform	and	Consumer	Protection	Act. The	bill	calls	for	comprehensive	financial	regulatory	reform	and	would	create	a Consumer	Protection	Agency	whose	mandate	includes	measures	that	would subject	federally	chartered	financial	institutions	to	state	consumer	protection laws	that	have	historically	been	preempted.	The	bill	would	also	provide	Federal regulators	with	the	authority	to	rein	in	or	dismantle	financial	institutions	whose collapse	could	pose	a	systemic	risk	to	the	financial	stability	or	economy	of	the U.S.	due	to	their	size,	leverage	or	interconnectedness.	The	Senate	Banking, Housing	and	Urban	Affairs	Committee	also	issued	a	discussion	draft	of	a	bill	in November	2009	based	on	the	Administration's	proposal,	which	differs significantly	from	the	House	bill	in	many	respects.

					More	recently,	in	early	2010,	the	Obama	Administration	proposed	further restrictions	on	the	size	and	scope	of	banks	and	other	financial	institutions.	There can	be	no	assurance	as	to	whether	or	when	any	of	the	parts	of	the Administration's	plan	or	other	proposals	will	be	enacted	into	legislation	and,	if adopted,	what	the	final	provisions	of	such	legislation	will	be.	New	legislation and	regulatory	changes	could	require	Citigroup	to	further	change	certain	of	its business	practices,	impose	additional	costs	on	Citigroup,	some	significant, adversely	affect	its	ability	to	pursue	business	opportunities	it	might	otherwise consider	engaging	in,	cause	business	disruptions	or	impact	the	value	of	assets that	Citigroup	holds.

# Citigroup's	participation	in	government	programs	to	modify	first	and	second lien	mortgage	loans	could	adversely	affect	the	amount	and	timing	of	its earnings	and	credit	losses	relating	to	those	loans.

The	U.S.	Treasury	has	announced	guidelines	for	its	first	and	second	lien modification	programs	under	the	Home	Affordable	Modification	Program (HAMP).	Citigroup	began	participating	in	the	HAMP	with	respect	to	first mortgages	during	the	second	quarter	of	2009	and	is	actively	engaged	in discussions	with	the	U.S.	Treasury	for	the	second	lien	program.

					Participation	in	the	HAMP	could	result	in	a	reduction	in	the	principal balances	of	certain	first	and	second	lien	mortgage	loans	and	the	acceleration	of loss	recognition	on	those	loans.	In	addition	to	the	principal	reduction	aspect	of the	programs,	loan	modification	efforts	can	impact	the	interest	rate	and	term	of these	loans,	which	would	in	turn	impact	the	total	return	on	those	assets	and	the timing	of	those	returns.	Participation	in	the	programs	as	a	servicer	could	also reduce	servicing	income	to	the	extent	the	principal	balance	of	a	serviced	loan	is reduced	or	because	it	increases	the	cost	of	servicing	a	loan.

					In	order	to	participate	in	the	HAMP,	borrowers	must	currently	complete	a three-	to	five-month	trial	period	during	which	the	original	terms	of	the	loans remain	in	effect	pending	final	modification.	As	a	result,	Citigroup	is	uncertain	of the	overall	impact	the	HAMP	will	have	on	its	delinquency	trends,	net	credit losses	and	other	loan	loss	metrics.

# The	expiration	of	a	provision	of	the	U.S.	tax	law	that	allows	Citigroup	to	defer U.S.	taxes	on	certain	active	financial	services	income	could	significantly increase	Citi's	tax	expense.

Citigroup's	tax	provision	has	historically	been	reduced	because	active	financing income	earned	and	indefinitely	reinvested	outside	the	U.S.	is	taxed	at	the	lower local	tax	rate	rather	than	at	the	higher	U.S.	tax	rate.	Such	reduction	has	been dependent	upon	a	provision	of	the	U.S.	tax	law	that	defers	the	imposition	of	U.S. taxes	on	certain	active	financial	services	income	until	that	income	is	repatriated to	the	U.S.	as	a	dividend.	This	"active	financing	exception"	expired	on December	31,	2009,	and	while	it	has	been	scheduled	to	expire	on	five	prior occasions	and	has	been	extended	each	time,	there	can	be	no	assurance	that	the exception	will	continue	to	be	extended.	The	Obama	Administration's	2011 budget	proposal	includes	a	two-year	extension	of	the	active	financing	exception. In	addition,	the	U.S.	House	of	Representatives	has	passed	a	one-year	extension of	the	exception	that	is	now	pending	a	vote	in	the	U.S.	Senate.	In	the	event	this exception	is	not	extended	beyond	2009,	the	U.S.	tax	imposed	on	Citi's	active financing	income	earned	outside	the	U.S.	would	increase,	which	could	further result	in	Citi's	tax	expense	increasing	significantly.

# Citigroup's	businesses	are	subject	to	risks	arising	from	extensive	operations outside	the	United	States.

As	a	global	participant	in	the	financial	services	industry,	Citigroup	is	subject	to extensive	regulation,	including	fiscal	and	monetary	policies,	in	jurisdictions around	the	world.

					As	a	result	of	the	current	financial	crisis,	there	are	currently	numerous reform	efforts	underway	outside	the	U.S.,	including	without	limitation	proposals by	the	European	Commission	to	amend	bank	capital	requirements	and	by	the Financial	Services	Authority	in	the	United	Kingdom	to	enhance	regulatory standards	applicable	to	financial	institutions.	This	level	of	regulation	could further	increase	in	all	jurisdictions	in	which	Citigroup	conducts	business.	Any regulatory	changes	could	lead	to	business	disruptions	or	could	impact	the	value of	assets	that	Citigroup	holds	or	the	scope	or	profitability	of	its	business activities.	Such	changes	could	also	require	Citigroup	to	change	certain	of	its business	practices	and	could	expose	Citigroup	to	additional	costs,	including compliance	costs,	and	liabilities	as	well	as	reputational	harm.	To	the	extent	the regulations	strictly	control	the	activities	of	financial	services	institutions,	such changes	would	also	make	it	more	difficult	for	Citigroup	to	distinguish	itself	from competitors.

					In	addition,	the	emerging	markets	in	which	Citigroup	operates	or	invests,	or in	which	it	may	do	so	in	the	future,	particularly	as	a	result	of	its	overall	strategy, may	be	more	volatile	than	the	U.S.	markets	or	other	developed	markets	outside the	U.S.	and	are	subject	to	changing	political,	economic,	financial	and	social factors.	Among	other	factors,	these	include	the	possibility	of	recent	or	future changes	in	political	leadership	and	economic	and	fiscal	policies	and	the	possible imposition	of,	or	changes	in,	currency	exchange	laws	or	other	laws	or restrictions	applicable	to	companies	or	investments	in	these	countries. Citigroup's	inability	to	remain	in	compliance	with	local	laws	in	a	particular market	could	have	a	materially	adverse	effect	not	only	on	its	business	in	that market	but	also	on	its	reputation	generally.

# Future	issuances	of	Citigroup	common	stock	and	preferred	stock	may	reduce any	earnings	available	to	Citi's	common	stockholders	and	the	return	on	the company's	equity.

During	2009,	Citigroup	raised	a	total	of	approximately	$79	billion	in	private	and public	offerings	of	common	stock	in	connection	with	its	exchange	offers	and	as required	by	the	U.S.	government	pursuant	to	Citigroup's	repayment	of	TARP. This	amount	does	not	include	approximately	$3.5	billion	of	tangible	equity	units issued	in	December	2009	that	will	be	settled	for	additional	shares	of	Citigroup common	stock	that	may	be	issued	over	a	three-year	period	but	in	no	event	later than	December	2012.

					In	addition,	in	January	2010,	Citigroup	issued	$1.7	billion	of	common	stock equivalents	to	its	employees	in	lieu	of	cash	compensation	they	would	have otherwise	received.	Subject	to	shareholder	approval	at	Citi's	annual	shareholder meeting	scheduled	to	be	held	on	April	20,	2010,	such	amount	of	common	stock equivalents	will	be	converted	to	common	stock.	Further,	pursuant	to	its agreement	with	the	Abu	Dhabi	Investment	Authority	(ADIA),	entered	into	in November	2007,	Citi	will	issue	an	aggregate	of	$7.5	billion	of	common	stock,	at a	price	per	share	of	$31.83,	over	an	approximately	two-year	period	beginning	in March	2010.

					While	this	additional	capital	has	provided,	or	will	provide,	funding	to Citigroup's	businesses	and	has	improved,	or	will	improve,	Citigroup's	financial position	and	capital	strength,	it	has	increased,	or	will	increase,	Citigroup's	equity and	the	number	of	actual	and	diluted	shares	of	Citigroup	common	stock.	Such increases	in	the	outstanding	shares	of	common	stock	reduce	Citigroup's	earnings per	share	and	the	return	on	Citigroup's	equity,	unless	Citigroup's	earnings increase	correspondingly.	In	addition,	any	additional	future	issuances	of common	stock,	including	without	limitation	pursuant	to	U.S.	governmental requirements	or	programs,	could	further	dilute	the	existing	common stockholders	and	any	earnings	available	to	the	common	stockholders.

The	sale	by	the	U.S.	Treasury	of	its	stake	in	Citigroup	will	result	in	a substantial	amount	of	Citigroup	common	stock	entering	the	market,	which could	adversely	affect	the	market	price	of	Citigroup	common	stock.

As	of	December	31,	2009,	the	U.S.	Treasury	held	a	27.0%	ownership	stake	in Citigroup.	In	December	2009,	the	U.S.	Treasury	announced	that	it	planned	to divest	its	stake	during	2010,	subject	to	market	conditions	and	following	a	90-day lockup	period	that	will	expire	on	March	16,	2010,	resulting	in	approximately	7.7 billion	shares	of	Citigroup	common	stock	being	sold	into	the	market.	The divestiture	of	such	a	large	number	of	shares	of	Citigroup	common	stock	within the	announced	timeframe	could	adversely	affect	the	market	price	of	Citigroup common	stock.

# Citigroup's	ability	to	utilize	its	deferred	tax	assets	(DTAs)	to	offset	future taxable	income	may	be	significantly	limited	if	it	experiences	an	"ownership change"	under	the	Internal	Revenue	Code.

As	of	December	31,	2009,	Citigroup	had	recognized	net	DTAs	of	approximately $46.1	billion,	which	are	included	in	its	tangible	common	equity.	Citigroup's ability	to	utilize	its	DTAs	to	offset	future	taxable	income	may	be	significantly limited	if	Citigroup	experiences	an	"ownership	change"	as	defined	in	Section 382	of	the	Internal	Revenue	Code	of	1986,	as	amended	(the	Code).	In	general, an	ownership	change	will	occur	if	there	is	a	cumulative	change	in	Citigroup's ownership	by	"5-percent	shareholders"	(as	defined	in	the	Code)	that	exceeds	50 percentage	points	over	a	rolling	three-year	period.

					The	common	stock	issued	pursuant	to	the	exchange	offers	in	July	2009,	and the	common	stock	and	tangible	equity	units	issued	in	December	2009	as	part	of Citigroup's	TARP	repayment,	did	not	result	in	an	ownership	change	under	the Code.	However,	these	common	stock	issuances	have	materially	increased	the risk	that	Citigroup	will	experience	an	ownership	change	in	the	future.

					On	June	9,	2009,	the	Board	of	Directors	of	Citigroup	adopted	a	Tax	Benefits Preservation	Plan.	This	Plan	is	subject	to	shareholders'	approval	at	the	2010 Annual	Meeting.	The	purpose	of	the	Plan	is	to	minimize	the	likelihood	of	an ownership	change	occurring	for	Section	382	purposes.	Despite	adoption	of	the Plan,	future	transactions	in	Citigroup	stock	that	may	not	be	in	its	control	may cause	Citigroup	to	experience	an	ownership	change	and	thus	limit	its	ability	to utilize	its	DTAs,	as	well	as	cause	a	reduction	in	Citigroup's	tangible	common equity	and	stockholders'	equity.

# Increases	in	FDIC	insurance	premiums	and	other	proposed	fees	on	banks	may adversely	affect	Citigroup's	earnings.

During	2008	and	continuing	in	2009,	higher	levels	of	bank	failures	have dramatically	increased	resolution	costs	of	the	FDIC	and	depleted	the	deposit insurance	fund.	In	order	to	maintain	a	strong	funding	position	and	restore reserve	ratios	of	the	deposit	insurance	fund,	the	FDIC	has	increased,	and	may further	increase	in	the	future,	assessment	rates	of	insured	institutions.	In November	2009,	the	FDIC	adopted	a	rule	requiring	banks	to	prepay	three	years of	estimated	premiums	to	replenish	the	depleted	insurance	fund,	which	Citigroup paid	in	the	fourth	quarter	of	2009.	There	have	also	been	proposals	to	change	the basis	on	which	these	assessment	rates	are	determined.	Moreover,	the	Obama Administration	has	recently	suggested	the	imposition	of	other	fees	on	banking institutions.

					Citigroup	is	generally	unable	to	control	the	basis	or	the	amount	of	premiums that	it	is	required	to	pay	for	FDIC	insurance	or	the	levying	of	other	fees	or assessments	on	financial	institutions.	If	there	are	additional	bank	or	financial institution	failures,	Citigroup	may	be	required	to	pay	even	higher	FDIC premiums	than	the	recently	increased	levels.	These	announced	increases	and prepayments,	and	any	future	increases	or	other	required	fees,	could	adversely impact	Citigroup's	earnings.

# Citigroup's	businesses	may	be	materially	adversely	affected	if	it	is	unable	to hire	and	retain	qualified	employees.

Citigroup's	performance	is	heavily	dependent	on	the	talents	and	efforts	of	the highly	skilled	individuals	that	Citigroup	is	able	to	attract	and	retain.	Competition from	within	the	financial	services	industry	and	from	businesses	outside	of	the financial	services	industry	for	qualified	employees	has	often	been	intense. 					Citigroup	is	required	to	comply	with	the	U.S.	government's	standards	for executive	compensation	and	related	corporate	governance	set	forth	in	the	ARRA generally	for	so	long	as	the	U.S.	government	holds	certain	Citigroup	securities. These	standards	generally	apply	to	Citigroup's	senior-most	executives	and certain	other	highly	compensated	employees.	The	incentive	compensation arrangements	for	Citigroup's	top	30	most	highly	compensated	employees	are also	subject	to	review	under	the	incentive	compensation	principles	set	by	the Federal	Reserve	Board,	in	consultation	with	Citi's	other	regulators.	In	addition, the	U.K.	recently	imposed	a	one-time	50%	tax	on	bonuses	above	a	certain amount	paid	to	employees	of	banks	operating	in	the	country.

					Furthermore,	the	market	price	of	Citigroup	common	stock	has	declined significantly	from	a	closing	price	of	$55.12	on	May	25,	2007.	Because	a substantial	portion	of	Citigroup's	annual	bonus	compensation	paid	to	its	senior employees	has	been	paid	in	the	form	of	equity,	such	awards	may	not	be	as valuable	from	a	compensatory	or	retention	perspective.

					There	can	be	no	assurance	that,	as	a	result	of	these	restrictions,	or	any potential	future	compensation	restrictions	or	guidelines	imposed	on	Citigroup, Citigroup	will	be	able	to	attract	new	employees	and	retain	and	motivate	its existing	employees,	which	may	in	turn	affect	its	ability	to	compete	effectively	in its	businesses,	manage	its	businesses	effectively	and	expand	into	new	businesses and	geographic	regions.

# Failure	to	maintain	the	value	of	the	Citigroup	brand	may	adversely	affect	its businesses.

Citigroup's	success	depends	on	the	continued	strength	and	recognition	of	the Citigroup	brand	on	a	global	basis.	The	Citi	name	is	integral	to	its	business	as well	as	to	the	implementation	of	its	strategy	for	expanding	its	businesses, including	outside	the	U.S.	Maintaining,	promoting	and	positioning	the	Citigroup brand	will	depend	largely	on	the	success	of	its	ability	to	provide	consistent,	high- quality	financial	services	and	products	to	its	clients	around	the	world. Citigroup's	brand	could	be	adversely	affected	if	it	fails	to	achieve	these objectives	or	if	its	public	image	or	reputation	were	to	be	tarnished	by	negative views	about	Citigroup	or	the	financial	services	industry	in	general,	or	by	a negative	perception	of	Citigroup's	short-term	or	long-term	financial	prospects. Any	of	these	events	could	have	a	material	adverse	effect	on	Citigroup's businesses.

# Although	Citigroup	currently	believes	it	is	"well	capitalized,"	its	capitalization may	not	prove	to	be	sufficiently	consistent	with	its	risk	profile	or	sufficiently robust	relative	to	future	capital	requirements.

Citigroup's	capital	management	framework	is	designed	to	ensure	that	Citigroup and	its	principal	subsidiaries	maintain	sufficient	capital	consistent	with Citigroup's	risk	profile,	all	applicable	regulatory	standards	and	guidelines	as well	as	external	rating	agency	conditions.	Citigroup	is	subject	to	the	risk	based capital	guidelines	issued	by	the	Federal	Reserve	Board.	Capital	adequacy	is measured,	in	part,	based	on	two	risk	based	capital	ratios,	the	Tier	1	Capital	and Total	Capital	(Tier	1	Capital	plus	Tier	2	Capital)	ratios.	In	conjunction	with	the conclusion	of	the	Supervisory	Capital	Assessment	Program	(SCAP),	U.S. banking	regulators	developed	a	new	measure	of	capital	called	Tier	1	Common. While	Tier	1	Common	and	related	ratios	are	measures	used	and	relied	on	by U.S.	banking	regulators,	they	are	non-GAAP	financial	measures	for	SEC purposes.	See	"Capital	Resources	and	Liquidity"	above	for	additional information	on	these	metrics.	Citigroup	is	also	subject	to	a	Leverage	ratio requirement,	a	non-risk-based	measure	of	capital	adequacy.	For	additional information	on	these	capital	adequacy	metrics,	including	the	estimated	impact	to Citi's	capital	ratios	of	adopting	SFAS	166	and	SFAS	167	as	of	January	1,	2010, see	"Capital	Resources	and	Liquidity—Capital	Resources."

					To	be	"well	capitalized"	under	U.S.	federal	bank	regulatory	agency definitions,	a	bank	holding	company	must	have	a	Tier	1	Capital	ratio	of	at	least 6%,	a	Total	Capital	ratio	of	at	least	10%	and	a	Leverage	ratio	of	at	least	3%,	and not	be	subject	to	a	Federal	Reserve	Board	directive	to	maintain	higher	capital levels.	As	of	December	31,	2009,	Citigroup	was	"well	capitalized,"	with	a	Tier	1 Capital	ratio	of	11.7%,	a	Total	Capital	ratio	of	15.2%	and	a	Leverage	ratio	of 6.9%,	as	well	as	a	Tier	1	Common	ratio	of	9.6%.	There	can	be	no	assurance, however,	that	Citigroup	will	be	able	to	maintain	sufficient	capital	consistent	with its	risk	profile	or	remain	"well	capitalized."	Moreover,	the	various	regulators	in the	U.S.	and	abroad	have	not	reached	consensus	as	to	the	appropriate	level	of capitalization	for	financial	services	institutions	such	as	Citigroup.	These regulators,	including	the	Federal	Reserve	Board,	may	alter	the	current	regulatory capital	requirements	to	which	Citigroup	is	subject	and	thereby	necessitate	equity increases	that	could	dilute	existing	stockholders,	lead	to	required	asset	sales	or adversely	impact	the	availability	of	Citi's	DTAs,	as	described	above,	among other	issues.

					In	addition,	Citigroup	could	adopt	the	provisions	of	the	Basel	II	regulatory capital	framework	as	early	as	April	1,	2011.	This	new	regulatory	capital framework	is	likely	to	result	in	a	need	for	Citigroup	to	hold	additional	regulatory capital.	If	market	conditions	do	not	improve,	the	capital	requirements	of	Basel	II could	increase	prior	to	scheduled	implementation	in	2011,	further	increasing	the amount	of	capital	needed	by	Citi.	The	new	rules	could	also	result	in	changes	in Citigroup's	funding	mix,	resulting	in	lower	net	income	and/or	continued shrinking	of	the	balance	sheet.	Separate	from	the	above	Basel	II	rules	for	credit and	operational	risk,	the	Basel	Committee	on	Banking	Supervision	has	also proposed	revisions	to	the	market	risk	framework	that	could	also	lead	to additional	capital	requirements.	Although	not	yet	ratified	by	the	U.S.	regulators, the	Basel	II	rules	for	market	risk	are	currently	scheduled	for	January	1,	2011, one	quarter	ahead	of	Citigroup's	earliest	date	for	Basel	II	implementation	for credit	and	operational	risk.

# Liquidity	is	essential	to	Citigroup's	businesses,	and	Citigroup	relies	on external	sources	to	finance	a	significant	portion	of	its	operations.

Adequate	liquidity	is	essential	to	Citigroup's	businesses.	Citigroup's	liquidity could	be	materially,	adversely	affected	by	factors	Citigroup	cannot	control,	such as	general	disruption	of	the	financial	markets	or	negative	views	about	the financial	services	industry	in	general.	In	addition,	Citigroup's	ability	to	raise funding	could	be	impaired	if	lenders	develop	a	negative	perception	of Citigroup's	short-term	or	long-term	financial	prospects,	or	a	perception	that	it	is experiencing	greater	liquidity	risk.

					Regulatory	measures	instituted	in	late	2008	and	2009,	such	as	the	FDIC's temporary	guarantee	of	the	newly	issued	senior	debt	as	well	as	deposits	in	non- interest-bearing	deposit	transaction	accounts,	and	the	commercial	paper	funding facility	of	the	Federal	Reserve	Board	were	designed	to	stabilize	the	financial markets	and	the	liquidity	position	of	financial	institutions	such	as	Citigroup. While	much	of	Citigroup's	long-term	and	short-term	unsecured	funding	during 2009	was	issued	pursuant	to	these	government-sponsored	funding	programs, Citigroup	began	to	access	funding	outside	of	these	programs,	particularly	during the	fourth	quarter	of	2009,	due,	in	part,	to	the	fact	that	many	of	these	facilities were	terminating.	Citi's	reliance	on	government-sponsored	short-term	funding facilities	was	substantially	reduced	as	of	the	end	of	2009.	The	impact	that	the termination	of	any	of	these	facilities	could	have	on	Citigroup's	ability	to	access funding	in	the	future	is	uncertain.	It	is	also	unclear	whether	Citigroup	will	be able	to	regain	access	to	the	public	long-term	unsecured	debt	markets	on historically	customary	terms.

					Citigroup's	cost	of	obtaining	long-term	unsecured	funding	is	directly	related to	its	credit	spreads	in	both	the	cash	bond	and	derivatives	markets.	Increases	in Citigroup's	credit	qualifying	spreads	can	significantly	increase	the	cost	of	this funding.	Credit	spreads	are	influenced	by	market	and	rating	agency	perceptions of	Citigroup's	creditworthiness	and	may	be	influenced	by	movements	in	the costs	to	purchasers	of	credit	default	swaps	referenced	to	Citigroup's	long-term debt.

					In	addition,	a	significant	portion	of	Citigroup's	business	activities	are	based on	gathering	deposits	and	borrowing	money	and	then	lending	or	investing	those funds,	including	through	market-making	activities	in	tradable	securities. Citigroup's	profitability	is	in	part	a	function	of	the	spread	between	interest	rates earned	on	such	loans	and	investments,	as	well	as	other	interest-earning	assets, and	the	interest	rates	paid	on	deposits	and	other	interest-bearing	liabilities. During	2009,	the	need	to	maintain	adequate	liquidity	caused	Citigroup	to	invest available	funds	in	lower-yielding	assets,	such	as	those	issued	by	the	U.S. government.	As	a	result,	during	2009,	the	yields	across	both	the	interest-earning assets	and	the	interest-bearing	liabilities	dropped	significantly	from	2008.	The lower	asset	yields	more	than	offset	the	lower	cost	of	funds,	resulting	in	lower	net interest	margins	compared	to	2008.	There	can	be	no	assurance	that	Citigroup's net	interest	margins	will	not	continue	to	remain	low.

# Any	reduction	in	Citigroup's	and	its	subsidiaries'	credit	ratings	could	increase the	cost	of	its	funding	from,	and	restrict	its	access	to,	the	capital	markets	and have	a	material	adverse	effect	on	its	results	of	operations	and	financial condition.

Each	of	Citigroup's	and	Citibank,	N.A.'s	long-term/senior	debt	is	currently	rated investment	grade	by	Fitch	Ratings,	Moody's	Investors	Service	and	Standard	& Poor's.	The	rating	agencies	regularly	evaluate	Citigroup	and	its	subsidiaries,	and their	ratings	of	Citigroup's	and	its	subsidiaries'	long-term	and	short-term	debt are	based	on	a	number	of	factors,	including	financial	strength,	as	well	as	factors not	entirely	within	the	control	of	Citigroup	and	its	subsidiaries,	such	as conditions	affecting	the	financial	services	industry	generally.

					In	light	of	the	difficulties	in	the	financial	services	industry	and	the	financial markets	generally,	or	as	a	result	of	events	affecting	Citigroup	more	specifically, Citigroup	and	its	subsidiaries	may	not	be	able	to	maintain	their	current respective	ratings.	A	reduction	in	Citigroup's	or	its	subsidiaries'	credit	ratings could	adversely	affect	Citigroup's	liquidity,	widen	its	credit	spreads	or	otherwise increase	its	borrowing	costs,	limit	its	access	to	the	capital	markets	or	trigger obligations	under	certain	bilateral	provisions	in	some	of	Citigroup's	trading	and collateralized	financing	contracts.	In	addition,	under	these	provisions, counterparties	could	be	permitted	to	terminate	certain	contracts	with	Citigroup	or require	it	to	post	additional	collateral.	Termination	of	Citigroup's	trading	and collateralized	financing	contracts	could	cause	Citigroup	to	sustain	losses	and impair	its	liquidity	by	requiring	Citigroup	to	find	other	sources	of	financing	or	to make	significant	cash	payments	or	securities	transfers.	For	additional information	on	the	potential	impact	of	a	reduction	in	Citigroup's	or	its subsidiaries'	credit	ratings,	see	"Capital	Resources	and	Liquidity."

					Certain	of	the	credit	rating	agencies	have	stated	that	the	credit	ratings	of	Citi and	other	financial	institutions	have	benefited	from	the	implicit	support	that	the U.S.	government	and	regulators	have	provided	to	the	financial	industry	through the	financial	crisis.	The	expectation	that	this	support	will	be	reduced	over	time, unless	offset	by	improvement	in	standalone	credit	profiles,	could	have	a	negative impact	on	the	credit	ratings	of	financial	institutions,	including	Citi.

# Market	disruptions	may	increase	the	risk	of	customer	or	counterparty delinquency	or	default.

Market	and	economic	disruptions,	as	well	as	the	policies	of	the	Federal	Reserve Board	or	other	government	agencies	or	entities,	can	adversely	affect	Citigroup's customers,	obligors	on	securities	or	other	instruments	or	other	counterparties, potentially	increasing	the	risk	that	they	may	fail	to	repay	their	securities	or	loans or	otherwise	default	on	their	contractual	obligations	to	Citigroup,	some	of	which maybe	significant.	These	customers,	obligors	or	counterparties	could	include individuals	or	corporate	or	governmental	entities.	Moreover,	Citigroup	may incur	significant	credit	risk	exposure	from	holding	securities	or	other	obligations or	entering	into	swap	or	other	derivative	contracts	under	which	obligors	or	other counterparties	have	long-term	obligations	to	make	payments	to	Citigroup. Market	conditions	over	the	last	several	years,	including	credit	deterioration, decreased	liquidity	and	pricing	transparency	along	with	increased	market volatility,	have	negatively	impacted	Citigroup's	credit	risk	exposure.	Although Citigroup	regularly	reviews	its	credit	exposures,	default	risk	may	arise	from events	or	circumstances	that	are	difficult	to	detect	or	foresee.

# Citigroup	may	fail	to	realize	all	of	the	anticipated	benefits	of	the	realignment of	its	businesses.

Effective	in	the	second	quarter	of	2009,	Citigroup	realigned	into	two	primary business	segments,	Citicorp	and	Citi	Holdings,	for	management	and	reporting purposes.	The	realignment	is	part	of	Citigroup's	strategy	to	focus	on	its	core businesses	and	reduce	non-core	assets	in	a	disciplined	and	deliberate	manner. Citigroup	believes	this	structure	will	allow	it	to	enhance	the	capabilities	and performance	of	Citigroup's	core	assets,	through	Citicorp,	as	well	as	realize	value from	its	non-core	assets,	through	Citi	Holdings.

					Citigroup	intends	to	exit	the	Citi	Holdings	non-core	businesses	as	quickly	as practicable	yet	in	an	economically	rational	manner	through	business	divestitures, portfolio	run-off	and	asset	sales.	Citigroup	has	been	making	substantial	progress divesting	and	exiting	businesses	included	within	Citi	Holdings,	having completed	more	than	20	divestitures	over	the	last	two	years,	including	the Morgan	Stanley	Smith	Barney	joint	venture,	Nikko	Cordial	Securities	and	Nikko Asset	Management	sales.	Citi	Holdings'	assets	have	been	reduced	from	a	peak level	of	approximately	$898	billion	in	the	first	quarter	of	2008	to	approximately $547	billion	at	year-end	2009.

					Despite	these	efforts,	given	the	rapidly	changing	and	uncertain	financial environment,	there	can	be	no	assurance	that	the	realignment	of	Citigroup's businesses	will	achieve	the	company's	desired	objectives	or	benefits,	including simplifying	the	organization	and	permitting	Citigroup	to	allocate	capital	to	fund its	long-term	strategic	businesses	comprising	Citicorp,	or	that	Citi	will	be	able	to continue	to	make	progress	in	divesting	or	exiting	businesses	within	Citi	Holdings in	an	orderly	and	timely	manner.

# Citigroup	may	experience	further	write-downs	of	its	financial	instruments	and other	losses	related	to	volatile	and	illiquid	market	conditions.

Market	volatility,	illiquid	market	conditions	and	disruptions	in	the	credit	markets have	made	it	extremely	difficult	to	value	certain	of	Citigroup's	assets. Subsequent	valuations,	in	light	of	factors	then	prevailing,	may	result	in significant	changes	in	the	values	of	these	assets	in	future	periods.	In	addition,	at the	time	of	any	sales	of	these	assets,	the	price	Citigroup	ultimately	realizes	will depend	on	the	demand	and	liquidity	in	the	market	at	that	time	and	may	be materially	lower	than	their	current	fair	value.	Further,	Citigroup's	hedging strategies	with	respect	to	these	assets	may	not	be	effective.	Any	of	these	factors could	require	Citigroup	to	take	further	write-downs	in	respect	of	these	assets, which	may	negatively	affect	Citigroup's	results	of	operations	and	financial condition	in	future	periods.

					Citigroup	finances	and	acquires	principal	positions	in	a	number	of	real	estate and	real-estate-related	products	for	its	own	account,	for	investment	vehicles managed	by	affiliates	in	which	it	also	may	have	a	significant	investment,	for separate	accounts	managed	by	affiliates	and	for	major	participants	in	the commercial	and	residential	real	estate	markets,	and	originates	loans	secured	by commercial	and	residential	properties.	Citigroup	also	securitizes	and	trades	in	a wide	range	of	commercial	and	residential	real	estate	and	real-estate-related whole	loans,	mortgages	and	other	real	estate	and	commercial	assets	and products,	including	residential	and	commercial	mortgage-backed	securities. These	businesses	have	been,	and	may	continue	to	be,	adversely	affected	by	the downturn	in	the	real	estate	sector.

					Furthermore,	in	the	past,	Citigroup	has	provided	financial	support	to	certain of	its	investment	products	and	vehicles	in	difficult	market	conditions,	and Citigroup	may	decide	to	do	so	again	in	the	future	for	contractual	reasons	or,	at	its discretion,	for	reputational	or	business	reasons,	including	through	equity investments	or	cash	or	capital	infusions.

					Should	unemployment	rates	continue	to	be	high,	and	if	stresses	in	the	real estate	market	continue	to	depress	housing	prices,	Citi	could	experience	greater write-offs	and	also	need	to	set	aside	larger	loan	loss	reserves	for	mortgage	and credit	card	portfolios	as	well	as	other	consumer	loans.

# The	elimination	of	QSPEs	from	the	guidance	in	SFAS	140	and	changes	in FIN	46(R)	will	significantly	impact,	and	may	continue	to	significantly	impact, Citigroup's	Consolidated	Financial	Statements.

During	2009,	the	FASB	issued	SFAS	No.	166,	Accounting	for	Transfers	of Financial	Assets,	which	eliminates	Qualifying	Special	Purpose	Entities	(QSPEs) from	the	guidance	in	SFAS	No.	140,	and	SFAS	No.	167,	Amendments	to	FASB Interpretation	No.	46(R),	which	makes	three	key	changes	to	the	consolidation model	in	FIN	46(R),	"Consolidation	of	Variable	Interest	Entities".	Such	changes include:	(i)	former	QSPEs	will	now	be	included	in	the	scope	of	SFAS	No.	167; (ii)	FIN	46(R)	has	been	amended	to	change	the	method	of	analyzing	which	party to	a	variable	interest	entity	(VIE)	should	consolidate	the	VIE	to	a	qualitative determination	of	"power"	combined	with	potentially	significant	benefits	or losses;	and	(iii)	the	analysis	of	primary	beneficiaries	has	to	be	re-evaluated whenever	circumstances	change.

					These	standards	became	effective	January	1,	2010,	including	for	Citigroup, and	they	will	have	a	significant	impact,	and	may	have	an	ongoing	significant impact,	on	Citigroup's	Consolidated	Financial	Statements	as	Citi	will	be required	to	bring	a	portion	of	assets	that	were	not	historically	on	its	balance sheet	onto	its	balance	sheet,	which	will	also	impact	Citi's	capital	ratios.	For	a further	discussion	of	these	changes,	see	"Significant	Accounting	Policies	and Significant	Estimates"	and	Note	1	to	the	Consolidated	Financial	Statements.	See also	"Capital	Resources	and	Liquidity—Capital	Resources."

# Citigroup's	financial	statements	are	based	in	part	on	assumptions	and estimates,	which,	if	wrong,	could	cause	unexpected	losses	in	the	future.

Pursuant	to	U.S.	GAAP,	Citigroup	is	required	to	use	certain	assumptions	and estimates	in	preparing	its	financial	statements,	including	in	determining	credit loss	reserves,	reserves	related	to	litigation	and	the	fair	value	of	certain	assets	and liabilities,	among	other	items.	If	assumptions	or	estimates	underlying Citigroup's	financial	statements	are	incorrect,	Citigroup	may	experience material	losses.	For	additional	information,	see	"Significant	Accounting	Policies and	Significant	Estimates."

# Changes	in	accounting	standards	can	be	difficult	to	predict	and	can	materially impact	how	Citigroup	records	and	reports	its	financial	condition	and	results	of operations.

Citigroup's	accounting	policies	and	methods	are	fundamental	to	how	it	records and	reports	its	financial	condition	and	results	of	operations.	From	time	to	time, the	FASB	changes	the	financial	accounting	and	reporting	standards	that	govern the	preparation	of	Citigroup's	financial	statements.	These	changes	can	be	hard

to	anticipate	and	implement	and	can	materially	impact	how	Citigroup	records and	reports	its	financial	condition	and	results	of	operations.	For	example,	the FASB's	current	financial	instruments	project	could,	among	other	things, significantly	change	the	way	loan	loss	provisions	are	determined	from	an incurred	loss	model	to	an	expected	loss	model,	and	may	also	result	in	most financial	instruments	being	required	to	be	reported	at	fair	value.

# Citigroup	may	incur	significant	losses	as	a	result	of	ineffective	risk management	processes	and	strategies,	and	concentration	of	risk	increases	the potential	for	such	losses.

Citigroup	seeks	to	monitor	and	control	its	risk	exposure	through	a	risk	and control	framework	encompassing	a	variety	of	separate	but	complementary financial,	credit,	operational,	compliance	and	legal	reporting	systems,	internal controls,	management	review	processes	and	other	mechanisms.	While	Citigroup employs	a	broad	and	diversified	set	of	risk	monitoring	and	risk	mitigation techniques,	those	techniques	and	the	judgments	that	accompany	their	application may	not	be	effective	and	may	not	anticipate	every	economic	and	financial outcome	in	all	market	environments	or	the	specifics	and	timing	of	such outcomes.	Market	conditions	over	the	last	several	years	have	involved unprecedented	dislocations	and	highlight	the	limitations	inherent	in	using historical	data	to	manage	risk.

					These	market	movements	can,	and	have,	limited	the	effectiveness	of Citigroup's	hedging	strategies	and	have	caused	Citigroup	to	incur	significant losses,	and	they	may	do	so	again	in	the	future.	In	addition,	concentration	of	risk increases	the	potential	for	significant	losses	in	certain	of	Citigroup's	businesses. For	example,	Citigroup	extends	large	commitments	as	part	of	its	credit origination	activities.	Citigroup's	inability	to	reduce	its	credit	risk	by	selling, syndicating	or	securitizing	these	positions,	including	during	periods	of	market dislocation,	could	negatively	affect	its	results	of	operations	due	to	a	decrease	in the	fair	value	of	the	positions,	as	well	as	the	loss	of	revenues	associated	with selling	such	securities	or	loans.	Further,	Citigroup	routinely	executes	a	high volume	of	transactions	with	counterparties	in	the	financial	services	industry, including	brokers	and	dealers,	commercial	banks	and	investment	funds.	This	has resulted	in	significant	credit	concentration	with	respect	to	this	industry.

# The	financial	services	industry	faces	substantial	legal	liability	and	regulatory risks,	and	Citigroup	may	face	damage	to	its	reputation	and	incur	significant legal	and	regulatory	liability.

Citigroup	faces	significant	legal	and	regulatory	risks	in	its	businesses,	and	the volume	of	claims	and	amount	of	damages	and	penalties	claimed	in	litigation	and regulatory	proceedings	against	financial	institutions	remain	high.	Citigroup's experience	has	been	that	legal	claims	by	shareholders,	regulators,	customers	and clients	increase	in	a	market	downturn.	In	addition,	employment-related	claims typically	increase	in	periods	when	Citigroup	has	reduced	the	total	number	of employees,	such	as	during	the	prior	two	fiscal

years.	There	have	also	been	a	number	of	highly	publicized	cases	involving	fraud or	other	misconduct	by	employees	in	the	financial	services	industry	in	recent years,	and	Citigroup	runs	the	risk	that	employee	misconduct	could	occur.	It	is not	always	possible	to	deter	or	prevent	employee	misconduct,	and	the	extensive precautions	Citigroup	takes	to	prevent	and	detect	this	activity	may	not	be effective	in	all	cases.

					For	further	information	relating	to	Citigroup's	legal	and	regulatory	risks,	see "Legal	Proceedings"	and	Note	30	to	the	Consolidated	Financial	Statements.

# A	failure	in	Citigroup's	operational	systems	or	infrastructure,	or	those	of	third parties,	could	impair	its	liquidity,	disrupt	its	businesses,	result	in	the disclosure	of	confidential	information,	damage	Citigroup's	reputation	and cause	losses.

Citigroup's	businesses	are	highly	dependent	on	its	ability	to	process	and	monitor, on	a	daily	basis,	a	very	large	number	of	transactions,	many	of	which	are	highly complex,	across	numerous	and	diverse	markets	in	many	currencies.	These transactions,	as	well	as	the	information	technology	services	Citigroup	provides to	clients,	often	must	adhere	to	client-specific	guidelines,	as	well	as	legal	and regulatory	standards.	Due	to	the	breadth	of	Citigroup's	client	base	and	its geographical	reach,	developing	and	maintaining	Citigroup's	operational	systems and	infrastructure	is	challenging.	Citigroup's	financial,	account,	data	processing or	other	operating	systems	and	facilities	may	fail	to	operate	properly	or	become disabled	as	a	result	of	events	that	are	wholly	or	partially	beyond	its	control,	such as	a	spike	in	transaction	volume	or	unforeseen	catastrophic	events,	adversely affecting	Citigroup's	ability	to	process	these	transactions	or	provide	these services.

					Citigroup	also	faces	the	risk	of	operational	failure,	termination	or	capacity constraints	of	any	of	the	clearing	agents,	exchanges,	clearing	houses	or	other financial	intermediaries	Citigroup	uses	to	facilitate	its	transactions,	and	as Citigroup's	interconnectivity	with	its	clients	grows,	it	increasingly	faces	the	risk of	operational	failure	with	respect	to	its	clients'	systems.

					In	addition,	Citigroup's	operations	rely	on	the	secure	processing,	storage	and transmission	of	confidential	and	other	information	in	its	computer	systems	and networks.	Although	Citigroup	takes	protective	measures	and	endeavors	to modify	them	as	circumstances	warrant,	its	computer	systems,	software	and networks	may	be	vulnerable	to	unauthorized	access,	computer	viruses	or	other malicious	code,	and	other	events	that	could	have	a	security	impact.	Given	the high	volume	of	transactions	at	Citigroup,	certain	errors	may	be	repeated	or compounded	before	they	are	discovered	and	rectified.	If	one	or	more	of	such events	occurs,	this	could	potentially	jeopardize	Citigroup's,	its	clients',	its counterparties'	or	third	parties'	confidential	and	other	information	processed	and stored	in,	and	transmitted	through,	Citigroup's	computer	systems	and	networks, or	otherwise	cause	interruptions	or	malfunctions	in	Citigroup's,	its	clients',	its counterparties'	or	third	parties'	operations,	which	could	result	in	significant losses	or	reputational	damage.

# MANAGING GLOBAL RISK

# RISK MANAGEMENT—OVERVIEW

Citigroup	believes	that	effective	risk	management	is	of	primary	importance	to	its success.	Accordingly,	Citigroup	has	a	comprehensive	risk	management	process to	monitor,	evaluate	and	manage	the	principal	risks	it	assumes	in	conducting	its activities.	These	include	credit,	market	(including	liquidity)	and	operational	risks (including	legal	and	reputational	exposures).	Each	of	credit,	market	and operational	risk	is	discussed	in	more	detail	throughout	this	section.

					Citigroup's	risk	management	framework	is	designed	to	balance	corporate oversight	with	well-defined	independent	risk	management	functions. Enhancements	continued	to	be	made	to	the	risk	management	framework throughout	2009	based	on	guiding	principles	established	by	Citi's	Chief	Risk Officer:

a	common	risk	capital	model	to	evaluate	risks;

a	defined	risk	appetite,	aligned	with	business	strategy;

accountability	through	a	common	framework	to	manage	risks;

risk	decisions	based	on	transparent,	accurate	and	rigorous	analytics;

expertise,	stature,	authority	and	independence	of	risk	managers;	and empowering	risk	managers	to	make	decisions	and	escalate	issues.

					Significant	focus	has	been	placed	on	fostering	a	risk	culture	based	on	a policy	of	"Taking	Intelligent	Risk	with	Shared	Responsibility,	Without Forsaking	Individual	Accountability:"

"Taking	intelligent	risk"	means	that	Citi	must	carefully	measure	and aggregate	risks,	must	appreciate	potential	downside	risks,	and	must understand	risk/return	relationships.

"Shared	responsibility"	means	that	risk	and	business	management must	actively	partner	to	own	risk	controls	and	influence	business outcomes.

"Individual	accountability"	means	that	all	individuals	are	ultimately responsible	for	identifying,	understanding	and	managing	risks.

					The	Chief	Risk	Officer,	working	closely	with	the	Citi	CEO	and	established management	committees,	and	with	oversight	from	the	Risk	Management	and Finance	Committee	of	the	Board	of	Directors	as	well	as	the	full	Board	of Directors,	is	responsible	for:

establishing	core	standards	for	the	management,	measurement	and reporting	of	risk;

identifying,	assessing,	communicating	and	monitoring	risks	on	a company-wide	basis;

engaging	with	senior	management	and	on	a	frequent	basis	on	material matters	with	respect	to	risk-taking	activities	in	the	businesses	and related	risk	management	processes;	and

ensuring	that	the	risk	function	has	adequate	independence,	authority, expertise,	staffing,	technology	and	resources.

					The	risk	management	organization	is	structured	so	as	to	facilitate	the management	of	risk	across	three	dimensions:	businesses,	regions	and	critical products.	Each	of	the	company's	major	business	groups	has	a	Business	Chief Risk	Officer	who	is	the	focal	point	for	risk	decisions,	such	as	setting	risk	limits or	approving	transactions	in	the	business.	There	are	also	Regional	Chief	Risk Officers,	accountable	for	the	risks	in	their	geographic	areas,	who	are	the	primary risk	contacts	for	the	regional	business	heads	and	local	regulators.	In	addition,	the positions	of	Product	Chief	Risk	Officers	were	created	for	those	areas	of	critical importance	to	Citigroup,	such	as	real	estate,	structured	products	and	fundamental credit.	The	Product	Chief	Risk	Officers	are	accountable	for	the	risks	within	their specialty	and	focus	on	problem	areas	across	businesses	and	regions.	The	Product Chief	Risk	Officers	serve	as	a	resource	to	the	Chief	Risk	Officer,	as	well	as	to the	Business	and	Regional	Chief	Risk	Officers,	to	better	enable	the	Business	and Regional	Chief	Risk	Officers	to	focus	on	the	day-to-day	management	of	risks and	responsiveness	to	business	flow.

					In	addition	to	revising	the	risk	management	organization	to	facilitate	the management	of	risk	across	these	three	dimensions,	the	risk	organization	also includes	the	business	management	team	to	ensure	that	the	risk	organization	has the	appropriate	infrastructure,	processes	and	management	reporting.	This	team includes:

the	risk	capital	group,	which	continues	to	enhance	the	risk	capital model	and	ensure	that	it	is	consistent	across	all	our	business	activities; the	risk	architecture	group,	which	ensures	the	company	has	integrated systems	and	common	metrics,	and	thereby	allows	us	to	aggregate	and stress-test	exposures	across	the	institution;

the	infrastructure	risk	group,	which	focuses	on	improving	our operational	processes	across	businesses	and	regions;	and the	office	of	the	Chief	Administrative	Officer,	which	focuses	on	re- engineering,	risk	communications	and	relationships,	including	our critical	regulatory	relationships.

# RISK AGGREGATION AND STRESS TESTING

While	Citi's	major	risk	areas	are	described	individually	on	the	following	pages, these	risks	also	need	to	be	reviewed	and	managed	in	conjunction	with	one another	and	across	the	various	businesses.

					The	Chief	Risk	Officer,	as	noted	above,	monitors	and	controls	major	risk exposures	and	concentrations	across	the	organization.	This	means	aggregating risks,	within	and	across	businesses,	as	well	as	subjecting	those	risks	to alternative	stress	scenarios	in	order	to	assess	the	potential	economic	impact	they may	have	on	Citigroup.

					Comprehensive	stress	tests	are	in	place	across	Citi	for	mark-to-market, available-for-sale,	and	accrual	portfolios.	These	firm-wide	stress	reports	measure the	potential	impact	to	Citi	and	its	component	businesses	of	very	large	changes in	various	types	of	key	risk	factors	(e.g.,	interest	rates,	credit	spreads),	as	well	as the	potential	impact	of	a	number	of	historical	and	hypothetical	forward-looking systemic	stress	scenarios.

					Supplementing	the	stress	testing	described	above,	Risk	Management, working	with	input	from	the	businesses	and	finance,	provides	enhanced	periodic updates	to	senior	management	on	significant	potential	exposures	across Citigroup	arising	from	risk	concentrations	(e.g.,	residential	real	estate),	financial market	participants	(e.g.,	monoline	insurers),	and	other	systemic	issues	(e.g., commercial	paper	markets).	These	risk	assessments	are	forward-looking exercises,	intended	to	inform	senior	management	about	the	potential	economic impacts	to	Citi	that	may	occur,	directly	or	indirectly,	as	a	result	of	hypothetical scenarios,	based	on	judgmental	analysis	from	independent	risk	managers.	Risk Management	also	reports	to	the	Risk	Management	and	Finance	Committee	of	the Board	of	Directors,	as	well	as	the	full	Board	of	Directors	on	these	matters. 					The	stress	testing	and	risk	assessment	exercises	are	a	supplement	to	the standard	limit-setting	and	risk-capital	exercises	described	below,	as	these processes	incorporate	events	in	the	marketplace	and	within	Citi	that	impact	the firm's	outlook	on	the	form,	magnitude,	correlation	and	timing	of	identified	risks that	may	arise.	In	addition	to	enhancing	awareness	and	understanding	of potential	exposures,	the	results	of	these	processes	then	serve	as	the	starting	point for	developing	risk	management	and	mitigation	strategies.

# RISK CAPITAL

Risk	capital	is	defined	as	the	amount	of	capital	required	to	absorb	potential unexpected	economic	losses	resulting	from	extremely	severe	events	over	a	one- year	time	period:

"Economic	losses"	include	losses	that	appear	on	the	income	statement and	fair	value	adjustments	to	the	financial	statements,	as	well	as	any further	declines	in	value	not	captured	on	the	income	statement. "Unexpected	losses"	are	the	difference	between	potential	extremely severe	losses	and	Citigroup's	expected	(average)	loss	over	a	one-year time	period.

"Extremely	severe"	is	defined	as	potential	loss	at	a	99.97%	confidence level,	based	on	the	distribution	of	observed	events	and	scenario analysis.

					The	drivers	of	"economic	losses"	are	risks,	which	for	Citi	can	be	broadly categorized	as	credit	risk	(including	cross-border	risk),	market	risk	(including liquidity)	and	operational	risk	(including	legal	and	regulatory):

Credit	risk	losses	primarily	result	from	a	borrower's	or	counterparty's inability	to	meet	its	obligations.

Market	risk	losses	arise	from	fluctuations	in	the	market	value	of trading	and	non-trading	positions,	including	the	treatment	changes	in value	resulting	from	fluctuations	in	rates.

Operational	risk	losses	result	from	inadequate	or	failed	internal processes,	systems	or	human	factors	or	from	external	events.

					These	risks	are	measured	and	aggregated	within	businesses	and	across Citigroup	to	facilitate	the	understanding	of	our	exposure	to	extreme	downside events	as	described	under	"Risk	Aggregation	and	Stress	Testing."

					The	risk	capital	framework	is	reviewed	and	enhanced	on	a	regular	basis	in light	of	market	developments	and	evolving	practices.

					The	following	is	a	more	detailed	discussion	of	the	principal	risks	Citi assumes	in	conducting	its	activities:	credit,	market	and	operational	risk.

# CREDIT RISK

Credit	risk	is	the	potential	for	financial	loss	resulting	from	the	failure	of	a borrower	or	counterparty	to	honor	its	financial	or	contractual	obligations.	Credit risk	arises	in	many	of	Citigroup's	business	activities,	including:

lending; sales	and	trading; derivatives; securities	transactions; settlement;	and when	Citigroup	acts	as	an	intermediary.

# Loan and Credit Overview

					During	2009,	Citigroup	recorded	a	net	build	of	$8.0	billion	to	its	credit reserves,	which	was	$6.6	billion	lower	than	the	build	in	2008.	The	net	build consisted	of	a	net	build	of	$7.6	billion	for	consumer	loans	($1.7	billion	in	RCB and	$5.9	billion	in	LCL)	and	a	net	build	of	$0.4	billion	for	corporate	loans	(a build	of	$0.9	billion	in	ICG	and	a	release	of	$0.5	billion	in	SAP). 					Net	credit	losses	of	$30.7	billion	during	2009	increased	$11.7	billion	from year-ago	levels.	The	increase	consisted	of	$7.6	billion	for	consumer	loans	($1.3 billion	in	RCB,	$6.1	billion	in	LCL	and	$0.2	billion	in	SAP)	and	a	net	increase	of $4.1	billion	for	corporate	loans	($0.2	billion	decrease	in	ICG	offset	by	a	$4.3 billion	increase	in	SAP).

					Consumer	non-accrual	loans	totaled	$18.6	billion	at	December	31,	2009, compared	to	$12.6	billion	at	December	31,	2008.	The	consumer	loan	90	days past	due	delinquency	rate	was	4.82%	at	December	31,	2009,	compared	to	2.96% at	December	31,	2008.	The	90	days	past	due	delinquencies	continue	to	rise	for the	first	mortgage	portfolio	in	the	U.S.,	primarily	due	to	the	lengthening	of	the foreclosure	process	by	many	states	and	the	increasing	impact	of	the	Home Affordable	Modification	Program	(HAMP).	Loans	in	the	HAMP	trial modification	period	are	reported	as	delinquent	if	the	original	contractual payments	are	not	received	on	time	(even	if	the	reduced	payments	agreed	to	under the	program	are	made	by	the	borrower)	until	the	loan	has	completed	the	trial period	under	the	program	(see	"Consumer	Loan	Modification	Programs"	and "U.S.	Consumer	Mortgage	Lending"	below).	The	30	to	89	days	past	due delinquency	rate	was	3.56%	at	December	31,	2009,	compared	to	3.51%	at December	31,	2008.

					Corporate	non-accrual	loans	were	$13.5	billion	at	December	31,	2009, compared	to	$9.7	billion	at	December	31,	2008.	The	increase	from	the	prior	year is	mainly	due	to	Citi's	continued	policy	of	actively	moving	loans	into	non- accrual	at	earlier	stages	of	anticipated	distress.	Over	two-thirds	of	the	non- accrual	corporate	loans	are	current	and	continue	to	make	their	contractual payments.

					For	Citi's	loan	accounting	policies,	see	Note	1	to	the	Consolidated	Financial Statements.

# 2010 Credit Outlook

Credit	costs	will	remain	a	significant	driver	of	Citi's	financial	performance	in 2010.	Certain	regions,	including	Asia	and	Latin	America,	are	showing improvement	in	consumer	credit	trends.	This	trend	is	expected	to	continue	into 2010	as	long	as	economic	recovery	in	these	regions	is	sustained.	In	North America,	however,	credit	trends	will	largely	depend	on	the	broader macroeconomic	environment,	as	well	as	the	impact	of	industry	factors	such	as CARD	Act	implementation	and	the	outcome	of	the	HAMP,	each	as	discussed	in more	detail.	Across	North	America,	a	modest	increase	in	net	credit	losses	is expected	in	the	first	quarter	of	2010,	after	which	there	may	be	some	slight improvement.	However,	the	outcome	for	the	second	half	of	2010	will	largely depend	on	the	economy,	and	the	success	of	Citi's	ongoing	loss	mitigation	efforts. Changes	to	the	Company's	consumer	loan	loss	reserve	balances	will	continue	to reflect	the	losses	embedded	in	the	portfolio	due	to	underlying	credit	trends,	as well	as	the	impact	of	forbearance	programs.

					Corporate	credit	is	inherently	difficult	to	predict,	and	accordingly,	the recognition	of	credit	losses	and	changes	in	reserves	will	be	somewhat	episodic.

# Loans Outstanding

| In millions of dollars at year end | 2009 | 2008 | 2007 | 2006 | 2005 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Consumer loans |  |  |  |  |  |
| In U.S. offices |  |  |  |  |  |
| Mortgage and real estate (1) | $183,842 | $219,482 | $240,644 | $208,592 | $180,725 |
| Installment, revolving credit, and other | 58,099 | 64,319 | 69,379 | 62,758 | 60,983 |
| Cards | 28,951 | 44,418 | 46,559 | 48,849 | 44,756 |
| Commercial and industrial | 5,640 | 7,041 | 7,716 | 7,595 | 6,816 |
| Lease financing | 11 | 31 | 3,151 | 4,743 | 5,095 |
|  | $276,543 | $335,291 | $367,449 | $332,537 | $298,375 |
| In offices outside the U.S. |  |  |  |  |  |
| Mortgage and real estate (1) | $47,297 | $44,382 | $49,326 | $41,859 | $37,319 |
| Installment, revolving credit, and other | 42,805 | 41,272 | 70,205 | 61,509 | 51,710 |
| Cards | 41,493 | 42,586 | 46,176 | 30,745 | 25,856 |
| Commercial and industrial | 14,780 | 16,814 | 18,422 | 15,750 | 13,529 |
| Lease financing | 331 | 304 | 1,124 | 960 | 866 |
|  | $146,706 | $145,358 | $185,253 | $150,823 | $129,280 |
| Total consumer loans | $423,249 | $480,649 | $552,702 | $483,360 | $427,655 |
| Unearned income | 808 | 738 | 787 | 460 | 4 |
| Consumer loans, net of unearned income | $424,057 | $481,387 | $553,489 | $483,820 | $427,659 |
| Corporate loans |  |  |  |  |  |
| In U.S. offices |  |  |  |  |  |
| Commercial and industrial | $15,614 | $26,447 | $20,696 | $18,066 | $17,870 |
| Loans to financial institutions | 6,947 | 10,200 | 8,778 | 4,126 | 1,235 |
| Mortgage and real estate (1) | 22,560 | 28,043 | 18,403 | 17,476 | 11,349 |
| Installment, revolving credit, and other | 17,737 | 22,050 | 26,539 | 17,051 | 17,853 |
| Lease financing | 1,297 | 1,476 | 1,630 | 2,101 | 1,952 |
|  | $64,155 | $88,216 | $76,046 | $58,820 | $50,259 |
| In offices outside the U.S. |  |  |  |  |  |
| Commercial and industrial | $68,467 | $79,809 | $94,775 | $89,115 | $65,460 |
| Installment, revolving credit, and other | 9,683 | 17,441 | 21,037 | 14,146 | 13,120 |
| Mortgage and real estate (1) | 9,779 | 11,375 | 9,981 | 7,932 | 7,506 |
| Loans to financial institutions | 15,113 | 18,413 | 20,467 | 21,827 | 16,889 |
| Lease financing | 1,295 | 1,850 | 2,292 | 2,024 | 2,082 |
| Governments and official institutions | 1,229 | 385 | 442 | 1,857 | 882 |
|  | $105,566 | $129,273 | $148,994 | $136,901 | $105,939 |
| Total corporate loans | $169,721 | $217,489 | $225,040 | $195,721 | $156,198 |
| Unearned income | (2,274) | (4,660) | (536) | (349) | (354) |
| Corporate loans, net of unearned income | $167,447 | $212,829 | $224,504 | $195,372 | $155,844 |
| Total loans—net of unearned income | $591,504 | $694,216 | $777,993 | $679,192 | $583,503 |
| Allowance for loan losses—on drawn exposures | (36,033) | (29,616) | (16,117) | (8,940) | (9,782) |
| Total loans—net of unearned income and allowance for credit losses | $555,471 | $664,600 | $761,876 | $670,252 | $573,721 |
| Allowance for loan losses as a percentage of total loans—net of |  |  |  |  |  |
| unearned income | 6.09% | 4.27% | 2.07% | 1.32% | 1.68% |
| Allowance for consumer loan losses as a percentage of total consumer |  |  |  |  |  |
| loans—net of unearned income | 6.70% | 4.61% | 2.26% |  |  |
| Allowance for corporate loan losses as a percentage of total corporate |  |  |  |  |  |
| loans—net of unearned income | 4.56% | 3.48% | 1.61% |  |  |

# Details of Credit Loss Experience

| In millions of dollars at year end | 2009 | 2008 | 2007 | 2006 | 2005 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Allowance for loan losses at beginning of year | $29,616 | $16,117 | $8,940 | $9,782 | $11,269 |
| Provision for loan losses |  |  |  |  |  |
| Consumer | $32,418 | $27,942 | $15,660 | $6,129 | $7,149 |
| Corporate | 6,342 | 5,732 | 1,172 | 191 | (295) |
|  | $38,760 | $33,674 | $16,832 | $6,320 | $6,854 |
| Gross credit losses |  |  |  |  |  |
| Consumer |  |  |  |  |  |
| In U.S. offices | $17,637 | $11,624 | $5,765 | $4,413 | $5,829 |
| In offices outside the U.S. | 8,834 | 7,172 | 5,165 | 3,932 | 2,964 |
| Corporate |  |  |  |  |  |
| Mortgage and real estate |  |  |  |  |  |
| In U.S. offices | 592 | 56 | 1 | — | — |
| In offices outside the U.S. | 151 | 37 | 3 | 1 | — |
| Governments and official institutions outside the U.S. | — | 3 | — | — | — |
| Loans to financial institutions |  |  |  |  |  |
| In U.S. offices | 274 | — | — | — | — |
| In offices outside the U.S. | 246 | 463 | 69 | 6 | 10 |
| Commercial and industrial |  |  |  |  |  |
| In U.S. offices | 3,299 | 627 | 635 | 85 | 78 |
| In offices outside the U.S. | 1,751 | 778 | 226 | 203 | 287 |
|  | $32,784 | $20,760 | $11,864 | $8,640 | $9,168 |
| Credit recoveries |  |  |  |  |  |
| Consumer |  |  |  |  |  |
| In U.S. offices | $576 | $585 | $695 | $646 | $1,007 |
| In offices outside the U.S. | 1,089 | 1,050 | 966 | 897 | 693 |
| Corporate |  |  |  |  |  |
| Mortgage and real estate |  |  |  |  |  |
| In U.S. offices | 3 | — | 3 | 5 | — |
| In offices outside the U.S. | 1 | 1 | — | 18 | 5 |
| Governments and official institutions outside the U.S. | — | — | 4 | 7 | 55 |
| Loans to financial institutions |  |  |  |  |  |
| In U.S. offices | — | — | — | — | — |
| In offices outside the U.S. | 11 | 2 | 1 | 4 | 15 |
| Commercial and industrial |  |  |  |  |  |
| In U.S. offices | 276 | 6 | 49 | 20 | 104 |
| In offices outside the U.S. | 87 | 105 | 220 | 182 | 473 |
|  | $2,043 | $1,749 | $1,938 | $1,779 | $2,352 |
| Net credit losses |  |  |  |  |  |
| In U.S. offices | $20,947 | $11,716 | $5,654 | $3,827 | $4,796 |
| In offices outside the U.S. | 9,794 | 7,295 | 4,272 | 3,034 | 2,020 |
| Total | $30,741 | $19,011 | $9,926 | $6,861 | $6,816 |
| Other—net (1) | $ (1,602) | $ (1,164) | $271 | $(301) | $ (1,525) |
| Allowance for loan losses at end of year | $36,033 | $29,616 | $16,117 | $8,940 | $9,782 |
| Allowance for unfunded lending commitments (2) | $1,157 | $887 | $1,250 | $1,100 | $850 |
| Total allowance for loans, leases and unfunded lending commitments | $37,190 | $30,503 | $17,367 | $10,040 | $10,632 |
| Net consumer credit losses | $24,806 | $17,161 | $9,269 | $6,802 | $7,093 |
| As a percentage of average consumer loans | 5.44% | 3.34% | 1.87% | 1.52% | 1.76% |
| Net corporate credit losses (recoveries) | $5,935 | $1,850 | $657 | $59 | $(277) |
| As a percentage of average corporate loans | 3.12% | 0.84% | 0.30% | 0.05% | NM |
| Allowance for loan losses at end of period (3) |  |  |  |  |  |
| Citicorp | $10,066 | $7,684 | $4,910 |  |  |
| Citi Holdings | 25,967 | 21,932 | 11,207 |  |  |
| Total Citigroup | $36,033 | $29,616 | $16,117 |  |  |

(1)  2009 primarily includes reductions to the loan loss reserve of approximately $543 million related to securitizations, approximately $402 million related to the sale or transfers to held-for-sale of U.S. real estate lending loans, and $562 million related to the transfer of the U.K. cards portfolio to held-for-sale. 2008 primarily includes reductions to the loan loss reserve of approximately $800 million related to FX translation, $102 million related to securitizations, $244 million for the sale of the German retail banking operation, $156 million for the sale of CitiCapital, partially offset by additions of $106 million related to the Cuscatlán and Bank of Overseas Chinese acquisitions. 2007 primarily includes reductions to the loan loss reserve of $475 million related to securitizations and transfers to loans held-for-sale, and reductions of $83 million related to the transfer of the U.K. CitiFinancial portfolio to held-for-sale, offset by additions of $610 million related to the acquisitions of Egg, Nikko Cordial, Grupo Cuscatlán and Grupo Financiero Uno. 2006 primarily includes reductions to the loan-loss reserve of $429 million related to securitizations and portfolio sales and the addition of $84 million related to the acquisition of the CrediCard portfolio. 2005 primarily includes reductions to the loan loss reserve of $584 million related to securitizations and portfolio sales, a reduction of $110 million related to purchase accounting adjustments from the KorAm acquisition, and a reduction of $90 million from the sale of CitiCapital's transportation portfolio.

(2) Represents additional credit loss reserves for unfunded lending commitments and letters of credit recorded in Other Liabilities on the Consolidated Balance Sheet.

(3) Allowance for loan losses represents management's best estimate of probable losses inherent in the portfolio, as well as probable losses related to large individually evaluated impaired loans and troubled debt restructurings. See "Significant Accounting Policies and Significant Estimates." Attribution of the allowance is made for analytical purposes only, and the entire allowance is available to absorb probable credit losses inherent in the overall portfolio.

# Non-Accrual Assets

The	table	below	summarizes	Citigroup's	view	of	non-accrual	loans	as	of	the	periods	indicated.	Non-accrual	loans	are	loans	in	which	the	borrower	has	fallen	behind	in interest	payments	or,	for	corporate	loans,	where	Citi	has	determined	that	the	payment	of	interest	or	principal	is	doubtful,	and	which	are	therefore	considered	impaired. Consistent	with	industry	conventions,	Citi	generally	accrues	interest	on	credit	card	loans	until	such	loans	are	charged-off,	which	typically	occurs	at	180	days	contractual delinquency.	As	such,	the	non-accrual	loan	disclosures	in	this	section	do	not	include	credit	card	loans.	As	discussed	under	"Accounting	Policies"	in	Note	1	to	the Consolidated	Financial	Statements,	in	situations	where	Citi	reasonably	expects	that	only	a	portion	of	the	principal	and	interest	owed	will	ultimately	be	collected,	all payments	received	are	reflected	as	a	reduction	of	principal	and	not	as	interest	income.	There	is	no	industry-wide	definition	of	non-accrual	assets,	however,	and	as	such, analysis	against	the	industry	is	not	always	comparable.

					As	discussed	under	"Loan	and	Credit	Overview,"	Citigroup	has	been	actively	moving	corporate	loans	into	the	non-accrual	category	at	earlier	stages	of	anticipated distress.	Corporate	non-accrual	loans	may	still	be	current	on	interest	payments,	however,	and	as	of	December	31,	2009,	over	two-thirds	of	the	total	portfolio	of	non- accrual	corporate	loans	are	current	and	continue	to	make	their	contractual	payments.

| In millions of dollars | 2009 | 2008 | 2007 | 2006 | 2005 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Citicorp | $4,968 | $3,193 | $2,027 | $1,141 | $1,136 |
| Citi Holdings | 27,216 | 19,104 | 6,941 | 3,906 | 3,888 |
| Total non-accrual loans (NAL) | $32,184 | $22,297 | $8,968 | $5,047 | $5,024 |
| Corporate non-accrual loans(1) |  |  |  |  |  |
| North America | $5,621 | $2,660 | $291 | $68 | $91 |
| EMEA | 6,308 | 6,330 | 1,152 | 128 | 297 |
| Latin America | 569 | 229 | 119 | 152 | 246 |
| Asia | 1,047 | 513 | 103 | 88 | 272 |
|  | $13,545 | $9,732 | $1,665 | $436 | $906 |
| Citicorp | $2,925 | $1,364 | $247 | $133 | $319 |
| Citi Holdings | 10,620 | 8,368 | 1,418 | 303 | 587 |
|  | $13,545 | $9,732 | $1,665 | $436 | $906 |
| Consumer non-accrual loans(1) |  |  |  |  |  |
| North America | $15,555 | $9,617 | $4,841 | $3,139 | $2,860 |
| EMEA | 1,159 | 948 | 696 | 441 | 396 |
| Latin America | 1,340 | 1,290 | 1,133 | 643 | 523 |
| Asia | 585 | 710 | 633 | 388 | 339 |
|  | $18,639 | $12,565 | \t $7,303 | $4,611 | $4,118 |
| Citicorp | $2,043 | $1,829 | $1,780 | $1,008 | \t $817 |
| Citi Holdings | 16,596 | 10,736 | 5,523 | 3,603 | 3,301 |
|  | $18,639 | $12,565 | $7,303 | $4,611 | $4,118 |

# Non-Accrual Assets (continued)

The	table	below	summarizes	Citigroup's	other	real	estate	owned	(OREO)	assets.	This	represents	the	carrying	value	of	all	property	acquired	by	foreclosure	or	other	legal proceedings	when	Citi	has	taken	possession	of	the	collateral.

(1)  The $6.403 billion of non-accrual loans transferred from the held-for-sale portfolio to the held-for-investment portfolio during the fourth quarter of 2008 were marked-to-market at the transfer date and, therefore, no allowance was necessary at the time of the transfer. $2.426 billion of the par value of the loans reclassified was written off prior to transfer.

(2) The allowance for loan losses includes the allowance for credit card and purchased distressed loans, while the non-accrual loans exclude credit card balances and purchased distressed loans as these continue to accrue interest until write-off.

| Non-accrual assets—Total Citicorp | 2009 | 2008 | 2007 | 2006 | 2005 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Non-accrual loans (NAL) | $4,968 | $3,193 | $2,027 | $1,141 | $1,136 |
| OREO | 148 | 371 | 541 | 342 | 209 |
| Other repossessed assets | N/A | N/A | N/A | N/A | N/A |
| Non-accrual assets (NAA) | $5,116 | $3,564 | $2,568 | $1,483 | $1,345 |
| NAA as a percentage of total assets | 0.47% | 0.36% | 0.21% |  |  |
| Allowance for loan losses as a percentage of NAL (1) | 203% | 241% | 242% |  |  |
| Non-accrual assets—Total Citi Holdings |  |  |  |  |  |
| Non-accrual loans (NAL) | $27,216 | $19,104 | $6,941 | $3,906 | $3,888 |
| OREO | 1,341 | 1,022 | 679 | 358 | 219 |
| Other repossessed assets | N/A | N/A | N/A | N/A | N/A |
| Non-accrual assets (NAA) | $28,557 | $20,126 | $7,620 | $4,264 | $4,107 |
| NAA as a percentage of total assets | 5.22% | 2.81% | 0.86% |  |  |
| Allowance for loan losses as a percentage of NAL (1) | 95% | 115% | 161% |  |  |

N/A Not available at the Citicorp or Citi Holdings level.

# Renegotiated Loans

| In millions of dollars at year end | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Renegotiated loans (1)(2) |  |  |  |
| In U.S. offices | $13,246 | \t $10,031 | $5,540 |
| In offices outside the U.S. | 3,017 | 1,755 | 1,176 |
|  | $16,263 | $11,786 | $6,716 |

(1)  Smaller-balance, homogeneous renegotiated loans were derived from Citi's risk management systems.

(2) Also includes Corporate and Commercial Business loans.

# Foregone Interest Revenue on Loans (1)

# U.S. Consumer First and Second Residential Mortgage Loans

(1)  Based on contractual terms. Repricing characteristics may effectively be modified from time to time using derivative contracts. See Note 24 to the Consolidated Financial Statements.

[THIS PAGE INTENTIONALLY LEFT BLANK]

# Consumer Loan Delinquency Amounts and Ratios

# Total

|  | Dec. |  | December 31, | December 31, |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars, except EOP loan amounts in billions | 2009 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 |
| Citicorp |  |  |  |  |  |  |  |
| Total | $124.7 | $1,935 | $1,710 | $1,545 | $2,325 | $2,567 | $2,151 |
| Ratio |  | 1.55% | 1.41 | 1.19% | 1.86% | 2.11% | 1.65% |
| Retail Bank |  |  |  |  |  |  |  |
| \t\t\t\t\t\t\tTotal | 80.7 | 789 | 584 | 500 | 1,011 | 1,111 | 856 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 0.98% | 0.77% | 0.62% | 1.25% | 1.46% | 1.07% |
| \t\t\t\t\t\t\tNorth America | 7.2 | 107 | 84 | 31 | 82 | 100 | 34 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 1.49% | 1.29% | 1.41% | 1.14% | 1.54% | 1.55% |
| \t\t\t\t\t\t\tEMEA | 5.2 | 60 | 47 | 30 | 203 | 194 | 122 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 1.15% | 0.75% | 0.45% | 3.90% | 3.08% | 1.82% |
| \t\t\t\t\t\t\tLatin America | 18.2 | 382 | 239 | 229 | 300 | 261 | 297 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 2.10% | 1.52% | 1.44% | 1.65% | 1.66% | 1.87% |
| \t\t\t\t\t\t\tAsia | 50.1 | 240 | 214 | 210 | 426 | 556 | 403 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 0.48% | 0.45% | 0.38% | 0.85% | 1.17% | 0.73% |
| Citi-Branded Cards (3) |  |  |  |  |  |  |  |
| \t\t\t\t\t\t\tTotal | 44.0 | 1,146 | 1,126 | 1,045 | 1,314 | 1,456 | 1,295 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 2.60% | 2.47% | 2.09% | 2.98% | 3.20% | 2.59% |
| \t\t\t\t\t\t\tNorth America | 11.1 | 238 | 263 | 221 | 251 | 277 | 242 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 2.14% | 1.84% | 1.33% | 2.26% | 1.94% | 1.46% |
| \t\t\t\t\t\t\tEMEA | 3.0 | 80 | 36 | 21 | 135 | 118 | 87 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 2.67% | 1.28% | 0.84% | 4.50% | 4.21% | 3.48% |
| \t\t\t\t\t\t\tLatin America | 12.2 | 555 | 566 | 554 | 558 | 636 | 606 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 4.55% | 4.80% | 3.85% | 4.57% | 5.39% | 4.21% |
| \t\t\t\t\t\t\tAsia | 17.7 | 273 | 261 | 249 | 370 | 425 | 360 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 1.54% | 1.57% | 1.50% | 2.09% | 2.56% | 2.17% |
| Citi Holdings—Local Consumer Lending (4) |  |  |  |  |  |  |  |
| \t\t\t\t\t\t\tTotal | 293.4 | 17,793 | 12,027 | 7,439 | 12,258 | 13,743 | 10,961 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 6.26% | 3.51% | 1.99% | 4.31% | 4.01% | 2.93% |
| \t\t\t\t\t\t\tInternational | 33.1 | 1,345 | 1,152 | 773 | 1,467 | 1,830 | 1,539 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 4.06% | 2.68% | 1.56% | 4.43% | 4.26% | 3.10% |
| \t\t\t\t\t\t\tNorth America retail partners cards (3) | 18.9 | 851 | 1,017 | 656 | 948 | 1,343 | 975 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 4.50% | 3.38% | 2.19% | 5.02% | 4.46% | 3.26% |
| \t\t\t\t\t\t\tNorth America (excluding cards) | 241.4 | 15,597 | 9,858 | 6,010 | 9,843 | 10,570 | 8,447 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tRatio |  | 6.71% | 3.65% | 2.02% | 4.24% | 3.91% | 2.84% |
| Total Citigroup (excluding Special Asset Pool) (4) | $418.1 | $19,728 | $13,737 | $8,984 | $14,583 | $16,310 | $13,112 |
| \t\t\t\t\t\t\tRatio |  | 4.82% | 2.96% | 1.78% | 3.56% | 3.51% | 2.60% |

(1)  Total loans exclude interest and fees on credit cards.

(2) The ratios of 90 days or more past due and 30-89 days past due are calculated based on end-of-period loans.

(3) The 90 days or more past due balances for Citi-branded cards and retail partners cards are generally still accruing interest. Citigroup's policy is generally to accrue interest on credit card loans until 180 days past due, unless notification of bankruptcy filing has been received earlier.

(4) The 90 or more and 30-89 days past due and related ratio for North America LCL (excluding cards) excludes U.S. mortgage loans that are guaranteed by U.S. government-sponsored agencies since the potential loss predominantly resides within the U.S. agencies. The amounts excluded for loans 90+days past due and (end-of-period loans) for each period are: $5.4 billion ($9.0 billion), $3.0 billion ($6.2 billion), and $1.8 billion ($3.3 billion) as of December 31, 2009, December 31, 2008 and December 31, 2007, respectively. The amounts excluded for loans 30-89 days past due (end-of-period loans have the same adjustment as above) for each period are: $1.0 billion, $0.6 billion, and $0.4 billion, as of December 31, 2009, December 31, 2008, and December 31, 2007, respectively.

# Consumer Loan Net Credit Losses and Ratios

|  | loans(1) |  | Net credit losses | (2) |
| :--- | :--- | :--- | :--- | :--- |
| In millions of dollars, except average loan amounts in billions | 2009 | 2009 | 2008 | 2007 |
| Citicorp |  |  |  |  |
| Total | $119.8 | $5,356 | $4,024 | $2,390 |
| Ratio |  | 4.47% | 3.15% | 2.08% |
| Retail Bank |  |  |  |  |
| Total | 76.3 | 1,515 | 1,158 | 466 |
| Ratio |  | 1.98% | 1.43% | 0.65% |
| North America | 7.2 | 309 | 145 | 68 |
| Ratio |  | 4.29% | 3.54% | 3.40% |
| EMEA | 5.6 | 302 | 160 | 72 |
| Ratio |  | 5.44% | 2.39% | 1.33% |
| Latin America | 16.6 | 515 | 488 | 146 |
| Ratio |  | 3.10% | 2.89% | 1.07% |
| Asia | 46.9 | 389 | 365 | 180 |
| Ratio |  | 0.83% | 0.69% | 0.36% |
| Citi-Branded Cards |  |  |  |  |
| Total | 43.5 | 3,841 | 2,866 | 1,924 |
| Ratio |  | 8.84% | 6.11% | 4.43% |
| North America | 12.5 | 842 | 470 | 382 |
| Ratio |  | 6.75% | 3.62% | 2.58% |
| EMEA | 2.8 | 185 | 77 | 41 |
| Ratio |  | 6.55% | 2.75% | 2.16% |
| Latin America | 11.7 | 1,920 | 1,717 | 1,043 |
| Ratio |  | 16.48% | 12.18% | 8.48% |
| Asia | 16.5 | 894 | 602 | 458 |
| Ratio |  | 5.42% | 3.54% | 3.16% |
| Citi Holdings—Local Consumer Lending |  |  |  |  |
| Total | 325.3 | 19,237 | 13,151 | 6,790 |
| Ratio |  | 5.91% | 3.56% | 1.90% |
| International | 39.1 | 3,576 | 2,835 | 2,227 |
| Ratio |  | 9.15% | 5.86% | 4.95% |
| North America retail partners cards | 24.8 | 3,485 | 2,454 | 1,639 |
| Ratio |  | 14.07% | 8.26% | 5.77% |
| North America (excluding cards) | 261.4 | 12,176 | 7,862 | 2,924 |
| Ratio |  | 4.66% | 2.70% | 1.03% |
| Total Citigroup (excluding Special Asset Pool) | $445.1 | $24,593 | $17,175 | $9,180 |
| Ratio |  | 5.53% | 3.45% | 1.94% |

(1)  Total average loans exclude interest and fees on credit cards.

(2) The ratios of net credit losses are calculated based on average loans, net of unearned income.

# Consumer Loan Modification Programs

Citigroup	has	instituted	a	variety	of	modification	programs	to	assist	borrowers with	financial	difficulties.	These	programs	include	modifying	the	original	loan terms,	reducing	interest	rates,	extending	the	remaining	loan	duration	and/or waiving	a	portion	of	the	remaining	principal	balance.	Citi's	programs	consist	of the	U.S.	Treasury's	Home	Affordable	Modification	Program	(HAMP),	as	well	as short-term	forbearance	and	long-term	modification	programs,	each	summarized below.

					HAMP.	The	HAMP	is	designed	to	reduce	monthly	mortgage	payments	to	a 31%	housing	debt	ratio	by	lowering	the	interest	rate,	extending	the	term	of	the loan	and	forbearing	principal	of	certain	eligible	borrowers	who	have	defaulted on	their	mortgages	or	who	are	at	risk	of	imminent	default	due	to	economic hardship.	In	order	to	be	entitled	to	loan	modifications,	borrowers	must	complete a	three-	to	five-month	trial	period,	make	the	agreed	payments	and	provide	the required	documentation.	Effective	June	1,	2010,	documentation	must	be provided	prior	to	beginning	the	trial	period,	whereas	prior	to	that	date,	it	was required	to	be	provided	before	the	end	of	the	trial	period.	This	change	generally means	that	Citi	will	be	able	to	verify	income	up	front	for	potential	HAMP participants	before	they	begin	making	lower	monthly	payments.	We	believe	this change	will	limit	the	number	of	borrowers	who	ultimately	fall	out	from	the	trials and	potentially	mitigate	the	impact	of	HAMP	trial	participants	on	early	bucket delinquency	data.

					During	the	trial	period,	Citi	requires	that	the	original	terms	of	the	loans remain	in	effect	pending	completion	of	the	modification.	As	of	December	31, 2009,	approximately	$7.1	billion	of	first	mortgages	were	enrolled	in	the	HAMP trial	period,	while	$300	million	have	successfully	completed	the	trial	period. Upon	completion	of	the	trial	period,	the	terms	of	the	loan	are	contractually modified,	and	it	is	accounted	for	as	a	"troubled	debt	restructuring"	(see	"Long- Term	Programs"	below).	For	additional	information	on	HAMP,	see	"U.S. Consumer	Lending—Mortgage	Lending"	below.

					Short-term	programs.	Citigroup	has	also	instituted	interest	rate	reduction programs	(primarily	in	the	United	States)	to	assist	borrowers	experiencing temporary	hardships.	These	programs	include	short-term	(12	months	or	less) interest	rate	reductions	and	deferrals	of	past	due	payments.	The	loan	volume under	these	short-term	programs	increased	significantly	during	2009,	and	loan loss	reserves	for	these	loans	have	been	enhanced,	giving	consideration	to	the higher	risk	associated	with	those	borrowers	and	reflecting	the	estimated	future credit	losses	for	those	loans.	See	Note	1	to	the	Consolidated	Financial Statements	for	a	further	discussion	of	the	allowance	for	loan	losses	for	such modified	loans.

					The	following	table	presents	the	amounts	of	gross	loans	modified	under short-term	interest	rate	reduction	programs	in	the	U.S.	as	of	December	31,	2009:

| In millions of dollars | Accrual							 Non-accrual | Accrual							 Non-accrual |
| :--- | :--- | :--- |
| Mortgage and real estate | $ 7,087 | $398 |
| Cards | 813 | — |
| Installment and other | 1,734 | 29 |

					Long-term	programs.	Long-term	modification	programs,	or	"troubled	debt restructurings"	(TDRs),	occur	when	the	terms	of	a	loan	have	been	modified	due to	the	borrowers'	financial	difficulties	and	a	long-term	concession	has	been granted	to	the	borrower.	Substantially	all	programs	in	place	provide	permanent interest	rate	reductions.	Valuation	allowances	for	TDRs	are	determined	by comparing	estimated	cash	flows	of	the	loans	discounted	at	the	loans'	original contractual	interest	rates	to	the	carrying	value	of	the	loans.	See	Note	1	to	the Consolidated	Financial	Statements	for	a	further	discussion	of	the	allowance	for loan	losses	for	such	modified	loans.

					The	following	table	presents	the	amounts	of	gross	loans	related	to	these TDRs	as	of	December	31,	2009	and	2008:

|  |  | Accrual |  | Non-accrual |
| :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2009\t\t\t\t\t\t\t2008 | 2009\t\t\t\t\t\t\t2008 |
| Mortgage and real estate | $8,654 | $4,364 | $1,413 | $207 |
| Cards | 2,303 | 1,054 | 150 | 41 |
| Installment and other | 3,128 | 2,345 | 250 | 141 |

					Payment	deferrals	that	do	not	continue	to	accrue	interest	primarily	occur	in the	U.S.	residential	mortgage	business.	Other	payment	deferrals	continue	to accrue	interest	and	are	not	deemed	to	offer	concessions	to	the	customer.	Other types	of	concessions	are	not	material.

					As	discussed	in	more	detail	in	"U.S.	Consumer	Lending—Mortgage Lending"	and	"U.S.	Consumer	Lending—North	America	Cards"	below,	the measurement	of	the	success	of	Citi's	loan	modification	programs	varies	by program	objectives,	type	of	loan,	geography,	and	other	factors.	Citigroup	uses	a variety	of	metrics	to	evaluate	success,	including	re-default	rates	and	balance reduction	trends.	These	metrics	may	be	compared	against	the	performance	of similarly	situated	customers	who	did	not	receive	concessions.

# U.S. CONSUMER LENDING

# Mortgage Lending

Citi's	North	America	consumer	mortgage	portfolio	consists	of	both	first	lien	and second	lien	mortgages.	As	of	December	31,	2009,	the	first	lien	mortgage portfolio	in	LCL	totaled	approximately	$118	billion	while	the	second	lien mortgage	portfolio	in	LCL	was	approximately	$54	billion.	Although	the	majority of	the	mortgage	portfolio	is	managed	by	LCL	within	Citi	Holdings,	there	are	$0.5 billion	of	first	lien	mortgages	and	$1.7	billion	of	second	lien	mortgages	reported in	Citicorp.	Additionally,	as	mentioned	above,	in	the	first	quarter	of	2010, approximately	$34	billion	of	U.S.	mortgages	will	be	transferred	from	LCL	within Citi	Holdings	to	NA	RCB	within	Citicorp.

					Citi's	first	lien	mortgage	portfolio	includes	$9.0	billion	of	loans	with	Federal Housing	Administration	or	Veterans	Administration	guarantees.	These	portfolios consist	of	loans	originated	to	low-to-moderate-income	borrowers	with	lower FICO	(Fair	Isaac	Corporation)	scores	and	generally	have	higher	loan-to-value ratios	(LTVs).	These	loans	have	high	delinquency	rates	but,	given	the guarantees,	Citi	has	experienced	negligible	credit	losses	on	these	loans.	The	first lien	mortgage	portfolio	also	includes	$1.8	billion	of	loans	with	LTVs	above 80%,	which	have	insurance	through	private	mortgage	insurance	(PMI) companies,	and	$3.5	billion	of	loans	subject	to	Long-Term	Standby Commitments1	with	U.S.	government	sponsored	enterprises	(GSE),	for	which Citi	has	limited	exposure	to	credit	losses.

					The	following	charts	detail	the	quarterly	trends	in	delinquencies	and	net	credit losses	for	Citi's	first	and	second	North	America	consumer	mortgage	portfolios. 					For	first	mortgages,	both	delinquencies	and	net	credit	losses	are	impacted	by the	HAMP	trial	loans	in	the	U.S.	mortgage	portfolio.	As	set	forth	in	the	first chart,	first	mortgage	delinquencies	rates	continued	to	increase	in	2009, exacerbated	in	part	by	the	reduction	in	loan	balances.	The	continued	increase	in first	mortgage	delinquencies	during	the	third	and	fourth	quarters	of	2009	was primarily	attributable	to	both	the	growing	backlog	of	foreclosures	in	process	and HAMP	modifications.

					The	growing	amount	of	foreclosures	in	process,	which	is	related	to	an industry-wide	phenomenon	resulting	from	foreclosure	moratoria	and	other efforts	to	prevent	or	forestall	foreclosure,	have	specific	implications	on	the portfolio:

It	tends	to	inflate	the	amount	of	180+	day	delinquencies	in	our mortgage	statistics.

It	can	result	in	increasing	levels	of	consumer	non-accrual	loans,	as	we are	unable	to	take	possession	of	the	underlying	assets	and	sell	these properties	on	a	timely	basis.

It	may	have	a	dampening	effect	on	NIM	as	non-accrual	assets	build on	the	Company's	balance	sheet.

					As	discussed	in	"Consumer	Loan	Modification	Programs"	above,	Citigroup offers	short-term	and	long-term	real	estate	loan	modification	programs.	Citi monitors	the	performance	of	its	real	estate	loan	modification	programs	by tracking	credit	loss	rates	by	vintage.	At	18	months	after	modifying	an	account,	in Citi's	experience	to	date,	we	typically	reduce	credit	loss	rates	by	approximately one-third	compared	to	similar	accounts	that	were	not	modified.

					Currently,	Citi's	efforts	are	concentrated	on	the	HAMP.	Contractual modifications	of	loans	that	successfully	completed	the	HAMP	trial	period	began in	September	2009;	accordingly,	this	is	the	earliest	HAMP	vintage	available	for comparison.	While	early	indications	of	the	performance	of	these	HAMP modifications	are	encouraging,	Citi	remains	cautious	and	will	continue	to monitor	the	performance	of	these	HAMP	and	non-HAMP	modification programs	and	their	impact	on	reducing	Citi's	credit	losses.

					As	previously	disclosed,	loans	in	the	HAMP	trial	modification	period	that	do not	make	their	original	contractual	payment	are	reported	as	delinquent,	even	if the	reduced	payments	agreed	to	under	the	program	are	made	by	the	borrower. Further,	HAMP	trial	modifications	have	the	effect	of	marginally	reducing	our net	credit	losses	and	increasing	our	required	loan	loss	reserves.	Specifically,	the HAMP	impacted	Citi's	net	credit	losses	in	the	first	mortgage	portfolio	during	the third	and	fourth	quarters	of	2009	as	loans	in	the	trial	period	are	not	charged	off	at 180	DPD	as	long	as	they	have	made	at	least	one	payment.	Citigroup	has increased	its	loan	loss	provisions	to	appropriately	reserve	for	this	risk.

					Citigroup	believes	that	the	success	rate	of	the	HAMP	will	be	a	key	factor influencing	net	credit	losses	from	delinquent	first	mortgage	loans,	at	least	during the	first	half	of	2010,	and	the	outcome	of	the	program	will	largely	depend	on	the success	rates	of	borrowers	completing	the	trial	period	and	meeting	the documentation	requirements.

					By	contrast,	second	mortgages	continue	to	show	positive	trends	in	both	net credit	losses	and	delinquencies,	reflecting	the	impact	of	portfolio	re-positioning and	loss	mitigation.	Citi	continues	to	actively	manage	this	exposure	by	reducing the	riskiest	accounts,	including	by	tightening	credit	requirements	through	higher FICOs,	lower	LTVs,	and	increased	documentation	and	verifications.	As discussed	under	"Risk	Factors,"	Citigroup	is	actively	engaged	in	discussions with	the	U.S.	Treasury	for	the	second	lien	program	under	HAMP.

1 A	Long-Term	Standby	Commitment	(LTSC)	is	a	structured	transaction	in	which	Citi	transfers	the credit	risk	of	certain	eligible	loans	to	an	investor	in	exchange	for	a	fee.	These	loans	remain	on	balance sheet	unless	they	reach	a	certain	delinquency	level	(between	120	and	180	days),	in	which	case	the LTSC	investor	is	required	to	buy	the	loan	at	par.

# First Mortgages

Note: Includes loans for Canada and Puerto Rico. Excludes loans that are guaranteed by U.S. government sponsored agencies.

# Second Mortgages

Note: Includes loans for Canada and Puerto Rico.

					Data	appearing	in	the	tables	below	have	been	sourced	from	Citigroup's	risk systems	and,	as	such,	may	not	reconcile	with	disclosures	elsewhere	generally due	to	differences	in	methodology	or	variations	in	the	manner	in	which information	is	captured.	Citi	has	noted	such	variations	in	instances	where	it believes	they	could	be	material	to	reconcile	the	information	presented elsewhere.

					Citi's	credit	risk	policy	is	not	to	offer	option	ARMs/negative	amortizing mortgage	products	to	its	customers.	As	a	result,	option	ARMs/negative amortizing	mortgages	represent	an	insignificant	portion	of	total	balances	that were	acquired	only	incidentally	as	part	of	prior	portfolio	and	business	purchases. 					A	portion	of	loans	in	the	U.S.	mortgage	portfolio	currently	requires	a payment	to	satisfy	only	the	current	accrued	interest	for	the	payment	period,	or	an interest-only	payment.	Our	mortgage	portfolio	includes	approximately	$28 billion	of	first	and	second	lien	home	equity	lines	of	credit	(HELOCs)	that	are still	within	their	revolving	period	and	have	not	commenced	amortization.	The interest-only	payment	feature	during	the	revolving	period	is	standard	for	the HELOC	product	across	the	industry.	The	first	mortgage	portfolio	contains approximately	$33	billion	of	mostly	adjustable	rate	mortgages	(ARMs)	that	are currently	required	to	make	an	interest-only	payment.	These	loans	will	be required	to	make	a	fully	amortizing	payment	upon	expiration	of	their	interest- only	payment	period,	and	most	will	do	so	within	a	few	years	of	origination. Borrowers	that	are	currently	required	to	make	an	interest-only	payment	cannot select	a	lower	payment	that	would	negatively	amortize	the	loan.	First	mortgage loans	with	this	payment	feature	are	primarily	to	high-credit-quality	borrowers that	have	on	average	significantly	higher	refreshed	FICO	scores	than	other	loans in	the	first	mortgage	portfolio.

# Loan	balances

First	mortgages—Loan	balances.	As	a	consequence	of	the	difficult	economic environment	and	the	decrease	in	housing	prices,	LTV	and	FICO	scores	have deteriorated	since	origination	as	depicted	in	the	table	below.	On	a	refreshed basis,	approximately	28%	of	first	lien	mortgages	had	a	LTV	ratio	above	100%, compared	to	approximately	0%	at	origination.	Approximately	30%	of	the	first lien	mortgages	had	FICO	scores	less	than	620	on	a	refreshed	basis,	compared	to 15%	at	origination.	One	half	of	the	first	lien	mortgages	with	refreshed	LTV ratios	above	100%	have	refreshed	FICO	scores	greater	than	660;	90	+	DPD	rates for	this	portion	of	the	portfolio	were	2.8%.

# Balances: December 31, 2009—First Lien Mortgages

| AT | FICO≥660 | 620≤FICO<660 | FICO<620 |
| :--- | :--- | :--- | :--- |
| ORIGINATION |  |  |  |
| LTV ≤\t80% | 59% | 6% | 7% |
| 80% < LTV ≤\t100% | 13% | 7% | 8% |
| LTV > 100% | NM | NM | NM |
| REFRESHED | FICO≥660 | 620≤FICO | FICO<620 |
|  |  | <660 |  |
| LTV ≤\t80% | 30% | 4% | 10% |
| 80% < LTV ≤\t100% | 16% | 3% | 9% |
| LTV > 100% | 14% | 3% | 11% |

Note: NM –	Not meaningful. First lien mortgage table excludes loans in Canada and Puerto Rico. Table excludes loans guaranteed by U.S. government sponsored agencies and loans subject to LTSCs. Table also excludes $2.0 billion from At Origination balances and $1.0 billion from Refreshed balances for which FICO or LTV data were unavailable. Balances exclude deferred fees/costs. Refreshed FICO scores based on updated credit scores obtained from Fair Isaac Corporation. Refreshed LTV ratios are derived from data at origination updated using mainly the Case-Shiller Home Price Index or the Federal Housing Finance Agency Price Index.

Second	mortgages—Loan	balances.	In	the	second	lien	mortgage	portfolio,	the majority	of	loans	are	in	the	higher	FICO	categories.	The	challenging	economic conditions	have	caused	a	migration	towards	lower	FICO	scores	and	higher	LTV ratios.	Approximately	42%	of	that	portfolio	had	refreshed	loan-to-value	ratios above	100%,	compared	to	approximately	0%	at	origination.	Approximately	18% of	second	lien	mortgages	had	FICO	scores	less	than	620	on	a	refreshed	basis, compared	to	4%	at	origination.	Over	two	thirds	of	the	second	lien	loans	with LTV	ratios	greater	than	100%	had	refreshed	FICO	scores	greater	than	660;	90+ DPD	rates	for	this	portion	of	the	portfolio	were	0.4%.

# Balances: December 31, 2009—Second Lien Mortgages

# Delinquencies: 90+DPD Rates—Second Lien Mortgages

| Balances: December 31, 2009—Second Lien Mortgages | Balances: December 31, 2009—Second Lien Mortgages | Balances: December 31, 2009—Second Lien Mortgages |  | Delinquencies: 90+DPD Rates—Second Lien Mortgages | Delinquencies: 90+DPD Rates—Second Lien Mortgages | Delinquencies: 90+DPD Rates—Second Lien Mortgages |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| AT | FICO ≥\t660 | 620 ≤\tFICO | FICO < 620 | AT | FICO\t≥\t660 | 620 ≤\tFICO | FICO <\t620 |
| ORIGINATION |  | <660 |  | ORIGINATION |  | <660 |  |
| LTV ≤\t80% | 48% | 2% | 2% | LTV ≤\t80% | 1.5% | 4.2% | 5.6% |
| 80% < LTV ≤\t100% | 43% | 3% | 2% | 80% < LTV ≤\t100% | 4.2% | 5.3% | 7.6% |
| LTV > 100% | NM | NM | NM | LTV > 100% | NM | NM | NM |
| REFRESHED | FICO ≥\t660 | 620 ≤\tFICO | FICO<620 | REFRESHED | FICO ≥\t660 | 620 ≤\tFICO | FICO < 620 |
|  |  | <660 |  |  |  | <660 |  |
| LTV ≤\t80% | 23% | 1% | 3% | LTV ≤\t80% | 0.0% | 0.7% | 8.5% |
| 80% < LTV ≤\t100% | 23% | 2% | 5% | 80% < LTV ≤\t100% | 0.1% | 1.3% | 9.8% |
| LTV > 100% | 29% | 4% | 10% | LTV > 100% | 0.4% | 4.5% | 19.3% |

Note: NM—Not meaningful. Second lien mortgage table excludes loans in Canada and Puerto Rico. Table excludes loans subject to LTSCs. Table also excludes $1.7 billion from At Origination balances and $0.8 billion from Refreshed balances for which FICO or LTV data were unavailable. Refreshed FICO scores, based on updated credit scores obtained from Fair Isaac Corporation. Refreshed LTV ratios are derived from data at origination updated using mainly the Case-Shiller Home Price Index or the Federal Housing Finance Agency Price Index.

# Delinquencies

The	tables	below	provide	delinquency	statistics	for	loans	90+DPD,	as	a percentage	of	outstandings	in	each	of	the	FICO/LTV	combinations,	in	both	the first	lien	and	second	lien	mortgage	portfolios.	For	example,	loans	with	FICO	≥ 660	and	LTV	≤	80%	at	origination	have	a	90+DPD	rate	of	7.9%.

					Loans	with	FICO	scores	of	less	than	620	exhibit	significantly	higher delinquencies	than	in	any	other	FICO	band.	Similarly,	loans	with	LTVs	greater than	100%	have	higher	delinquencies	than	LTVs	of	less	than	or	equal	to	100%. 					The	first	mortgage	delinquencies	continued	to	rise	during	2009.	Further breakout	of	the	FICO	below	620	segment	indicates	that	delinquencies	in	this segment,	on	a	refreshed	basis,	are	about	three	times	higher	than	in	the	overall first	mortgage	portfolio.

# Delinquencies: 90+DPD Rates—First Lien Mortgages

| AT | FICO ≥	660 | 620 ≤	FICO | FICO <	620 |
| :--- | :--- | :--- | :--- |
| ORIGINATION |  | <660 |  |
| LTV ≤\t80% | 7.9% | 13.1% | 14.0% |
| 80% < LTV ≤\t100% | 10.2% | 17.3% | 20.7% |
| LTV > 100% | NM | NM | NM |
| REFRESHED | FICO ≥\t660 | 620 ≤\tFICO | FICO < 620 |
|  |  | <660 |  |
| LTV ≤\t80% | 0.3% | 3.8% | 18.0% |
| 80% < LTV ≤\t100% | 0.8% | 8.5% | 27.3% |
| LTV > 100% | 2.8% | 23.3% | 42.0% |

Note: NM—Not meaningful. 90+DPD rates are based on balances referenced in the tables above.

# Origination	channel,	geographic	distribution	and	origination	vintage

The	following	tables	detail	Citi's	first	and	second	lien	U.S.	consumer	mortgage portfolio	by	origination	channel,	geographic	distribution	and	origination	vintage.

# By	origination	channel

Citi's	U.S.	consumer	mortgage	portfolio	has	been	originated	from	three	main channels:	retail,	broker	and	correspondent.

Retail:	loans	originated	through	a	direct	relationship	with	the borrower.

Broker:	loans	originated	through	a	mortgage	broker,	where	Citi underwrites	the	loan	directly	with	the	borrower.

Correspondent:	loans	originated	and	funded	by	a	third	party,	where Citi	purchases	the	closed	loans	after	the	correspondent	has	funded	the loan.	This	channel	includes	loans	acquired	in	large	bulk	purchases from	other	mortgage	originators	primarily	in	2006	and	2007.	Such bulk	purchases	were	discontinued	in	2007.

# First Lien Mortgages: December 31, 2009

As	of	December	31,	2009,	approximately	55%	of	the	first	lien	mortgage portfolio	was	originated	through	third-party	channels.	Given	that	loans originated	through	correspondents	have	exhibited	higher	90+DPD	delinquency rates	than	retail	originated	mortgages,	Citi	terminated	business	with	a	number	of correspondent	sellers	in	2007	and	2008.	During	2008,	Citi	also	severed relationships	with	a	number	of	brokers,	only	maintaining	those	who	have produced	strong,	high-quality	and	profitable	volume.	Citi	has	also	discontinued purchasing	loans	held	in	portfolio	from	correspondents	and	significantly	reduced bulk	purchases.

| CHANNELS | FIRST LIEN | CHANNEL | 90+DPD % | *FICO | *LTV |
| :--- | :--- | :--- | :--- | :--- | :--- |
| ($ in billions) | MORTGAGES | % TOTAL |  | < 620 | > 100% |
| RETAIL | $48.2 | 44.9% | 5.1% | $14.3 | $9.1 |
| BROKER | $19.0 | 17.7% | 11.3% | $3.7 | $5.7 |
| CORRESPONDENT | $40.1 | 37.4% | 16.6% | $14.0 | $15.0 |

* Refreshed FICO and LTV.

Note: First lien mortgage table excludes Canada and Puerto Rico, deferred fees/costs, loans guaranteed by U.S. government sponsored agencies and loans subject to LTSCs.

# Second Lien Mortgages: December 31, 2009

For	second	lien	mortgages,	approximately	49%	of	the	loans	were	originated through	third-party	channels.	As	these	mortgages	have	demonstrated	a	higher incidence	of	delinquencies,	Citi	no	longer	originates	second	mortgages	through third-party	channels.

| CHANNELS | SECOND LIENCHANNEL90+DPD%*FICO < 620 | SECOND LIENCHANNEL90+DPD%*FICO < 620 | SECOND LIENCHANNEL90+DPD%*FICO < 620 | SECOND LIENCHANNEL90+DPD%*FICO < 620 | *LTV > 100% |
| :--- | :--- | :--- | :--- | :--- | :--- |
| ($ in billions) | MORTGAGES | % TOTAL |  |  |  |
| RETAIL | $25.2 | 51.0% | 1.7% | $3.9 | $6.9 |
| BROKER | $12.4 | 25.0% | 3.9% | $2.2 | $6.8 |
| CORRESPONDENT | $11.8 | 24.0% | 5.0% | $2.9 | $7.0 |

Note: Excludes Canada and Puerto Rico and loans subject to LTSCs.

# By	state

Approximately	half	of	Citi's	U.S.	consumer	mortgage	portfolio	is	located	in	five states:	California,	New	York,	Florida,	Texas	and	Illinois.	Those	states	represent 50%	of	first	lien	mortgages	and	54%	of	second	lien	mortgages.

					Florida	and	Illinois	have	above-average	90+DPD	delinquency	rates.	Florida has	55%	of	its	first	lien	mortgage	portfolio	with	refreshed	LTV>100%, compared	to	28%	overall	for	first	lien	mortgages.	Illinois	has	35%	of	its	loan portfolio	with	refreshed	LTV>100%.	Texas,	despite	having	40%	of	its	portfolio with	FICO<620,	has	a	lower	delinquency	rate	relative	to	the	overall	portfolio. Texas	has	less	than	0.5%	of	its	loan	portfolio	with	refreshed	LTV>100%.

| STATES | FIRST LIEN | STATE90+DPD %*FICO &lt; 620 | STATE90+DPD %*FICO &lt; 620 | STATE90+DPD %*FICO &lt; 620 | *LTV &gt; 100% |
| :--- | :--- | :--- | :--- | :--- | :--- |
| ($ in billions) | MORTGAGES% TOTAL | MORTGAGES% TOTAL |  |  |  |
| CALIFORNIA | $29.6 | 27.6% | 10.4% | $ 4.8 | $12.6 |
| NEW YORK | $8.9 | 8.3% | 7.1% | $ 1.6 | $0.5 |
| FLORIDA | $6.6 | 6.2% | 18.1% | $ 2.5 | $3.7 |
| ILLINOIS | $4.5 | 4.2% | 12.3% | $ 1.5 | $1.6 |
| TEXAS | $4.2 | 3.9% | 6.2% | $ 1.7 | $0.0 |
| OTHERS | $53.5 | 49.9% | 10.4% | $19.8 | $11.5 |

					In	the	second	lien	mortgage	portfolio,	Florida	continues	to	experience	above- average	delinquencies,	with	approximately	72%	of	their	loans	with	LTV	>	100% compared	to	42%	overall	for	second	lien	mortgages.

| STATES | SECOND LIEN | STATE90+DPD %*FICO &lt; 620 | STATE90+DPD %*FICO &lt; 620 | STATE90+DPD %*FICO &lt; 620 | *LTV &gt; 100% |
| :--- | :--- | :--- | :--- | :--- | :--- |
| ($ in billions) | MORTGAGES% TOTAL | MORTGAGES% TOTAL |  |  |  |
| CALIFORNIA | $13.7 | 27.8% | 3.4% | $1.9 | $7.3 |
| NEW YORK | $6.6 | 13.4% | 2.0% | $0.8 | $1.1 |
| FLORIDA | $3.2 | 6.6% | 5.4% | $0.8 | $2.3 |
| ILLINOIS | $1.9 | 3.9% | 2.9% | $0.4 | $1.1 |
| TEXAS | $1.4 | 2.8% | 1.5% | $0.2 | $0.0 |
| OTHERS | $22.5 | 45.5% | 2.9% | $4.8 | $8.7 |

# By	vintage

For	Citigroup's	combined	U.S.	consumer	mortgage	portfolio	(first	and	second lien	mortgages),	approximately	half	of	the	portfolio	consists	of	2006	and	2007 vintages,	which	demonstrate	above-average	delinquencies.	In	first	mortgages, approximately	43%	of	the	portfolio	is	of	2006	and	2007	vintages,	which	have 90+DPD	rates	well	above	the	overall	portfolio	rate.	In	second	mortgages,	62%	of the	portfolio	is	of	2006	and	2007	vintages,	which	again	have	higher delinquencies	compared	to	the	overall	portfolio	rate.

| VINTAGES | FIRST LIENVINTAGE90+DPD %*FICO &lt; 620 | FIRST LIENVINTAGE90+DPD %*FICO &lt; 620 | FIRST LIENVINTAGE90+DPD %*FICO &lt; 620 | FIRST LIENVINTAGE90+DPD %*FICO &lt; 620 | *LTV &gt; 100% |
| :--- | :--- | :--- | :--- | :--- | :--- |
| ($ in billions) | MORTGAGES% TOTAL | MORTGAGES% TOTAL |  |  |  |
| 2009 | $4.5 | 4.2% | 0.6% | $0.6 | $0.1 |
| 2008 | $13.8 | 12.8% | 5.5% | $3.0 | $2.1 |
| 2007 | $27.2 | 25.4% | 16.9% | $10.2 | $11.5 |
| 2006 | $19.5 | 18.1% | 14.3% | $6.4 | $8.4 |
| 2005 | $18.6 | 17.4% | 7.8% | $4.4 | $5.9 |
| ≤ 2004 | $23.7 | 22.1% | 6.9% | $7.4 | $1.8 |

| VINTAGES | SECOND LIENVINTAGE90+DPD %*FICO &lt; 620 | SECOND LIENVINTAGE90+DPD %*FICO &lt; 620 | SECOND LIENVINTAGE90+DPD %*FICO &lt; 620 | SECOND LIENVINTAGE90+DPD %*FICO &lt; 620 | *LTV &gt; 100% |
| :--- | :--- | :--- | :--- | :--- | :--- |
| ($ in billions) | MORTGAGES% TOTAL | MORTGAGES% TOTAL |  |  |  |
| 2009 | $0.6 | 1.2% | 0.5% | $0.0 | $0.0 |
| 2008 | $4.3 | 8.7% | 1.1% | $0.6 | $0.7 |
| 2007 | $14.6 | 29.5% | 3.6% | $2.9 | $6.8 |
| 2006 | $16.1 | 32.6% | 3.7% | $3.2 | $8.4 |
| 2005 | $9.5 | 19.3% | 2.7% | $1.5 | $4.0 |
| ≤ 2004 | $4.3 | 8.6% | 1.9% | $0.7 | $0.6 |

# North America Cards

Citi's	North	America	cards	portfolio	consists	of	our	Citi-branded	and	retail partner	cards	portfolios	located	in	Citicorp—Regional	Consumer	Banking	and Citi	Holdings—Local	Consumer	Lending,	respectively.	As	of	December	31, 2009,	the	Citi-branded	portfolio	totaled	approximately	$83	billion	while	the retail	partner	cards	portfolio	was	approximately	$58	billion,	both	reported	on	a managed	basis.

					The	following	charts	detail	the	quarterly	trends	in	delinquencies	and	net credit	losses	for	Citigroup's	North	America	Citi-branded	and	retail	partner	cards portfolios.

					In	each	of	the	two	portfolios,	Citi	has	been	actively	eliminating	riskier accounts	and	sales	to	mitigate	losses.	First,	we	have	removed	high-risk customers	from	the	portfolio	by	either	reducing	available	lines	of	credit	or closing	accounts.	On	a	net	basis,	end	of	period	open	accounts	are	down	11%	in both	Citi-branded	and	retail	partner	cards	versus	prior-year	levels.	Second,	Citi has	improved	the	tools	used	to	identify	and	manage	exposure	in	each	of	the portfolios	by	targeting	unique	customer	attributes.

					In	Citi's	experience	to	date,	these	portfolios	have	significantly	different characteristics:

Citi-branded	cards	tend	to	have	a	longer	estimated	account	life,	with	higher credit	lines	and	balances	reflecting	the	greater	utility	of	a	multi-purpose	credit card.

Retail	partner	cards	tend	to	have	a	shorter	account	life,	with	smaller	credit lines	and	balances.	The	account	portfolio,	by	nature,	turns	faster	and	the	loan balances	reflect	more	recent	vintages.

					As	a	result,	loss	mitigation	efforts,	such	as	stricter	underwriting	standards	for new	accounts,	decreasing	higher-risk	credit	lines,	closing	high-risk	accounts	and re-pricing,	tend	to	affect	the	retail	partner	cards	portfolio	faster	than	the	branded portfolio.

					In	addition	to	tightening	credit	standards,	Citi	also	continues	to	pursue	other loss	mitigation	efforts,	including	improvements	in	collections	effectiveness	and various	forbearance	programs.	We	believe	forbearance	programs	improve	the longer-term	quality	of	these	accounts.

					Citigroup	offers	both	short-term	and	long-term	modification	programs	to	its credit	card	customers,	primarily	in	the	U.S.	The	short-term	U.S.	programs provide	interest	rate	reductions	for	up	to	12	months,	while	the	long-term programs	provide	interest	rate	reductions	for	up	to	five	years.	In	both	types	of U.S.	programs,	the	annual	percentage	rate	(APR)	is	typically	reduced	to	below 10%.

					Citigroup	monitors	the	performance	of	these	U.S.	credit	card	short-term	and long-term	modification	programs	by	tracking	cumulative	loss	rates	by	vintages (when	customers	enter	a	program)	and	comparing	that	performance	with	that	of similar	accounts	whose	terms	were	not	modified.	For	example,	for	U.S.	credit cards,	in	Citi's	experience	to	date,	at	24	months	after	modifying	an	account,	Citi typically	reduces	credit	losses	by	approximately	one-third	compared	to	similar accounts	that	were	not	modified.	Citi	has	observed	that	this	improved performance	of	modified	loans	relative	to	those	not	modified	is	generally greatest	during	the	first	12	months	after	modification.	Following	that	period, losses	have	tended	to	increase	but	typically	stabilize	at	levels	which	are	still below	those	for	similar	loans	that	were	not	modified,	resulting	in	an	improved cumulative	loss	performance.	To	date,	Citi	has	tended	to	see	that	this	benefit	is sustained	over	time	across	our	U.S.	credit	card	portfolios.

					Recognizing	the	impact	of	various	forbearance	programs,	we	are nevertheless	seeing	some	early	positive	credit	trends	in	both	Citi-branded	and retail	partner	cards.	While	both	portfolios	experienced	an	expected	seasonal increase	in	90+	day	delinquencies	in	the	fourth	quarter	of	2009,	which	we currently	expect	could	lead	to	a	moderate	increase	in	net	credit	losses	in	the	first quarter	of	2010,	earlier	bucket	delinquencies	(30–89	days	past	due)	improved	on a	dollar	basis.

					Overall,	however,	Citi	remains	cautious	and	currently	believes	that	net	credit losses	in	each	of	the	cards	portfolios	will	continue	to	remain	at	elevated	levels and	will	continue	to	be	highly	dependent	on	the	external	environment	and industry	changes.

# Citi-Branded Cards

Note: Includes Puerto Rico.

# Retail Partners Cards

Note: Includes Canada, Puerto Rico and Installment Lending.

					As	set	forth	in	the	table	below,	approximately	73%	of	the	Citi-branded portfolio	had	FICO	credit	scores	of	at	least	660	on	a	refreshed	basis	as	of December	31,	2009,	while	63%	of	the	retail	partner	cards	portfolio	had	scores above	660.

| Refreshed | Citi Branded | Retail Partners |
| :--- | :--- | :--- |
| FICO ≥ 660 | 73% | 63% |
| 620 ≤ FICO &lt; 660 | 11% | 13% |
| FICO &lt; 620 | 16% | 24% |

Note: Based on balances of $137 billion. Balances include interest and fees. Excludes Canada, Puerto Rico, Installment and Classified portfolios. Excludes balances where FICO was unavailable ($0.7 billion for Citi-branded, $2.1 billion for retail partners cards).

					The	table	below	provides	delinquency	statistics	for	loans	90+DPD	for	both the	Citi-branded	and	retail	partners	cards	portfolios	as	of	December	31,	2009. Given	the	economic	environment,	customers	have	migrated	down	from	higher FICO	score	ranges,	driven	by	their	delinquencies	with	Citi	and/or	with	other creditors.	As	these	customers	roll	through	the	delinquency	buckets,	they materially	damage	their	credit	score	and	may	ultimately	go	to	charge-off.	Loans 90+DPD	are	more	likely	to	be	associated	with	low	refreshed	FICO	scores,	both because	low	scores	are	indicative	of	repayment	risk	and	because	their delinquency	has	been	reported	by	Citigroup	to	the	credit	bureaus.	Loans	with FICO	scores	less	than	620,	which	constitute	16%	of	the	Citi-branded	portfolio, have	a	90+DPD	rate	of	16.9%;	in	the	retail	partner	cards	portfolio,	loans	with FICO	scores	less	than	620	constitute	24%	of	the	portfolio	and	have	a	90+DPD rate	of	18.0%.

| Refreshed | Citi Branded 90+DPD% | Retail Partners 90+DPD% |
| :--- | :--- | :--- |
| FICO ≥ 660 | 0.1% | 0.2% |
| 620 ≤ FICO &lt; 660 | 0.4% | 0.7% |
| FICO &lt; 620 | 16.9% | 18.0% |

Note: Based on balances of $137 billion. Balances include interest and fees. Excludes Canada, Puerto Rico, Installment and Classified portfolios.

# U.S. Installment and Other Revolving Loans

In	the	table	below,	Citi's	U.S.	Installment	portfolio	consists	of	consumer	loans	in the	following	businesses:	Consumer	Finance,	Retail	Banking,	Auto,	Student Lending	and	Cards.	Other	Revolving	consists	of	consumer	loans	(Ready	Credit and	Checking	Plus	products)	in	the	Consumer	Retail	Banking	business. Commercial-related	loans	are	not	included.

					As	of	December	31,	2009,	the	U.S.	Installment	portfolio	totaled approximately	$56	billion,	while	the	U.S.	Other	Revolving	portfolio	was approximately	$1	billion.	While	substantially	all	of	the	U.S.	Installment	portfolio is	managed	under	LCL	within	Citi	Holdings,	it	does	include	$0.4	billion	of Consumer	Retail	Banking	loans	which	are	reported	in	Citicorp.	The	U.S.	Other Revolving	portfolio	is	managed	under	Citicorp.

					The	U.S.	Installment	portfolio	includes	$20	billion	of	Student	Loans originated	under	the	Federal	Family	Education	Loan	Program	(FFELP)	where losses	are	substantially	mitigated	by	federal	guarantees.	These	loans	generally have	higher	90+DPD	rates	compared	to	other	installment	loans,	but	due	to	the federal	guarantees,	have	lower	net	credit	loss	rates	relative	to	other	installment loans.

					Approximately	43%	of	the	Installment	portfolio	had	FICO	credit	scores	less than	620	on	a	refreshed	basis.	Approximately	30%	of	the	Other	Revolving portfolio	is	composed	of	loans	having	FICO	less	than	620.

| Refreshed | Installment | Other Revolving |
| :--- | :--- | :--- |
| FICO ≥ 660 | 42% | 55% |
| 620 ≤ FICO &lt; 660 | 15% | 15% |
| FICO &lt; 620 | 43% | 30% |

Note: Based on balances of $54 billion for Installment and $0.9 billion for Other Revolving. Excludes Canada and Puerto Rico. Excludes balances where FICO was unavailable ($2.3 billion for Installment, $0.1 billion for Other Revolving).

					The	table	below	provides	delinquency	statistics	for	loans	90+DPD	for	both the	Installment	and	Other	Revolving	portfolios.	Loans	90+DPD	are	more	likely to	be	associated	with	low	refreshed	FICO	scores	both	because	low	scores	are indicative	of	repayment	risk	and	because	their	delinquency	has	been	reported	by Citigroup	to	the	credit	bureaus.	On	a	refreshed	basis,	loans	with	FICO	scores	of less	than	620	exhibit	significantly	higher	delinquencies	than	in	any	other	FICO band	and	will	drive	the	majority	of	the	losses.

| Refreshed | Installment 90+DPD% | Other Revolving 90+DPD% |
| :--- | :--- | :--- |
| FICO ≥ 660 | 0.2% | 0.0% |
| 620 ≤ FICO &lt; 660 | 0.7% | 0.3% |
| FICO &lt; 620 | 6.1% | 8.3% |

Note: Based on balances of $54 billion for Installment and $0.9 billion for Other Revolving. Excludes Canada and Puerto Rico.

# Interest Rate Risk Associated with Consumer Mortgage Lending Activity

Citigroup	originates	and	funds	mortgage	loans.	As	with	all	other	lending	activity, this	exposes	Citigroup	to	several	risks,	including	credit,	liquidity	and	interest	rate risks.	To	manage	credit	and	liquidity	risk,	Citigroup	sells	most	of	the	mortgage loans	it	originates,	but	retains	the	servicing	rights.	These	sale	transactions	create an	intangible	asset	referred	to	as	mortgage	servicing	rights	(MSRs).	The	fair value	of	this	asset	is	primarily	affected	by	changes	in	prepayments	that	result from	shifts	in	mortgage	interest	rates.	Thus,	by	retaining	the	servicing	rights	of sold	mortgage	loans,	Citigroup	is	still	exposed	to	interest	rate	risk.

					In	managing	this	risk,	Citigroup	hedges	a	significant	portion	of	the	value	of its	MSRs	through	the	use	of	interest	rate	derivative	contracts,	forward	purchase commitments	of	mortgage-backed	securities,	and	purchased	securities	classified as	trading	(primarily	mortgage-backed	securities	including	principal-only	strips). 					Since	the	change	in	the	value	of	these	hedging	instruments	does	not	perfectly match	the	change	in	the	value	of	the	MSRs,	Citigroup	is	still	exposed	to	what	is commonly	referred	to	as	"basis	risk."	Citigroup	manages	this	risk	by	reviewing the	mix	of	the	various	hedging	instruments	referred	to	above	on	a	daily	basis. 					Citigroup's	MSRs	totaled	$6.530	billion	and	$5.657	billion	at	December	31, 2009	and	December	31,	2008,	respectively.	For	additional	information	on	Citi's MSRs,	see	Notes	19	and	23	to	the	Consolidated	Financial	Statements.

					As	part	of	the	mortgage	lending	activity,	Citigroup	commonly	enters	into purchase	commitments	to	fund	residential	mortgage	loans	at	specific	interest rates	within	a	given	period	of	time,	generally	up	to	60	days	after	the	rate	has been	set.	If	the	resulting	loans	from	these	commitments	will	be	classified	as loans	held-for-sale,	Citigroup	accounts	for	the	commitments	as	derivatives. Accordingly,	the	initial	and	subsequent	changes	in	the	fair	value	of	these commitments,	which	are	driven	by	changes	in	mortgage	interest	rates,	are recognized	in	current	earnings	after	taking	into	consideration	the	likelihood	that the	commitment	will	be	funded.

					Citigroup	hedges	its	exposure	to	the	change	in	the	value	of	these commitments	by	utilizing	hedging	instruments	similar	to	those	referred	to	above.

# CORPORATE LOAN DETAILS

For	corporate	clients	and	investment	banking	activities	across	Citigroup,	the credit	process	is	grounded	in	a	series	of	fundamental	policies,	in	addition	to those	described	under	"Managing	Global	Risk—Risk	Management—Overview," above.	These	include:

joint	business	and	independent	risk	management	responsibility	for	managing credit	risks;

portfolio	limits	to	ensure	diversification	and	maintain	risk/capital	alignment; a	minimum	of	two	authorized	credit	officer	signatures	required	on	extensions of	credit,	one	of	which	must	be	from	a	credit	officer	in	credit	risk management;

risk	rating	standards,	applicable	to	every	obligor	and	facility;	and consistent	standards	for	credit	origination	documentation	and	remedial management.

a	single	center	of	control	for	each	credit	relationship	that	coordinates	credit activities	with	that	client;

# Corporate Credit Portfolio

The	following	table	presents	credit	data	for	Citigroup's	corporate	loans	and	unfunded	lending	commitments	at	December	31,	2009.	The	ratings	scale	is	based	on	Citi's internal	risk	ratings,	which	generally	correspond	to	the	ratings	as	defined	by	S&P	and	Moody's.

| In millions of dollars |  |  |  |  | At December 31, 2009 | At December 31, 2009 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | \t\t\t\t\t\t Recorded investment | \t\t\t\t\t\t Recorded investment |  |  | Unfunded |  |  |
| Corporate loans (1) | in loans | (2) | % of total | (3) | lending commitments | % of total | (3) |
| Investment grade (4) | $91,565 |  | 59% | 59% | $271,444 | 88% | 88% |
| Non-investment grade (4) |  |  |  |  |  |  |  |
| Noncriticized | 17,984 |  | 12 |  | 13,769 | 4 |  |
| Criticized performing (5) | 30,873 |  | 20 |  | 19,953 | 6 |  |
| Commercial real estate (CRE) | 6,926 |  | 4 |  | 1,872 | 1 |  |
| Commercial and Industrial and Other | 23,947 |  | 16 |  | 18,081 | 6 |  |
| Non-accrual (criticized) (5) | 13,545 |  | 9 |  | 2,570 | 1 |  |
| Commercial real estate (CRE) | 4,051 |  | 3 |  | 732 | 0 |  |
| Commercial and Industrial and Other | 9,494 |  | 6 |  | 1,838 | 1 |  |
| Total non-investment grade | $62,402 |  | 41% | 41% | $36,292 | 12% | 12% |
| Private Banking loans managed on a delinquency basis (4) | 14,349 |  |  |  | 2,451 |  |  |
| Loans at fair value | 1,405 |  |  |  | — |  |  |
| Total corporate loans | $169,721 |  |  |  | $310,187 |  |  |
| Unearned income | (2,274) |  |  |  | — |  |  |
| Corporate loans, net of unearned income | $167,447 |  |  |  | $310,187 |  |  |

(1)							Includes $955 million of TDRs for which concessions, such as the reduction of interest rates or the deferral of interest or principal payments, have been granted as a result of deterioration in the borrowers' financial condition. Each of the borrowers is current under the restructured terms.

(2) Recorded investment in a loan includes accrued interest, net deferred loan fees and costs, unamortized premium or discount, less any direct write-downs.

(3) Percentages disclosed above exclude Private Banking loans managed on a delinquency basis and loans at fair value.

(4) Held-for-investment loans accounted for on an amortized cost basis.

(5) Criticized exposures correspond to the "Special Mention," "Substandard" and "Doubtful" asset categories defined by banking regulatory authorities.

					The	following	tables	represent	the	corporate	credit	portfolio	(excluding Private	Banking),	before	consideration	of	collateral,	by	maturity	at	December 31,	2009.	The	corporate	portfolio	is	broken	out	by	direct	outstandings	that include	drawn	loans,	overdrafts,	interbank	placements,	bankers'	acceptances, certain	investment	securities	and	leases	and	unfunded	commitments	that	include unused	commitments	to	lend,	letters	of	credit	and	financial	guarantees.

|  | Due | than 1 year | Greater |  |
| :--- | :--- | :--- | :--- | :--- |
|  | within | but within | than | Total |
| In billions of dollars | \t\t\t\t1 year | 5 years\t\t\t\t5 years\t\t\t\t exposure | 5 years\t\t\t\t5 years\t\t\t\t exposure | 5 years\t\t\t\t5 years\t\t\t\t exposure |
| Direct outstandings | $213 | $66 | $7 | $286 |
| Unfunded lending commitments | 182 | 120 | 10 | 312 |
| Total | $395 | $186 | $17 | $598 |

|  | Due | than 1 year | Greater |  |
| :--- | :--- | :--- | :--- | :--- |
|  | within | but within | than | Total |
| In billions of dollars | \t\t\t\t1 year | 5 years\t\t\t\t5 years\t\t\t\t exposure | 5 years\t\t\t\t5 years\t\t\t\t exposure | 5 years\t\t\t\t5 years\t\t\t\t exposure |
| Direct outstandings | $161 | $100 | $9 | $270 |
| Unfunded lending commitments | 206 | 141 | 12 | 359 |
| Total | $367 | $241 | $21 | $629 |

# Portfolio Mix

The	corporate	credit	portfolio	is	diverse	across	counterparty	and	industry,	and geography.	The	following	table	shows	direct	outstandings	and	unfunded commitments	by	region:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| North America | 51% | 49% |
| EMEA | 27 | 29 |
| Latin America | 9 | 8 |
| Asia | 13 | 14 |
| Total | 100% | 100% |

					The	maintenance	of	accurate	and	consistent	risk	ratings	across	the	corporate credit	portfolio	facilitates	the	comparison	of	credit	exposure	across	all	lines	of business,	geographic	regions	and	products.

					Obligor	risk	ratings	reflect	an	estimated	probability	of	default	for	an	obligor and	are	derived	primarily	through	the	use	of	statistical	models	(which	are validated	periodically),	external	rating	agencies	(under	defined	circumstances)	or approved	scoring	methodologies.	Facility	risk	ratings	are	assigned,	using	the obligor	risk	rating,	and	then	factors	that	affect	the	loss-given	default	of	the facility,	such	as	support	or	collateral,	are	taken	into	account.With	regard	to climate	change	risk,	factors	evaluated	include	consideration	of	the	business impact,	impact	of	regulatory	requirements,	or	lack	thereof,	and	impact	of physical	effects	on	obligors	and	their	assets.

These	factors	may	adversely	affect	the	ability	of	some	obligors	to	perform	and thus	increase	the	risk	of	lending	activities	to	these	obligors.	Citigroup	also	has incorporated	climate	risk	assessment	criteria	for	certain	obligors,	as	necessary. 					Internal	obligor	ratings	equivalent	to	BBB	and	above	are	considered investment	grade.	Ratings	below	the	equivalent	of	the	BBB	category	are considered	non-investment	grade.

					The	following	table	presents	the	corporate	credit	portfolio	by	facility	risk rating	at	December	31,	2009	and	2008,	as	a	percentage	of	the	total	portfolio:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| AAA/AA/A | 58% | 58% |
| BBB | 24 | 24 |
| BB/B | 11 | 13 |
| CCC or below | 7 | 5 |
| Unrated | — | — |
| Total | 100% | 100% |

					The	corporate	credit	portfolio	is	diversified	by	industry,	with	a	concentration only	in	the	financial	sector,	including	banks,	other	financial	institutions, insurance	companies,	investment	banks	and	government	and	central	banks.	The following	table	shows	the	allocation	of	direct	outstandings	and	unfunded commitments	to	industries	as	a	percentage	of	the	total	corporate	portfolio:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Government and central banks | 12% | 11% |
| Investment banks | 5 | 7 |
| Banks | 9 | 6 |
| Other financial institutions | 12 | 5 |
| Utilities | 4 | 4 |
| Insurance | 4 | 4 |
| Petroleum | 4 | 4 |
| Agriculture and food preparation | 4 | 4 |
| Telephone and cable | 3 | 3 |
| Industrial machinery and equipment | 2 | 3 |
| Global information technology | 2 | 2 |
| Chemicals | 2 | 2 |
| Real estate | 3 | 3 |
| Other industries (1) | 34 | 42 |
| Total | 100% | 100% |

(1)							Includes all other industries, none of which exceeds 2% of total outstandings.

# Credit Risk Mitigation

As	part	of	its	overall	risk	management	activities,	Citigroup	uses	credit derivatives	and	other	risk	mitigants	to	hedge	portions	of	the	credit	risk	in	its portfolio,	in	addition	to	outright	asset	sales.	The	purpose	of	these	transactions	is to	transfer	credit	risk	to	third	parties.	The	results	of	the	mark-to-market	and	any realized	gains	or	losses	on	credit	derivatives	are	reflected	in	the	Principal transactions	line	on	the	Consolidated	Statement	of	Income.

					At	December	31,	2009	and	2008,	$59.6	billion	and	$95.5	billion, respectively,	of	credit	risk	exposure	were	economically	hedged.	Citigroup's expected	loss	model	used	in	the	calculation	of	its	loan	loss	reserve	does	not include	the	favorable	impact	of	credit	derivatives	and	other	risk	mitigants.	In addition,	the	reported	amounts	of	direct	outstandings	and	unfunded commitments	in	this	report	do	not	reflect	the	impact	of	these	hedging transactions.	At	December	31,	2009	and	2008,	the	credit	protection	was economically	hedging	underlying	credit	exposure	with	the	following	risk	rating distribution,	respectively:

# Rating of Hedged Exposure

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| AAA/AA/A | 45% | 54% |
| BBB | 37 | 32 |
| BB/B | 11 | 9 |
| CCC or below | 7 | 5 |
| Total | 100% | 100% |

					At	December	31,	2009	and	2008,	the	credit	protection	was	economically hedging	underlying	credit	exposure	with	the	following	industry	distribution, respectively:

# Industry of Hedged Exposure

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| Utilities | 9% | 10% |
| Telephone and cable | 9 | 9 |
| Agriculture and food preparation | 8 | 7 |
| Petroleum | 6 | 7 |
| Industrial machinery and equipment | 6 | 6 |
| Insurance | 4 | 5 |
| Chemicals | 8 | 5 |
| Retail | 4 | 5 |
| Other financial institutions | 4 | 4 |
| Autos | 6 | 4 |
| Pharmaceuticals | 5 | 4 |
| Natural gas distribution | 3 | 4 |
| Global information technology | 3 | 4 |
| Metals | 4 | 3 |
| Other industries (1) | 21 | 23 |
| Total | 100% | 100% |

(1)							Includes all other industries, none of which is greater than 2% of the total hedged amount.

# U.S. Subprime-Related Direct Exposure in Citi Holdings—Special Asset Pool

The	following	table	summarizes	Citigroup's	U.S.	subprime-related	direct	exposures	in	Citi	Holdings—SAP	at	December	31,	2009	and	December	31,	2008:

|  | Dec. 31, 2008 | write-ups | write-ups | 2009										 Dec. 31, 2009 | 2009										 Dec. 31, 2009 | 2009										 Dec. 31, 2009 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In billions of dollars | exposures | (downs) | (1) | other (2) | other (2) | exposures |
| Direct ABS CDO super-senior exposures: |  |  |  |  |  |  |
| \t\t\t\t\t\t\tGross ABS CDO super-senior exposures (A) | $18.9 |  |  |  |  | $13.3 |
| \t\t\t\t\t\t\tHedged exposures (B) | 6.9 |  |  |  |  | 5.9 |
| Net ABS CDO super-senior exposures: |  |  |  |  |  |  |
| ABCP/CDO (3) | 9.9 | $0.6 | $0.6 | $ (3.6) |  | 7.0 |
| \t\t\t\t\t\t\tHigh grade | 0.8 | 0.3 | 0.3 | (1.0) |  | 0.1 |
| \t\t\t\t\t\t\tMezzanine | 1.3 | — (4) | — (4) | (1.0) |  | 0.3 |
| Total net ABS CDO super-senior exposures (A-B=C) | $12.0 | $0.9 | $0.9 | $ (5.6 | ) (4) | $7.4 |
| Lending and structuring exposures (D) | $2.0 | $(0.1) | $(0.1) | $ (0.9) |  | $1.0 |
| Total net exposures (C+D) (5) (6) | $14.1 | $0.8 | $0.8 | $ (6.5) |  | $8.4 |

Note: Table may not foot or cross-foot due to rounding.

(1)  Includes net profits and losses associated with liquidations.

(2) Reflects sales, transfers and repayment or liquidations of principal.

(3) Consists of older-vintage, high-grade ABS CDOs.

(4) A portion of the underlying securities was purchased in liquidations of CDOs and reported as Trading account assets. As of December 31, 2009, $235 million relating to deals liquidated was held in the trading books.

(5) Composed of net CDO super-senior exposures and gross lending and structuring exposures.

(6) This $8.4 billion in net direct exposures includes the $7.3 billion of assets reflected in the table titled "Assets Within Special Asset Pool" under "Results of Operations—Citi Holdings—Special Asset Pool" above.

(7) Adjustment related to counterparty credit risk.

					Citi	Holdings	had	approximately	$8.4	billion	in	net	U.S.	subprime-related direct	exposures	in	the	SAP	at	December	31,	2009.	The	exposure	consisted	of	(a) approximately	$7.4	billion	of	net	exposures	in	the	super-senior	tranches	(i.e.,	the most	senior	tranches)	of	CDOs,	which	are	collateralized	by	asset-backed securities,	derivatives	on	asset-backed	securities,	or	both	(ABS	CDOs),	and	(b) approximately	$1.0	billion	of	exposures	in	its	lending	and	structuring	business. 					The	SAP	also	has	trading	positions,	both	long	and	short,	in	U.S.	subprime RMBS	and	related	products,	including	ABS	CDOs,	which	are	not	included	in	the figures	above.	The	exposure	from	these	positions	is	actively	managed	and hedged,	although	the	effectiveness	of	the	hedging	products	used	may	vary	with material	changes	in	market	conditions.

# Direct	ABS	CDO	super-senior	exposures

The	net	$7.4	billion	in	ABS	CDO	super-senior	exposures	as	of	December	31, 2009	is	collateralized	primarily	by	subprime	RMBS,	derivatives	on	RMBS,	or both.

					Citi	Holdings'	CDO	super-senior	subprime	direct	exposures	are	Level	3 assets.	The	valuation	of	the	high-grade	and	mezzanine	ABS	CDO	positions	uses trader	prices	based	on	the	underlying	assets	of	each	high-grade	and	mezzanine ABS	CDO.	Unlike	the	ABCP	positions,	the	high-grade	and

mezzanine	positions	are	now	largely	hedged	through	the	ABX	and	bond	short positions,	which	are	trader	priced.	This	results	in	closer	symmetry	in	the	way these	long	and	short	positions	are	valued	by	the	business.	Citi	Holdings	intends to	use	trader	marks	to	value	this	portion	of	the	portfolio	going	forward	so	long	as it	remains	largely	hedged.

					The	valuation	of	the	ABCP	positions	is	subject	to	valuation	based	on significant	unobservable	inputs.	Fair	value	of	these	exposures	is	based	on estimates	of	future	cash	flows	from	the	mortgage	loans	underlying	the	assets	of the	ABS	CDOs.	To	determine	the	performance	of	the	underlying	mortgage	loan portfolios,	Citi	estimates	the	prepayments,	defaults	and	loss	severities	based	on	a number	of	macroeconomic	factors.	The	model	is	calibrated	using	available mortgage	loan	information	including	historical	loan	performance.	An appropriate	discount	rate	is	then	applied	to	the	cash	flows	generated	for	each ABCP	tranche,	in	order	to	estimate	its	fair	value	under	current	market conditions.

					The	primary	drivers	that	currently	impact	the	model	valuations	are	the discount	rates	used	to	calculate	the	present	value	of	projected	cash	flows	and projected	mortgage	loan	performance.	Each	10-basis-point	change	in	the discount	rate	used	generally	results	in	an	approximate	$24	million	change	in	the fair	value	of	Citi's	direct	ABCP	exposures	as	of	December	31,	2009. 					Estimates	of	the	fair	value	of	the	CDO	super-senior	exposures	depend	on market	conditions	and	are	subject	to	further	change	over	time.	For	a	further discussion	of	the	valuation	methodology	and	assumptions	used	to	value	direct ABS	CDO	super-senior	exposures	to	U.S.	subprime	mortgages,	see	Note	26	to the	Consolidated	Financial	Statements.

# Lending	and	structuring	exposures

The	$1.0	billion	of	subprime-related	exposures	includes	approximately	$0.6 billion	of	actively	managed	subprime	loans	purchased	for	resale	or	securitization at	a	discount	to	par	during	2007	that	continue	to	be	held	by	SAP	and approximately	$0.4	billion	of	financing	transactions	with	customers	secured	by subprime	collateral,	and	are	carried	at	fair	value.

# Exposure to Commercial Real Estate in ICG and SAP

ICG	and	the	SAP,	through	their	business	activities	and	as	capital	markets participants,	incur	exposures	that	are	directly	or	indirectly	tied	to	the	commercial real	estate	(CRE)	market.	These	exposures	are	represented	primarily	by	the following	three	categories:

					(1)	Assets	held	at	fair	value	include	approximately	$5.5	billion,	of	which approximately	$4.6	billion	are	securities,	loans	and	other	items	linked	to	CRE that	are	carried	at	fair	value	as	trading	account	assets,	and	of	which approximately	$0.9	billion	are	securities	backed	by	CRE	carried	at	fair	value	as available-for-sale	(AFS)	investments.	Changes	in	fair	value	for	these	trading account	assets	are	reported	in	current	earnings,	while	AFS	investments	are reported	in	Accumulated	other	comprehensive	income	with	other-than-temporary impairments	reported	in	current	earnings.

					The	majority	of	these	exposures	are	classified	as	Level	3	in	the	fair	value hierarchy.	Weakening	activity	in	the	trading	markets	for	some	of	these instruments	resulted	in	reduced	liquidity,	thereby	decreasing	the	observable inputs	for	such	valuations,	and	could	have	an	adverse	impact	on	how	these instruments	are	valued	in	the	future	if	such	conditions	persist.

					(2)	Assets	held	at	amortized	cost	include	approximately	$1.8	billion	of securities	classified	as	held-to-maturity	(HTM)	and	$20.9	billion	of	loans	and commitments.	The	HTM	securities	were	classified	as	such	during	the	fourth quarter	of	2008	and	were	previously	classified	as	either	trading	or	AFS.	They	are accounted	for	at	amortized	cost,	subject	to	other-than-temporary	impairment. Loans	and	commitments	are	recorded	at	amortized	cost,	less	loan	loss	reserves. The	impact	from	changes	in	credit	is	reflected	in	the	calculation	of	the	allowance for	loan	losses	and	in	net	credit	losses.

					(3)	Equity	and	other	investments	include	approximately	$4.3	billion	of equity	and	other	investments	such	as	limited	partner	fund	investments	that	are accounted	for	under	the	equity	method,	which	recognizes	gains	or	losses	based on	the	investor's	share	of	the	net	income	of	the	investee.

# Direct Exposure to Monolines

Citi	Holdings	has	exposure,	via	the	SAP,	to	various	monoline	bond	insurers (Monolines),	listed	in	the	table	below,	from	hedges	on	certain	investments	and from	trading	positions.	The	hedges	are	composed	of	credit	default	swaps	and other	hedge	instruments.	Citi	Holdings	recorded	$1.3	billion

in	downward	credit	valuation	adjustments	(CVA)	related	to	exposure	to Monolines	during	2009,	bringing	the	total	CVA	balance	to	$5.6	billion. 					The	following	table	summarizes	the	market	value	of	Citi	Holdings'	direct exposures	to	and	the	corresponding	notional	amounts	of	transactions	with	the various	Monolines,	as	well	as	the	aggregate	credit	valuation	adjustment associated	with	these	exposures	as	of	December	31,	2009	and	2008.

|  |  | December 31, 2009 |  | December 31, 2008 |
| :--- | :--- | :--- | :--- | :--- |
|  |  | Notional |  | Notional |
|  | Fair | amount | Fair | amount |
|  | value | of | value | of |
| In millions of dollars | \t\t\t\t\t\t\texposure | transactions | exposure | transactions |
| Direct subprime ABS CDO super senior—Ambac | $4,468 | $5,295 | $4,461 | $5,357 |
| Trading assets—non-subprime: |  |  |  |  |
| MBIA | $1,939 | $3,828 | $1,924 | $4,040 |
| FSA | 52 | 835 | 204 | 1,126 |
| Assured | 81 | 452 | 141 | 465 |
| Radian | 3 | 150 | 58 | 150 |
| Ambac | — | 178 | 21 | 1,106 |
| Subtotal trading assets—non-subprime | $2,075 | $5,443 | $2,348 | $6,887 |
| Total gross fair value direct exposure | $6,543 |  | $6,809 |  |
| Credit valuation adjustment | (5,580) |  | (4,279) |  |
| Total net fair value direct exposure | $963 |  | $2,530 |  |

					The	fair	value	exposure,	net	of	payable	and	receivable	positions,	represents the	market	value	of	the	contract	as	of	December	31,	2009	and	2008,	respectively, excluding	the	CVA.	The	notional	amount	of	the	transactions,	including	both	long and	short	positions,	is	used	as	a	reference	value	to	calculate	payments.	The	CVA is	a	downward	adjustment	to	the	fair	value	exposure	to	a	counterparty	to	reflect the	counterparty's	creditworthiness	in	respect	of	the	obligations	in	question. 					Credit	valuation	adjustments	are	based	on	credit	spreads	and	on	estimates	of the	terms	and	timing	of	the	payment	obligations	of	the	Monolines.	Timing	in turn	depends	on	estimates	of	the	performance	of	the	transactions	to	which	Citi's exposure	relates,	estimates	of	whether	and	when	liquidation	of	such	transactions may	occur	and	other	factors,	each	considered	in	the	context	of	the	terms	of	the Monolines'	obligations.

					As	of	December	31,	2009	and	2008,	SAP	had	$5.9	billion	and	$6.9	billion, respectively,	in	notional	amount	of	hedges	against	its	direct	subprime	ABS	CDO super-senior	positions.	Of	those	amounts,	$5.3	billion	and	$5.4	billion, respectively,	were	purchased	from	Monolines	and	are	included	in	the	notional amount	of	transactions	in	the	table	above.

					With	respect	to	SAP's	trading	assets,	there	were	$2.1	billion	and	$2.3	billion of	fair	value	exposure	to	Monolines	as	of	December	31,	2009	and	2008, respectively.	Trading	assets	include	trading	positions,	both	long	and	short,	in U.S.	subprime	RMBS	and	related	products,	including	ABS	CDOs. 					The	notional	amount	of	transactions	related	to	the	remaining	non-subprime trading	assets	as	of	December	31,	2009	was	$5.4	billion.	Of	the	$5.4	billion,	$4.7 billion	was	in	the	form	of	credit	default	swaps	and	total	return	swaps	with	a	fair value	exposure	of	$2.1	billion.	The	remaining	notional	amount	comprised	$0.7 billion,	primarily	in	interest-rate	swaps,	with	a	corresponding	fair	value	exposure of	$12	million	net	payable.

					The	notional	amount	of	transactions	related	to	the	remaining	non-subprime trading	assets	at	December	31,	2008	was	$6.9	billion,	with	a	corresponding	fair value	exposure	of	$2.3	billion.	Of	the	$6.9	billion,	$5.1	billion	was	in	the	form	of credit	default	swaps	and	total	return	swaps	with	a	fair	value	of	$2.3	billion.	The remaining	notional	amount	comprised	$1.8	billion,	primarily	in	interest-rate swaps	with	a	corresponding	fair	value	exposure	of	$3.9	million.

					Citigroup	has	purchased	mortgage	insurance	from	various	Monoline mortgage	insurers	on	first-mortgage	loans.	The	notional	amount	of	this	insurance protection	was	approximately	$230	million	and	$400	million	as	of	December	31, 2009	and	2008,	respectively,	with	nominal	pending	claims	against	this	notional amount.

					In	addition,	Citigroup	has	indirect	exposure	to	Monolines	in	various	other parts	of	its	businesses.	Indirect	exposure	includes	circumstances	in	which Citigroup	is	not	a	contractual	counterparty	to	the	Monolines,	but	instead	owns securities	that	may	benefit	from	embedded	credit	enhancements	provided	by	a Monoline.	For	example,	corporate	or	municipal	bonds	in	the	trading	business may	be	insured	by	the	Monolines.	The	table	and	discussion	above	do	not	reflect this	type	of	indirect	exposure	to	the	Monolines.

# Highly Leveraged Financing Transactions

Highly	leveraged	financing	commitments	are	agreements	that	provide	funding	to a	borrower	with	higher	levels	of	debt	(measured	by	the	ratio	of	debt	capital	to equity	capital	of	the	borrower)	than	is	generally	the	case	for	other	companies.	In recent	years	through	mid-2008,	highly	leveraged	financing	had	been	commonly employed	in	corporate	acquisitions,	management	buy-outs	and	similar transactions.

					In	these	financings,	debt	service	(that	is,	principal	and	interest	payments) absorbs	a	significant	portion	of	the	cash	flows	generated	by	the	borrower's business.	Consequently,	the	risk	that	the	borrower	may	not	be	able	to	meet	its debt	obligations	is	greater.	Due	to	this	risk,	the	interest	rates	and	fees	charged	for this	type	of	financing	are	generally	higher	than	for	other	types	of	financing. 					Prior	to	funding,	highly	leveraged	financing	commitments	are	assessed	for impairment	and	losses	are	recorded	when	they	are	probable	and	reasonably estimable.	For	the	portion	of	loan	commitments	that	relates	to	loans	that	will	be held	for	investment,	loss	estimates	are	made	based	on	the	borrower's	ability	to repay	the	facility	according	to	its	contractual	terms.	For	the	portion	of	loan commitments	that	relates	to	loans	that	will	be	held-for-sale,	loss	estimates	are made	in	reference	to	current	conditions	in	the	resale	market	(both	interest	rate risk	and	credit	risk	are	considered	in	the	estimate).	Loan	origination, commitment,	underwriting	and	other	fees	are	netted	against	any	recorded	losses. 					Citigroup	generally	manages	the	risk	associated	with	highly	leveraged financings	it	has	entered	into	by	seeking	to	sell	a	majority	of	its	exposures	to	the market	prior	to	or	shortly	after	funding.	In	certain	cases,	all	or	a	portion	of	a highly	leveraged	financing	to	be	retained	is	hedged	with	credit	derivatives	or other	hedging	instruments.	Thus,	when	a	highly	leveraged	financing	is	funded, Citigroup	records	the	resulting	loan	as	follows:

the	portion	that	Citigroup	will	seek	to	sell	is	recorded	as	a	loan	held-for-sale in	Other	assets	on	the	Consolidated	Balance	Sheet,	and	measured	at	the	lower of	cost	or	market;	and

the	portion	that	will	be	retained	is	recorded	as	a	loan	held-for-investment	in Loans	and	measured	at	amortized	cost	less	a	reserve	for	loan	losses.

					Due	to	the	dislocation	of	the	credit	markets	and	the	reduced	market	interest	in higher-risk/higher-yield	instruments	since	the	latter	half	of	2007,	liquidity	in	the market	for	highly	leveraged	financings	has	been	limited.	This	has	resulted	in Citi's	recording	pretax	write-downs	on	funded	and	unfunded	highly	leveraged finance	exposures	of	$521	million	in	2009	and	$4.9	billion	in	2008.

					Citigroup's	exposures	to	highly	leveraged	financing	commitments	totaled $5.0	billion	at	December	31,	2009	($4.7	billion	funded	and	$0.3	billion	in unfunded	commitments),	reflecting	a	decrease	of	$5	billion	from	December	31, 2008.

					In	2008,	Citigroup	completed	the	transfer	of	approximately	$12.0	billion	of loans	to	third	parties,	of	which	$8.5	billion	relates	to	highly	leveraged	loan commitments.	In	these	transactions,	the	third	parties	purchased	subordinate interests	backed	by	the	transferred	loans.	These	subordinate	interests	absorb	first loss	on	the	transferred	loans	and	provide	the	third	parties	with	control	of	the loans.	Citigroup	retained	senior	debt	securities	backed	by	the	transferred	loans. These	transactions	were	accounted	for	as	sales	of	the	transferred	loans.	The	loans were	removed	from	the	balance	sheet	and	the	retained	securities	are	classified	as AFS	securities	on	Citi's	Consolidated	Balance	Sheet.

					In	addition,	Citigroup	purchased	protection	on	the	senior	debt	securities	from the	third-party	subordinate	interest	holders	via	total	return	swaps	(TRS).	The counterparty	credit	risk	in	the	TRS	is	protected	through	margin	agreements	that provide	for	both	initial	margin	and	additional	margin	at	specified	triggers.	Due	to the	initial	cash	margin	received,	the	existing	margin	requirements	on	the	TRS, and	the	substantive	subordinate	investments	made	by	third	parties,	Citi	believes that	the	transactions	largely	mitigate	Citi's	risk	related	to	the	transferred	loans. 					Citigroup's	sole	remaining	exposure	to	the	transferred	loans	are	the	senior debt	securities,	which	have	an	amortized	cost	basis	and	fair	value	of	$7.0	billion at	December	31,	2009.	The	change	in	the	value	of	the	retained	senior	debt securities	that	are	classified	as	AFS	securities	are	recorded	in	AOCI	as	they	are deemed	temporary.	The	offsetting	change	in	the	TRS	are	recorded	as	cash	flow hedges	within	AOCI.	See	Notes	16	and	22	to	the	Consolidated	Financial Statements	for	additional	information.

# MARKET RISK

Market	risk	encompasses	liquidity	risk	and	price	risk,	both	of	which	arise	in	the normal	course	of	business	of	a	global	financial	intermediary.	Liquidity	risk	is	the risk	that	an	entity	may	be	unable	to	meet	a	financial	commitment	to	a	customer, creditor,	or	investor	when	due.	See	"Capital	Resources	and	Liquidity"	for	further discussion.

					Price	risk	is	the	earnings	risk	from	changes	in	interest	rates,	foreign exchange	rates,	and	equity	and	commodity	prices,	and	in	their	implied volatilities.	Price	risk	arises	in	non-trading	portfolios,	as	well	as	in	trading portfolios.

					Market	risks	are	measured	in	accordance	with	established	standards	to	ensure consistency	across	businesses	and	the	ability	to	aggregate	risk.	Each	business	is required	to	establish,	with	approval	from	independent	market	risk	management, a	market	risk	limit	framework	for	identified	risk	factors	that	clearly	defines approved	risk	profiles	and	is	within	the	parameters	of	Citigroup's	overall	risk appetite.	In	all	cases,	the	businesses	are	ultimately	responsible	for	the	market risks	they	take	and	for	remaining	within	their	defined	limits.

# Non-Trading Portfolios Interest Rate Risk

One	of	Citigroup's	primary	business	functions	is	providing	financial	products that	meet	the	needs	of	its	customers.	Loans	and	deposits	are	tailored	to	the customers'	requirements	with	regard	to	tenor,	index	(if	applicable),	and	rate	type. Net	interest	revenue	(NIR)	is	the	difference	between	the	yield	earned	on	the	non- trading	portfolio	assets	(including	customer	loans)	and	the	rate	paid	on	the liabilities	(including	customer	deposits	or	company	borrowings).	NIR	is	affected by	changes	in	the	level	of	interest	rates.	For	example:

At	any	given	time,	there	may	be	an	unequal	amount	of	assets	and	liabilities that	are	subject	to	market	rates	due	to	maturation	or	repricing.	Whenever	the amount	of	liabilities	subject	to	repricing	exceeds	the	amount	of	assets	subject to	repricing,	a	company	is	considered	"liability	sensitive."	In	this	case,	a company's	NIR	will	deteriorate	in	a	rising	rate	environment. The	assets	and	liabilities	of	a	company	may	reprice	at	different	speeds	or mature	at	different	times,	subjecting	both	"liability-sensitive"	and "asset-sensitive"	companies	to	NIR	sensitivity	from	changing	interest	rates. For	example,	a	company	may	have	a	large	amount	of	loans	that	are	subject	to repricing	in	the	current	period,	but	the	majority	of	deposits	are	not	scheduled for	repricing	until	the	following	period.	That	company	would	suffer	from	NIR deterioration	if	interest	rates	were	to	fall.

					NIR	in	the	current	period	is	the	result	of	customer	transactions	and	the related	contractual	rates	originated	in	prior	periods	as	well	as	new	transactions	in the	current	period;	those	prior-period	transactions	will	be	impacted	by	changes	in rates	on	floating-rate	assets	and	liabilities	in	the	current	period.

					Due	to	the	long-term	nature	of	portfolios,	NIR	will	vary	from	quarter	to quarter	even	assuming	no	change	in	the	shape	or	level	of	the	yield	curve	as assets	and	liabilities	reprice.	These	repricings	are	a	function	of	implied	forward interest	rates,	which	represent	the	overall	market's	estimate	of	future	interest rates	and	incorporate	possible	changes	in	the	Federal	Funds	rate	as	well	as	the shape	of	the	yield	curve.

# Interest Rate Risk Governance

The	risks	in	Citigroup's	non-traded	portfolios	are	estimated	using	a	common	set of	standards	that	define,	measure,	limit	and	report	the	market	risk.	Each	business is	required	to	establish,	with	approval	from	independent	market	risk management,	a	market	risk	limit	framework	that	clearly	defines	approved	risk profiles	and	is	within	the	parameters	of	Citigroup's	overall	risk	appetite.	In	all cases,	the	businesses	are	ultimately	responsible	for	the	market	risks	they	take	and for	remaining	within	their	defined	limits.	These	limits	are	monitored	by independent	market	risk,	country	and	business	Asset	and	Liability	Committees (ALCOs)	and	the	Global	Finance	and	Asset	and	Liability	Committee (FinALCO).

# Interest Rate Risk Measurement

Citigroup's	principal	measure	of	risk	to	NIR	is	interest	rate	exposure	(IRE).	IRE measures	the	change	in	expected	NIR	in	each	currency	resulting	solely	from unanticipated	changes	in	forward	interest	rates.	Factors	such	as	changes	in volumes,	spreads,	margins	and	the	impact	of	prior-period	pricing	decisions	are not	captured	by	IRE.	IRE	assumes	that	businesses	make	no	additional	changes	in pricing	or	balances	in	response	to	the	unanticipated	rate	changes.

					IRE	tests	the	impact	on	NIR	resulting	from	unanticipated	changes	in	forward interest	rates.	For	example,	if	the	current	90-day	LIBOR	rate	is	3%	and	the	one- year-forward	rate	is	5%	(i.e.,	the	estimated	90-day	LIBOR	rate	in	one	year),	the +100	bps	IRE	scenario	measures	the	impact	on	the	company's	NIR	of	a	100	bps instantaneous	change	in	the	90-day	LIBOR	to	6%	in	one	year.

					The	impact	of	changing	prepayment	rates	on	loan	portfolios	is	incorporated into	the	results.	For	example,	in	the	declining	interest	rate	scenarios,	it	is assumed	that	mortgage	portfolios	prepay	faster	and	income	is	reduced.	In addition,	in	a	rising	interest	rate	scenario,	portions	of	the	deposit	portfolio	are assumed	to	experience	rate	increases	that	may	be	less	than	the	change	in	market interest	rates.

# Mitigation and Hedging of Risk

Financial	institutions'	financial	performance	is	subject	to	some	degree	of	risk due	to	changes	in	interest	rates.	In	order	to	manage	these	risks	effectively, Citigroup	may	modify	pricing	on	new	customer	loans	and	deposits,	enter	into transactions	with	other	institutions	or	enter	into	off-balance-sheet	derivative transactions	that	have	the	opposite	risk	exposures.	Therefore,	Citigroup	regularly assesses	the	viability	of	strategies	to	reduce	unacceptable	risks	to	earnings	and implements	such	strategies	when	it	believes	those	actions	are	prudent.	As information	becomes	available,	Citigroup	formulates	strategies	aimed	at protecting	earnings	from	the	potential	negative	effects	of	changes	in	interest rates.

					Citigroup	employs	additional	measurements,	including	stress	testing	the impact	of	non-linear	interest	rate	movements	on	the	value	of	the	balance	sheet; the	analysis	of	portfolio	duration	and	volatility,	particularly	as	they	relate	to mortgage	loans	and	mortgage-backed	securities;	and	the	potential	impact	of	the change	in	the	spread	between	different	market	indices.

# Non-Trading Portfolios

The	exposures	in	the	following	table	represent	the	approximate	annualized	risk to	NIR	assuming	an	unanticipated	parallel	instantaneous	100	bps	change,	as	well as	a	more	gradual	100	bps	(25	bps	per	quarter)	parallel	change	in	rates	compared with	the	market	forward	interest	rates	in	selected	currencies.

| Gross IRE | $(1,194) | $1,473 | $(801) | $391 |
| :--- | :--- | :--- | :--- | :--- |
| \t\t\t\t\tLess: ICG trading | 336 | (350) | 563 | (465) |
| Net non-trading IRE | $(859) | $1,123 | $(238) | $(74) |
| Gradual change |  |  |  |  |
| \t\t\t\t\tGross IRE | $(565) | $872 | $(456) | $81 |
| \t\t\t\t\tLess: ICG trading | 105 | (164) | 281 | (308) |
| Net non-trading IRE | $(460) | $708 | $(175) | $(227) |
| Mexican peso |  |  |  |  |
| Instantaneous change | $50 | $(50) | $(18) | $18 |
| Gradual change | $26 | $(26) | $(14) | $14 |
| Euro |  |  |  |  |
| Instantaneous change | $(139) | $87 | $(56) | $57 |
| Gradual change | $(89) | $89 | $(43) | $43 |
| Japanese yen |  |  |  |  |
| Instantaneous change | $213 | NM | $172 | NM |
| Gradual change | $124 | NM | $51 | NM |
| Pound sterling |  |  |  |  |
| Instantaneous change | $(4) | $15 | $(1) | $1 |
| Gradual change | $(1) | $1 | $— | $— |

NM							Not meaningful. A 100 bps decrease in interest rates would imply negative rates for the Japanese yen yield curve.

					Certain	trading-oriented	businesses	within	Citi	have	accrual-accounted positions	that	are	hedged	with	mark-to-market	positions.	If	the	economic	impact of	these	offsetting	positions	is	included,	Citi's	12-month	exposure	to	a	100	bps instantaneous	rise	in	interest	rates	is	reduced	from	$(1,194)	million	to	$(731) million.	The	changes	in	the	U.S.	dollar	IRE	from	the	prior	year	reflect	changes	in the	customer-related	asset	and	liability	mix,	the	expected	impact	of	market	rates on	customer	behavior	and	Citigroup's	view	of	prevailing	interest	rates.

					The	following	table	shows	the	risk	to	NIR	from	six	different	changes	in	the	implied-forward	rates.	Each	scenario	assumes	that	the	rate	change	will	occur	on	a gradual	basis	every	three	months	over	the	course	of	one	year.

|  | Scenario 1							 Scenario 2 | Scenario 1							 Scenario 2 | Scenario 3							 Scenario 4							 Scenario 5							 Scenario 6 | Scenario 3							 Scenario 4							 Scenario 5							 Scenario 6 | Scenario 3							 Scenario 4							 Scenario 5							 Scenario 6 | Scenario 3							 Scenario 4							 Scenario 5							 Scenario 6 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Overnight rate change (bps) | — | 100 | 200 | (200) | (100) | — |
| 10-year rate change (bps) | (100) | — | 100 | (100) | — | 100 |
| Impact to net interest revenue (in millions of dollars) | $199 | $(502) | $(1,161) | $560 | $464 | $(42) |

# Trading Portfolios

Price	risk	in	trading	portfolios	is	monitored	using	a	series	of	measures, including:

# factor	sensitivities;

# value-at-risk	(VAR);	and

					Factor	sensitivities	are	expressed	as	the	change	in	the	value	of	a	position	for	a defined	change	in	a	market	risk	factor,	such	as	a	change	in	the	value	of	a Treasury	bill	for	a	one-basis-point	change	in	interest	rates.	Citigroup's independent	market	risk	management	ensures	that	factor	sensitivities	are calculated,	monitored	and,	in	most	cases,	limited,	for	all	relevant	risks	taken	in	a trading	portfolio.

					VAR	estimates	the	potential	decline	in	the	value	of	a	position	or	a	portfolio under	normal	market	conditions.	The	VAR	method	incorporates	the	factor sensitivities	of	the	trading	portfolio	with	the	volatilities	and	correlations	of	those factors	and	is	expressed	as	the	risk	to	Citigroup	over	a	one-day	holding	period,	at a	99%	confidence	level.	Citigroup's	VAR	is	based	on	the	volatilities	of	and correlations	among	a	multitude	of	market	risk	factors	as	well	as	factors	that	track the	specific	issuer	risk	in	debt	and	equity	securities.

					Stress	testing	is	performed	on	trading	portfolios	on	a	regular	basis	to	estimate the	impact	of	extreme	market	movements.	It	is	performed	on

both	individual	trading	portfolios,	and	on	aggregations	of	portfolios	and businesses.	Independent	market	risk	management,	in	conjunction	with	the businesses,	develops	stress	scenarios,	reviews	the	output	of	periodic	stress- testing	exercises,	and	uses	the	information	to	make	judgments	as	to	the	ongoing appropriateness	of	exposure	levels	and	limits.

					Each	trading	portfolio	has	its	own	market	risk	limit	framework encompassing	these	measures	and	other	controls,	including	permitted	product lists	and	a	new	product	approval	process	for	complex	products.

					Total	revenues	of	the	trading	business	consist	of:

customer	revenue,	which	includes	spreads	from	customer	flow	and positions	taken	to	facilitate	customer	orders;

proprietary	trading	activities	in	both	cash	and	derivative	transactions; and

net	interest	revenue.

					All	trading	positions	are	marked-to-market,	with	the	result	reflected	in earnings.	In	2009,	negative	trading-related	revenue	(net	losses)	was	recorded	for 58	of	260	trading	days.	Of	the	58	days	on	which	negative	revenue	(net	losses) was	recorded,	two	days	were	greater	than	$400	million.	The	following	histogram of	total	daily	revenue	or	loss	captures	trading	volatility	and	shows	the	number	of days	in	which	Citigroup's	trading-related	revenues	fell	within	particular	ranges.

# Histogram of Daily-Trading Related Revenue—12 Months Ended December 31, 2009

Revenues (in millions of dollars)

Citigroup	periodically	performs	extensive	back-testing	of	many	hypothetical	test portfolios	as	one	check	of	the	accuracy	of	its	VAR.	Back-testing	is	the	process	in which	the	daily	VAR	of	a	portfolio	is	compared	to	the	actual	daily	change	in	the market	value	of	its	transactions.	Back-testing	is	conducted

to	confirm	that	the	daily	market	value	losses	in	excess	of	a	99%	confidence	level occur,	on	average,	only	1%	of	the	time.	The	VAR	calculation	for	the hypothetical	test	portfolios,	with	different	degrees	of	risk	concentration,	meets this	statistical	criteria.

					The	level	of	price	risk	exposure	at	any	given	point	in	time	depends	on	the market	environment	and	expectations	of	future	price	and	market	movements,	and will	vary	from	period	to	period.

					For	Citigroup's	major	trading	centers,	the	aggregate	pretax	VAR	in	the trading	portfolios	was	$205	million	at	December	31,	2009	and	$319	million	at December	31,	2008.	Daily	exposures	averaged	$266	million	in	2009	and	ranged from	$200	million	to	$335	million.

						The	following	table	summarizes	VAR	to	Citigroup	in	the	trading	portfolios as	of	December	31,	2009	and	2008,	including	the	total	VAR,	the	specific	risk- only	component	of	VAR,	and	total—general	market	factors	only,	along	with	the yearly	averages:

|  | Dec. 31, | 2009 | Dec. 31, | 2008 |
| :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009\t\t\t\taverage | 2009\t\t\t\taverage | 2008\t\t\t\taverage | 2008\t\t\t\taverage |
| Interest rate | $191 | $235 | $320 | $280 |
| Foreign exchange | 45 | 65 | 118 | 54 |
| Equity | 69 | 79 | 84 | 99 |
| Commodity | 18 | 34 | 15 | 34 |
| Covariance adjustment | (118) | (147) | (218) | (175) |
| Total—all market |  |  |  |  |
| risk factors, |  |  |  |  |
| including general |  |  |  |  |
| and specific risk | $205 | $266 | $319 | $292 |
| Specific risk-only |  |  |  |  |
| component | $20 | $20 | $8 | $21 |
| Total—general |  |  |  |  |
| market factors only | $185 | $246 | $311 | $271 |

VAR	reflects	the	divestiture	of	Phibro	LLC	as	of	December	31,	2009	(see	Note	2 to	the	Consolidated	Financial	Statements).	The	specific	risk-only	component represents	the	level	of	equity	and	debt	issuer-specific	risk	embedded	in	VAR.

The	table	below	provides	the	range	of	VAR	in	each	type	of	trading	portfolio	that was	experienced	during	2009	and	2008:

|  |  | 2009 |  | 2008 |
| :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | Low\t\t\t\t\t\t High | Low\t\t\t\t\t\t High | Low | High |
| Interest rate | $185 | \t$320 | $227 | \t$339 |
| Foreign exchange | 18 | 140 | 23 | 130 |
| Equity | 46 | 167 | 58 | 235 |
| Commodity | 12 | 50 | 12 | 60 |

					The	following	table	provides	the	VAR	for	Citicorp's	Securities	and	Banking business	(ICG	Citicorp	VAR,	which	excludes	Consumer)	during	2009:

| In millions of dollars | December 31, 2009 |
| :--- | :--- |
| Total—all market |  |
| risk factors, |  |
| including general |  |
| and specific risk | $163 |
| Average—during year | 180 |
| High—during year | 247 |
| Low—during year | 144 |

# Interest Revenue/Expense and Yields

# Average Rates—Interest Revenue, Interest Expense and Net Interest Margin

|  |  |  |  |  |  | Change<br>Change | Change<br>Change |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | (1) | 2007 | (1) | 2009 vs. 2008\t\t\t\t\t\t2008 vs. 2007 | 2009 vs. 2008\t\t\t\t\t\t2008 vs. 2007 |
| Interest revenue (2) | $76,635 | $106,499 |  | $121,347 |  | (28)% | (12)% |
| Interest expense (3) | 27,721 | 52,750 |  | 75,958 |  | (47)\n(31) | (47)\n(31) |
| Net interest revenue (2) (3) | $48,914 | $53,749 |  | $45,389 |  | (9)% | 18% |
| Interest revenue—average rate | 4.75% | 6.13% | 6.13% | 6.47% | 6.47% | (138) bps | (34) bps |
| Interest expense—average rate | 1.92% | 3.28% | 3.28% | 4.43% | 4.43% | (136) bps | (115) bps |
| Net interest margin | 3.03% | 3.09% | 3.09% | 2.42% | 2.42% | (6) bps | 67 bps |
| Interest-rate benchmarks: |  |  |  |  |  |  |  |
| Federal Funds rate—end of period | 0.00-0.25% | 0.00-0.25% | 0.00-0.25% | 4.25% | 4.25% | — | (400+) bps |
| Federal Funds rate—average rate | 0.00-0.25% | 2.08% | 2.08% | 5.05% | 5.05% | — | (297) bps |
| Two-year U.S. Treasury note—average rate | 0.96% | 2.01% | 2.01% | 4.36% | 4.36% | (105) bps | (235) bps |
| 10-year U.S. Treasury note—average rate | 3.26% | 3.66% | 3.66% | 4.63% | 4.63% | (40) bps | (97) bps |
| 10-year vs. two-year spread | 230 bps | 165 bps | 165 bps | 27 bps | 27 bps |  |  |

(1) Reclassified to conform to the current period's presentation and to exclude discontinued operations.

(3) Excludes expenses associated with hybrid financial instruments and beneficial interest in consolidated VIEs. These obligations are classified as Long-term debt and accounted for at fair value with changes recorded in Principal transactions. In addition, the majority of the funding provided by Treasury to CitiCapital operations is excluded from this line.

					A	significant	portion	of	Citi's	business	activities	are	based	upon	gathering deposits	and	borrowing	money	and	then	lending	or	investing	those	funds, including	market-making	activities	in	tradable	securities.	Net	interest	margin (NIM)	is	calculated	by	dividing	annualized	gross	interest	revenue	less	gross interest	expense	by	average	interest	earning	assets.

					During	the	second	half	of	2009,	the	yields	across	both	the	interest-earning assets	as	well	as	the	interest-bearing	liabilities	dropped	significantly	from	the same	period	in	2008.	The	lower	asset	yields	more	than	offset	the	lower	cost	of funds,	resulting	in	slightly	lower	NIM	compared	to	the	prior-year	period.	The narrowing	of	yields	in	Citi's	asset	businesses	due	to	the	continued	de-risking	of loan	portfolios	and	expansion	of	loss	mitigation	efforts	and	the	natural compression	of	spreads	in	the	deposit	businesses,	a	result	of	the	continued	low rates	environment,	negatively	impacted	NIM.	The	impact	of	these	factors	was reduced	by	the	lower	asset	base.

# AVERAGE BALANCES AND INTEREST RATES—ASSETS

|  |  | Average volume | Average volume |  | Interest revenue | Interest revenue |  | % Average rate | % Average rate |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | \t\t2009 | 2008 | 2007 |
| Assets |  |  |  |  |  |  |  |  |  |
| Deposits with banks (5) | $186,841 | $77,200 | $53,044 | $1,478 | $3,074 | $3,097 | 0.79% | 3.98% | 5.84% |
| Federal funds sold and securities borrowed or purchased |  |  |  |  |  |  |  |  |  |
| under agreements to resell (6) |  |  |  |  |  |  |  |  |  |
| In U.S. offices | $138,579 | $164,732 | $192,824 | $1,975 | $5,071 | $11,728 | 1.43% | 3.08% | 6.08% |
| In offices outside the U.S. (5) | 63,909 | 73,833 | 129,301 | 1,109 | 4,079 | 6,613 | 1.74 | 5.52 | 5.11 |
| Total | $202,488 | $238,565 | $322,125 | $3,084 | $9,150 | $18,341 | 1.52% | 3.84% | 5.69% |
| Trading account assets (7) (8) |  |  |  |  |  |  |  |  |  |
| In U.S. offices | $140,233 | $221,455 | $263,922 | $6,844 | $12,331 | $13,557 | 4.88% | 5.57% | 5.14% |
| In offices outside the U.S. (5) | 126,309 | 151,071 | 171,504 | 3,879 | 5,115 | 4,917 | 3.07 | 3.39 | 2.87 |
| Total | $266,542 | $372,526 | $435,426 | $10,723 | $17,446 | $18,474 | 4.02% | 4.68% | 4.24% |
| Investments |  |  |  |  |  |  |  |  |  |
| In U.S. offices |  |  |  |  |  |  |  |  |  |
| Taxable | $124,404 | $112,071 | $136,482 | $6,208 | $4,846 | $6,840 | 4.99% | 4.32% | 5.01% |
| Exempt from U.S. income tax (1) | 16,489 | 13,584 | 17,796 | 864 | 613 | 909 | 5.24 | 4.51 | 5.11 |
| In offices outside the U.S. (5) | 118,988 | 94,725 | 108,875 | 6,047 | 5,259 | 5,674 | 5.08 | 5.55 | 5.21 |
| Total | $259,881 | $220,380 | $263,153 | $13,119 | $10,718 | $13,423 | 5.05% | 4.86% | 5.10% |
| Loans (net of unearned income) (9) |  |  |  |  |  |  |  |  |  |
| Consumer loans |  |  |  |  |  |  |  |  |  |
| In U.S. offices | $304,976 | $339,417 | $336,742 | $21,982 | $27,456 | $27,794 | 7.21% | 8.09% | 8.25% |
| In offices outside the U.S. (5) | 151,262 | 173,851 | 157,888 | 13,402 | 17,963 | 17,016 | 8.86 | 10.33 | 10.78 |
| Total consumer loans | $456,238 | $513,268 | $494,630 | $35,384 | $45,419 | $44,810 | 7.76% | 8.85% | 9.06% |
| Corporate loans |  |  |  |  |  |  |  |  |  |
| In U.S. offices | $73,961 | $77,450 | $62,321 | $2,709 | $3,482 | $5,095 | 3.66% | 4.50% | 8.18% |
| In offices outside the U.S. (5) | 116,421 | 143,806 | 153,956 | 9,364 | 13,435 | 13,296 | 8.04 | 9.34 | 8.64 |
| Total corporate loans | $190,382 | $221,256 | $216,277 | $12,073 | $16,917 | $18,391 | 6.34% | 7.65% | 8.50% |
| Total loans | $646,620 | $734,524 | $710,907 | $47,457 | $62,336 | $63,201 | 7.34% | 8.49% | 8.89% |
| Other interest-earning assets | $49,707 | $94,123 | $89,742 | $774 | $3,775 | $4,811 | 1.56% | 4.01% | 5.36% |
| Total interest-earning assets | $1,612,079 | $1,737,318 | \t$ 1,874,397 | $76,635 | $106,499 | $121,347 | 4.75% | 6.13% | 6.47% |
| Non-interest-earning assets (7) | $264,165 | $383,150 | $249,958 |  |  |  |  |  |  |
| Total assets from discontinued operations | 15,137 | 47,010 | 47,177 |  |  |  |  |  |  |
| Total assets | $1,891,381 | $2,167,478 | \t$ 2,171,532 |  |  |  |  |  |  |

(1)  Interest revenue excludes the taxable equivalent adjustments (based on the U.S. federal statutory tax rate of 35%) of $752 million, $323 million, and $125 million for 2009, 2008, and 2007, respectively.

(2) Interest rates and amounts include the effects of risk management activities associated with the respective asset and liability categories.

(3) Monthly or quarterly averages have been used by certain subsidiaries where daily averages are unavailable.

(4) Detailed average volume, interest revenue and interest expense exclude discontinued operations. See Note 3 to the Consolidated Financial Statements.

(5) Average rates reflect prevailing local interest rates, including inflationary effects and monetary corrections in certain countries.

(6) Average volumes of securities borrowed or purchased under agreements to resell are reported net. However, Interest revenue is reflected gross.

(7) The fair value carrying amounts of derivative and foreign exchange contracts are reported in non-interest-earning assets and other non-interest-bearing liabilities.

(8) Interest expense on Trading account liabilities of ICG is reported as a reduction of interest revenue. Interest revenue and interest expense on cash collateral positions are reported in Trading account assets and Trading account liabilities, respectively.

(9) Includes cash-basis loans.

Reclassified to conform to the current period's presentation.

# AVERAGE BALANCES AND INTEREST RATES—LIABILITIES AND EQUITY, AND NET INTEREST REVENUE

|  |  | Average volume | Average volume |  | Interest expense | Interest expense |  | % Average rate | % Average rate |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | \t\t2009 | 2008 | 2007 |
| Liabilities |  |  |  |  |  |  |  |  |  |
| Deposits |  |  |  |  |  |  |  |  |  |
| In U.S. offices |  |  |  |  |  |  |  |  |  |
| Savings deposits (5) | $174,260 | $167,509 | $154,229 | $2,765 | $2,921 | $4,772 | 1.59% | 1.74% | 3.09% |
| Other time deposits | 59,673 | 58,998 | 58,808 | 1,104 | 2,604 | 3,358 | 1.85 | 4.41 | 5.71 |
| In offices outside the U.S. (6) | 443,601 | 473,452 | 481,874 | 6,277 | 14,746 | 20,272 | 1.42 | 3.11 | 4.21 |
| Total | $677,534 | $699,959 | $694,911 | $10,146 | $20,271 | $ 28,402 | 1.50% | 2.90% | 4.09% |
| Federal funds purchased and securities loaned or sold under |  |  |  |  |  |  |  |  |  |
| agreements to repurchase (7) |  |  |  |  |  |  |  |  |  |
| In U.S. offices | $133,375 | $185,621 | $244,258 | $988 | $5,066 | $ 14,339 | 0.74% | 2.73% | 5.87% |
| In offices outside the U.S. (6) | 72,258 | 95,857 | 140,941 | 2,445 | 6,199 | 8,664 | 3.38 | 6.47 | 6.15 |
| Total | $205,633 | $281,478 | $385,199 | $3,433 | $11,265 | $ 23,003 | 1.67% | 4.00% | 5.97% |
| Trading account liabilities\n (8) (9) |  |  |  |  |  |  |  |  |  |
| In U.S. offices | $22,854 | $31,984 | $46,383 | $222 | $1,107 | $1,142 | 0.97% | 3.46% | 2.46% |
| In offices outside the U.S. (6) | 37,244 | 42,941 | 56,843 | 67 | 150 | 278 | 0.18 | 0.35 | 0.49 |
| Total | $60,098 | $74,925 | $103,226 | $289 | $1,257 | $1,420 | 0.48% | 1.68% | 1.38% |
| Short-term borrowings |  |  |  |  |  |  |  |  |  |
| In U.S. offices | $123,168 | $154,190 | $169,457 | $1,050 | $3,241 | $6,234 | 0.85% | 2.10% | 3.68% |
| In offices outside the U.S. (6) | 33,379 | 51,499 | 58,384 | 375 | 670 | 789 | 1.12 | 1.30 | 1.35 |
| Total | $156,547 | $205,689 | $227,841 | $1,425 | $3,911 | $7,023 | 0.91% | 1.90% | 3.08% |
| Long-term debt (10) |  |  |  |  |  |  |  |  |  |
| In U.S. offices | $316,223 | $311,439 | $266,968 | $11,347 | $14,305 | $ 14,245 | 3.59% | 4.59% | 5.34% |
| In offices outside the U.S. (6) | 29,132 | 36,981 | 35,709 | 1,081 | 1,741 | 1,865 | 3.71 | 4.71 | 5.22 |
| Total | $345,355 | $348,420 | $302,677 | $12,428 | $16,046 | $ 16,110 | 3.60% | 4.61% | 5.32% |
| Total interest-bearing liabilities | $1,445,167 | $1,610,471 | \t$ 1,713,854 | $27,721 | $52,750 | $ 75,958 | 1.92% | 3.28% | 4.43% |
| Demand deposits in U.S. offices | $27,032 | $8,308 | $7,510 |  |  |  |  |  |  |
| Other non-interest-bearing liabilities (8) | 263,296 | 381,912 | 300,156 |  |  |  |  |  |  |
| Total liabilities from discontinued operations | 9,502 | 28,471 | 23,969 |  |  |  |  |  |  |
| Total liabilities | $1,744,997 | $2,029,162 | \t$ 2,045,489 |  |  |  |  |  |  |
| Citigroup equity (11) | $144,510 | $132,708 | $122,823 |  |  |  |  |  |  |
| Noncontrolling interest | 1,874 | 5,608 | 3,220 |  |  |  |  |  |  |
| Total stockholders' equity (11) | $146,384 | $138,316 | $126,043 |  |  |  |  |  |  |
| Total liabilities and stockholders' equity | $1,891,381 | $2,167,478 | \t$ 2,171,532 |  |  |  |  |  |  |
| Net interest revenue as a percentage of average |  |  |  |  |  |  |  |  |  |
| interest-earning assets (12) |  |  |  |  |  |  |  |  |  |
| In U.S. offices | $962,084 | $1,005,414 | \t$ 1,079,565 | $23,956 | $25,982 | $ 22,069 | 2.49% | 2.58% | 2.04% |
| In offices outside the U.S. (6) | 649,995 | 731,903 | 794,832 | 24,958 | 27,767 | 23,320 | 3.84 | 3.79 | 2.93 |
| Total | $1,612,079 | $1,737,317 | \t$ 1,874,397 | $48,914 | $53,749 | $ 45,389 | 3.03% | 3.09% | 2.42% |

(5) Savings deposits consist of Insured Money Market accounts, NOW accounts, and other savings deposits. The interest expense includes FDIC deposit insurance fees and charges.

(7) Average volumes of securities loaned or sold under agreements to repurchase are reported net. However, Interest revenue is reflected gross.

(10) Excludes hybrid financial instruments and beneficial interests in consolidated VIEs that are classified as Long-term debt, as these obligations are accounted for at fair value with changes recorded in Principal transactions. In addition, the majority of the funding provided by Treasury to CitiCapital operations is excluded from this line.

(11) Includes stockholders' equity from discontinued operations.

(12) Includes allocations for capital and funding costs based on the location of the asset.

# ANALYSIS OF CHANGES IN INTEREST REVENUE

|  |  | 2009 vs. 2008 | 2009 vs. 2008 |  | 2008 vs. 2007 | 2008 vs. 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Increase (decrease) | Increase (decrease) |  | Increase (decrease) | Increase (decrease) |  |
|  | due to change in: | due to change in: |  |  | due to change in: |  |
|  | Average | Average | Net | Average | Average | Net |
| In millions of dollars | volume | rate | change | volume | rate | change |
| Deposits with banks (4) | $2,129 | $(3,725) | $(1,596) | $1,146 | $(1,169) | $(23) |
| Federal funds sold and securities borrowed or |  |  |  |  |  |  |
| purchased under agreements to resell |  |  |  |  |  |  |
| In U.S. offices | $(706) | $(2,390) | $(3,096) | $ (1,516) | $(5,141) | $(6,657) |
| In offices outside the U.S. (4) | (487) | (2,483) | (2,970) | (3,029) | 495 | (2,534) |
| Total | $(1,193) | $(4,873) | $(6,066) | $ (4,545) | $(4,646) | $(9,191) |
| Trading account assets (5) |  |  |  |  |  |  |
| In U.S. offices | $(4,105) | $(1,382) | $(5,487) | $ (2,302) | $1,076 | $(1,226) |
| In offices outside the U.S. (4) | (788) | (448) | (1,236) | (628) | 826 | 198 |
| Total | $(4,893) | $(1,830) | $(6,723) | $ (2,930) | $1,902 | $(1,028) |
| Investments (1) |  |  |  |  |  |  |
| In U.S. offices | $707 | $906 | $1,613 | $ (1,325) | $(965) | $(2,290) |
| In offices outside the U.S. (4) | 1,261 | (473) | 788 | (769) | 354 | (415) |
| Total | $1,968 | $433 | $2,401 | $ (2,094) | $(611) | $(2,705) |
| Loans—consumer |  |  |  |  |  |  |
| In U.S. offices | $(2,640) | $(2,834) | $(5,474) | $220 | $(558) | $(338) |
| In offices outside the U.S. (4) | (2,175) | (2,386) | (4,561) | 1,670 | (723) | 947 |
| Total | $(4,815) | $(5,220) | $ (10,035) | $1,890 | $(1,281) | $609 |
| Loans—corporate |  |  |  |  |  |  |
| In U.S. offices | $(151) | $(622) | $(773) | $1,042 | $(2,655) | $(1,613) |
| In offices outside the U.S. (4) | (2,353) | (1,718) | (4,071) | (909) | 1,048 | 139 |
| Total | $(2,504) | $(2,340) | $(4,844) | $133 | $(1,607) | $(1,474) |
| Total loans | $(7,319) | $(7,560) | $ (14,879) | $2,023 | $(2,888) | $(865) |
| Other interest-earning assets | $(1,307) | $(1,694) | $(3,001) | $225 | $(1,261) | $(1,036) |
| Total interest revenue | $(10,615) | $(19,249) | $ (29,864) | $ (6,175) | $(8,673) | $ (14,848) |

(1)  The taxable equivalent adjustment is based on the U.S. federal statutory tax rate of 35% and is excluded from this presentation.

(2) Rate/volume variance is allocated based on the percentage relationship of changes in volume and changes in rate to the total net change.

(4) Changes in average rates reflect changes in prevailing local interest rates, including inflationary effects and monetary corrections in certain countries.

# ANALYSIS OF CHANGES IN INTEREST EXPENSE AND NET INTEREST REVENUE

|  |  | 2009 vs. 2008 | 2009 vs. 2008 |  | 2008 vs. 2007 | 2008 vs. 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Increase (decrease) | Increase (decrease) |  | Increase (decrease) | Increase (decrease) |  |
|  | due to change in: | due to change in: |  | due to change in: | due to change in: |  |
|  | Average | Average | Net | Average | Average | Net |
| In millions of dollars | volume | rate | change | volume | rate | change |
| Deposits |  |  |  |  |  |  |
| In U.S. offices | $176 | $(1,832) | $(1,656) | $486 | $(3,091) | $(2,605) |
| In offices outside the U.S. (4) | (877) | (7,592) | (8,469) | (349) | (5,177) | (5,526) |
| Total | $(701) | $(9,424) | $ (10,125) | $137 | $(8,268) | $(8,131) |
| Federal funds purchased and securities loaned |  |  |  |  |  |  |
| or sold under agreements to repurchase |  |  |  |  |  |  |
| In U.S. offices | $(1,136) | $(2,942) | $(4,078) | $ (2,872) | $(6,401) | $(9,273) |
| In offices outside the U.S. (4) | (1,279) | (2,475) | (3,754) | (2,895) | 430 | (2,465) |
| Total | $(2,415) | $(5,417) | $(7,832) | $ (5,767) | $(5,971) | $ (11,738) |
| Trading account liabilities (5) |  |  |  |  |  |  |
| In U.S. offices | $(251) | $(634) | $(885) | $(417) | $382 | $(35) |
| In offices outside the U.S. (4) | (18) | (65) | (83) | (59) | (69) | (128) |
| Total | $(269) | $(699) | $(968) | $(476) | $313 | $(163) |
| Short-term borrowings |  |  |  |  |  |  |
| In U.S. offices | $(554) | $(1,637) | $(2,191) | $(520) | $(2,473) | $(2,993) |
| In offices outside the U.S. (4) | (213) | (82) | (295) | (90) | (29) | (119) |
| Total | $(767) | $(1,719) | $(2,486) | $(610) | $(2,502) | $(3,112) |
| Long-term debt |  |  |  |  |  |  |
| In U.S. offices | $217 | $(3,175) | $(2,958) | $2,193 | $(2,133) | $60 |
| In offices outside the U.S. (4) | (331) | (329) | (660) | 65 | (189) | (124) |
| Total | $(114) | $(3,504) | $(3,618) | $2,258 | $(2,322) | $(64) |
| Total interest expense | $(4,266) | $(20,763) | $ (25,029) | $ (4,458) | $(18,750) | $ (23,208) |
| Net interest revenue | $(6,349) | $1,514 | $(4,835) | $ (1,717) | $10,077 | $8,360 |

# OPERATIONAL RISK

Operational	risk	is	the	risk	of	loss	resulting	from	inadequate	or	failed	internal processes,	systems	or	human	factors,	or	from	external	events.	It	includes	the reputation	and	franchise	risk	associated	with	business	practices	or	market conduct	in	which	Citi	is	involved.	Operational	risk	is	inherent	in	Citigroup's global	business	activities	and,	as	with	other	risk	types,	is	managed	through	an overall	framework	designed	to	balance	strong	corporate	oversight	with	well- defined	independent	risk	management.	This	framework	includes:

recognized	ownership	of	the	risk	by	the	businesses; oversight	by	independent	risk	management;	and independent	review	by	Citi's	Audit	and	Risk	Review	(ARR).

					The	goal	is	to	keep	operational	risk	at	appropriate	levels	relative	to	the characteristics	of	Citigroup's	businesses,	the	markets	in	which	the	company operates	its	capital	and	liquidity,	and	the	competitive,	economic	and	regulatory environment.	Notwithstanding	these	controls,	Citigroup	incurs	operational losses.

# Framework

To	monitor,	mitigate	and	control	operational	risk,	Citigroup	maintains	a	system of	comprehensive	policies	and	has	established	a	consistent,	value-added framework	for	assessing	and	communicating	operational	risk	and	the	overall effectiveness	of	the	internal	control	environment	across	Citigroup.	An Operational	Risk	Council	provides	oversight	for	operational	risk	across Citigroup.	The	Council's	membership	includes	senior	members	of	the	Chief	Risk Officer's	organization	covering	multiple	dimensions	of	risk	management	with representatives	of	the	Business	and	Regional	Chief	Risk	Officers'	organizations and	the	Business	Management	Group.	The	Council's	focus	is	on	further advancing	operational	risk	management	at	Citigroup	with	a	focus	on	proactive identification	and	mitigation	of	operational	risk	and	related	incidents.	The Council	works	with	the	business	segments	and	the	control	functions	to	help ensure	a	transparent,	consistent	and	comprehensive	framework	for	managing operational	risk	globally.

					Each	major	business	segment	must	implement	an	operational	risk	process consistent	with	the	requirements	of	this	framework.	The	process	for	operational risk	management	includes	the	following	steps:

identify	and	assess	key	operational	risks; establish	key	risk	indicators;

produce	a	comprehensive	operational	risk	report;	and prioritize	and	assure	adequate	resources	to	actively	improve	the operational	risk	environment	and	mitigate	emerging	risks.

					The	operational	risk	standards	facilitate	the	effective	communication	and mitigation	of	operational	risk	both	within	and	across	businesses.	As	new products	and	business	activities	are	developed,	processes	are	designed,	modified or	sourced	through	alternative	means	and	operational	risks	are	considered. Information	about	the	businesses'	operational	risk,	historical

losses,	and	the	control	environment	is	reported	by	each	major	business	segment and	functional	area,	and	is	summarized	and	reported	to	senior	management	as well	as	the	Risk	Management	and	Finance	Committee	of	Citi's	Board	of Directors	and	the	full	Board	of	Directors.

# Measurement and Basel II

To	support	advanced	capital	modeling	and	management,	the	businesses	are required	to	capture	relevant	operational	risk	capital	information.	An	enhanced version	of	the	risk	capital	model	for	operational	risk	has	been	developed	and implemented	across	the	major	business	segments	as	a	step	toward	readiness	for Basel	II	capital	calculations.	The	risk	capital	calculation	is	designed	to	qualify	as an	"Advanced	Measurement	Approach"	under	Basel	II.	It	uses	a	combination	of internal	and	external	loss	data	to	support	statistical	modeling	of	capital requirement	estimates,	which	are	then	adjusted	to	reflect	qualitative	data regarding	the	operational	risk	and	control	environment.

# Information Security and Continuity of Business

Information	security	and	the	protection	of	confidential	and	sensitive	customer data	are	a	priority	for	Citigroup.	Citi	has	implemented	an	Information	Security Program	that	complies	with	the	Gramm-Leach-Bliley	Act	and	other	regulatory guidance.	The	Information	Security	Program	is	reviewed	and	enhanced periodically	to	address	emerging	threats	to	customers'	information.

					The	Corporate	Office	of	Business	Continuity,	with	the	support	of	senior management,	continues	to	coordinate	global	preparedness	and	mitigate	business continuity	risks	by	reviewing	and	testing	recovery	procedures.

# COUNTRY AND FFIEC CROSS-BORDER RISK MANAGEMENT PROCESS

# Country Risk

Country	risk	is	the	risk	that	an	event	in	a	foreign	country	will	impair	the	value	of Citigroup	assets	or	will	adversely	affect	the	ability	of	obligors	within	that country	to	honor	their	obligations	to	Citigroup.	Country	risk	events	may	include sovereign	defaults,	banking	or	currency	crises,	social	instability,	and	changes	in governmental	policies	(for	example,	expropriation,	nationalization,	confiscation of	assets	and	other	changes	in	legislation	relating	to	international	ownership). Country	risk	includes	local	franchise	risk,	credit	risk,	market	risk,	operational risk	and	cross-border	risk.

					The	country	risk	management	framework	at	Citigroup	includes	a	number	of tools	and	management	processes	designed	to	facilitate	the	ongoing	analysis	of individual	countries	and	their	risks.	These	include	country	risk	rating	models, scenario	planning	and	stress	testing,	internal	watch	lists,	and	the	Country	Risk Committee	process.

					The	Citigroup	Country	Risk	Committee	is	the	senior	forum	to	evaluate	Citi's total	business	footprint	within	a	specific	country	franchise	with	emphasis	on responses	to	current	potential	country	risk	events.	The	Committee	is	chaired	by the	Head	of	Global	Country	Risk	Management	and	includes	as	its	members senior	risk	management	officers,	senior	regional	business	heads,	and	senior product	heads.	The	Committee	regularly	reviews	all	risk	exposures	within	a country,	makes	recommendations	as	to	actions,	and	follows	up	to	ensure appropriate	accountability.

# Cross-Border Risk

Cross-border	risk	is	the	risk	that	actions	taken	by	a	non-U.S.	government	may prevent	the	conversion	of	local	currency	into	non-local	currency	and/	or	the transfer	of	funds	outside	the	country,	among	other	risks,	thereby	impacting	the ability	of	Citigroup	and	its	customers	to	transact	business	across	borders. Examples	of	cross-border	risk	include	actions	taken	by	foreign	governments such	as

exchange	controls,	debt	moratoria,	or	restrictions	on	the	remittance	of	funds. These	actions	might	restrict	the	transfer	of	funds	or	the	ability	of	Citigroup	to obtain	payment	from	customers	on	their	contractual	obligations.	See	Note	32	to the	Consolidated	Financial	Statements	for	a	recent	example	of	this	risk.

					Management	oversight	of	cross-border	risk	is	performed	through	a	formal review	process	that	includes	annual	setting	of	cross-border	limits	and	ongoing monitoring	of	cross-border	exposures,	as	well	as	monitoring	of	economic conditions	globally	and	the	establishment	of	internal	cross-border	risk management	policies.

					Under	Federal	Financial	Institutions	Examination	Council	(FFIEC) regulatory	guidelines,	total	reported	cross-border	outstandings	include	cross- border	claims	on	third	parties,	as	well	as	investments	in	and	funding	of	local franchises.	Cross-border	claims	on	third	parties	(trade	and	short-,	medium-	and long-term	claims)	include	cross-border	loans,	securities,	deposits	with	banks, investments	in	affiliates,	and	other	monetary	assets,	as	well	as	net	revaluation gains	on	foreign	exchange	and	derivative	products.

					Cross-border	outstandings	are	reported	based	on	the	country	of	the	obligor	or guarantor.	Outstandings	backed	by	cash	collateral	are	assigned	to	the	country	in which	the	collateral	is	held.	For	securities	received	as	collateral,	cross-border outstandings	are	reported	in	the	domicile	of	the	issuer	of	the	securities.	Cross- border	resale	agreements	are	presented	based	on	the	domicile	of	the	counterparty in	accordance	with	FFIEC	guidelines.

					Investments	in	and	funding	of	local	franchises	represent	the	excess	of	local country	assets	over	local	country	liabilities.	Local	country	assets	are	claims	on local	residents	recorded	by	branches	and	majority-owned	subsidiaries	of Citigroup	domiciled	in	the	country,	adjusted	for	externally	guaranteed	claims	and certain	collateral.	Local	country	liabilities	are	obligations	of	non-U.S.	branches and	majority-owned	subsidiaries	of	Citigroup	for	which	no	cross-border guarantee	has	been	issued	by	another	Citigroup	office.

# COUNTRY AND CROSS-BORDER RISK

The	table	below	shows	all	countries	where	total	Federal	Financial	Institutions	Examination	Council	(FFIEC)	cross-border	outstandings	exceed	0.75%	of	total	Citigroup assets:

|  |  |  |  |  | Trading | Investments |  |  |  |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  |  |  | and | in and |  |  |  |  |  |  |  |
|  |  |  |  |  | short- | funding of |  | Total |  |  | Total |  |  |
|  |  |  |  |  | term | local\t\t\t\t\t\tcross-border | local\t\t\t\t\t\tcross-border | local\t\t\t\t\t\tcross-border |  | \t\t\t\t\t\t cross-border | \t\t\t\t\t\t cross-border |  |  |
| In billions of dollars | Banks\t\t\t\t Public | Banks\t\t\t\t Public | Private\t\t\t\t Total | Private\t\t\t\t Total | claims | franchises | \t(1) | outstandings | Commitments | \t(2) | outstandings\t\t\t\tCommitments | outstandings\t\t\t\tCommitments | \t(2) |
| France | $11.4 | $10.9 | $10.4 | $32.7 | $22.8 | — |  | $32.7 | $ 68.5 |  | $21.4 | $66.4 |  |
| Germany | 9.6 | 9.2 | 5.9 | 24.7 | 17.7 | 3.8 |  | 28.5 | 53.1 |  | 29.9 | 48.6 |  |
| India | 1.7 | 0.4 | 10.1 | \t 12.2 | 9.4 | 15.8 |  | 28.0 | 1.8 |  | 28.0 | 1.6 |  |
| South Korea | 1.1 | 1.4 | 8.0 | 10.5 | 10.3 | 11.6 |  | 22.1 | 14.4 |  | 22.0 | 15.7 |  |
| Italy | 0.9 | 15.9 | 3.0 | 19.8 | 13.6 | 1.9 |  | 21.7 | 21.2 | 21.2 | 14.7 | 20.2 |  |
| Netherlands | 7.0 | 5.1 | 8.2 | 20.3 | 13.0 | — |  | 20.3 | 65.7 |  | 17.7 | 67.4 |  |
| Japan | 11.2 | 0.1 | 3.4 | 14.7 | 14.1 | 4.1 |  | 18.8 | 26.3 |  | 4.3 | 31.8 |  |
| Cayman Islands | 0.2 | — | 16.5 | 16.7 | 15.2 | — |  | 16.7 | 6.1 |  | 22.1 | 8.2 |  |
| United Kingdom | 6.5 | 0.2 | 9.8 | 16.5 | 13.6 | — |  | 16.5 | 140.2 |  | 26.3 | 128.3 |  |

(1) Included in total cross-border claims on third parties.

(2) Commitments (not included in total cross-border outstandings) include legally binding cross-border letters of credit and other commitments and contingencies as defined by the FFIEC. Effective March 31, 2006, the FFIEC revised the definition of commitments to include commitments to local residents to be funded with local currency local liabilities.

# DERIVATIVES

See	Note	24	to	the	Consolidated	Financial	Statements	for	a	discussion	and disclosures	relate	to	Citigroup's	derivative	activities.	The	following	discussions relate	to	the	Derivative	Obligor	Information,	the	Fair	Valuation	for	Derivatives and	Credit	Derivatives	activities.

# Derivative Obligor Information

The	following	table	presents	the	global	derivatives	portfolio	by	internal	obligor credit	rating	at	December	31,	2009	and	2008,	as	a	percentage	of	credit	exposure:

|  | 2009 | 2008 |
| :--- | :--- | :--- |
| AAA/AA/A | 68% | 68% |
| BBB | 17 | 20 |
| BB/B | 8 | 7 |
| CCC or below | 7 | 5 |
| Unrated | — | — |
| Total | 100% | 100% |

The	following	table	presents	the	global	derivatives	portfolio	by	industry	of	the obligor	as	a	percentage	of	credit	exposure:

|  | December 31,						December 31, | December 31,						December 31, |
| :--- | :--- | :--- |
|  | 2009 | 2008 |
| Financial institutions | 64% | 73% |
| Governments | 8 | 7 |
| Corporations | 28 | 20 |
| Total | 100% | 100% |

# Fair Valuation Adjustments for Derivatives

The	fair	value	adjustments	applied	by	Citigroup	to	its	derivative	carrying	values consist	of	the	following	items:

Liquidity	adjustments	are	applied	to	items	in	Level	2	or	Level	3	of	the fair-value	hierarchy	(see	Note	26	to	the	Consolidated	Financial Statements	for	more	details)	to	ensure	that	the	fair	value	reflects	the price	at	which	the	entire	position	could	be	liquidated.	The	liquidity reserve	is	based	on	the	bid/offer	spread	for	an	instrument,	adjusted	to take	into	account	the	size	of	the	position.

Credit	valuation	adjustments	(CVA)	are	applied	to	over-the-counter derivative	instruments,	in	which	the	base	valuation	generally discounts	expected	cash	flows	using	LIBOR	interest	rate	curves. Because	not	all	counterparties	have	the	same	credit	risk	as	that implied	by	the	relevant	LIBOR	curve,	a	CVA	is	necessary	to incorporate	the	market	view	of	both	counterparty	credit	risk	and	Citi's own	credit	risk	in	the	valuation.

					Citigroup	CVA	methodology	comprises	two	steps.	First,	the	exposure	profile for	each	counterparty	is	determined	using	the	terms	of	all	individual	derivative positions	and	a	Monte	Carlo	simulation	or	other	quantitative	analysis	to	generate a	series	of	expected	cash	flows	at	future	points	in	time.	The	calculation	of	this exposure	profile	considers	the	effect	of	credit	risk	mitigants,	including	pledged cash	or	other	collateral	and	any	legal	right	of	offset	that	exists	with	a counterparty	through	arrangements	such	as	netting	agreements.	Individual derivative	contracts	that	are	subject	to	an	enforceable	master	netting	agreement with	a	counterparty	are	aggregated	for	this	purpose,	since	it	is	those	aggregate net	cash	flows	that	are	subject	to	nonperformance	risk.	This	process	identifies specific,	point-in-time	future	cash	flows	that	are	subject	to	nonperformance	risk, rather	than	using	the	current	recognized	net	asset	or	liability	as	a	basis	to measure	the	CVA.

					Second,	market-based	views	of	default	probabilities	derived	from	observed credit	spreads	in	the	credit	default	swap	market	are	applied	to	the	expected	future cash	flows	determined	in	step	one.	Own-credit	CVA	is	determined	using	Citi- specific	CDS	spreads	for	the	relevant	tenor.	Generally,	counterparty	CVA	is determined	using	CDS	spread	indices	for	each	credit	rating	and	tenor.	For	certain identified	facilities	where	individual	analysis	is	practicable	(for	example, exposures	to	monoline	counterparties)	counterparty-specific	CDS	spreads	are used.

					The	CVA	adjustment	is	designed	to	incorporate	a	market	view	of	the	credit risk	inherent	in	the	derivative	portfolio.	However,	most	derivative	instruments are	negotiated	bilateral	contracts	and	are	not	commonly	transferred	to	third parties.	Derivative	instruments	are	normally	settled	contractually,	or	if terminated	early,	are	terminated	at	a	value	negotiated	bilaterally	between

the	counterparties.	Therefore,	the	CVA	(both	counterparty	and	own-credit)	may not	be	realized	upon	a	settlement	or	termination	in	the	normal	course	of business.	In	addition,	all	or	a	portion	of	the	credit	valuation	adjustments	may	be reversed	or	otherwise	adjusted	in	future	periods	in	the	event	of	changes	in	the credit	risk	of	Citi	or	its	counterparties,	or	changes	in	the	credit	mitigants (collateral	and	netting	agreements)	associated	with	the	derivative	instruments. Historically,	Citigroup's	credit	spreads	have	moved	in	tandem	with	general counterparty	credit	spreads,	thus	providing	offsetting	CVAs	affecting	revenue. However,	in	the	fourth	quarter	of	2008,	Citigroup's	credit	spreads	generally narrowed	and	counterparty	credit	spreads	widened,	each	of	which	negatively affected	revenues	in	2008.	During	2009,	both	Citigroup's	and	counterparty	credit spreads	narrowed.	The	table	below	summarizes	the	CVA	applied	to	the	fair value	of	derivative	instruments	as	of	December	31,	2009	and	2008.

| In millions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Non-monoline counterparties | $(2,483) | $(8,266) |
| Citigroup (own) | 1,349 | 3,646 |
| Net non-monoline CVA | $(1,134) | $(4,620) |
| Monoline counterparties (1) | (5,580) | (4,279) |
| Total CVA—derivative instruments | $(6,714) | $(8,899) |

# (1)						Certain derivatives with monoline counterparties were terminated during 2008.

					The	table	below	summarizes	pretax	gains	(losses)	related	to	changes	in	credit valuation	adjustments	on	derivative	instruments	for	the	years	ended	December 31,	2009	and	2008:

| In millions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Non-monoline counterparties | $ 5,783 | $(6,653) |
| Citigroup (own) | (2,297) | 2,303 |
| Net non-monoline CVA | $ 3,486 | $(4,350) |
| Monoline counterparties | (1,301) | (5,736) |
| Total CVA—derivative instruments | $ 2,185 | $(10,086) |

					The	credit	valuation	adjustment	amounts	shown	above	relate	solely	to	the derivative	portfolio,	and	do	not	include:

Own-credit	adjustments	for	non-derivative	liabilities	measured	at	fair value	under	the	fair	value	option.	See	Note	26	to	the	Consolidated Financial	Statements	for	further	information.

The	effect	of	counterparty	credit	risk	embedded	in	non-derivative instruments.	During	2008	and	2009	a	range	of	financial	instruments. Losses	on	non-derivative	instruments,	such	as	bonds	and	loans, related	to	counterparty	credit	risk	are	not	included	in	the	table	above.

# Credit Derivatives

Citigroup	makes	markets	in	and	trades	a	range	of	credit	derivatives,	both	on behalf	of	clients	as	well	as	for	its	own	account.	Through	these	contracts Citigroup	either	purchases	or	writes	protection	on	either	a	single-name	or portfolio	basis.	Citi	uses	credit	derivatives	to	help	mitigate	credit	risk	in	its corporate	loan	portfolio	and	other	cash	positions,	to	take	proprietary	trading positions,	and	to	facilitate	client	transactions.

					Credit	derivatives	generally	require	that	the	seller	of	credit	protection	make payments	to	the	buyer	upon	the	occurrence	of	predefined	events	(settlement triggers).	These	settlement	triggers,	which	are	defined	by	the	form	of	the derivative	and	the	referenced	credit,	are	generally	limited	to	the	market	standard of	failure	to	pay	on	indebtedness	and	bankruptcy	(or	comparable	events)	of	the reference	credit	and,	in	a	more	limited	range	of	transactions,	debt	restructuring.

					Credit	derivative	transactions	referring	to	emerging	market	reference	credits will	also	typically	include	additional	settlement	triggers	to	cover	the	acceleration of	indebtedness	and	the	risk	of	repudiation	or	a	payment	moratorium.	In	certain transactions	on	a	portfolio	of	referenced	credits	or	asset-backed	securities,	the seller	of	protection	may	not	be	required	to	make	payment	until	a	specified amount	of	losses	has	occurred	with	respect	to	the	portfolio	and/or	may	only	be required	to	pay	for	losses	up	to	a	specified	amount.

					The	following	tables	summarize	the	key	characteristics	of	Citi's	credit	derivative	portfolio	by	counterparty	and	derivative	form	as	of	December	31,	2009	and December	31,	2008:

| 2009 |  | Fair values |  | Notionals |
| :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | Receivable | Payable\t\t\t\t\t\t Beneficiary\t\t\t\t\t\t Guarantor | Payable\t\t\t\t\t\t Beneficiary\t\t\t\t\t\t Guarantor | Payable\t\t\t\t\t\t Beneficiary\t\t\t\t\t\t Guarantor |
| By industry/counterparty |  |  |  |  |
| Bank | $52,383 | $50,778 | $872,523 | $807,484 |
| Broker-dealer | 23,241 | 22,932 | 338,829 | 340,949 |
| Monoline | 5,860 | — | 10,018 | 33 |
| Non-financial | 339 | 371 | 13,437 | 13,221 |
| Insurance and other financial institutions | 10,969 | 8,343 | 98,155 | 52,366 |
| Total by industry/counterparty | $92,792 | $82,424 | $1,332,962 | $1,214,053 |
| By instrument |  |  |  |  |
| Credit default swaps and options | $91,625 | $81,174 | $1,305,724 | $1,213,208 |
| Total return swaps and other | 1,167 | 1,250 | 27,238 | 845 |
| Total by instrument | $92,792 | $82,424 | $1,332,962 | $1,214,053 |

| 2008 |  | Fair values |  | Notionals |
| :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | Receivable | Payable | Beneficiary | Guarantor |
| By industry/counterparty |  |  |  |  |
| Bank | $128,042 | $121,811 | $996,248 | $943,949 |
| Broker-dealer | 59,321 | 56,858 | 403,501 | 365,664 |
| Monoline | 6,886 | 91 | 9,973 | 139 |
| Non-financial | 4,874 | 2,561 | 5,608 | 7,540 |
| Insurance and other financial institutions | 29,228 | 22,388 | 180,354 | 125,988 |
| Total by industry/counterparty | $228,351 | $203,709 | $1,595,684 | $1,443,280 |
| By instrument |  |  |  |  |
| Credit default swaps and options | $221,159 | $203,220 | $1,560,222 | $1,441,375 |
| Total return swaps and other | 7,192 | 489 | 35,462 | 1,905 |
| Total by instrument | $228,351 | $203,709 | $1,595,684 | $1,443,280 |

					The	fair	values	shown	are	prior	to	the	application	of	any	netting	agreements, cash	collateral,	and	market	or	credit	value	adjustments.

					Citigroup	actively	participates	in	trading	a	variety	of	credit	derivatives products	as	both	an	active	two-way	market-maker	for	clients	and	to	manage credit	risk.	The	majority	of	this	activity	was	transacted	with	other	financial intermediaries,	including	both	banks	and	broker-dealers.	Citigroup	generally	has a	mismatch	between	the	total	notional	amounts	of	protection	purchased	and	sold and	it	may	hold	the	reference	assets	directly,	rather	than	entering	into	offsetting credit	derivative	contracts	as	and	when	desired.	The	open	risk	exposures	from credit	derivative	contracts	are	largely	matched	after	certain	cash	positions	in reference	assets	are	considered	and	after	notional	amounts	are	adjusted,	either	to a	duration-based	equivalent	basis	or	to	reflect	the	level	of	subordination	in tranched	structures.

					Citi	actively	monitors	its	counterparty	credit	risk	in	credit	derivative contracts.	Approximately	85%	and	88%	of	the	gross	receivables	are	from counterparties	with	which	Citi	maintains	collateral	agreements	as	of	December 31,	2009	and	2008,	respectively.	A	majority	of	Citi's	top	15	counterparties	(by receivable	balance	owed	to	the	company)	are	banks,	financial	institutions	or other	dealers.	Contracts	with	these	counterparties	do	not	include	ratings-based termination	events.	However,	counterparty	rating	downgrades	may	have	an incremental	effect	by	lowering	the	threshold	at	which	Citigroup	may	call	for additional	collateral.	A	number	of	the	remaining	significant	counterparties	are monolines	(which	have	CVA	as	shown	above).

# PENSION AND POSTRETIREMENT PLANS

Citigroup	has	several	non-contributory	defined	benefit	pension	plans	covering substantially	all	U.S.	employees	and	has	various	defined	benefit	pension	and termination	indemnity	plans	covering	employees	outside	the	United	States.	The U.S.	defined	benefit	plan	provides	benefits	under	a	cash	balance	formula. Employees	satisfying	certain	age	and	service	requirements	remain	covered	by	a prior	final	pay	formula.	Citigroup	also	offers	postretirement	health	care	and	life insurance	benefits	to	certain	eligible	U.S.	retired	employees,	as	well	as	to	certain eligible	employees	outside	the	United	States.

					The	following	table	shows	the	pension	(benefit)	expense	and	contributions for	Citigroup's	plans:

|  |  | U.S. plans | U.S. plans |  | Non-U.S. plans | Non-U.S. plans |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008\t\t\t\t\t2007\t\t\t\t\t2009 | 2008\t\t\t\t\t2007\t\t\t\t\t2009 | 2008\t\t\t\t\t2007\t\t\t\t\t2009 | 2008 | 2007 |
| Pension (benefit)\n       expense (1) | $(148) | $(160) | $179 | $198 | \t$205 | \t $123 |
| Company |  |  |  |  |  |  |
| contributions (2) | — | — | — | 382 | 286 | 223 |

(1) The 2008 expense includes a $23 million curtailment loss for the U.S. plans and $22 million for the non-U.S. plans recognized in the fourth quarter of 2008 relating to Citigroup's restructuring actions.

(2) In addition, Citigroup absorbed $11 million, $13 million and $15 million during 2009, 2008 and 2007, respectively, relating to certain investment management fees and administration costs for the U.S. plans, which are excluded from this table.

					The	following	table	shows	the	combined	postretirement	expense	and contributions	for	Citigroup's	U.S.	and	foreign	plans:

| In millions of dollars | 2009 | 2008					 2007 | 2008					 2007 |
| :--- | :--- | :--- | :--- |
| Postretirement expense (1) | \t$109 | \t$115 | \t $69 |
| Company contributions | 91 | 103 | 72 |

(1) The 2008 expense includes a $6 million curtailment loss related to Citigroup's fourth quarter of 2008 restructuring actions.

# Expected Rate of Return

Citigroup	determines	its	assumptions	for	the	expected	rate	of	return	on	plan assets	for	its	U.S.	pension	and	postretirement	plans	using	a	"building	block" approach,	which	focuses	on	ranges	of	anticipated	rates	of	return	for	each	asset class.	A	weighted	range	of	nominal	rates	is	then	determined	based	on	target allocations	to	each	asset	class.	Citigroup	considers	the	expected	rate	of	return	to be	a	long-term	assessment	of	return	expectations	and	does	not	anticipate changing	this	assumption	annually	unless	there	are	significant	changes	in investment	strategy	or	economic	conditions.	This	contrasts	with	the	selection	of the	discount	rate,	future	compensation	increase	rate,	and	certain	other assumptions,	which	are	reconsidered	annually	in	accordance	with	generally accepted	accounting	principles.

					The	expected	rate	of	return	for	the	U.S.	pension	and	post-retirement	plans was	7.75%	at	December	31,	2009,	7.75%	at	December	31,	2008	and	8%	at December	31,	2007,	reflecting	the	performance	of	the	global	capital	markets. Actual	returns	in	2009	and	2008	were	less	than	the	expected	returns,	while	actual returns	in	2007	were	more	than	the	expected	returns.	This	expected	amount reflects	the	expected	annual	appreciation	of	the	plan	assets	and	reduces	the annual	pension	expense	of	Citigroup.	It	is	deducted	from	the	sum	of	service	cost, interest	and	other	components	of	pension	expense	to	arrive	at	the	net	pension (benefit)	expense.	Net	pension	(benefit)	expense	for	the	U.S.	pension	plans	for 2009,	2008	and	2007	reflects	deductions	of	$912,	$949	million	and	$889	million of	expected	returns,	respectively.

					The	following	table	shows	the	expected	versus	actual	rate	of	return	on	plan assets	for	the	U.S.	pension	and	postretirement	plans:

| Expected rate of return | 7.75% | 7.75% | 8.0% |
| :--- | :--- | :--- | :--- |
| Actual rate of return (1) | (2.77)% | (5.42)% | 13.2% |

# (1) Actual rates of return are presented gross of fees.

					For	the	foreign	plans,	pension	expense	for	2009	was	reduced	by	the	expected return	of	$336	million,	compared	with	the	actual	return	of	$728	million.	Pension expense	for	2008	and	2007	was	reduced	by	expected	returns	of	$487	million	and $477	million,	respectively.	Actual	returns	were	higher	in	2007,	but	lower	in 2008,	than	the	expected	returns	in	those	years.

# Discount Rate

The	2009	and	2008	discount	rates	for	the	U.S.	pension	and	postretirement	plans were	selected	by	reference	to	a	Citigroup-specific	analysis	using	each	plan's specific	cash	flows	and	compared	with	the	Moody's	Aa	Long-Term	Corporate Bond	Yield	for	reasonableness.	Citigroup's	policy	is	to	round	to	the	nearest	tenth of	a	percent.	Accordingly,	at	December	31,	2009,	the	discount	rate	was	set	at 5.9%	for	the	pension	plans	and	at	5.55%	for	the	postretirement	welfare	plans. 					At	December	31,	2008,	the	discount	rate	was	set	at	6.1%	for	the	pension plans	and	6.0%	for	the	postretirement	plans,	referencing	a	Citigroup-specific	cash flow	analysis.

					At	December	31,	2007,	the	discount	rate	was	set	at	6.2%	for	the	pension plans	and	6.0%	for	the	postretirement	plans,	referencing	a	Citigroup-specific	cash flow	analysis.

					The	discount	rates	for	the	foreign	pension	and	postretirement	plans	are selected	by	reference	to	high-quality	corporate	bond	rates	in	countries	that	have developed	corporate	bond	markets.	However,	where	developed	corporate	bond markets	do	not	exist,	the	discount	rates	are	selected	by	reference	to	local government	bond	rates	with	a	premium	added	to	reflect	the	additional	risk	for corporate	bonds.

					For	additional	information	on	the	pension	and	postretirement	plans,	and	on discount	rates	used	in	determining	pension	and	postretirement	benefit	obligations and	net	benefit	expense	for	Citigroup's	plans,	as	well	as	the	effects	of	a	one- percentage-point	change	in	the	expected	rates	of	return	and	the	discount	rates, see	Note	9	to	the	Consolidated	Financial	Statements.

# SIGNIFICANT ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES

Note	1	to	the	Consolidated	Financial	Statements	contains	a	summary	of Citigroup's	significant	accounting	policies,	including	a	discussion	of	recently issued	accounting	pronouncements.	These	policies,	as	well	as	estimates	made	by management,	are	integral	to	the	presentation	of	the	company's	financial condition.	While	all	of	these	policies	require	a	certain	level	of	management judgment	and	estimates,	this	section	highlights	and	discusses	the	significant accounting	policies	that	require	management	to	make	highly	difficult,	complex, or	subjective	judgments	and	estimates,	at	times	regarding	matters	that	are inherently	uncertain	and	susceptible	to	change.	Management	has	discussed	each of	these	significant	accounting	policies,	the	related	estimates,	and	its	judgments with	the	Audit	Committee	of	the	Board	of	Directors.	Additional	information about	these	policies	can	be	found	in	Note	1	to	the	Consolidated	Financial Statements.

# VALUATIONS OF FINANCIAL INSTRUMENTS

Citigroup	holds	fixed-income	and	equity	securities,	derivatives,	retained interests	in	securitizations,	investments	in	private	equity,	and	other	financial instruments.	In	addition,	Citigroup	purchases	securities	under	agreements	to resell	and	sells	securities	under	agreements	to	repurchase.	Citigroup	holds	its investments,	trading	assets	and	liabilities,	and	resale	and	repurchase	agreements on	the	balance	sheet	to	meet	customer	needs,	to	manage	liquidity	needs	and interest	rate	risks,	and	for	proprietary	trading	and	private	equity	investing. 					Substantially	all	of	the	assets	and	liabilities	described	in	the	preceding paragraph	are	reflected	at	fair	value	on	Citigroup's	balance	sheet.	In	addition, certain	loans,	short-term	borrowings,	long-term	debt	and	deposits	as	well	as certain	securities	borrowed	and	loaned	positions	that	are	collateralized	with	cash are	carried	at	fair	value.	Approximately	37.6%	and	34.2%	of	total	assets,	and 16.5%	and	20.4%	of	total	liabilities,	are	accounted	for	at	fair	value	as	of December	31,	2009	and	2008,	respectively.

					When	available,	Citi	generally	uses	quoted	market	prices	to	determine	fair value	and	classifies	such	items	within	Level	1	of	the	fair	value	hierarchy established	under	ASC	820-10,	Fair	Value	Measurements	and	Disclosures	(see Note	26	to	the	Consolidated	Financial	Statements).	If	quoted	market	prices	are not	available,	fair	value	is	based	upon	internally	developed	valuation	models	that use,	where	possible,	current	market-based	or	independently	sourced	market parameters,	such	as	interest	rates,	currency	rates,	option	volatilities,	etc.	Where	a model	is	internally	developed	and	used	to	price	a	significant	product,	it	is	subject to	validation	and	testing	by	independent	personnel.	Such	models	are	often	based on	a	discounted	cash	flow	analysis.

					Items	valued	using	such	internally	generated	valuation	techniques	are classified	according	to	the	lowest	level	input	or	value	driver	that	is	significant	to the	valuation.	Thus,	an	item	may	be	classified	in	Level	3	even	though	there	may be	some	significant	inputs	that	are	readily	observable.

					As	seen	during	the	second	half	of	2007,	the	credit	crisis	has	caused	some markets	to	become	illiquid,	thus	reducing	the	availability	of	certain

observable	data	used	by	Citigroup's	valuation	techniques.	This	illiquidity continued	through	2008	and	2009.	When	or	if	liquidity	returns	to	these	markets, the	valuations	will	revert	to	using	the	related	observable	inputs	in	verifying internally	calculated	values.	For	additional	information	on	Citigroup's	fair	value analysis,	see	"Managing	Global	Risk"	and	"Balance	Sheet	Review."

# Recognition of Changes in Fair Value

Changes	in	the	valuation	of	the	trading	assets	and	liabilities,	as	well	as	all	other assets	(excluding	available-for-sale	securities)	and	liabilities	carried	at	fair	value are	recorded	in	the	Consolidated	Statement	of	Income.	Changes	in	the	valuation of	available-for-sale	securities,	other	than	write-offs	and	credit	impairments, generally	are	recorded	in	Accumulated	other	comprehensive	income	(loss) (AOCI),	which	is	a	component	of	Stockholders'	equity	on	the	Consolidated Balance	Sheet.	A	full	description	of	Citi's	related	policies	and	procedures	can	be found	in	Notes	1,	26,	27	and	28	to	the	Consolidated	Financial	Statements.

# Evaluation of Other-than-Temporary Impairment

Citigroup's	conducts	and	documents	periodic	reviews	of	all	securities	with unrealized	losses	to	evaluate	whether	the	impairment	is	other	than	temporary. Prior	to	January	1,	2009	these	reviews	were	conducted	pursuant	to	FSP	FAS 115-2	and	FAS	124-2	(now	ASC	320-10-35,	Investments—Debt	and	Equity Securities:	Subsequent	Measurement).	Any	unrealized	loss	identified	as	other than	temporary	was	recorded	directly	in	the	Consolidated	Statement	of	Income. As	of	January	1,	2009,	Citigroup	adopted	ASC	320-10.	Accordingly,	any	credit- related	impairment	related	to	debt	securities	that	Citi	does	not	plan	to	sell	and	is not	likely	to	be	required	to	sell	is	recognized	in	the	Consolidated	Statement	of Income,	with	the	non-credit-related	impairment	recognized	in	AOCI.	For	other impaired	debt	securities,	the	entire	impairment	is	recognized	in	the	Consolidated Statement	of	Income.	An	unrealized	loss	exists	when	the	current	fair	value	of	an individual	security	is	less	than	its	amortized	cost	basis.	Unrealized	losses	that	are determined	to	be	temporary	in	nature	are	recorded,	net	of	tax,	in	AOCI	for available-for-sale	securities,	while	such	losses	related	to	held-to-maturity securities	are	not	recorded,	as	these	investments	are	carried	at	their	amortized cost	(less	any	other-than-temporary	impairment).	For	securities	transferred	to held-to-maturity	from	Trading	account	assets,	amortized	cost	is	defined	as	the fair	value	amount	of	the	securities	at	the	date	of	transfer.	For	securities transferred	to	held-to-maturity	from	available-for-sale,	amortized	cost	is	defined as	the	original	purchase	cost,	plus	or	minus	any	accretion	or	amortization	of interest,	less	any	impairment	recognized	in	earnings.

					Regardless	of	the	classification	of	the	securities	as	available-for-sale	or	held- to-maturity,	Citi	has	assessed	each	position	for	credit	impairment.

					For	a	further	discussion,	see	Note	16	to	the	Consolidated	Financial Statements.

# Key Controls over Fair Value Measurement

Citi's	processes	include	a	number	of	key	controls	that	are	designed	to	ensure	that fair	value	is	measured	appropriately,	particularly	where	a	fair-value	model	is internally	developed	and	used	to	price	a	significant	product.	Such	controls include	a	model	validation	policy	requiring	that	valuation	models	be	validated by	qualified	personnel,	independent	from	those	who	created	the	models	and escalation	procedures,	to	ensure	that	valuations	using	unverifiable	inputs	are identified	and	monitored	on	a	regular	basis	by	senior	management.

# CVA Methodology

ASC	820-10	requires	that	Citi's	own	credit	risk	be	considered	in	determining	the market	value	of	any	Citi	liability	carried	at	fair	value.	These	liabilities	include derivative	instruments	as	well	as	debt	and	other	liabilities	for	which	the	fair value	option	was	elected.	The	credit	valuation	adjustment	(CVA)	is	recognized on	the	balance	sheet	as	a	reduction	in	the	associated	liability	to	arrive	at	the	fair value	(carrying	value)	of	the	liability.

					Prior	to	the	fourth	quarter	of	2008,	Citi	had	historically	used	its	credit spreads	observed	in	the	credit	default	swap	(CDS)	market	to	estimate	the	market value	of	these	liabilities.	Beginning	in	September	2008,	Citi's	CDS	spread	and credit	spreads	observed	in	the	bond	market	(cash	spreads)	diverged	from	each other	and	from	their	historical	relationship.	For	example,	the	three-year	CDS spread	narrowed	from	315	basis	points	(bps)	on	September	30,	2008,	to	202	bps on	December	31,	2008,	while	the	three-year	cash	spread	widened	from	430	bps to	490	bps	over	the	same	time	period.	Due	to	the	persistence	and	significance	of this	divergence	during	the	fourth	quarter	of	2008,	management	determined	that such	a	pattern	may	not	be	temporary	and	that	using	cash	spreads	would	be	more relevant	to	the	valuation	of	debt	instruments	(whether	issued	as	liabilities	or purchased	as	assets).	Therefore,	Citi	changed	its	method	of	estimating	the market	value	of	liabilities	for	which	the	fair	value	option	was	elected	to incorporate	Citi's	cash	spreads.	(CDS	spreads	continue	to	be	used	to	calculate	the CVA	for	derivative	positions.)	This	change	in	estimation	methodology	resulted in	a	$2.5	billion	pretax	gain	recognized	in	earnings	in	the	fourth	quarter	of 2008.	Citigroup	recognized	a	pretax	gain	of	$4,558	million	due	to	changes	in	the CVA	balance	in	2008.

					The	table	below	summarizes	the	CVA	for	fair	value	option	debt	instruments, determined	under	each	methodology	as	of	December	31,	2008	and	2007,	and	the pretax	gain	that	would	have	been	recognized	in	2008	had	each	methodology been	used	consistently	during	2008	and	2007.

| In millions of dollars | 2008 | 2007 |
| :--- | :--- | :--- |
| Year-end CVA reserve balance as calculated using |  |  |
| CDS spreads | $2,953 | $888 |
| Cash spreads | 5,446 | 1,359 |
| Difference (1) | $2,493 | $471 |
| Year-to-date pretax gain from the change in CVA\n       reserve that would have been recorded in the |  |  |
| \t\t\t\t\t\t\tincome\tstatement\tas\tcalculated\tusing |  |  |
| CDS spreads | $2,065 | $888 |
| Cash spreads | 4,087 | 1,359 |

(1) In changing the methodology for calculating the CVA reserve, Citi recorded the 2008 cumulative difference of $2.493 billion in December 2008, resulting in a year-to-date pretax gain of $4.558 billion recorded in the Consolidated Statement of Income.

					The	CVA	recognized	on	fair	value	option	debt	instruments	was	$1,220 million	and	$5,446	million	as	of	December	31,	2009	and	2008,	respectively. Citigroup	recognized	a	pretax	loss	of	$4,226	million	in	2009	due	to	changes	in the	CVA	balance.	The	pretax	loss	in	2009	includes	a	pretax	adjustment	of	$330 million	reflecting	a	correction	of	errors	in	the	calculation	of	CVA	for	periods through	December	31,	2008.

					For	a	further	discussion,	see	Notes	1	and	34	to	the	Consolidated	Financial Statements.

# ALLOWANCE FOR CREDIT LOSSES

Management	provides	reserves	for	an	estimate	of	probable	losses	inherent	in	the funded	loan	portfolio	on	the	balance	sheet	in	the	form	of	an	allowance	for	loan losses.	These	reserves	are	established	in	accordance	with	Citigroup's	Credit Reserve	Policies,	as	approved	by	the	Audit	Committee	of	the	Board	of	Directors. Citi's	Chief	Risk	Officer	and	Chief	Financial	Officer	review	the	adequacy	of	the credit	loss	reserves	each	quarter	with	representatives	from	the	Risk	Management and	Finance	staffs	for	each	applicable	business	area.

					During	these	reviews,	the	above-mentioned	representatives	covering	the business	area	having	classifiably	managed	portfolios	(that	is,	portfolios	where internal	credit	risk	ratings	are	assigned,	which	are	primarily	ICG,	Regional Consumer	Banking	and	Local	Consumer	Lending)	and	modified	consumer	loans where	a	concession	was	granted	due	to	the	borrowers'	financial	difficulties,	and present	recommended	reserve	balances	for	their	funded	and	unfunded	lending portfolios	along	with	supporting	quantitative	and	qualitative	data.	The quantitative	data	include:

Estimated	probable	losses	for	nonperforming,	nonhomogeneous exposures	within	a	business	line's	classifiably	managed	portfolio	and impaired	smaller-balance	homogeneous	loans	whose	terms	have	been modified	due	to	the	borrowers'	financial	difficulties,	and	it	was determined	that	a	long-term	concession	was	granted	to	the	borrower. Consideration	may	be	given	to	the	following,	as	appropriate,	when determining	this	estimate:	(i)	the	present	value	of	expected	future	cash flows;	(ii)	the	borrower's	overall	financial	condition,	resources	and payment	record;	and	(iii)	the	prospects	for	support	from	financially responsible	guarantors	or	the	realizable	value	of	any	collateral.	When impairment	is	measured	based	on	the	present	value	of	expected	future cash	flows,	the	entire	change	in	present	value	is	recorded	in	the Provision	for	loan	losses.

Statistically	calculated	losses	inherent	in	the	classifiably	managed portfolio	for	performing	and	de	minimis	non-performing	exposures.

The	calculation	is	based	upon:	(i)	Citigroup's	internal	system	of credit-risk	ratings,	which	are	analogous	to	the	risk	ratings	of	the	major rating	agencies;	and	(ii)	historical	default	and	loss	data,	including rating	agency	information	regarding	default	rates	from	1983	to	2008, and	internal	data	dating	to	the	early	1970s	on	severity	of	losses	in	the event	of	default.

Additional	adjustments	include:	(i)	statistically	calculated	estimates	to cover	the	historical	fluctuation	of	the	default	rates	over	the	credit cycle,	the	historical	variability	of	loss	severity	among	defaulted	loans, and	the	degree	to	which	there	are	large	obligor	concentrations	in	the global	portfolio;	and	(ii)	adjustments	made	for	specifically	known items,	such	as	current	environmental	factors	and	credit	trends.

					In	addition,	representatives	from	both	the	Risk	Management	and	Finance staffs	that	cover	business	areas	with	delinquency-managed	portfolios	containing smaller	homogeneous	loans	(primarily	the	noncommercial

lending	areas	of	Regional	Consumer	Banking)	present	their	recommended reserve	balances	based	upon	leading	credit	indicators,	including	loan delinquencies	and	changes	in	portfolio	size,	as	well	as	economic	trends	including housing	prices,	unemployment	and	GDP.	This	methodology	is	applied	separately for	each	individual	product	within	each	different	geographic	region	in	which these	portfolios	exist.

					This	evaluation	process	is	subject	to	numerous	estimates	and	judgments.	The frequency	of	default,	risk	ratings,	loss	recovery	rates,	the	size	and	diversity	of individual	large	credits,	and	the	ability	of	borrowers	with	foreign	currency obligations	to	obtain	the	foreign	currency	necessary	for	orderly	debt	servicing, among	other	things,	are	all	taken	into	account	during	this	review.	Changes	in these	estimates	could	have	a	direct	impact	on	the	credit	costs	in	any	quarter	and could	result	in	a	change	in	the	allowance.	Changes	to	the	reserve	flow	through the	Consolidated	Statement	of	Income	on	the	lines	Provision	for	loan	losses	and Provision	for	unfunded	lending	commitments.	For	a	further	description	of	the loan	loss	reserve	and	related	accounts,	see	"Managing	Global	Risk—Credit Risk"	and	Notes	1	and	18	to	the	Consolidated	Financial	Statements.

# SECURITIZATIONS

Citigroup	securitizes	a	number	of	different	asset	classes	as	a	means	of strengthening	its	balance	sheet	and	accessing	competitive	financing	rates	in	the market.	Under	these	securitization	programs,	assets	are	transferred	into	a	trust and	used	as	collateral	by	the	trust	to	obtain	financing.	The	cash	flows	from	assets in	the	trust	service	the	corresponding	trust	securities.	If	the	structure	of	the	trust meets	certain	accounting	guidelines,	trust	assets	are	treated	as	sold	and	are	no longer	reflected	as	assets	of	Citi.	If	these	guidelines	are	not	met,	the	assets continue	to	be	recorded	as	Citi's	assets,	with	the	financing	activity	recorded	as liabilities	on	Citigroup's	balance	sheet.

					Citigroup	also	assists	its	clients	in	securitizing	their	financial	assets	and packages	and	securitizes	financial	assets	purchased	in	the	financial	markets.	Citi may	also	provide	administrative,	asset	management,	underwriting,	liquidity facilities	and/or	other	services	to	the	resulting	securitization	entities	and	may continue	to	service	some	of	these	financial	assets.

# Elimination of QSPEs and Changes in the Consolidation Model for Variable Interest Entities

In	June	2009,	the	FASB	issued	SFAS	No.	166,	Accounting	for	Transfers	of Financial	Assets,	an	amendment	of	FASB	Statement	No.	140	(SFAS	166),	that will	eliminate	Qualifying	Special	Purpose	Entities	(QSPEs).	SFAS	166	is effective	for	fiscal	years	that	begin	after	November	15,	2009.	This	change	will have	a	significant	impact	on	Citigroup's	Consolidated	Financial	Statements. Beginning	January	1,	2010,	Citigroup	will	lose	sales	treatment	for	certain	future asset	transfers	that	would	have	been	considered	sales	under	SFAS	140,	and	for certain	transfers	of	portions	of	assets	that	do	not	meet	the	definition	of participating	interests.

						Simultaneously,	the	FASB	issued	SFAS	No.	167,	Amendments	to	FASB Interpretation	No.	46(R)	(SFAS	167),	which	details	three	key	changes	to	the consolidation	model.	First,	former	QSPEs	will	now	be	included	in	the	scope	of SFAS	167.	In	addition,	the	FASB	has	changed	the	method	of	analyzing	which party	to	a	variable	interest	entity	(VIE)	should	consolidate	the	VIE	(known	as	the primary	beneficiary)	to	a	qualitative	determination	of	which	party	to	the	VIE	has "power"	combined	with	potentially	significant	benefits	or	losses,	instead	of	the current	quantitative	risks	and	rewards	model.	The	entity	that	has	power	has	the ability	to	direct	the	activities	of	the	VIE	that	most	significantly	impact	the	VIE's economic	performance.	Finally,	the	new	standard	requires	that	the	primary beneficiary	analysis	be	re-evaluated	whenever	circumstances	change.	The current	rules	require	reconsideration	of	the	primary	beneficiary	only	when specified	reconsideration	events	occur.

					As	a	result	of	implementing	these	new	accounting	standards,	Citigroup	will consolidate	certain	of	the	VIEs	and	former	QSPEs	with	which	it	currently	has involvement.	An	ongoing	evaluation	of	the	application	of	these	new requirements	could,	with	the	resolution	of	certain	uncertainties,	result	in	the identification	of	additional	VIEs	and	former	QSPEs,	other	than	those	presented below,	needing	to	be	consolidated.	It	is	not	currently	anticipated,	however,	that any	such	newly	identified	VIEs	and	former	QSPEs	would	have	a	significant impact	on	Citigroup's	Consolidated	Financial	Statements	or	capital	position. 					In	accordance	with	SFAS	167,	Citigroup	employed	three	approaches	for consolidating	all	of	the	VIEs	and	former	QSPEs	that	it	consolidated	as	of January	1,	2010.	The	first	approach	requires	initially	measuring	the	assets, liabilities,	and	noncontrolling	interests	of	the	VIEs	and	former	QSPEs	at	their carrying	values	(the	amounts	at	which	the	assets,	liabilities,	and	noncontrolling interests	would	have	been	carried	in	the	Consolidated	Financial	Statements,	if Citigroup	had	always	consolidated	these	VIEs	and	former	QSPEs).	The	second approach	is	to	use	the	unpaid	principal	amounts,	where	using	carrying	values	is not	practicable.	The	third	approach	is	to	elect	the	fair	value	option,	in	which	all of	the	financial	assets	and	liabilities	of	certain	designated	VIEs	and	former QSPEs	would	be	recorded	at	fair	value	upon	adoption	of	SFAS	167	and	continue to	be	marked	to	market	thereafter,	with	changes	in	fair	value	reported	in earnings.

					Citigroup	consolidated	all	required	VIEs	and	former	QSPEs	as	of	January	1, 2010	at	carrying	values	or	unpaid	principal	amounts,	except	for	certain	private label	residential	mortgage	and	mutual	fund	deferred	sales	commissions	VIEs,	for which	the	fair	value	option	was	elected.	The	following	tables	present	the	pro forma	impact	of	adopting	these	new	accounting	standards	applying	these approaches.

					The	pro	forma	impact	of	these	changes	on	incremental	GAAP	assets	and resulting	risk-weighted	assets	for	those	VIEs	and	former	QSPEs	that	were consolidated	or	deconsolidated	for	accounting	purposes	as	of	January	1,	2010 (based	on	financial	information	as	of	December	31,	2009),	reflecting	Citigroup's present	understanding	of	the	new	accounting	requirements	and	immediate implementation	of	the	recently	issued	final	risk-based	capital	rules	regarding SFAS	166	and	SFAS	167,	was	as	follows:

| In billions of dollars | assets | assets |
| :--- | :--- | :--- |
| Impact of consolidation |  |  |
| Credit cards | $86.3 | $0.8 |
| Commercial paper conduits | 28.3 | 13.0 |
| Student loans | 13.6 | 3.7 |
| Private label consumer mortgages | 4.4 | 1.3 |
| Municipal tender option bonds | 0.6 | 0.1 |
| Collateralized loan obligations | 0.5 | 0.5 |
| Mutual fund deferred sales commissions | 0.5 | 0.5 |
| Subtotal | $134.2 | $19.9 |
| Impact of deconsolidation |  |  |
| Collateralized debt obligations (2) | $1.9 | $3.6 |
| Equity-linked notes (3) | 1.2 | 0.5 |
| Total | $137.3 | $24.0 |

(1) Citigroup undertook certain actions during the first and second quarters of 2009 in support of its off-balance-sheet credit card securitization vehicles. As a result of these actions, Citigroup included approximately $82 billion of incremental risk-weighted assets in its risk-based capital ratios as of March 31, 2009 and an additional approximate $900 million as of June 30, 2009. See Note 23 to the Consolidated Financial Statements.

(2) The implementation of SFAS 167 will result in the deconsolidation of certain synthetic and cash collateralized debt obligation (CDO) VIEs that were previously consolidated under the requirements of ASC 810 (FIN 46(R)). Upon deconsolidation of these synthetic CDOs, Citigroup's Consolidated Balance Sheet will reflect the recognition of current receivables and payables related to purchased and written credit default swaps entered into with these VIEs, which had previously been eliminated in consolidation. The deconsolidation of certain cash CDOs will have a minimal impact on GAAP assets, but will cause a sizable increase in risk-weighted assets. The impact on risk-weighted assets results from replacing, in Citigroup's trading account, largely investment grade securities owned by these VIEs when consolidated, with Citigroup's holdings of non-investment grade or unrated securities issued by these VIEs when deconsolidated.

(3) Certain equity-linked note client intermediation transactions that had previously been consolidated under the requirements of ASC 810 (FIN 46 (R)) will be deconsolidated with the implementation of SFAS 167. Upon deconsolidation, Citigroup's Consolidated Balance Sheet will reflect both the equity-linked notes issued by the VIEs and held by Citigroup as trading assets, as well as related trading liabilities in the form of prepaid equity derivatives. These trading assets and trading liabilities were formerly eliminated in consolidation.

					The	preceding	table	reflects	(i)	the	estimated	portion	of	the	assets	of	former QSPEs	to	which	Citigroup,	acting	as	principal,	had	transferred	assets	and received	sales	treatment	as	of	December	31,	2009	(totaling	approximately	$712.0 billion),	and	(ii)	the	estimated	assets	of	significant	unconsolidated	VIEs	as	of December	31,	2009	with	which	Citigroup	is	involved	(totaling	approximately $219.2	billion)	that	are	required	to	be	consolidated	under	the	new	accounting standards.	Due	to	the	variety	of	transaction	structures	and	the	level	of	Citigroup involvement	in	individual	former	QSPEs	and	VIEs,	only	a	portion	of	the	former QSPEs	and	VIEs	with	which	Citi	is	involved	are	to	be	consolidated. 					In	addition,	the	cumulative	effect	of	adopting	these	new	accounting standards	as	of	January	1,	2010,	based	on	financial	information	as	of	December 31,	2009,	would	result	in	an	estimated	aggregate	after-tax	charge	to	Retained earnings	of	approximately	$8.3	billion,	reflecting	the	net	effect	of	an	overall pretax	charge	to	Retained	earnings	(primarily	relating	to	the	establishment	of loan	loss	reserves	and	the	reversal	of	residual	interests	held)	of	approximately $13.4	billion	and	the	recognition	of	related	deferred	tax	assets	amounting	to approximately	$5.1	billion.

					The	pro	forma	impact	on	certain	of	Citigroup's	regulatory	capital	ratios	of adopting	these	new	accounting	standards	(based	on	financial	information	as	of December	31,	2009),	reflecting	immediate	implementation	of	the	recently	issued final	risk-based	capital	rules	regarding	SFAS	166	and	SFAS	167,	would	be	as follows:

|  | As reported | Pro forma | Impact |
| :--- | :--- | :--- | :--- |
| Tier 1 Capital | 11.67% | 10.26% | (141)\tbps |
| Total Capital | 15.25% | 13.82% | (143)\tbps |

					The	actual	impact	of	adopting	the	new	accounting	standards	on	January	1, 2010	could	differ,	as	financial	information	changes	from	the	December	31,	2009 estimates	and	as	several	uncertainties	in	the	application	of	these	new	standards are	resolved.

					Among	these	uncertainties,	the	FASB	has	proposed	an	indefinite	deferral	of the	requirements	of	SFAS	167	for	certain	investment	companies.	Without	the proposed	deferral,	Citi	had	most	recently	estimated	that	approximately	$3.3 billion	of	assets	held	by	investment	funds	managed	by	Citigroup	would	be	newly consolidated	upon	the	adoption	of	SFAS	167.	If	the	proposed	deferral	were	to	be finalized	as	currently	contemplated,	Citi	expects	that	many,	if	not	all,	of	the investment	vehicles	managed	by	Citigroup	would	not	be	subject	to	the requirements	of	SFAS	167.	Nevertheless,	Citigroup	is	continuing	to	evaluate	the potential	impacts	of	the	proposed	requirements	and,	depending	upon	the	eventual resolution	of	specific	implementation	matters,	may	be	required	to	consolidate certain	investment	vehicles,	the	aggregate	assets	of	which	could	range	up	to	a total	of	approximately	$1.2	billion.	The	effect	on	Citi's	regulatory	capital	ratios, should	consolidation	of	any	or	all	such	noted	investment	vehicles	be	required,	is not	expected	to	be	significant.	The	preceding	tables	reflect	Citi's	view	that	none of	the	investment	vehicles	managed	by	Citigroup	will	be	required	to	be consolidated	under	SFAS	167.

# Proposed Changes to FDIC "Safe Harbor" Securitization Rule

As	described	above,	FASB's	issuance	of	SFAS	Nos.	166	and	167,	effective starting	in	the	first	quarter	of	2010,	will	result	in	the	loss	of	GAAP	sale	treatment in	certain	credit	card	and	other	securitization	transactions	and	the	consolidation of	the	assets	of	such	transactions	into	the	assets	of	the	sponsoring	entity.		This development	has	raised	concerns	regarding	effects	under	the	FDIC's	current "safe	harbor"	securitization	rule.		Under	the	current	rule,	if	a	securitization	is accounted	for	as	a	sale	for	GAAP	purposes	and	certain	other	conditions	are satisfied,	the	FDIC,	as	conservator	or	receiver	of	an	insolvent	bank,	will	treat	the transferred	assets	as	sold	and	surrender	any	right	to	reclaim	the	assets	transferred in	the	securitization.		If	securitized	assets	are	at	risk	of	seizure	by	the	FDIC	in cases	of	conservatorship	or	receivership,	the	credit	treatment	of	the	securitized transactions	would	be	impacted	by	the	credit	status	of	the	sponsoring	bank;	for example,	the	highest	credit	rating	for	a	securitization	transaction	may	be	limited by	the	credit	rating	of	the	sponsoring	bank.

					On	November	12,	2009,	the	FDIC	amended	its	securitization	rule	on	an interim	basis	so	that	it	will	continue	to	apply	to	assets	transferred	in	securities transactions	completed	on	or	prior	to	March	31,	2010	if	the	transfers	would	have satisfied	the	conditions	for	GAAP	sale	treatment	in	effect	for	reporting	periods prior	to	November	15,	2009.		The	FDIC	is	currently	engaged	in	a	rulemaking process	regarding	this	issue,	and	the	ultimate	outcome	is	unknown.		If	Citi	is unwilling	or	unable	to	meet	the	conditions	of	any	final	rule,	the	highest	credit rating	of	securities	issued	in	its	credit	card	and	certain	other	securitization transactions	may	be	limited	to	its	then-current	rating,	and	Citi	may	engage	in	a reduced	level	of	such	transactions.

# GOODWILL

Citigroup	has	recorded	on	its	Consolidated	Balance	Sheet	Goodwill	of	$25.4 billion	(1.4%	of	assets)	and	$27.1	billion	(1.4%	of	assets)	at	December	31,	2009 and	December	31,	2008,	respectively.	No	goodwill	impairment	was	recorded during	2009.	The	December	31,	2008	balance	is	net	of	a	$9.6	billion	goodwill impairment	charge	recorded	as	a	result	of	testing	performed	as	of	December	31, 2008.	The	impairment	was	composed	of	a	$2.3	billion	pretax	charge	($2.0	billion after	tax)	related	to	North	America	Regional	Consumer	Banking,	a	$4.3	billion pretax	charge	($4.1	billion	after	tax)	related	to	Latin	America	Regional Consumer	Banking,	and	a	$3.0	billion	pretax	charge	($2.6	billion	after	tax) related	to	Local	Consumer	Lending—Other.

					The	primary	cause	for	the	goodwill	impairment	in	the	above	reporting	units was	the	rapid	deterioration	in	the	financial	markets	as	well	as	in	the	global economic	outlook,	particularly	during	the	period	beginning	mid-November through	year-end	2008.	This	deterioration	further	weakened	the	near-term prospects	for	the	financial	services	industry.	The	following	summary	describes Citigroup's	process	for	accounting	for	goodwill	and	testing	for	impairment. 					Goodwill	is	allocated	to	the	reporting	units	at	the	date	the	goodwill	is initially	recorded.	Once	goodwill	has	been	allocated	to	the	reporting	units,	it generally	no	longer	retains	its	identification	with	a	particular	acquisition,	but instead	becomes	identified	with	the	reporting	unit	as	a	whole.	As	a	result,	all	of the	fair	value	of	each	reporting	unit	is	available	to	support	the	value	of	goodwill allocated	to	the	unit.	As	of	December	31,	2009,	Citigroup	operated	in	three	core business	segments,	as	discussed.	Goodwill	impairment	testing	is	performed	at the	reporting	unit	level,	one	level	below	the	business	segment.

					The	changes	in	the	organizational	structure	in	2009	resulted	in	the	creation	of new	reporting	segments.	As	a	result,	commencing	with	the	second	quarter	2009, Citi	identified	new	reporting	units	as	required	under	ASC	350, Intangibles—Goodwill	and	Other.	Goodwill	affected	by	the	reorganization	has been	reassigned	from	10	reporting	units	to	nine,	using	a	fair	value	approach. Subsequent	to	July	1,	2009,	goodwill	was	allocated	to	disposals	and	tested	for impairment	under	the	new	reporting	units.	The	nine	new	reporting	units,	which remain	unchanged	at	December	31,	2009,	are	North	America	Regional Consumer	Banking,	EMEA	Regional	Consumer	Banking,	Asia	Regional Consumer	Banking,	LATAM	Regional	Consumer	Banking,	Securities	and Banking,	Transaction	Services,	Brokerage	and	Asset	Management,	Local Consumer	Lending—Cards	and	Local	Consumer	Lending—Other.

					Under	ASC	350,	the	goodwill	impairment	analysis	is	done	in	two	steps.	The first	step	requires	a	comparison	of	the	fair	value	of	the	individual	reporting	unit to	its	carrying	value	including	goodwill.	If	the	fair	value	of	the	reporting	unit	is in	excess	of	the	carrying	value,	the	related	goodwill

is	considered	not	to	be	impaired	and	no	further	analysis	is	necessary.	If	the carrying	value	of	the	reporting	unit	exceeds	the	fair	value,	there	is	an	indication of	potential	impairment	and	a	second	step	of	testing	is	performed	to	measure	the amount	of	impairment,	if	any,	for	that	reporting	unit.

					When	required,	the	second	step	of	testing	involves	calculating	the	implied fair	value	of	goodwill	for	each	of	the	affected	reporting	units.	The	implied	fair value	of	goodwill	is	determined	in	the	same	manner	as	the	amount	of	goodwill recognized	in	a	business	combination,	which	is	the	excess	of	the	fair	value	of	the reporting	unit	determined	in	step	one	over	the	fair	value	of	the	net	assets	and identifiable	intangibles	as	if	the	reporting	unit	were	being	acquired.	If	the	amount of	the	goodwill	allocated	to	the	reporting	unit	exceeds	the	implied	fair	value	of the	goodwill	in	the	pro	forma	purchase	price	allocation,	an	impairment	charge	is recorded	for	the	excess.	A	reorganized	impairment	charge	subsequently	cannot exceed	the	amount	of	goodwill	allocated	to	a	reporting	unit	and	cannot	be reversed	even	if	the	fair	value	of	the	reporting	unit	recovers.

					Goodwill	impairment	testing	involves	management	judgment,	requiring	an assessment	of	whether	the	carrying	value	of	the	reporting	unit	can	be	supported by	the	fair	value	of	the	individual	reporting	unit	using	widely	accepted	valuation techniques,	such	as	the	market	approach	(earnings	multiples	and/or	transaction multiples)	and/or	discounted	cash	flow	methods	(DCF).	In	applying	these methodologies,	Citi	utilizes	a	number	of	factors,	including	actual	operating results,	future	business	plans,	economic	projections,	and	market	data.	A combination	of	methodologies	is	used	and	weighted	appropriately	for	reporting units	with	significant	adverse	changes	in	business	climate.	Management	may engage	an	independent	valuation	specialist	to	assist	in	Citi's	valuation	process. 					Prior	to	2008,	Citi	primarily	employed	the	market	approach	for	estimating fair	value	of	the	reporting	units.	As	a	result	of	significant	adverse	changes	during 2008	in	certain	of	Citigroup	reporting	units,	and	the	increase	in	financial	sector volatility	primarily	in	the	U.S.,	Citigroup	engaged	the	services	of	an	independent valuation	specialist	to	assist	in	Citi's	valuation	of	all	or	a	portion	of	the	following reporting	units	during	2009—North	America	Regional	Consumer	Banking,	Latin America	Regional	Consumer	Banking,	Securities	and	Banking,	Local	Consumer Lending—Cards	and	Local	Consumer	Lending—Other.	The	DCF	method	was incorporated	to	ensure	reliability	of	results.	Citi	believes	that	the	DCF	method, using	management	projections	for	the	selected	reporting	units	and	an	appropriate risk-adjusted	discount	rate,	is	most	reflective	of	a	market	participant's	view	of fair	values	given	current	market	conditions.	For	the	reporting	units	where	both methods	were	utilized	in	2009,	the	resulting	fair	values	were	relatively	consistent and	appropriate	weighting	was	given	to	outputs	from	both	methods.

					The	DCF	method	used	at	the	time	of	each	impairment	test	used	discount rates	that	Citi	believes	adequately	reflected	the	risk	and	uncertainty	in	the financial	markets	generally	and	specifically	in	the	internally	generated	cash	flow projections.	The	DCF	method	employs	a	capital	asset	pricing	model	in estimating	the	discount	rate.	Citi	continues	to	value	the	remaining	reporting	units where	it	believes	the	risk	of	impairment	to	be	low,	using	primarily	the	market approach.

					Citi	prepares	a	formal	three-year	strategic	plan	for	its	businesses	on	an annual	basis.	These	projections	incorporate	certain	external	economic projections	developed	at	the	point	in	time	the	strategic	plan	is	developed.	For	the purpose	of	performing	any	impairment	test,	the	three-year	forecast	is	updated	by Citi	to	reflect	current	economic	conditions	as	of	the	testing	date.	Citi	used updated	long-range	financial	forecasts	as	a	basis	for	its	interim	goodwill impairment	test	performed	as	of	April	1,	2009	and	its	annual	goodwill impairment	test	performed	as	of	July	1,	2009	(as	discussed	below).	The	2009 Strategic	Plan	incorporating	the	most	current	market	outlook	was	the	basis	for the	interim	impairment	test	as	of	November	30,	2009	(as	discussed	below). 					As	discussed	above,	management	tests	goodwill	for	impairment	annually	as of	July	1.	The	results	of	the	July	1,	2009	test	validated	that	the	fair	values exceeded	the	carrying	values	for	all	reporting	units.	Citi	is	also	required	to	test goodwill	for	impairment	whenever	events	or	circumstances	make	it	more	likely than	not	that	impairment	may	have	occurred,	such	as	a	significant	adverse change	in	the	business	climate,	a	decision	to	sell	or	dispose	of	all	or	a	significant portion	of	a	reporting	unit,	or	a	significant	decline	in	Citi's	stock	price. Implementation	of	the	new	organizational	structure	as	of	the	second	quarter	of 2009	resulted	in	the	performance	of	an	interim	goodwill	impairment	test	and reallocation	of	goodwill	among	new	reporting	units	as	of	April	1,	2009.	An interim	goodwill	impairment	test	for	Citigroup	was	performed	for	both	the	pre- reorganization	reporting	units	and	the	post-reorganization	reporting	units	as	of April	1,	2009.	Results	of	the	test	indicated	no	goodwill	impairment	for	any	of	the pre-	or	post-reorganization	reporting	units.	Based	on	negative	macro-economic and	industry-specific	factors,	Citigroup	performed	an	additional	impairment	test for	its	Local	Consumer	Lending—Cards	reporting	unit	as	of	November	30,	2009. The	test	validated	that	the	fair	value	of	the	reporting	unit	was	in	excess	of	the associated	carrying	value	and,	therefore,	that	there	was	no	indication	of	goodwill impairment.

					Since	none	of	the	Company's	reporting	units	are	publicly	traded,	individual reporting	unit	fair	value	determinations	cannot	be	directly	correlated	to Citigroup's	stock	price.	The	sum	of	the	fair	values	of	the	reporting	units significantly	exceeds	the	overall	market	capitalization	of	Citi.

However,	Citi	believes	that	it	is	not	meaningful	to	reconcile	the	sum	of	the	fair values	of	the	Company's	reporting	units	to	its	market	capitalization	due	to several	factors.	These	factors,	which	do	not	directly	impact	the	individual reporting	unit	fair	values,	include	the	significant	economic	stake	and	influence held	by	the	U.S.	government	in	Citi.	In	addition,	the	market	capitalization	of Citigroup	reflects	the	execution	risk	in	a	transaction	involving	Citigroup	due	to its	size.	However,	the	individual	reporting	units'	fair	values	are	not	subject	to	the same	level	of	execution	risk	or	a	business	model	that	is	perceived	to	be	complex. 					While	no	impairment	was	noted	in	step	one	of	Citigroup's	Local	Consumer Lending—Cards	reporting	unit	impairment	test	at	November	30,	2009,	goodwill present	in	that	reporting	unit	may	be	particularly	sensitive	to	further deterioration	in	economic	conditions.	Under	the	market	approach	for	valuing	this reporting	unit,	the	earnings	multiples	and	transaction	multiples	were	selected from	multiples	obtained	using	data	from	guideline	companies	and	acquisitions. The	selection	of	the	actual	multiple	considers	operating	performance	and financial	condition	such	as	return	on	equity	and	net	income	growth	of	Local Consumer	Lending—Cards	as	compared	to	the	guideline	companies	and acquisitions.	For	the	valuation	under	the	income	approach,	Citi	utilized	a discount	rate	that	it	believes	reflects	the	risk	and	uncertainty	related	to	the projected	cash	flows,	and	selected	2012	as	the	terminal	year.

					Small	deterioration	in	the	assumptions	used	in	the	valuations,	in	particular the	discount-rate	and	growth-rate	assumptions	used	in	the	net	income projections,	could	significantly	affect	Citigroup's	impairment	evaluation	and, hence,	results.	If	the	future	were	to	differ	adversely	from	management's	best estimate	of	key	economic	assumptions,	and	associated	cash	flows	were	to decrease	by	a	small	margin,	Citi	could	potentially	experience	future	material impairment	charges	with	respect	to	$4,683	million	of	goodwill	remaining	in	our Local	Consumer	Lending—Cards	reporting	unit.	Any	such	charges,	by themselves,	would	not	negatively	affect	Citi's	Tier	1	and	Total	Capital regulatory	ratios,	or	Tier	1	Common	ratio,	its	Tangible	Common	Equity	or	Citi's liquidity	position.

# INCOME TAXES

Citigroup	is	subject	to	the	income	tax	laws	of	the	U.S.,	its	states	and	local municipalities,	and	the	foreign	jurisdictions	in	which	Citi	operates.	These	tax laws	are	complex	and	subject	to	different	interpretations	by	the	taxpayer	and	the relevant	governmental	taxing	authorities.	In	establishing	a	provision	for	income tax	expense,	Citi	must	make	judgments	and	interpretations	about	the	application of	these	inherently	complex	tax	laws.	Citi	must	also	make	estimates	about	when in	the	future	certain	items	will	affect	taxable	income	in	the	various	tax jurisdictions,	both	domestic	and	foreign.

					Disputes	over	interpretations	of	the	tax	laws	may	be	subject	to	review	/ adjudication	by	the	court	systems	of	the	various	tax	jurisdictions	or	may	be settled	with	the	taxing	authority	upon	audit.	Deferred	taxes	are	recorded	for	the future	consequences	of	events	that	have	been	recognized	in	the	financial statements	or	tax	returns,	based	upon	enacted	tax	laws	and	rates.	Deferred	tax assets	(DTAs)	are	recognized	subject	to	management's	judgment	that	realization is	more	likely	than	not.

					Although	realization	is	not	assured,	Citi	believes	that	the	realization	of	the recognized	net	deferred	tax	asset	of	$46.1	billion	at	December	31,	2009	is	more likely	than	not	based	on	expectations	as	to	future	taxable	income	in	the jurisdictions	in	which	the	DTAs	arise,	and	based	on	available	tax	planning strategies	as	defined	in	ASC	740	that	could	be	implemented	if	necessary	to prevent	a	carryforward	from	expiring.

# Jurisdiction/Component

| Net operating loss (NOL) | $5.1 | $4.6 |
| :--- | :--- | :--- |
| Foreign tax credit (FTC) | 12.0 | 10.5 |
| General business credit (GBC) | 1.2 | 0.6 |
| Future tax deductions and credits | 17.5 | 19.9 |
| Other | 0.5 | 0.9 |
| Total U.S. federal | $36.3 | $36.5 |
| State and local |  |  |
| New York NOLs | $0.9 | $1.2 |
| Other State NOLs | 0.4 | 0.4 |
| Future tax deductions | 3.0 | 2.7 |
| Total State and local | $4.3 | $4.3 |
| Foreign |  |  |
| APB 23 subsidiary NOLs | 0.7 | 0.2 |
| Non-APB 23 subsidiary NOLs | 0.4 | 0.9 |
| Future tax deductions | 4.4 | 2.6 |
| Total foreign | $5.5 | $3.7 |
| Total | $46.1 | $44.5 |

					Included	in	the	net	U.S.	federal	DTA	of	$36.3	billion	are	deferred	tax liabilities	of	$5	billion	that	will	reverse	in	the	relevant	carryforward	period	and may	be	used	to	support	the	DTA	and	$0.5	billion	in	compensation	deductions that	reduced	additional	paid-in	capital	in	January	2010	and	for	which	no adjustment	to	such	DTA	is	permitted	at	December	31,	2009,	because	the	related stock	compensation	was	not	yet	deductible	to	Citi.	Included	in	Citi's	overall	net DTA	of	$46.1	billion	are	$25	billion	of	future	tax	deductions	and	credits	that arose	largely	due	to	timing	differences	between	the	recognition	of	income	for GAAP	and	tax	and	represent	net	deductions	and	credits	that	have	not	yet	been taken	on	a	tax	return.	The	most	significant	source	of	these	timing	differences	is the	loan	loss	reserve	build,	which	accounts	for	approximately	$15	billion	of	the net	DTA.		In	general,	Citi	would	need	to	generate	approximately	$86	billion	of taxable	income	during	the	respective	carryforward	periods	to	fully	realize	its U.S.	federal,	state	and	local	DTAs.

					As	a	result	of	the	recent	losses	incurred,	Citi	is	in	a	three-year	cumulative pretax	loss	position	at	December	31,	2009.	A	cumulative	loss	position	is considered	significant	negative	evidence	in	assessing	the	realizability	of	a	DTA. Citi	has	concluded	that	there	is	sufficient	positive	evidence	to	overcome	this negative	evidence.	The	positive	evidence	includes	two	means	by	which	Citi	is able	to	fully	realize	its	DTA.	First,	Citi	forecasts	sufficient	taxable	income	in	the carryforward	period,	exclusive	of	tax	planning	strategies,	even	under	stressed scenarios.	Secondly,	Citi	has	sufficient	tax	planning	strategies,	including potential	sales	of	businesses	and	assets,	in	which	it	could	realize	the	excess	of appreciated	value	over	the	tax	basis	of	its	assets,	in	an	amount	sufficient	to	fully realize	its	DTA.	The	amount	of	the	DTA	considered	realizable,	however,	could be	significantly	reduced	in	the	near	term	if	estimates	of	future	taxable	income during	the	carryforward	period	are	significantly	lower	than	forecasted	due	to deterioration	in	market	conditions.

					Based	upon	the	foregoing	discussion,	as	well	as	tax	planning	opportunities and	other	factors	discussed	below,	the	U.S.	federal	and	New	York	State	and	City net	operating	loss	carryforward	period	of	20	years	provides	enough	time	to utilize	the	DTAs	pertaining	to	the	existing	net	operating	loss	carryforwards	and any	NOL	that	would	be	created	by	the	reversal	of	the	future	net	deductions	that have	not	yet	been	taken	on	a	tax	return.

					The	U.S.	foreign	tax	credit	carryforward	period	is	10	years.	In	addition, utilization	of	foreign	tax	credits	in	any	year	is	restricted	to	35%	of	foreign	source taxable	income	in	that	year.	Further,	overall	domestic	losses	that	Citi	has incurred	of	approximately	$45	billion	are	allowed	to	be	reclassified	as	foreign source	income	to	the	extent	of	50%	of	domestic	source	income	produced	in subsequent	years,	and	such	resulting	foreign	source	income	is	in	fact	sufficient to	cover	the	foreign	tax	credits	being	carried	forward.	As	such,	the	foreign source	taxable	income	limitation	will	not	be	an	impediment	to	the	foreign	tax credit	carryforward	usage	as	long	as	Citi	can	generate	sufficient	domestic	taxable income	within	the	10-year	carryforward	period.

					Regarding	the	estimate	of	future	taxable	income,	Citi	has	projected	its	pretax earnings,	predominantly	based	upon	the	"core"	businesses	that	Citi	intends	to conduct	going	forward.	These	"core"	businesses	have	produced	steady	and strong	earnings	in	the	past.	During	2008	and	2009,	the	"core"	businesses	were negatively	affected	by	the	large	increase	in	consumer	credit	losses	during	this sharp	downturn	in	the	economic	cycle.	Citigroup	has	already	taken	steps	to reduce	its	cost	structure.	Taking	these	items	into	account,	Citi	is	projecting	that	it will	generate	sufficient	pretax	earnings	within	the	10-year	carryforward	period alluded	to	above	to	be	able	to	fully	utilize	the	foreign	tax	credit	carryforward,	in addition	to	any	foreign	tax	credits	produced	in	such	period.

					Citi	has	also	examined	tax	planning	strategies	available	to	it	in	accordance with	ASC	740	that	would	be	employed,	if	necessary,	to	prevent	a	carryforward from	expiring.	These	strategies	include	repatriating	low-taxed	foreign	earnings for	which	an	assertion	that	the	earnings	have	been	indefinitely	reinvested	has	not been	made,	accelerating	taxable	income	into	or	deferring	deductions	out	of	the latter	years	of	the	carryforward	period	with	reversals	to	occur	after	the carryforward	period	(e.g.,	selling	appreciated	intangible	assets	and	electing straight-line	depreciation),	holding	onto	available-for-sale	debt	securities	with losses	until	they	mature	and	selling	certain	assets	that	produce	tax-exempt income,	while	purchasing	assets	that	produce	fully	taxable	income.	In	addition, the	sale	or	restructuring	of	certain	businesses	can	produce	significant	taxable income	within	the	relevant	carryforward	periods.

					Citi's	ability	to	utilize	its	deferred	tax	assets	to	offset	future	taxable	income may	be	significantly	limited	if	Citi	experiences	an	"ownership	change,"	as defined	in	Section	382	of	the	Internal	Revenue	Code	of	1986,	as	amended	(the "Code").	In	general,	an	ownership	change	will	occur	if	there	is	a	cumulative change	in	Citi's	ownership	by	"5%	shareholders"	(as	defined	in	the	Code)	that exceeds	50	percentage	points	over	a	rolling	three-year	period.

					The	common	stock	issued	pursuant	to	the	exchange	offers	in	July	2009	and the	common	stock		and	tangible	equity	units	issued	in	December	2009	as	part	of Citigroup's	TARP	repayment	did	not	result	in	an	ownership	change	under	the Code.	However,	these	common	stock	issuances	have	materially	increased	the risk	that	Citigroup	will	experience		an	ownership	change	in	the	future.	On	June 9,	2009,	the	Board	of	Directors	of	Citigroup	adopted	a	tax	benefits	preservation plan	(the	"Plan").	This	Plan	is	subject	to	the	shareholders'	approval	at	the	2010 Annual	Meeting.	The	purpose	of	the	Plan	is	to	minimize	the	likelihood	of	an ownership	change	occurring	for	Section	382	purposes.	Despite	adoption	of	the Plan,	future	transactions	in	our	stock	that	may	not	be	in	our	control	may	cause Citi	to	experience	an	ownership	change	and	thus	limit	Citi's	ability	to	utilize	its deferred	tax	asset	as	well	as	cause	a	reduction	in	its	TCE	and	stockholders' equity.

					Approximately	$15	billion	of	the	net	DTA	is	included	in	Tier	1	Common and	Tier	1	Capital.

					See	Note	11	to	the	Consolidated	Financial	Statements	for	a	further description	of	Citi's	tax	provision	and	related	income	tax	assets	and	liabilities.

# LEGAL RESERVES

See	the	discussions	under	"Legal	Proceedings"	and	in	Note	30	to	the Consolidated	Financial	Statements	for	information	regarding	Citi's	policies	on establishing	reserves	for	legal	and	regulatory	claims.

# ACCOUNTING CHANGES AND FUTURE APPLICATION OF ACCOUNTING STANDARDS

See	Note	1	to	the	Consolidated	Financial	Statements	for	a	discussion	of "Accounting	Changes"	and	the	"Future	Application	of	Accounting	Standards."

# FORWARD-LOOKING INFORMATION

Certain	statements	in	this	Form	10-K,	including	but	not	limited	to	statements included	within	the	Management's	Discussion	and	Analysis	of	Financial Condition	and	Results	of	Operations,	are	forward-looking	statements	within	the meaning	of	the	Private	Securities	Litigation	Reform	Act	of	1995.	Generally, forward-looking	statements	are	not	based	on	historical	facts	but	instead	represent only	Citigroup's	and	management's	beliefs	regarding	future	events.	Such statements	may	be	identified	by	words	such	as	believe,	expect,	anticipate,	intend, estimate,	may	increase,	may	fluctuate,	and	similar	expressions,	or	future	or conditional	verbs	such	as	will,	should,	would	and	could.

					Such	statements	are	based	on	management's	current	expectations	and	are subject	to	uncertainty	and	changes	in	circumstances.	Actual	results	may	differ materially	from	those	included	in	these	statements	due	to	a	variety	of	factors, including	but	not	limited	to	the	factors	listed	and	described	under	"Risk	Factors" in	this	Form	10-K	and	those	factors	described	below:

the	impact	of	the	economic	recession	and	disruptions	in	the	global financial	markets	on	Citi's	business	and	results	of	operations; the	impact	of	previously	enacted	and	potential	future	legislation	on Citi's	business	practices,	costs	of	operations	or	otherwise	(including without	limitation	the	CARD	Act);

Citi's	participation	in	U.S.	government	programs	to	modify	first	and second	lien	mortgage	loans,	as	well		as	Citi's	own	loss	mitigation	and forbearance	programs,	and	their	effect	on	the	amount	and	timing	of Citi's	earnings	and	credit	losses	related	to	those	loans; the	expiration	of	a	provision	of	the	U.S.	tax	law	allowing	Citi	to	defer U.S.	taxes	on	certain	active	financial	services	income	and	its	effect	on Citi's	tax	expense;

risks	arising	from	Citi's	extensive	operations	outside	the	U.S.;

potential	reduction	in	earnings	available	to	Citi's	common

stockholders	and	return	on	Citi's	equity	due	to	future	issuances	of	Citi common	stock	and	preferred	stock;

the	effect	of	the	U.S.	Treasury's	sale	of	its	stake	in	Citi	on	the	market price	of	Citi	common	stock;

an	"ownership	change"	under	the	Internal	Revenue	Code	and	its

effect	on	on	Citi's	ability	to	utilize	its	deferred	tax	assets	to	offset future	taxable	income;

the	impact	of	increases	in	FDIC	insurance	premiums	and	other proposed	fees	on	banks	on	Citi's	earnings;

Citi's	ability	to	hire	and	retain	qualified	employees;

Citi's	ability	to	maintain	the	value	of	the	Citi	brand;

Citi's	ability	to	maintain	sufficient	capitalization	consistent	with	its risk	profile	and	robust	relative	to	future	capital	requirements; Citi's	continuing	ability	to	obtain	financing	from	external	sources	and maintain	adequate	liquidity;

reduction	in	Citi's	or	its	subsidiaries'	credit	ratings	and	its	effect	on the	cost	of	funding	from,	and	access	to,	the	capital	markets; market	disruptions	and	their	impact	on	the	risk	of	customer	or counterparty	delinquency	or	default;

failure	to	realize	all	of	the	anticipated	benefits	of	the	realignment	of Citi's	business;

volatile	and	illiquid	market	conditions,	which	could	lead	to	further write-downs	of	Citi's	financial	instruments;

the	elimination	of	QSPEs	from	the	guidance	in	SFAS	140	and changes	in	FIN	46(R)	and	its	impact	on	Citi's	Consolidated	Financial Statements;

the	accuracy	of	Citi's	assumptions	and	estimates	used	to	prepare	its financial	statements;

changes	in	accounting	standards	and	its	impact	on	how	Citi	records and	reports	its	financial	condition	and	results	of	operations; the	effectiveness	of	Citi's	risk	management	processes	and	strategies; the	exposure	of	Citi	to	reputational	damage	and	significant	legal	and regulatory	liability	as	a	member	of	the	financial	services	industry;	and a	failure	in	Citi's	operational	systems	or	infrastructure,	or	those	of third	parties.

# CONTROLS AND PROCEDURES

# Disclosure

Citigroup's	disclosure	controls	and	procedures	are	designed	to	ensure	that information	required	to	be	disclosed	under	the	Securities	Exchange	Act	of	1934 is	accumulated	and	communicated	to	management,	including	the	Chief Executive	Officer	(CEO)	and	Chief	Financial	Officer	(CFO),	to	allow	for	timely decisions	regarding	required	disclosure	and	appropriate	SEC	filings.

					Citi's	Disclosure	Committee	is	responsible	for	ensuring	that	there	is	an adequate	and	effective	process	for	establishing,	maintaining	and	evaluating disclosure	controls	and	procedures	for	Citi's	external	disclosures.

					Citigroup's	management,	with	the	participation	of	the	company's	CEO	and CFO,	has	evaluated	the	effectiveness	of	Citigroup's	disclosure	controls	and procedures	(as	defined	in	Rule	13a-15(e)	under	the	Exchange	Act)	as	of December	31,	2009	and,	based	on	that	evaluation,	the	CEO	and	CFO	have concluded	that	at	that	date	Citigroup's	disclosure	controls	and	procedures	were effective.

# Financial Reporting

There	were	no	changes	in	Citigroup's	internal	control	over	financial	reporting	(as defined	in	Rule	13a-15(f)	under	the	Exchange	Act)	during	the	fiscal	quarter ended	December	31,	2009	that	materially	affected,	or	are	reasonably	likely	to materially	affect,	Citi's	internal	control	over	financial	reporting.

# MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The	management	of	Citigroup	is	responsible	for	establishing	and	maintaining adequate	internal	control	over	financial	reporting	(as	defined	in	Rule	13a-15(f) under	the	Exchange	Act).	Citigroup's	internal	control	system	is	designed	to provide	reasonable	assurance	to	management	and	the	Board	of	Directors regarding	the	preparation	and	fair	presentation	of	published	financial	statements in	accordance	with	U.S.	generally	accepted	accounting	principles.	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.

					Management	maintains	a	comprehensive	system	of	controls	intended	to ensure	that	transactions	are	executed	in	accordance	with	management's authorization,	assets	are	safeguarded,	and	financial	records	are	reliable. Management	also	takes	steps	to	ensure	that	information	and	communication flows	are	effective	and	to	monitor	performance,	including	performance	of internal	control	procedures.

					Citigroup	management	assessed	the	effectiveness	of	Citigroup's	internal control	over	financial	reporting	as	of	December	31,	2009	based	on	the	criteria set	forth	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway Commission	(COSO)	in	Internal	Control-Integrated	Framework.	Based	on	this assessment,	management	believes	that,	as	of	December	31,	2009,	Citigroup's internal	control	over	financial	reporting	is	effective.

					The	effectiveness	of	Citigroup's	internal	control	over	financial	reporting	as of	December	31,	2009	has	been	audited	by	KPMG	LLP,	Citigroup's independent	registered	public	accounting	firm,	as	stated	in	their	report	below, which	expressed	an	unqualified	opinion	on	the	effectiveness	of	Citigroup's internal	control	over	financial	reporting	as	of	December	31,	2009.

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM—INTERNAL CONTROL OVER FINANCIAL

# REPORTING

The	Board	of	Directors	and	Stockholders Citigroup	Inc.:

We	have	audited	Citigroup	Inc.	and	subsidiaries'	(the	"Company"	or "Citigroup")	internal	control	over	financial	reporting	as	of	December	31,	2009, based	on	criteria	established	in	Internal	Control—Integrated	Framework	issued by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission (COSO).	The	Company'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,	included	in	the accompanying	management's	report	on	internal	control	over	financial	reporting. Our	responsibility	is	to	express	an	opinion	on	the	Company'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,	assessing	the	risk	that	a	material	weakness	exists,	and	testing and	evaluating	the	design	and	operating	effectiveness	of	internal	control	based on	the	assessed	risk.	Our	audit	also	included	performing	such	other	procedures	as we	considered	necessary	in	the	circumstances.	We	believe	that	our	audit provides	a	reasonable	basis	for	our	opinion.

					A	company'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	generally	accepted	accounting	principles.	A	company'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	company;	(2)	provide reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit preparation	of	financial	statements	in	accordance	with	generally	accepted accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are being	made	only	in	accordance	with	authorizations	of	management	and	directors of	the	company;	and	(3)	provide	reasonable	assurance	regarding	prevention	or timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	the company'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,	Citigroup	maintained,	in	all	material	respects,	effective internal	control	over	financial	reporting	as	of	December	31,	2009,	based	on criteria	established	in	Internal	Control—Integrated	Framework	issued	by	the Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission. 					We	also	have	audited,	in	accordance	with	the	standards	of	the	Public Company	Accounting	Oversight	Board	(United	States),	the	consolidated	balance sheets	of	Citigroup	as	of	December	31,	2009	and	2008,	and	the	related consolidated	statements	of	income,	changes	in	stockholders'	equity	and	cash flows	for	each	of	the	years	in	the	three-year	period	ended	December	31,	2009, and	our	report	dated	February	26,	2010	expressed	an	unqualified	opinion	on those	consolidated	financial	statements.

/s/	KPMG	LLP

New	York,	New	York

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM—CONSOLIDATED FINANCIAL

# STATEMENTS

We	have	audited	the	accompanying	consolidated	balance	sheets	of	Citigroup Inc.	and	subsidiaries	(the	"Company"	or	"Citigroup")	as	of	December	31,	2009 and	2008,	and	the	related	consolidated	statements	of	income,	changes	in stockholders'	equity	and	cash	flows	for	each	of	the	years	in	the	three-year	period ended	December	31,	2009,	and	the	related	consolidated	balance	sheets	of Citibank,	N.A.	and	subsidiaries	as	of	December	31,	2009	and	2008.	These consolidated	financial	statements	are	the	responsibility	of	the	Company's management.	Our	responsibility	is	to	express	an	opinion	on	these	consolidated 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	management,	as	well	as evaluating	the	overall	financial	statement	presentation.	We	believe	that	our audits	provide	a	reasonable	basis	for	our	opinion.

					In	our	opinion,	the	consolidated	financial	statements	referred	to	above present	fairly,	in	all	material	respects,	the	financial	position	of	Citigroup	as	of December	31,	2009	and	2008,	and	the	results	of	its	operations	and	its	cash	flows for	each	of	the	years	in	the	three-year	period	ended	December	31,	2009,	and	the financial	position	of	Citibank,	N.A.	and	subsidiaries	as	of	December	31,	2009 and	2008,	in	conformity	with	U.S.	generally	accepted	accounting	principles. 					As	discussed	in	Note	1	to	the	consolidated	financial	statements,	in	2009,	the Company	changed	its	method	of	accounting	for	other-than-temporary impairments	on	investment	securities,	business	combinations,	noncontrolling interests	in	subsidiaries,	and	earnings	per	share.

					We	also	have	audited,	in	accordance	with	the	standards	of	the	Public Company	Accounting	Oversight	Board	(United	States),	Citigroup's	internal control	over	financial	reporting	as	of	December	31,	2009,	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	26,	2010	expressed	an	unqualified	opinion	on	the effectiveness	of	the	Company's	internal	control	over	financial	reporting.

# FINANCIAL STATEMENTS AND NOTES TABLE OF CONTENTS

# CONSOLIDATED FINANCIAL STATEMENTS

| CONSOLIDATED FINANCIAL STATEMENTS |  |
| :--- | :--- |
| Consolidated\tStatement\tof\tIncome— |  |
| \t\t\t\tFor\tthe\tYears\tEnded\tDecember\t31,\t2009,\t2008\tand\t2007 | 120 |
| Consolidated\tBalance\tSheet— |  |
| \t\t\t\tDecember\t31,\t2009\tand\t2008 | 121 |
| Consolidated\tStatement\tof\tChanges\tin\tStockholders'\tEquity— |  |
| \t\t\t\tFor\tthe\tYears\tEnded\tDecember\t31,\t2009,\t2008\tand\t2007 | 122 |
| Consolidated\tStatement\tof\tCash\tFlows— |  |
| \t\t\t\tFor\tthe\tYears\tEnded\tDecember\t31,\t2009,\t2008\tand\t2007 | 124 |
| Citibank\tConsolidated\tBalance\tSheet— |  |
| \t\t\t\tCitibank,\tN.A.\tand\tSubsidiaries—December\t31,\t2009\tand\t2008 | 125 |
| NOTES TO CONSOLIDATED FINANCIAL |  |
| STATEMENTS |  |
| Note\t1\t–\tSummary\tof\tSignificant\tAccounting\tPolicies | 126 |
| Note\t2\t–\tBusiness\tDevelopments | 143 |
| Note\t3\t–\tDiscontinued\tOperations | 146 |
| Note\t4\t–\tBusiness\tSegments | 148 |
| Note\t5\t–\tInterest\tRevenue\tand\tExpense | 149 |
| Note\t6\t–\tCommissions\tand\tFees | 149 |
| Note\t7\t–\tPrincipal\tTransactions | 150 |
| Note\t8\t–\tIncentive\tPlans | 150 |
| Note\t9\t–\tRetirement\tBenefits | 155 |
| Note\t10\t–\tRestructuring | 164 |
| Note\t11\t–\tIncome\tTaxes | 166 |
| Note\t12\t–\tEarnings\tper\tShare | 171 |
| Note\t13\t–\tFederal\tFunds/Securities\tBorrowed,\tLoaned,\tand |  |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tSubject\tto\tRepurchase\tAgreements | 172 |
| Note\t14\t–\tBrokerage\tReceivables\tand\tBrokerage\tPayables | 173 |
| Note\t15\t–\tTrading\tAccount\tAssets\tand\tLiabilities | 173 |
| Note\t16\t–\tInvestments | 174 |
| Note\t17\t–\tLoans | 183 |
| Note\t18\t–\tAllowance\tfor\tCredit\tLosses | 185 |
| Note\t19\t–\tGoodwill\tand\tIntangible\tAssets | 186 |
| Note\t20\t–\tDebt | 189 |

| Note	21	–	Preferred	Stock	and	Stockholders'	Equity | 192 |
| :--- | :--- |
| Note\t22\t–\tChanges\tin\tAccumulated\tOther\tComprehensive |  |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tIncome\t(Loss) | 194 |
| Note\t23\t–\tSecuritizations\tand\tVariable\tInterest\tEntities | 195 |
| Note\t24\t–\tDerivatives\tActivities | 215 |
| Note\t25\t–\tConcentrations\tof\tCredit\tRisk | 223 |
| Note\t26\t–\tFair\tValue\tMeasurement | 223 |
| Note\t27\t–\tFair\tValue\tElections | 234 |
| Note\t28\t–\tFair\tValue\tof\tFinancial\tInstruments | 239 |
| Note\t29\t–\tPledged\tAssets,\tCollateral,\tCommitments |  |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tand\tGuarantees | 240 |
| Note\t30\t–\tContingencies | 246 |
| Note\t31\t–\tCitibank,\tN.A.\tStockholder's\tEquity | 247 |
| Note\t32\t–\tSubsequent\tEvent | 248 |
| Note\t33\t–\tCondensed\tConsolidating\tFinancial |  |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tStatement\tSchedules | 248 |
| Note\t34\t–\tSelected\tQuarterly\tFinancial\tData\t(Unaudited) | 257 |

# CONSOLIDATED STATEMENT OF INCOME

Citigroup Inc. and Subsidiaries

| In millions of dollars, except per-share amounts | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Revenues |  |  |  |
| Interest revenue | $76,635 | $106,499 | $121,347 |
| Interest expense | 27,721 | 52,750 | 75,958 |
| Net interest revenue | $48,914 | $53,749 | $45,389 |
| Commissions and fees | $17,116 | $10,366 | $20,068 |
| Principal transactions | 3,932 | (22,601) | (12,347) |
| Administration and other fiduciary fees | 5,195 | 8,222 | 8,860 |
| Realized gains (losses) on sales of investments | 1,996 | 679 | 1,168 |
| Other than temporary impairment losses on investments (1) |  |  |  |
| Gross impairment losses | (7,262) | (2,740) | — |
| Less: Impairments recognized in OCI | 4,356 | — | — |
| Net impairment losses recognized in earnings (1) | $(2,906) | $(2,740) | $ — |
| Insurance premiums | $3,020 | $3,221 | $3,062 |
| Other revenue | 3,018 | 703 | 11,100 |
| Total non-interest revenues | $31,371 | $(2,150) | $31,911 |
| Total revenues, net of interest expense | $80,285 | $51,599 | $77,300 |
| Provisions for credit losses and for benefits and claims |  |  |  |
| Provision for loan losses | $38,760 | $33,674 | $16,832 |
| Policyholder benefits and claims | 1,258 | 1,403 | 935 |
| Provision for unfunded lending commitments | 244 | (363) | 150 |
| Total provisions for credit losses and for benefits and claims | $40,262 | $34,714 | $17,917 |
| Operating expenses |  |  |  |
| Compensation and benefits | $24,987 | $31,096 | $32,705 |
| Premises and equipment | 4,339 | 5,317 | 4,837 |
| Technology/communication | 4,573 | 5,993 | 5,620 |
| Advertising and marketing | 1,415 | 2,188 | 2,729 |
| Restructuring | (113) | 1,550 | 1,528 |
| Other operating | 12,621 | 23,096 | 11,318 |
| Total operating expenses | $47,822 | $69,240 | $58,737 |
| Income (loss) from continuing operations before income taxes | $(7,799) | $ (52,355) | $646 |
| Provision (benefit) for income taxes | (6,733) | (20,326) | (2,546) |
| Income (loss) from continuing operations | $(1,066) | $ (32,029) | $3,192 |
| Discontinued operations |  |  |  |
| Income (loss) from discontinued operations | $(653) | $784 | $1,052 |
| Gain on sale | 102 | 3,139 | — |
| Provision (benefit) for income taxes | (106) | (79) | 344 |
| Income (loss) from discontinued operations, net of taxes | $(445) | $4,002 | $708 |
| Net income (loss) before attribution of noncontrolling interests | $(1,511) | $ (28,027) | $3,900 |
| Net income (loss) attributable to noncontrolling interests | 95 | (343) | 283 |
| Citigroup's net income (loss) | $(1,606) | $ (27,684) | $3,617 |
| Basic earnings per share ^(2) |  |  |  |
| Income (loss) from continuing operations | $(0.76) | $(6.39) | $0.53 |
| Income (loss) from discontinued operations, net of taxes | (0.04) | 0.76 | 0.15 |
| Net income (loss) | $(0.80) | $(5.63) | $0.68 |
| Weighted average common shares outstanding | 11,568.3 | 5,265.4 | 4,905.8 |
| Diluted earnings per share (2) |  |  |  |
| Income (loss) from continuing operations | $(0.76) | $(6.39) | $0.53 |
| Income (loss) from discontinued operations, net of taxes | (0.04) | 0.76 | 0.14 |
| Net income (loss) | $(0.80) | $(5.63) | $0.67 |
| Adjusted weighted average common shares outstanding | 12,099.0 | 5,768.9 | 4,924.0 |

(1)						As of January 1, 2009, the Company adopted ASC 320-10-65, Investments—Debt and Equity Securities. The Company disclosed comparable information with the prior year in its 2009 periodic reports. This accounting change was not applicable to 2007 and, accordingly, 2007 information is not disclosed above.

(2) The Diluted EPS calculation for 2009 and 2008 utilizes Basic shares and Income available to common shareholders (Basic) due to the negative Income available to common shareholders. Using actual Diluted shares and Income available to common shareholders (Diluted) would result in anti-dilution.

See Notes to the Consolidated Financial Statements.

# CONSOLIDATED BALANCE SHEET

|  |  | December 31 |
| :--- | :--- | :--- |
| In millions of dollars, except shares | 2009 | 2008 |
| Assets |  |  |
| Cash and due from banks (including segregated cash and other deposits) | $25,472 | $29,253 |
| Deposits with banks | 167,414 | 170,331 |
| Federal funds sold and securities borrowed or purchased under agreements to resell (including $87,837 |  |  |
| and $70,305 as of December 31, 2009 and December 31, 2008, respectively, at fair value) | 222,022 | 184,133 |
| Brokerage receivables | 33,634 | 44,278 |
| Trading account assets (including $111,219 and $148,703 pledged to creditors at December 31, 2009\n and December 31, 2008, respectively) | 342,773 | 377,635 |
| Investments (including $15,154 and $14,875 pledged to creditors at December 31, 2009 |  |  |
| and December 31, 2008, respectively and $246,429 and $184,451 at December 31, 2009 |  |  |
| and December 31, 2008, respectively, at fair value) | 306,119 | 256,020 |
| Loans, net of unearned income |  |  |
| Consumer (including $34 and $36 at fair value as of December 31, 2009 and December 31, 2008, respectively) | 424,057 | 481,387 |
| Corporate (including $1,405 and $2,696 at December 31, 2009 and December 31, 2008, respectively, at fair value) | 167,447 | 212,829 |
| Loans, net of unearned income | $591,504 | $694,216 |
| Allowance for loan losses | (36,033) | (29,616) |
| Total loans, net | $555,471 | $664,600 |
| Goodwill | 25,392 | 27,132 |
| Intangible assets (other than MSRs) | 8,714 | 14,159 |
| Mortgage servicing rights (MSRs) | 6,530 | 5,657 |
| Other assets (including $12,664 and $21,372 as of December 31, 2009 and December 31, 2008 respectively, at fair value) | 163,105 | 165,272 |
| Total assets | $1,856,646 | $1,938,470 |
| Liabilities |  |  |
| Non-interest-bearing deposits in U.S. offices | $71,325 | $55,485 |
| and December 31, 2008, respectively, at fair value) | 232,093 | 234,491 |
| Non-interest-bearing deposits in offices outside the U.S. | 44,904 | 37,412 |
| and December 31, 2008, respectively, at fair value) | 487,581 | 446,797 |
| Total deposits | $835,903 | $774,185 |
| Federal funds purchased and securities loaned or sold under agreements to repurchase (including $104,030 |  |  |
| and $138,866 as of December 31, 2009 and December 31, 2008, respectively, at fair value) | 154,281 | 205,293 |
| Brokerage payables | 60,846 | 70,916 |
| Trading account liabilities | 137,512 | 165,800 |
| Short-term borrowings (including $639 and $17,607 at December 31, 2009 and December 31, 2008, respectively, at fair value) | 68,879 | 126,691 |
| Long-term debt (including $25,942 and $27,263 at December 31, 2009 and December 31, 2008, respectively, at fair value) | 364,019 | 359,593 |
| Other liabilities (including $11,542 and $13,567 as of December 31, 2009 and December 31, 2008, respectively, at fair value) | 80,233 | 91,970 |
| Total liabilities | $1,701,673 | $1,794,448 |
| Stockholders' equity |  |  |
| at aggregate liquidation value | $312 | $70,664 |
| and 5,671,743,807 at December 31, 2008 | 286 | 57 |
| Additional paid-in capital | 98,142 | 19,165 |
| Retained earnings | 77,440 | 86,521 |
| Treasury stock, at cost:\t2009—142,833,099 shares\tand 2008—221,675,719 shares | (4,543) | (9,582) |
| Accumulated other comprehensive income (loss) | (18,937) | (25,195) |
| Total Citigroup stockholders' equity | $152,700 | $141,630 |
| Noncontrolling interest | 2,273 | 2,392 |
| Total equity | $154,973 | $144,022 |
| Total liabilities and equity | $1,856,646 | $1,938,470 |

# CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

|  |  |  | Amounts |  |  | Shares |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars, except shares in thousands | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 |
| Preferred stock at aggregate liquidation value |  |  |  |  |  |  |
| Balance, beginning of year | $ 70,664 | $ — | $1,000 | 829 | — | 4,000 |
| Redemption or retirement of preferred stock | (74,005) | — | (1,000) | (824) | — | (4,000) |
| Issuance of new preferred stock | 3,530 | 70,627 | — | 7 | 829 | — |
| Preferred stock Series H discount accretion | 123 | 37 | — | — | — | — |
| Balance, end of year | $312 | $70,664 | $ — | 12 | 829 | — |
| Common stock and additional paid-in capital |  |  |  |  |  |  |
| Balance, beginning of year | $ 19,222 | $18,062 | $18,308 | 5,671,744 | 5,477,416 | 5,477,416 |
| Employee benefit plans | (4,395) | (1,921) | 455 | — | — | — |
| Issuance of new common stock | — | 4,911 | — | — | 194,328 | — |
| Conversion of preferred stock to common stock | 61,963 | — | — | 17,372,588 | — | — |
| Reset of convertible preferred stock conversion price | 1,285 | — | — | — | — | — |
| Issuance of shares and T-DECs for TARP repayment | 20,298 | — | — | 5,581,768 | — | — |
| Issuance of shares for Nikko Cordial acquisition | — | (3,500) | — | — | — | — |
| Issuance of TARP-related warrants | 88 | 1,797 | — | — | — | — |
| Issuance of shares for Grupo Cuscatlán acquisition | — | — | 118 | — | — | — |
| Issuance of shares for ATD acquisition | — | — | 74 | — | — | — |
| Present value of stock purchase contract payments | — | — | (888) | — | — | — |
| Other | (33) | (127) | (5) | — | — | — |
| Balance, end of year | $ 98,428 | $19,222 | $18,062 | 28,626,100 | 5,671,744 | 5,477,416 |
| Retained earnings |  |  |  |  |  |  |
| Balance, beginning of year | $ 86,521 | $121,769 | $129,116 |  |  |  |
| Adjustment to opening balance, net of taxes (1) (2) | 413 | — | (186) |  |  |  |
| Adjusted balance, beginning of period | $ 86,934 | $121,769 | $128,930 |  |  |  |
| Net income (loss) | (1,606) | (27,684) | 3,617 |  |  |  |
| Common dividends (3) | (36) | (6,050) | (10,733) |  |  |  |
| Preferred dividends | (3,202) | (1,477) | (45) |  |  |  |
| Preferred stock Series H discount accretion | (123) | (37) | — |  |  |  |
| Reset of convertible preferred stock conversion price | (1,285) | — | — |  |  |  |
| Conversion of preferred stock to common stock | (3,242) | — | — |  |  |  |
| Balance, end of year | $ 77,440 | $86,521 | $121,769 |  |  |  |
| Treasury stock, at cost |  |  |  |  |  |  |
| Balance, beginning of year | $(9,582) | $ (21,724) | $(25,092) | (221,676) | (482,835) | (565,422) |
| Issuance of shares pursuant to employee benefit plans | 5,020 | 4,270 | 2,853 | 79,247 | 84,724 | 68,839 |
| Treasury stock acquired (4) | (3) | (7) | (663) | (971) | (343) | (12,463) |
| Issuance of shares for Nikko acquisition | — | 7,858 | — | — | 174,653 | — |
| Issuance of shares for Grupo Cuscatlán acquisition | — | — | 637 | — | — | 14,192 |
| Issuance of shares for ATD acquisition | — | — | 503 | — | — | 11,172 |
| Other | 22 | 21 | 38 | 567 | 2,125 | 847 |
| Balance, end of year | $(4,543) | $(9,582) | $(21,724) | (142,833) | (221,676) | (482,835) |

(Statement continues on next page)

# (Continued)

|  |  |  | Amounts |  |  | Shares |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars, except shares in thousands | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 |
| Accumulated other comprehensive income (loss) |  |  |  |  |  |  |
| Balance, beginning of year | $ (25,195) | $(4,660) | $(3,700) |  |  |  |
| Adjustment to opening balance, net of taxes (1)(5) | (413) | — | 149 |  |  |  |
| Adjusted balance, beginning of period | $ (25,608) | $(4,660) | $(3,551) |  |  |  |
| Net change in unrealized gains and losses on investment securities, net of taxes | 5,713 | (10,118) | (621) |  |  |  |
| Net change in cash flow hedges, net of taxes | 2,007 | (2,026) | (3,102) |  |  |  |
| Net change in foreign currency translation adjustment, net of taxes | (203) | (6,972) | 2,024 |  |  |  |
| Pension liability adjustment, net of taxes (6) | (846) | (1,419) | 590 |  |  |  |
| Net change in\tAccumulated other comprehensive income (loss) | $6,671 | $ (20,535) | $(1,109) |  |  |  |
| Balance, end of year | $ (18,937) | $ (25,195) | $(4,660) |  |  |  |
| Total Citigroup common stockholders' equity and common shares |  |  |  |  |  |  |
| outstanding | $152,388 | $70,966 | $113,447 | 28,483,267 | 5,450,068 | 4,994,581 |
| Total Citigroup stockholders' equity | $152,700 | $141,630 | $113,447 |  |  |  |
| Noncontrolling interest |  |  |  |  |  |  |
| Balance, beginning of period | $2,392 | $5,308 | $2,713 |  |  |  |
| Initial origination of a noncontrolling interest | 285 | 1,409 | 2,814 |  |  |  |
| Transactions between noncontrolling interest shareholders and the related |  |  |  |  |  |  |
| consolidating subsidiary | (134) | (2,348) | (573) |  |  |  |
| Transactions between Citigroup and the noncontrolling-interest shareholders | (354) | (1,207) | (160) |  |  |  |
| \t Net income attributable to noncontrolling-interest shareholders | 95 | (343) | 283 |  |  |  |
| \t Dividends paid to noncontrolling–interest shareholders | (17) | (168) | (226) |  |  |  |
| \t Accumulated other comprehensive income—net change in unrealized gains and |  |  |  |  |  |  |
| losses on investment securities, net of tax | 5 | 3 | (10) |  |  |  |
| \t Accumulated other comprehensive income—net change in FX translation |  |  |  |  |  |  |
| adjustment, net of tax | 39 | (167) | 140 |  |  |  |
| \t All other | (38) | (95) | 327 |  |  |  |
| Net change in noncontrolling interests | $(119) | $(2,916) | $2,595 |  |  |  |
| Balance, end of period | $2,273 | $2,392 | $5,308 |  |  |  |
| Total equity | $154,973 | $144,022 | $118,755 |  |  |  |
| Comprehensive income (loss) |  |  |  |  |  |  |
| Net income (loss) before attribution of noncontrolling interests | $(1,511) | $ (28,027) | $3,900 |  |  |  |
| Net change in\tAccumulated other comprehensive income (loss) | 6,715 | (20,699) | (979) |  |  |  |
| Total comprehensive income (loss) | $5,204 | $ (48,726) | $2,921 |  |  |  |
| Comprehensive income (loss) attributable to the noncontrolling interests | $139 | $(507) | $413 |  |  |  |
| Comprehensive income (loss) attributable to Citigroup | $5,065 | $ (48,219) | $2,508 |  |  |  |

(1)						The adjustment to the opening balances for Retained earnings and Accumulated other comprehensive income (loss) represents the cumulative effect of initially adopting ASC 320-10-35-34, Investments—Debt and Equity securities: Recognition of an Other-Than-Temporary Impairment (formerly FSP FAS 115-2 and FAS 124-2).

(2) The adjustment to the opening balance of Retained earnings in 2007 represents the total of the after-tax gain (loss) amounts for the adoption of the following accounting pronouncements:

•	ASC 820,	Fair Value Measurements and Disclosures	(SFAS 157) for $75 million,

See Notes 1, 26 and 27 to the Consolidated Financial Statements.

(4) All open market repurchases were transacted under an existing authorized share repurchase plan and relate to customer fails/errors.

(5) The after-tax adjustment to the opening balance of Accumulated other comprehensive income (loss) represents the reclassification of the unrealized gains (losses) related to the Legg Mason securities as well as several miscellaneous items previously reported. The related unrealized gains and losses were reclassified to Retained earnings upon the adoption of the fair value option. See Notes 1, 26 and 27 to the Consolidated Financial Statements for further discussion.

(6) In 2009, reflects decreased return on assets for the U.S. plan. In 2008, reflects decreased fair value of plan assets and a lower discount rate, which increased the PBO (Projected Benefit Obligation). In 2007, reflects changes in the funded status of the Company's pension and postretirement plans.

# CONSOLIDATED STATEMENT OF CASH FLOWS

| In millions of dollars | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Cash flows from operating activities of continuing operations |  |  |  |
| Net income (loss) before attribution of noncontrolling interests | $(1,511) | $(28,027) | $3,900 |
| Net income (loss) attributable to noncontrolling interests | 95 | (343) | 283 |
| Citigroup's net income (loss) | $(1,606) | $(27,684) | $3,617 |
| Income (loss) from discontinued operations, net of taxes | (402) | 1,070 | 708 |
| Gain (loss) on sale, net of taxes | (43) | 2,932 | — |
| Income (loss) from continuing operations—excluding noncontrolling interests | $(1,161) | $(31,686) | $2,909 |
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities of continuing operations |  |  |  |
| Amortization of deferred policy acquisition costs and present value of future profits | $434 | $206 | $369 |
| Additions to deferred policy acquisition costs | (461) | (397) | (482) |
| Depreciation and amortization | 2,853 | 2,466 | 2,421 |
| Deferred tax benefit | (7,709) | (20,535) | (3,927) |
| Provision for credit losses | 39,004 | 33,311 | 16,982 |
| Change in trading account assets | 25,864 | 123,845 | (62,798) |
| Change in trading account liabilities | (25,382) | (14,604) | 20,893 |
| Change in federal funds sold and securities borrowed or purchased under agreements to resell | (43,726) | 89,933 | 38,143 |
| Change in federal funds purchased and securities loaned or sold under agreements to repurchase | (47,669) | (98,950) | (56,983) |
| Change in brokerage receivables net of brokerage payables | 1,847 | (954) | (15,529) |
| Realized gains from sales of investments | (1,996) | (679) | (1,168) |
| Change in loans held-for-sale | (1,711) | 29,009 | (30,649) |
| Other, net | 4,094 | (14,445) | 18,268 |
| Total adjustments | $(54,558) | $ 128,206 | $(74,460) |
| Net cash (used in) provided by operating activities of continuing operations | $(55,719) | $96,520 | $(71,551) |
| Cash flows from investing activities of continuing operations |  |  |  |
| Change in deposits with banks | $2,519 | $(100,965) | $(17,216) |
| Change in loans | (148,651) | (270,521) | (361,934) |
| Proceeds from sales and securitizations of loans | 241,367 | 313,808 | 273,464 |
| Purchases of investments | (281,115) | (344,336) | (274,426) |
| Proceeds from sales of investments | 85,395 | 93,666 | 211,753 |
| Proceeds from maturities of investments | 133,614 | 209,312 | 121,346 |
| Capital expenditures on premises and equipment | (1,146) | (2,541) | (4,003) |
| Proceeds from sales of premises and equipment, subsidiaries and affiliates, and repossessed assets | 6,303 | 23,966 | 4,253 |
| Business acquisitions | — | — | (15,614) |
| Net cash provided by (used in) investing activities of continuing operations | $38,286 | $(77,611) | $(62,377) |
| Cash flows from financing activities of continuing operations |  |  |  |
| Dividends paid | $(3,237) | $(7,526) | $(10,778) |
| Issuance of common stock | 17,514 | 6,864 | 1,060 |
| Issuances (redemptions) of preferred stock, net | — | 70,626 | (1,000) |
| Issuances of T-DECs - APIC | 2,784 | — | — |
| Treasury stock acquired | (3) | (7) | (663) |
| Stock tendered for payment of withholding taxes | (120) | (400) | (951) |
| Issuance of long-term debt | 110,088 | 90,414 | 118,496 |
| Payments and redemptions of long-term debt | (123,743) | (132,901) | (65,517) |
| Change in deposits | 61,718 | (37,811) | 93,422 |
| Change in short-term borrowings | (51,995) | (13,796) | 10,425 |
| Net cash provided by (used in) financing activities of continuing operations | $13,006 | $(24,537) | $ 144,494 |
| Effect of exchange rate changes on cash and cash equivalents | $632 | $(2,948) | $1,005 |
| Discontinued operations |  |  |  |
| Net cash provided by (used in) discontinued operations | $14 | $(377) | $121 |
| Change in cash and due from banks | $(3,781) | $(8,953) | $11,692 |
| Cash and due from banks at beginning of period | 29,253 | 38,206 | 26,514 |
| Cash and due from banks at end of period | $25,472 | $29,253 | $38,206 |
| Supplemental disclosure of cash flow information for continuing operations |  |  |  |
| Cash (received) paid during the year for income taxes | $(289) | $3,170 | $5,923 |
| Cash paid during the year for interest | $28,389 | $55,678 | $72,732 |
| Non-cash investing activities |  |  |  |
| Transfers to repossessed assets | $2,880 | $3,439 | $2,287 |
| Transfers to investments (held-to-maturity) from trading account assets | — | 33,258 | — |
| Transfers to investments (available-for-sale) from trading account assets | — | 4,654 | — |
| Transfers to loans held for investment (loans) from loans held-for-sale | — | $15,891 | — |

# CITIBANK CONSOLIDATED BALANCE SHEET

# Citibank, N.A. and Subsidiaries

|  |  | December 31 |
| :--- | :--- | :--- |
| In millions of dollars, except shares | 2009 | 2008 |
| Assets |  |  |
| Cash and due from banks | $20,246 | $22,107 |
| Deposits with banks | 154,372 | 156,774 |
| Federal funds sold and securities purchased under agreements to resell | 31,434 | 41,613 |
| Trading account assets (including $914 and $12,092 pledged to creditors at December 31, 2009 and December 31, 2008, respectively) | 156,380 | 197,052 |
| Investments (including $3,849 and $3,028 pledged to creditors at December 31, 2009 and December 31, 2008, respectively) | 233,086 | 165,914 |
| Loans, net of unearned income | 477,974 | 555,198 |
| Allowance for loan losses | (22,685) | (18,273) |
| Total loans, net | $455,289 | $536,925 |
| Goodwill | 10,200 | 10,148 |
| Intangible assets | 8,243 | 7,689 |
| Premises and equipment, net | 4,832 | 5,331 |
| Interest and fees receivable | 6,840 | 7,171 |
| Other assets | 80,439 | 76,316 |
| Total assets | $1,161,361 | $1,227,040 |
| Liabilities |  |  |
| Non-interest-bearing deposits in U.S. offices | $76,729 | $55,223 |
| Interest-bearing deposits in U.S. offices | 176,149 | 185,322 |
| Non-interest-bearing deposits in offices outside the U.S. | 39,414 | 33,769 |
| Interest-bearing deposits in offices outside the U.S. | 479,350 | 480,984 |
| Total deposits | $771,642 | $755,298 |
| Trading account liabilities | 52,010 | 108,921 |
| Purchased funds and other borrowings | 89,503 | 116,333 |
| Accrued taxes and other expenses | 9,046 | 8,192 |
| Long-term debt and subordinated notes | 82,086 | 113,381 |
| Other liabilities | 39,181 | 42,475 |
| Total liabilities | $1,043,468 | $1,144,600 |
| Citibank stockholder's equity |  |  |
| Capital stock ($20 par value) outstanding shares: 37,534,553 in each period | $751 | $751 |
| Surplus | 107,923 | 74,767 |
| Retained earnings | 19,457 | 21,735 |
| Accumulated other comprehensive income (loss) (1) | (11,532) | (15,895) |
| Total Citibank stockholder's equity | $116,599 | $81,358 |
| Noncontrolling interest | 1,294 | 1,082 |
| Total equity | $117,893 | $82,440 |
| Total liabilities and equity | $1,161,361 | $1,227,040 |

(1)						Amounts at December 31, 2009 and December 31, 2008 include the after-tax amounts for net unrealized gains (losses) on investment securities of $(4.735) billion and $(8.008) billion, respectively, for foreign currency translation of $(3.255) billion and $(3.964) billion, respectively, for cash flow hedges of $(2.367) billion and $(3.247) billion, respectively, and for pension liability adjustments of $(1.175) billion and $(676) million, respectively.

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

# 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

# Principles of Consolidation

The	Consolidated	Financial	Statements	include	the	accounts	of	Citigroup	and	its subsidiaries	(the	Company).	The	Company	consolidates	subsidiaries	in	which	it holds,	directly	or	indirectly,	more	than	50%	of	the	voting	rights	or	where	it exercises	control.	Entities	where	the	Company	holds	20%	to	50%	of	the	voting rights	and/or	has	the	ability	to	exercise	significant	influence,	other	than investments	of	designated	venture	capital	subsidiaries,	or	investments	accounted for	at	fair	value	under	the	fair	value	option,	are	accounted	for	under	the	equity method,	and	the	pro	rata	share	of	their	income	(loss)	is	included	in	Other revenue.	Income	from	investments	in	less	than	20%-owned	companies	is recognized	when	dividends	are	received.	As	discussed	below,	Citigroup consolidates	entities	deemed	to	be	variable-interest	entities	when	Citigroup	is determined	to	be	the	primary	beneficiary.	Gains	and	losses	on	the	disposition	of branches,	subsidiaries,	affiliates,	buildings,	and	other	investments	and	charges for	management's	estimate	of	impairment	in	their	value	that	is	other	than temporary,	such	that	recovery	of	the	carrying	amount	is	deemed	unlikely,	are included	in	Other	revenue.

	Certain	reclassifications	have	been	made	to	the	prior-period's	financial statements	and	notes	to	conform	to	the	current	period's	presentation.

# Citibank, N.A.

Citibank,	N.A.	is	a	commercial	bank	and	wholly	owned	subsidiary	of	Citigroup Inc.	Citibank's	principal	offerings	include	consumer	finance,	mortgage	lending, and	retail	banking	products	and	services;	investment	banking,	commercial banking,	cash	management,	trade	finance	and	e-commerce	products	and	services; and	private	banking	products	and	services.

	The	Company	includes	a	balance	sheet	and	statement	of	changes	in stockholder's	equity	for	Citibank,	N.A.	to	provide	information	about	this	entity to	shareholders	and	international	regulatory	agencies.	(See	Note	31	to	the Consolidated	Financial	Statements	for	further	discussion.)

# Variable Interest Entities

An	entity	is	referred	to	as	a	variable	interest	entity	(VIE)	if	it	meets	the	criteria outlined	in	ASC	810,	Consolidation	(formerly	FASB	Interpretation	No.	46(R), Consolidation	of	Variable	Interest	Entities	(revised	December	2003)	(FIN 46(R)),	which	are:	(1)	the	entity	has	equity	that	is	insufficient	to	permit	the	entity to	finance	its	activities	without	additional	subordinated	financial	support	from other	parties,	or	(2)	the	entity	has	equity	investors	that	cannot	make	significant decisions	about	the	entity's	operations	or	that	do	not	absorb	their	proportionate share	of	the	expected	losses	or	receive	the	expected	returns	of	the	entity.

	In	addition,	a	VIE	must	be	consolidated	by	the	Company	if	it	is	deemed	to be	the	primary	beneficiary	of	the	VIE,	which	is	the	party	involved	with	the	VIE that	has	a	majority	of	the	expected	losses	or	a	majority	of	the	expected	residual returns	or	both.

	Along	with	the	VIEs	that	are	consolidated	in	accordance	with	these guidelines,	the	Company	has	significant	variable	interests	in	other	VIEs	that	are not	consolidated	because	the	Company	is	not	the	primary	beneficiary.

These	include	multi-seller	finance	companies,	certain	collateralized	debt obligations	(CDOs),	many	structured	finance	transactions,	and	various investment	funds.

	However,	these	VIEs	as	well	as	all	other	unconsolidated	VIEs	are	regularly monitored	by	the	Company	to	determine	if	any	reconsideration	events	have occurred	that	could	cause	its	primary	beneficiary	status	to	change.	These	events include:

additional	purchases	or	sales	of	variable	interests	by	Citigroup	or	an unrelated	third	party,	which	cause	Citigroup's	overall	variable	interest ownership	to	change;

changes	in	contractual	arrangements	in	a	manner	that	reallocates expected	losses	and	residual	returns	among	the	variable	interest holders;	and

providing	support	to	an	entity	that	results	in	an	implicit	variable interest.

	All	other	entities	not	deemed	to	be	VIEs	with	which	the	Company	has involvement	are	evaluated	for	consolidation	under	other	subtopics	of	ASC	810 (formerly	Accounting	Research	Bulletin	(ARB)	No.	51,	Consolidated	Financial Statements,	SFAS	No.	94,	Consolidation	of	All	Majority-Owned	Subsidiaries, and	EITF	Issue	No.	04-5,	"Determining	Whether	a	General	Partner,	or	the General	Partners	as	a	Group,	Controls	a	Limited	Partnership	or	Similar	Entity When	the	Limited	Partners	Have	Certain	Rights.")

# Foreign Currency Translation

Assets	and	liabilities	denominated	in	foreign	currencies	are	translated	into	U.S. dollars	using	year-end	spot	foreign-exchange	rates.	Revenues	and	expenses	are translated	monthly	at	amounts	that	approximate	weighted	average	exchange rates,	with	resulting	transaction	gains	and	losses	included	in	income.	The	effects of	translating	net	assets	with	a	functional	currency	other	than	the	U.S.	dollar	are included	in	a	separate	component	of	stockholders'	equity	along	with	related hedge	and	tax	effects.	The	effects	of	translating	income	from	transactions denominated	in	foreign	currency	subsidiaries	with	the	U.S.	dollar	as	the functional	currency,	including	those	in	highly	inflationary	environments,	are primarily	included	in	Other	revenue	along	with	the	related	hedge	effects.	Hedges of	foreign	currency	exposures	include	forward	foreign	currency,	option	and swap	contracts	and	designated	issues	of	non-U.S.	dollar	debt.

# Investment Securities

Investments	include	fixed	income	and	equity	securities.	Fixed	income instruments	include	bonds,	notes	and	redeemable	preferred	stocks,	as	well	as certain	loan-backed	and	structured	securities	that	are	subject	to	prepayment	risk. Equity	securities	include	common	and	nonredeemable	preferred	stocks. Investment	securities	are	classified	and	accounted	for	as	follows:

Fixed	income	securities	classified	as	"held-to-maturity"	represent securities	that	the	Company	has	both	the	ability	and	the	intent	to	hold until	maturity,	and	are	carried	at	amortized	cost.	Interest	income	on such	securities	is	included	in	Interest	revenue.

Fixed	income	securities	and	marketable	equity	securities	classified	as "available-for-sale"	are	carried	at	fair	value	with	changes	in	fair	value reported	in	a	separate	component	of	Stockholders'	equity,	net	of applicable	income	taxes.	As	set	out	in	Note	16	to	the	Consolidated Financial	Statements,	declines	in	fair	value	that	are	determined	to	be other	than	temporary	are	recorded	in	earnings	immediately.	Realized gains	and	losses	on	sales	are	included	in	income	primarily	on	a specific	identification	cost	basis,	and	interest	and	dividend	income	on such	securities	is	included	in	Interest	revenue.

Venture	capital	investments	held	by	Citigroup's	private	equity subsidiaries	that	are	considered	investment	companies	are	carried	at fair	value	with	changes	in	fair	value	reported	in	Other	revenue.	These subsidiaries	include	entities	registered	as	Small	Business	Investment Companies	and	engage	exclusively	in	venture	capital	activities. Certain	investments	in	non-marketable	equity	securities	and	certain investments	that	would	otherwise	have	been	accounted	for	using	the equity	method	are	carried	at	fair	value,	since	the	Company	has	elected to	apply	fair	value	accounting.	Changes	in	fair	value	of	such investments	are	recorded	in	earnings.

Certain	non-marketable	equity	securities	are	carried	at	cost	and periodically	assessed	for	other-than-temporary	impairment,	as	set	out in	Note	16	to	the	Consolidated	Financial	Statements.

	For	investments	in	fixed-income	securities	classified	as	held-to-maturity	or available-for-sale,	accrual	of	interest	income	is	suspended	for	investments	that are	in	default	or	on	which	it	is	likely	that	future	interest	payments	will	not	be made	as	scheduled.

	The	Company	uses	a	number	of	valuation	techniques	for	investments carried	at	fair	value,	which	are	described	in	Note	26	to	the	Consolidated Financial	Statements.

# Trading Account Assets and Liabilities

Trading	account	assets	include	debt	and	marketable	equity	securities, derivatives	in	a	receivable	position,	residual	interests	in	securitizations	and physical	commodities	inventory.	In	addition	(as	set	out	in	Note	27	to	the Consolidated	Financial	Statements),	certain	assets	that	Citigroup	has	elected	to carry	at	fair	value	under	the	fair	value	option,	such	as	loans	and	purchased guarantees,	are	also	included	in	Trading	account	assets.

	Trading	account	liabilities	include	securities	sold,	not	yet	purchased	(short positions),	and	derivatives	in	a	net	payable	position,	as	well	as	certain	liabilities that	Citigroup	has	elected	to	carry	at	fair	value,	as	set	out	in	Note	27	to	the Consolidated	Financial	Statements.

	Other	than	physical	commodities	inventory,	all	trading	account	assets	and liabilities	are	carried	at	fair	value.	Revenues	generated	from	trading	assets	and trading	liabilities	are	generally	reported	in	Principal	transactions	and	include realized	gains	and	losses	as	well	as	unrealized	gains	and	losses	resulting	from changes	in	the	fair	value	of	such	instruments.	Interest	income	on	trading	assets	is recorded	in	Interest	revenue	reduced	by	interest	expense	on	trading	liabilities.

	Physical	commodities	inventory	is	carried	at	the	lower	of	cost	or	market (LOCOM)	with	related	gains	or	losses	reported	in	Principal	transactions. Realized	gains	and	losses	on	sales	of	commodities	inventory	are	included	in Principal	transactions	on	a	"first	in,	first	out"	basis.

	Derivatives	used	for	trading	purposes	include	interest	rate,	currency,	equity, credit,	and	commodity	swap	agreements,	options,	caps	and	floors,	warrants,	and financial	and	commodity	futures	and	forward	contracts.	Derivative	asset	and liability	positions	are	presented	net	by	counterparty	on	the	Consolidated	Balance Sheet	when	a	valid	master	netting	agreement	exists	and	the	other	conditions	set out	in	ASC	210-20,	Balance	Sheet—Offsetting	(formerly	FASB	Interpretation No.	39,	"Offsetting	of	Amounts	Related	to	Certain	Contracts")	are	met. 	The	Company	uses	a	number	of	techniques	to	determine	the	fair	value	of trading	assets	and	liabilities,	all	of	which	are	described	in	Note	26	to	the Consolidated	Financial	Statements.

# Securities Borrowed and Securities Loaned

Securities	borrowing	and	lending	transactions	generally	do	not	constitute	a	sale of	the	underlying	securities	for	accounting	purposes,	and	so	are	treated	as collateralized	financing	transactions	when	the	transaction	involves	the	exchange of	cash.	Such	transactions	are	recorded	at	the	amount	of	cash	advanced	or received	plus	accrued	interest.	As	set	out	in	Note	27	to	the	Consolidated Financial	Statements,	the	Company	has	elected	to	apply	fair	value	accounting	to a	number	of	securities	borrowing	and	lending	transactions.	Irrespective	of whether	the	Company	has	elected	fair	value	accounting,	fees	paid	or	received	for all	securities	lending	and	borrowing	transactions	are	recorded	in	Interest	expense or	Interest	revenue	at	the	contractually	specified	rate.

	Where	the	conditions	of	ASC	210-20	are	met,	amounts	recognized	in respect	of	securities	borrowed	and	securities	loaned	are	presented	net	on	the Consolidated	Balance	Sheet.

	With	respect	to	securities	borrowed	or	loaned,	the	Company	pays	or receives	cash	collateral	in	an	amount	in	excess	of	the	market	value	of	securities borrowed	or	loaned.	The	Company	monitors	the	market	value	of	securities borrowed	and	loaned	on	a	daily	basis	with	additional	collateral	received	or	paid as	necessary.

	As	described	in	Note	26	to	the	Consolidated	Financial	Statements,	the Company	uses	a	discounted	cash	flow	technique	to	determine	the	fair	value	of securities	lending	and	borrowing	transactions.

# Repurchase and Resale Agreements

Securities	sold	under	agreements	to	repurchase	(repos)	and	securities	purchased under	agreements	to	resell	(reverse	repos)	generally	do	not	constitute	a	sale	for accounting	purposes	of	the	underlying	securities,	and	so	are	treated	as collateralized	financing	transactions.	As	set	out	in	Note	27	to	the	Consolidated Financial	Statements,	the	Company	has	elected	to	apply	fair	value	accounting	to a	majority	of	such	transactions,	with	changes	in	fair	value	reported	in	earnings. Any	transactions	for	which	fair	value	accounting	has	not	been	elected	are recorded	at	the	amount	of	cash	advanced	or	received	plus	accrued	interest. Irrespective	of	whether	the	Company	has	elected	fair	value	accounting,	interest paid	or	received	on	all	repo	and	reverse	repo	transactions	is	recorded	in	Interest expense	or	Interest	revenue	at	the	contractually	specified	rate.

# 	Where	the	conditions	of	ASC	210-20-45-11,	Balance	Sheet—Offsetting:

# Repurchase	and	Reverse	Repurchase	Agreements	(formerly	FASB	Interpretation

No.	41,	"Offsetting	of	Amounts	Related	to	Certain	Repurchase	and	Reverse Repurchase	Agreements"),	are	met,	repos	and	reverse	repos	are	presented	net	on the	Consolidated	Balance	Sheet.

	The	Company's	policy	is	to	take	possession	of	securities	purchased	under agreements	to	resell.	The	market	value	of	securities	to	be	repurchased	and	resold is	monitored,	and	additional	collateral	is	obtained	where	appropriate	to	protect against	credit	exposure.

	As	described	in	Note	26	to	the	Consolidated	Financial	Statements,	the Company	uses	a	discounted	cash	flow	technique	to	determine	the	fair	value	of repo	and	reverse	repo	transactions.

Loans	are	reported	at	their	outstanding	principal	balances	net	of	any	unearned income	and	unamortized	deferred	fees	and	costs	except	that	credit	card receivable	balances	also	include	accrued	interest	and	fees.	Loan	origination	fees and	certain	direct	origination	costs	are	generally	deferred	and	recognized	as adjustments	to	income	over	the	lives	of	the	related	loans.

	As	described	in	Note	27	to	the	Consolidated	Financial	Statements,	the Company	has	elected	fair	value	accounting	for	certain	loans.	Such	loans	are carried	at	fair	value	with	changes	in	fair	value	reported	in	earnings.	Interest income	on	such	loans	is	recorded	in	Interest	revenue	at	the	contractually specified	rate.

	Loans	for	which	the	fair	value	option	has	not	been	elected	are	classified upon	origination	or	acquisition	as	either	held-for-investment	or	held-for-sale. This	classification	is	based	on	management's	initial	intent	and	ability	with	regard to	those	loans.

	Loans	that	are	held-for-investment	are	classified	as	Loans,	net	of	unearned income	on	the	Consolidated	Balance	Sheet,	and	the	related	cash	flows	are included	within	the	cash	flows	from	investing	activities	category	in	the Consolidated	Statement	of	Cash	Flows	on	the	line	Change	in	loans.	However, when	the	initial	intent	for	holding	a	loan	has	changed	from	held-for-investment to	held-for-sale,	the	loan	is	reclassified	to	held-for-sale,	but	the	related	cash	flows continue	to	be	reported	in	cash	flows	from	investing	activities	in	the Consolidated	Statement	of	Cash	Flows	on	the	line	Proceeds	from	sales	and securitizations	of	loans.

	Substantially	all	of	the	consumer	loans	sold	or	securitized	by	Citigroup	are U.S.	prime	residential	mortgage	loans	or	U.S.	credit	card	receivables.	The practice	of	the	U.S.	prime	mortgage	business	has	been	to	sell	all	of	its	loans except	for	non-conforming	adjustable	rate	loans.	U.S.	prime	mortgage conforming	loans	are	classified	as	held-for-sale	at	the	time	of	origination.	The related	cash	flows	are	classified	in	the	Consolidated	Statement	of	Cash	Flows	in the	cash	flows	from	operating	activities	category	on	the	line	Change	in	loans held-for-sale.

	U.S.	credit	card	receivables	are	classified	at	origination	as	loans-held-for- sale	to	the	extent	that	management	does	not	have	the	intent	to	hold	the receivables	for	the	foreseeable	future	or	until	maturity.	The	U.S.	credit	card securitization	forecast	for	the	three	months	following	the	latest	balance	sheet date,	excluding	replenishments,	is	the	basis	for	the	amount	of	such	loans classified	as	held-for-sale.

Cash	flows	related	to	U.S.	credit	card	loans	classified	as	held-for-sale	at origination	or	acquisition	are	reported	in	the	cash	flows	from	operating	activities category	on	the	line	Change	in	loans	held-for-sale.

# Consumer	loans

Consumer	loans	represent	loans	and	leases	managed	primarily	by	the	Regional Consumer	Banking	and	Local	Consumer	Lending	businesses.	As	a	general	rule, interest	accrual	ceases	for	installment	and	real	estate	(both	open-	and	closed-end) loans	when	payments	are	90	days	contractually	past	due.	For	credit	cards	and unsecured	revolving	loans,	however,	the	Company	generally	accrues	interest until	payments	are	180	days	past	due.	Loans	that	have	been	modified	to	grant	a short-term	or	long-term	concession	to	a	borrower	who	is	in	financial	difficulty may	not	be	accruing	interest	at	the	time	of	the	modification.	The	policy	for returning	such	modified	loans	to	accrual	status	varies	by	product	and/or	region. In	most	cases,	a	minimum	number	of	payments	(ranging	from	one	to	six)	are required,	while	in	other	cases	the	loan	is	never	returned	to	accrual	status. 	Citi's	charge-off	policies	follow	the	general	guidelines	below:

Unsecured	installment	loans	are	charged	off	at	120	days	past	due. Unsecured	revolving	loans	and	credit	card	loans	are	charged	off	at 180	days	contractually	past	due.

Loans	secured	with	non-real	estate	collateral	are	written	down	to	the estimated	value	of	the	collateral,	less	costs	to	sell,	at	120	days	past due.

Real	estate-secured	loans	are	written	down	to	the	estimated	value	of the	property,	less	costs	to	sell,	at	180	days	contractually	past	due. Non-bank	loans	secured	by	real	estate	are	written	down	to	the estimated	value	of	the	property,	less	costs	to	sell,	at	the	earlier	of	the receipt	of	title	or	12	months	in	foreclosure	(a	process	that	must commence	when	payments	are	120	days	contractually	past	due). Non-bank	auto	loans	are	written	down	to	the	estimated	value	of	the collateral,	less	costs	to	sell,	at	repossession	or,	if	repossession	is	not pursued,	no	later	than	180	days	contractually	past	due.

Non-bank	unsecured	personal	loans	are	charged	off	when	the	loan	is 180	days	contractually	past	due	if	there	have	been	no	payments	within the	last	six	months,	but	in	no	event	can	these	loans	exceed	360	days contractually	past	due.

Unsecured	loans	in	bankruptcy	are	charged	off	within	30	days	of notification	of	filing	by	the	bankruptcy	court	or	within	the	contractual write-off	periods,	whichever	occurs	earlier.

Real	estate-secured	loans	in	bankruptcy	are	written	down	to	the estimated	value	of	the	property,	less	costs	to	sell,	60	days	after notification	if	the	borrower	is	60	days	contractually	past	due. Non-bank	unsecured	personal	loans	in	bankruptcy	are	charged	off when	they	are	30	days	contractually	past	due.

# Corporate	loans

Corporate	loans	represent	loans	and	leases	managed	by	ICG	or	the	Special	Asset Pool.	Corporate	loans	are	identified	as	impaired	and	placed	on	a	cash	(non- accrual)	basis	when	it	is	determined	that	the	payment	of	interest	or	principal	is doubtful	or	when	interest	or	principal	is	90	days	past	due,	except	when	the	loan	is well	collateralized	and	in	the	process	of	collection.	Any	interest	accrued	on impaired	corporate	loans	and	leases	is	reversed	at	90	days	and	charged	against current	earnings,	and	interest	is	thereafter	included	in	earnings	only	to	the	extent actually	received	in	cash.	When	there	is	doubt	regarding	the	ultimate collectability	of	principal,	all	cash	receipts	are	thereafter	applied	to	reduce	the recorded	investment	in	the	loan.

	Impaired	corporate	loans	and	leases	are	written	down	to	the	extent	that principal	is	judged	to	be	uncollectible.	Impaired	collateral-dependent	loans	and leases,	where	repayment	is	expected	to	be	provided	solely	by	the	sale	of	the underlying	collateral	and	there	are	no	other	available	and	reliable	sources	of repayment,	are	written	down	to	the	lower	of	cost	or	collateral	value.	Cash-basis loans	are	returned	to	an	accrual	status	when	all	contractual	principal	and	interest amounts	are	reasonably	assured	of	repayment	and	there	is	a	sustained	period	of repayment	performance	in	accordance	with	the	contractual	terms.

# Loans Held-for-Sale

Corporate	and	consumer	loans	that	have	been	identified	for	sale	are	classified	as loans	held-for-sale	included	in	Other	assets.	With	the	exception	of	certain mortgage	loans	for	which	the	fair	value	option	has	been	elected,	these	loans	are accounted	for	at	the	lower	of	cost	or	market	value	(LOCOM),	with	any	write- downs	or	subsequent	recoveries	charged	to	Other	revenue.

# Allowance for Loan Losses

Allowance	for	loan	losses	represents	management's	best	estimate	of	probable losses	inherent	in	the	portfolio,	as	well	as	probable	losses	related	to	large individually	evaluated	impaired	loans	and	troubled	debt	restructurings. Attribution	of	the	allowance	is	made	for	analytical	purposes	only,	and	the	entire allowance	is	available	to	absorb	probable	credit	losses	inherent	in	the	overall portfolio.	Additions	to	the	allowance	are	made	through	the	provision	for	credit losses.	Credit	losses	are	deducted	from	the	allowance,	and	subsequent	recoveries are	added.	Securities	received	in	exchange	for	loan	claims	in	debt	restructurings are	initially	recorded	at	fair	value,	with	any	gain	or	loss	reflected	as	a	recovery or	charge-off	to	the	allowance,	and	are	subsequently	accounted	for	as	securities available-for-sale.

In	the	Corporate	portfolios,	the	allowance	for	loan	losses	includes	an	asset- specific	component	and	a	statistically-based	component.	The	asset	specific component	is	calculated	under	ASC	310-10-35,	Receivables—Subsequent Measurement	(formerly	SFAS	114)	on	an	individual	basis	for	larger-balance, non-homogeneous	loans,	which	are	considered	impaired.	An	asset-specific allowance	is	established	when	the	discounted	cash	flows,	collateral	value	(less disposal	costs),	or	observable	market	price	of	the	impaired	loan	is	lower	than	its carrying	value.	This	allowance	considers	the	borrower's	overall	financial condition,	resources,	and	payment	record,	the	prospects	for	support	from	any financially	responsible	guarantors	and,	if	appropriate,	the	realizable	value	of	any collateral.	The	asset	specific	component	of	the	allowance	for	smaller	balance impaired	loans	is	calculated	on	a	pool	basis	considering	historical	loss experience.	The	allowance	for	the	remainder	of	the	loan	portfolio	is	calculated under	ASC	450,	Contingencies	(formerly	SFAS	5)	using	a	statistical methodology,	supplemented	by	management	judgment.	The	statistical	analysis considers	the	portfolio's	size,	remaining	tenor,	and	credit	quality	as	measured	by internal	risk	ratings	assigned	to	individual	credit	facilities,	which	reflect probability	of	default	and	loss	given	default.	The	statistical	analysis	considers historical	default	rates	and	historical	loss	severity	in	the	event	of	default, including	historical	average	levels	and	historical	variability.	The	result	is	an estimated	range	for	inherent	losses.	The	best	estimate	within	the	range	is	then determined	by	management's	quantitative	and	qualitative	assessment	of	current conditions,	including	general	economic	conditions,	specific	industry	and geographic	trends,	and	internal	factors	including	portfolio	concentrations,	trends in	internal	credit	quality	indicators,	and	current	and	past	underwriting	standards.

For	Consumer	loans,	each	portfolio	of	smaller-balance,	homogeneous	loans— including	consumer	mortgage,	installment,	revolving	credit,	and	most	other consumer	loans—is	independently	evaluated	for	impairment.	The	allowance	for loan	losses	attributed	to	these	loans	is	established	via	a	process	that	estimates	the probable	losses	inherent	in	the	specific	portfolio	based	upon	various	analyses. These	include	migration	analysis,	in	which	historical	delinquency	and	credit	loss experience	is	applied	to	the	current	aging	of	the	portfolio,	together	with	analyses that	reflect	current	trends	and	conditions.

	Management	also	considers	overall	portfolio	indicators,	including	historical credit	losses,	delinquent,	non-performing,	and	classified	loans,	trends	in	volumes and	terms	of	loans,	an	evaluation	of	overall	credit	quality,	the	credit	process, including	lending	policies	and	procedures,	and	economic,	geographical,	product and	other	environmental	factors.

	In	addition,	valuation	allowances	are	determined	for	impaired	smaller- balance	homogeneous	loans	whose	terms	have	been	modified	due	to	the borrowers'	financial	difficulties	and	where	it	has	been	determined	that	a concession	will	be	granted	to	the	borrower.	Such	modifications	may	include interest	rate	reductions,	principal	forgiveness	and/or	term	extensions.	Where long-term	concessions	have	been	granted,	such	modifications	are	accounted	for

as	"Troubled	Debt	Restructurings"	(TDRs).	The	allowance	for	loan	losses	for TDRs	is	determined	by	comparing	expected	cash	flows	of	the	loans	discounted at	the	loans'	original	effective	interest	rates	to	the	carrying	value	of	the	loans. Where	short-term	concessions	have	been	granted,	the	allowance	for	loan	losses is	calculated	by	the	analyses	described	above	for	smaller-balance,	homogeneous loans	and	also	reflects	the	estimated	future	credit	losses	for	those	loans.

# Reserve Estimates and Policies

Management	provides	reserves	for	an	estimate	of	probable	losses	inherent	in	the funded	loan	portfolio	on	the	balance	sheet	in	the	form	of	an	allowance	for	loan losses.	These	reserves	are	established	in	accordance	with	Citigroup's	Credit Reserve	Policies,	as	approved	by	the	Audit	Committee	of	the	Company's	Board of	Directors.	The	Company's	Chief	Risk	Officer	and	Chief	Financial	Officer review	the	adequacy	of	the	credit	loss	reserves	each	quarter	with	representatives from	the	Risk	Management	and	Finance	staffs	for	each	applicable	business	area. 	The	above-mentioned	representatives	covering	the	business	areas	having classifiably	managed	portfolios,	where	internal	credit-risk	ratings	are	assigned (primarily	ICG,	Regional	Consumer	Banking	and	Local	Consumer	Lending),	or modified	consumer	loans,	where	concessions	were	granted	due	to	the	borrowers' financial	difficulties	present	recommended	reserve	balances	for	their	funded	and unfunded	lending	portfolios	along	with	supporting	quantitative	and	qualitative data.	The	quantitative	data	include:

Estimated	probable	losses	for	non-performing,	non-homogeneous exposures	within	a	business	line's	classifiably	managed	portfolio	and impaired	smaller-balance	homogeneous	loans	whose	terms	have	been modified	due	to	the	borrowers'	financial	difficulties,	and	it	was determined	that	a	long-term	concession	was	granted	to	the	borrower. Consideration	may	be	given	to	the	following,	as	appropriate,	when determining	this	estimate:	(i)	the	present	value	of	expected	future	cash flows	discounted	at	the	loan's	original	effective	rate;	(ii)	the borrower's	overall	financial	condition,	resources	and	payment	record; and	(iii)	the	prospects	for	support	from	financially	responsible guarantors	or	the	realizable	value	of	any	collateral.	When	impairment is	measured	based	on	the	present	value	of	expected	future	cash	flows, the	entire	change	in	present	value	is	recorded	in	the	Provision	for	loan losses.

	In	addition,	representatives	from	both	the	Risk	Management	and	Finance staffs	that	cover	business	areas	that	have	delinquency-managed	portfolios containing	smaller	homogeneous	loans	(primarily	the	non-commercial	lending areas	of	Regional	Consumer	Banking)	present	their	recommended	reserve balances	based	upon	leading	credit	indicators,	including	loan	delinquencies	and changes	in	portfolio	size	as	well	as	economic	trends	including	housing	prices, unemployment	and	GDP.	This	methodology	is	applied	separately	for	each individual	product	within	each	different	geographic	region	in	which	these portfolios	exist.

	This	evaluation	process	is	subject	to	numerous	estimates	and	judgments. The	frequency	of	default,	risk	ratings,	loss	recovery	rates,	the	size	and	diversity of	individual	large	credits,	and	the	ability	of	borrowers	with	foreign	currency obligations	to	obtain	the	foreign	currency	necessary	for	orderly	debt	servicing, among	other	things,	are	all	taken	into	account	during	this	review.	Changes	in these	estimates	could	have	a	direct	impact	on	the	credit	costs	in	any	quarter	and could	result	in	a	change	in	the	allowance.	Changes	to	the	reserve	flow	through the	Consolidated	Statement	of	Income	on	the	lines	Provision	for	loan	losses	and Provision	for	unfunded	lending	commitments.

				Additional	information	on	the	allowance	for	loan	losses	is	included	in	Note	18 to	the	Consolidated	Financial	Statements.

# Allowance for Unfunded Lending Commitments

A	similar	approach	to	the	allowance	for	loan	losses	is	used	for	calculating	a reserve	for	the	expected	losses	related	to	unfunded	loan	commitments	and standby	letters	of	credit.	This	reserve	is	classified	on	the	balance	sheet	in	Other liabilities.

# Mortgage Servicing Rights (MSRs)

Mortgage	servicing	rights	(MSRs)	are	recognized	as	intangible	assets	when purchased	or	when	the	Company	sells	or	securitizes	loans	acquired	through purchase	or	origination	and	retains	the	right	to	service	the	loans.

	Servicing	rights	in	the	U.S.	mortgage	and	student	loan	classes	of	servicing rights	are	accounted	for	at	fair	value,	with	changes	in	value	recorded	in	current earnings.

	Additional	information	on	the	Company's	MSRs	can	be	found	in	Note	23	to the	Consolidated	Financial	Statements.

# Representations and Warranties

When	selling	a	loan,	the	Company	makes	various	representations	and	warranties relating	to,	among	other	things,	the	following:

the	Company's	ownership	of	the	loan;

the	validity	of	the	lien	securing	the	loan;

the	absence	of	delinquent	taxes	or	liens	against	the	property	securing the	loan;

the	effectiveness	of	title	insurance	on	the	property	securing	the	loan; the	process	used	in	selecting	the	loans	for	inclusion	in	a	transaction; the	loan's	compliance	with	any	applicable	loan	criteria	(e.g.,	loan balance	limits,	property	type,	delinquency	status)	established	by	the buyer;	and

the	loan's	compliance	with	applicable	local,	state	and	federal	laws.

	Citigroup's	repurchases	are	primarily	from	Government	Sponsored	Entities. The	specific	representations	and	warranties	made	by	the	Company	depend	on	the nature	of	the	transaction	and	the	requirements	of	the	buyer.	Market	conditions and	credit-ratings	agency	requirements	may	also	affect	representations	and warranties	and	the	other	provisions	the	Company	may	agree	to	in	loan	sales. 	In	the	event	of	a	breach	of	the	representations	and	warranties,	the	Company may	be	required	to	either	repurchase	the	mortgage	loans	(generally	at	unpaid principal	balance	plus	accrued	interest)	with	the	identified	defects	or	indemnify ("make-whole")	the	investor	or	insurer.	The	Company	has	recorded	a	repurchase reserve	that	is	included	in	Other	liabilities	in	the	Consolidated	Balance	Sheet.	In the	case	of	a	repurchase,	the	Company	will	bear	any	subsequent	credit	loss	on the	mortgage	loans.	The	Company's	representations	and	warranties	are	generally not	subject	to	stated	limits	in	amount	or	time	of	coverage.	However,	contractual liability	arises	only	when	the	representations	and	warranties	are	breached	and generally	only	when	a	loss	results	from	the	breach.	In	the	case	of	a	repurchase, the	loan	is	typically	considered	a	credit-impaired	loan	and	accounted	for	under SOP	03-3,	"Accounting	for	Certain	Loans	and	Debt	Securities,	Acquired	in	a Transfer"	(now	incorporated	into	ASC	310-30,	Receivables—Loans	and	Debt Securities	Acquired	with	Deteriorated	Credit	Quality).	These	repurchases	have not	had	a	material	impact	on	nonperforming	loan	statistics,	because	credit- impaired	purchased	SOP	03-3	loans	are	not	included	in	nonaccrual	loans.

	The	Company	estimates	its	exposure	to	losses	from	its	obligation	to repurchase	previously	sold	loans	based	on	the	probability	of	repurchase	or	make- whole	and	an	estimated	loss	given	repurchase	or	make-whole.	This	estimate	is calculated	separately	by	sales	vintage	(i.e.,	the	year	the	loans	were	sold)	based on	a	combination	of	historical	trends	and	forecasted	repurchases	and	losses considering	the:	(1)	trends	in	requests	by	investors	for	loan	documentation packages	to	be	reviewed;	(2)	trends	in	recent	repurchases	and	make-wholes;	(3) historical	percentage	of	claims	made	as	a	percentage	of	loan	documentation package	requests;	(4)	success	rate	in	appealing	claims;	(5)	inventory	of unresolved	claims;	and	(6)	estimated	loss	given	repurchase	or	make-whole, including	the	loss	of	principal,	accrued	interest,	and	foreclosure	costs.	The Company	does	not	change	its	estimation	methodology	by	counterparty,	but	the historical	experience	and	trends	are	considered	when	evaluating	the	overall reserve.

	The	request	for	loan	documentation	packages	is	an	early	indicator	of	a potential	claim.	During	2009,	loan	documentation	package	requests	and	the	level of	outstanding	claims	increased.	In	addition,	our	loss	severity	estimates increased	during	2009	due	to	the	impact	of	macroeconomic	factors	and	recent experience.	These	factors	contributed	to	a	$493	million	change	in	estimate	for this	reserve	in	2009.

	As	indicated	above,	the	repurchase	reserve	is	calculated	by	sales	vintage. The	majority	of	the	repurchases	in	2009	were	from	the	2006	and	2007	sales vintages,	which	also	represent	the	vintages	with	the	largest	loss-given- repurchase.	An	insignificant	percentage	of	2009	repurchases	were	from	vintages prior	to	2006,	and	this	is	expected	to	decrease,	because	those

vintages	are	later	in	the	credit	cycle.	Although	early	in	the	credit	cycle,	the Company	has	experienced	improved	repurchase	and	loss-given-repurchase statistics	from	the	2008	and	2009	vintages.

	In	the	case	of	a	repurchase	of	a	credit-impaired	SOP	03-3	loan	(now incorporated	into	ASC	310-30),	the	difference	between	the	loan's	fair	value	and unpaid	principal	balance	at	the	time	of	the	repurchase	is	recorded	as	a	utilization of	the	repurchase	reserve.	Payments	to	make	the	investor	whole	are	also	treated as	utilizations	and	charged	directly	against	the	reserve.	The	provision	for estimated	probable	losses	arising	from	loan	sales	is	recorded	as	an	adjustment	to the	gain	on	sale,	which	is	included	in	Other	revenue	in	the	Consolidated Statement	of	Income.	A	liability	for	representations	and	warranties	is	estimated when	the	Company	sells	loans	and	is	updated	quarterly.	Any	subsequent adjustment	to	the	provision	is	recorded	in	Other	revenue	in	the	Consolidated Statement	of	Income.

	The	activity	in	the	repurchase	reserve	for	the	years	ended	December	31, 2009	and	2008	is	as	follows:

| In millions of dollars | 2009							2008 | 2009							2008 |
| :--- | :--- | :--- |
| Balance, beginning of the year | $75 | $2 |
| Additions for new sales | 33 | 23 |
| Change in estimate | 493 | 59 |
| Utilizations | (119) | (9) |
| Balance, end of the year | $ 482 | $75 |

Goodwill	represents	an	acquired	company's	acquisition	cost	over	the	fair	value of	net	tangible	and	intangible	assets	acquired.	Goodwill	is	subject	to	annual impairment	tests,	whereby	Goodwill	is	allocated	to	the	Company's	reporting units	and	an	impairment	is	deemed	to	exist	if	the	carrying	value	of	a	reporting unit	exceeds	its	estimated	fair	value.	Furthermore,	on	any	business	dispositions, Goodwill	is	allocated	to	the	business	disposed	of	based	on	the	ratio	of	the	fair value	of	the	business	disposed	of	to	the	fair	value	of	the	reporting	unit.

# Intangible Assets

Intangible	assets—including	core	deposit	intangibles,	present	value	of	future profits,	purchased	credit	card	relationships,	other	customer	relationships,	and other	intangible	assets,	but	excluding	MSRs—are	amortized	over	their	estimated useful	lives.	Intangible	assets	deemed	to	have	indefinite	useful	lives,	primarily certain	asset	management	contracts	and	trade	names,	are	not	amortized	and	are subject	to	annual	impairment	tests.	An	impairment	exists	if	the	carrying	value	of the	indefinite-lived	intangible	asset	exceeds	its	fair	value.	For	other	Intangible assets	subject	to	amortization,	an	impairment	is	recognized	if	the	carrying amount	is	not	recoverable	and	exceeds	the	fair	value	of	the	Intangible	asset.

# Other Assets and Other Liabilities

Other	assets	include,	among	other	items,	loans	held-for-sale,	deferred	tax	assets, equity-method	investments,	interest	and	fees	receivable,	premises	and equipment,	end-user	derivatives	in	a	net	receivable	position,	repossessed	assets, and	other	receivables.

	Other	liabilities	includes,	among	other	items,	accrued	expenses	and	other payables,	deferred	tax	liabilities,	minority	interest,	end-user	derivatives	in	a	net payable	position,	and	reserves	for	legal	claims,	taxes,	restructuring	reserves	for unfunded	lending	commitments,	and	other	matters.

# Repossessed Assets

Upon	repossession,	loans	are	adjusted,	if	necessary,	to	the	estimated	fair	value	of the	underlying	collateral	and	transferred	to	repossessed	assets.	This	is	reported in	Other	assets,	net	of	a	valuation	allowance	for	selling	costs	and	net	declines	in value	as	appropriate.

The	Company	primarily	securitizes	credit	card	receivables	and	mortgages.	Other types	of	securitized	assets	include	corporate	debt	instruments	(in	cash	and synthetic	form)	and	student	loans.

	There	are	two	key	accounting	determinations	that	must	be	made	relating	to securitizations.	First,	in	the	case	where	Citigroup	originated	or	owned	the financial	assets	transferred	to	the	securitization	entity,	a	decision	must	be	made as	to	whether	that	transfer	is	considered	a	sale	under	U.S.	Generally	Accepted Accounting	Principles	(GAAP).	If	it	is	a	sale,	the	transferred	assets	are	removed from	the	Company's	Consolidated	Balance	Sheet	with	a	gain	or	loss	recognized. Alternatively,	when	the	transfer	would	be	considered	to	be	a	financing	rather than	a	sale,	the	assets	will	remain	on	the	Company's	Consolidated	Balance	Sheet with	an	offsetting	liability	recognized	in	the	amount	of	proceeds	received. 	Second,	a	determination	must	be	made	as	to	whether	the	securitization entity	would	be	included	in	the	Company's	Consolidated	Financial	Statements. For	each	securitization	entity	with	which	it	is	involved,	the	Company	makes	a determination	of	whether	the	entity	should	be	considered	a	subsidiary	of	the Company	and	be	included	in	its	Consolidated	Financial	Statements	or	whether the	entity	is	sufficiently	independent	that	it	does	not	need	to	be	consolidated.	If the	securitization	entity's	activities	are	sufficiently	restricted	to	meet	accounting requirements	to	be	a	qualifying	special	purpose	entity	(QSPE),	the	securitization entity	is	not	consolidated	by	the	seller	of	the	transferred	assets.	If	the securitization	entity	is	determined	to	be	a	VIE,	the	Company	consolidates	the VIE	if	it	is	the	primary	beneficiary.

	For	all	other	securitization	entities	determined	not	to	be	VIEs	in	which Citigroup	participates,	a	consolidation	decision	is	made	by	evaluating	several factors,	including	how	much	of	the	entity's	ownership	is	in	the	hands	of	third- party	investors,	who	controls	the	securitization	entity,	and	who	reaps	the	rewards and	bears	the	risks	of	the	entity.	Only	securitization	entities	controlled	by Citigroup	are	consolidated.

	Interests	in	the	securitized	and	sold	assets	may	be	retained	in	the	form	of subordinated	interest-only	strips,	subordinated	tranches,	spread	accounts,	and servicing	rights.	In	credit

card	securitizations,	the	Company	retains	a	seller's	interest	in	the	credit	card receivables	transferred	to	the	trusts,	which	is	not	in	securitized	form. Accordingly,	the	seller's	interest	is	carried	on	a	historical	cost	basis	and classified	as	Consumer	loans.	Retained	interests	in	securitized	mortgage	loans and	student	loans	are	classified	as	Trading	account	assets,	as	is	a	majority	of	the retained	interests	in	securitized	credit	card	receivables.	Certain	other	retained interests	are	recorded	as	available-for-sale	investments,	but	servicing	rights	are recorded	at	fair	value	and	included	in	Intangible	assets.	Gains	or	losses	on securitization	and	sale	depend	in	part	on	the	previous	carrying	amount	of	the loans	involved	in	the	transfer	at	the	date	of	sale.	Gains	are	recognized	at	the	time of	securitization	and	are	reported	in	Other	revenue.

	The	Company	values	its	securitized	retained	interests	at	fair	value	using quoted	market	prices,	if	such	positions	are	actively	traded,	or	financial	models that	incorporate	observable	and	unobservable	inputs.	More	specifically,	these models	estimate	the	fair	value	of	these	retained	interests	by	determining	the present	value	of	expected	future	cash	flows,	using	modeling	techniques	that incorporate	management's	best	estimates	of	key	assumptions,	including prepayment	speeds,	credit	losses	and	discount	rates,	when	observable	inputs	are not	available.	In	addition,	internally	calculated	fair	values	of	retained	interests are	compared	to	recent	sales	of	similar	assets,	if	available.

	Additional	information	on	the	Company's	securitization	activities	can	be found	in	Note	23	to	the	Consolidated	Financial	Statements.

Short-term	borrowings	and	long-term	debt	are	generally	accounted	for	at amortized	cost,	except	where	the	Company	has	elected	to	report	certain structured	notes	at	fair	value.

# Transfers of Financial Assets

For	a	transfer	of	financial	assets	to	be	considered	a	sale:	the	assets	must	have been	isolated	from	the	Company,	even	in	bankruptcy	or	other	receivership;	the purchaser	must	have	the	right	to	sell	the	assets	transferred	or	the	purchaser	must be	a	QSPE;	and	the	Company	may	not	have	an	option	or	any	obligation	to reacquire	the	assets.	If	these	sale	requirements	are	met,	the	assets	are	removed from	the	Company's	Consolidated	Balance	Sheet.	If	the	conditions	for	sale	are not	met,	the	transfer	is	considered	to	be	a	secured	borrowing,	the	assets	remain on	the	Consolidated	Balance	Sheet,	and	the	sale	proceeds	are	recognized	as	the Company's	liability.	A	legal	opinion	on	a	sale	is	generally	obtained	for	complex transactions	or	where	the	Company	has	continuing	involvement	with	assets transferred	or	with	the	securitization	entity.	For	a	transfer	to	be	eligible	for	sale accounting,	those	opinions	must	state	that	the	asset	transfer	is	considered	a	sale and	that	the	assets	transferred	would	not	be	consolidated	with	the	Company's Other	assets	in	the	event	of	the	Company's	insolvency.

					See	Note	23	to	the	Consolidated	Financial	Statements	for	further	discussion.

# Risk Management Activities—Derivatives Used for Non-Trading Purposes

The	Company	manages	its	exposures	to	market	rate	movements	outside	its trading	activities	by	modifying	the	asset	and	liability	mix,	either	directly	or through	the	use	of	derivative	financial	products,	including	interest-rate	swaps, futures,	forwards,	and	purchased-option	positions,	as	well	as	foreign-exchange contracts.	These	end-user	derivatives	are	carried	at	fair	value	in	Other	assets	or Other	liabilities.

					To	qualify	as	a	hedge	under	the	hedge	accounting	rules,	a	derivative	must	be highly	effective	in	offsetting	the	risk	designated	as	being	hedged.

The	hedge	relationship	must	be	formally	documented	at	inception,	detailing	the particular	risk	management	objective	and	strategy	for	the	hedge,	which	includes the	item	and	risk	that	is	being	hedged	and	the	derivative	that	is	being	used,	as well	as	how	effectiveness	will	be	assessed	and	ineffectiveness	measured.	The effectiveness	of	these	hedging	relationships	is	evaluated	on	a	retrospective	and prospective	basis,	typically	using	quantitative	measures	of	correlation	with hedge	ineffectiveness	measured	and	recorded	in	current	earnings.	If	a	hedge relationship	is	found	to	be	ineffective,	it	no	longer	qualifies	as	a	hedge	and	hedge accounting	would	not	be	applied.	Any	gains	or	losses	attributable	to	the derivatives,	as	well	as	subsequent	changes	in	fair	value,	are	recognized	in	Other revenue	with	no	offset	on	the	hedged	item,	similar	to	trading	derivatives. 					The	foregoing	criteria	are	applied	on	a	decentralized	basis,	consistent	with the	level	at	which	market	risk	is	managed,	but	are	subject	to	various	limits	and controls.	The	underlying	asset,	liability	or	forecasted	transaction	may	be	an individual	item	or	a	portfolio	of	similar	items.

					For	fair	value	hedges,	in	which	derivatives	hedge	the	fair	value	of	assets	or liabilities,	changes	in	the	fair	value	of	derivatives	are	reflected	in	Other	revenue, together	with	changes	in	the	fair	value	of	the	related	hedged	risk.	These	are expected	to,	and	generally	do,	offset	each	other.	Any	net	amount,	representing hedge	ineffectiveness,	is	reflected	in	current	earnings.	Citigroup's	fair	value hedges	are	primarily	hedges	of	fixed-rate	long-term	debt,	and	available-for-sale securities.

					For	cash	flow	hedges,	in	which	derivatives	hedge	the	variability	of	cash flows	related	to	floating-	and	fixed-rate	assets,	liabilities	or	forecasted transactions,	the	accounting	treatment	depends	on	the	effectiveness	of	the	hedge. To	the	extent	these	derivatives	are	effective	in	offsetting	the	variability	of	the hedged	cash	flows,	the	effective	portion	of	the	changes	in	the	derivatives'	fair values	will	not	be	included	in	current	earnings,	but	are	reported	in	Accumulated other	comprehensive	income	(loss).	These	changes	in	fair	value	will	be	included in	earnings	of	future	periods	when	the	hedged	cash	flows	impact	earnings.	To the	extent	these	derivatives	are	not	effective,	changes	in	their	fair	values	are immediately	included	in	Other	revenue.	Citigroup's	cash	flow	hedges	primarily include	hedges	of	floating-	and	fixed-rate	debt,	as	well	as	rollovers	of	short-term fixed-rate	liabilities	and	floating-rate	liabilities.

					For	net	investment	hedges	in	which	derivatives	hedge	the	foreign	currency exposure	of	a	net	investment	in	a	foreign	operation,	the	accounting	treatment	will similarly	depend	on	the	effectiveness	of	the	hedge.	The	effective	portion	of	the change	in	fair	value	of	the	derivative,	including	any	forward	premium	or discount,	is	reflected	in	Accumulated	other	comprehensive	income	(loss)	as	part of	the	foreign	currency	translation	adjustment.

					End-user	derivatives	that	are	economic	hedges,	rather	than	qualifying	for hedge	accounting,	are	also	carried	at	fair	value,	with	changes	in	value	included	in Principal	transactions	or	Other	revenue.	Citigroup	often	uses	economic	hedges when	qualifying	for	hedge	accounting	would	be	too	complex	or	operationally burdensome;	examples	are	hedges	of	the	credit	risk	component	of	commercial loans	and	loan	commitments.	Citigroup	periodically	evaluates	its	hedging strategies	in	other	areas	and	may	designate

either	a	qualifying	hedge	or	an	economic	hedge,	after	considering	the	relative cost	and	benefits.	Economic	hedges	are	also	employed	when	the	hedged	item itself	is	marked-to-market	through	current	earnings,	such	as	hedges	of commitments	to	originate	one-to-four-family	mortgage	loans	to	be	held-for-sale and	mortgage	servicing	rights	(MSRs).

					For	those	hedge	relationships	that	are	terminated	or	when	hedge	designations are	removed,	the	hedge	accounting	treatment	described	in	the	paragraphs	above is	no	longer	applied.	Instead,	the	end-user	derivative	is	terminated	or	transferred to	the	trading	account.	For	fair	value	hedges,	any	changes	in	the	fair	value	of	the hedged	item	remain	as	part	of	the	basis	of	the	asset	or	liability	and	are	ultimately reflected	as	an	element	of	the	yield.	For	cash	flow	hedges,	any	changes	in	fair value	of	the	end-user	derivative	remain	in	Accumulated	other	comprehensive income	(loss)	and	are	included	in	earnings	of	future	periods	when	the	hedged cash	flows	impact	earnings.	However,	if	the	hedged	forecasted	transaction	is	no longer	likely	to	occur,	any	changes	in	fair	value	of	the	end-user	derivative	are immediately	reflected	in	Other	revenue.

# Employee Benefits Expense

Employee	benefits	expense	includes	current	service	costs	of	pension	and	other postretirement	benefit	plans,	which	are	accrued	on	a	current	basis,	contributions and	unrestricted	awards	under	other	employee	plans,	the	amortization	of restricted	stock	awards	and	costs	of	other	employee	benefits.

# Stock-Based Compensation

The	Company	recognizes	compensation	expense	related	to	stock	and	option awards	over	the	requisite	service	period	based	on	the	instruments'	grant	date	fair value,	reduced	by	expected	forfeitures.	Compensation	cost	related	to	awards granted	to	employees	who	meet	certain	age	plus	years-of-service	requirements (retirement	eligible	employees)	is	accrued	in	the	year	prior	to	the	grant	date,	in the	same	manner	as	the	accrual	for	cash	incentive	compensation.

The	Company	is	subject	to	the	income	tax	laws	of	the	U.S.,	its	states	and municipalities	and	those	of	the	foreign	jurisdictions	in	which	the	Company operates.	These	tax	laws	are	complex	and	subject	to	different	interpretations	by the	taxpayer	and	the	relevant	governmental	taxing	authorities.	In	establishing	a provision	for	income	tax	expense,	the	Company	must	make	judgments	and interpretations	about	the	application	of	these	inherently	complex	tax	laws.	The Company	must	also	make	estimates	about	when	in	the	future	certain	items	will affect	taxable	income	in	the	various	tax	jurisdictions,	both	domestic	and	foreign. 					Disputes	over	interpretations	of	the	tax	laws	may	be	subject	to review/adjudication	by	the	court	systems	of	the	various	tax	jurisdictions	or	may be	settled	with	the	taxing	authority	upon	examination	or	audit.

					The	Company	implemented	FASB	Interpretation	No.	48,	"Accounting	for Uncertainty	in	Income	Taxes"	(FIN	48)	(now	ASC	740,	Income	Taxes),	on January	1,	2007,	which	sets	out	a	consistent	framework	to	determine	the appropriate	level	of	tax	reserves	to	maintain	for	uncertain	tax	positions.	See "Accounting	Changes."

					The	Company	treats	interest	and	penalties	on	income	taxes	as	a	component of	Income	tax	expense.

					Deferred	taxes	are	recorded	for	the	future	consequences	of	events	that	have been	recognized	for	financial	statements	or	tax	returns,	based	upon	enacted	tax laws	and	rates.	Deferred	tax	assets	are	recognized	subject	to	management's judgment	that	realization	is	more	likely	than	not.

					See	Note	11	to	the	Consolidated	Financial	Statements	for	a	further description	of	the	Company's	provision	and	related	income	tax	assets	and liabilities.

# Commissions, Underwriting and Principal Transactions

Commissions,	underwriting	and	principal	transactions	revenues	and	related expenses	are	recognized	in	income	on	a	trade-date	basis.

# Earnings per Share

Earnings	per	share	(EPS)	is	computed	after	deducting	preferred-stock	dividends. The	Company	has	granted	restricted	and	deferred	share	awards	that	are considered	to	be	participating	securities,	which	constitute	a	second	class	of common	stock.	Accordingly,	a	portion	of	Citigroup's	earnings	is	allocated	to	the second	class	of	common	stock	in	the	EPS	calculation.

					Basic	earnings	per	share	is	computed	by	dividing	income	available	to common	stockholders	after	the	allocation	of	dividends	and	undistributed earnings	to	the	second	class	of	common	stock	by	the	weighted	average	number of	common	shares	outstanding	for	the	period.	Diluted	earnings	per	share	reflects the	potential	dilution	that	could	occur	if	securities	or	other	contracts	to	issue common	stock	were	exercised.	It	is	computed	after	giving	consideration	to	the weighted	average	dilutive	effect	of	the	Company's	stock	options	and	warrants, convertible	securities,	T-DECs,	and	the	shares	that	could	have	been	issued	under the	Company's	Management	Committee	Long-Term	Incentive	Plan	and	after	the allocation	of	earnings	to	the	second	class	of	common	stock.

# Use of Estimates

Management	must	make	estimates	and	assumptions	that	affect	the	Consolidated Financial	Statements	and	the	related	footnote	disclosures.	Such	estimates	are used	in	connection	with	certain	fair	value	measurements.	See	Note	26	to	the Consolidated	Financial	Statements	for	further	discussions	on	estimates	used	in the	determination	of	fair	value.	The	Company	also	uses	estimates	in	determining consolidation	decisions	for	special-purpose	entities	as	discussed	in	Note	23. Moreover,	estimates	are	significant	in	determining	the	amounts	of	other-than- temporary	impairments,	impairments	of	goodwill	and	other	intangible	assets, provisions	for	probable	losses	that	may	arise	from	credit-related	exposures	and probable	and	estimable	losses	related	to	litigation	and	regulatory	proceedings, and	tax	reserves.	While	management	makes	its	best	judgment,	actual	amounts	or results	could	differ	from	those	estimates.	Current	market	conditions	increase	the risk	and	complexity	of	the	judgments	in	these	estimates.

# Cash Flows

Cash	equivalents	are	defined	as	those	amounts	included	in	cash	and	due	from banks.	Cash	flows	from	risk	management	activities	are	classified	in	the	same category	as	the	related	assets	and	liabilities.

# Related Party Transactions

The	Company	has	related	party	transactions	with	certain	of	its	subsidiaries	and affiliates.	These	transactions,	which	are	primarily	short-term	in	nature,	include cash	accounts,	collateralized	financing	transactions,	margin	accounts,	derivative trading,	charges	for	operational	support	and	the	borrowing	and	lending	of	funds, and	are	entered	into	in	the	ordinary	course	of	business.

# ACCOUNTING CHANGES

# FASB Launches Accounting Standards Codification

The	FASB	has	issued	FASB	Statement	No.	168,	The	FASB	Accounting Standards	Codification™	and	the	Hierarchy	of	Generally	Accepted	Accounting Principles	(now	ASC	105,	Generally	Accepted	Accounting	Principles).	The statement	establishes	the	FASB	Accounting	Standards	Codification™ (Codification	or	ASC)	as	the	single	source	of	authoritative	U.S.	generally accepted	accounting	principles	(GAAP)	recognized	by	the	FASB	to	be	applied by	nongovernmental	entities.	Rules	and	interpretive	releases	of	the	Securities	and Exchange	Commission	(SEC)	under	authority	of	federal	securities	laws	are	also sources	of	authoritative	GAAP	for	SEC	registrants.	The	Codification	supersedes all	existing	non-SEC	accounting	and	reporting	standards.	All	other nongrandfathered,	non-SEC	accounting	literature	not	included	in	the Codification	has	become	nonauthoritative.

					Following	the	Codification,	the	Board	will	not	issue	new	standards	in	the form	of	Statements,	FASB	Staff	Positions	or	Emerging	Issues	Task	Force Abstracts.	Instead,	it	will	issue	Accounting	Standards	Updates	(ASU),	which	will serve	to	update	the	Codification,	provide	background	information	about	the guidance	and	provide	the	basis	for	conclusions	on	the	changes	to	the Codification.

					GAAP	is	not	intended	to	be	changed	as	a	result	of	the	FASB's	Codification project,	but	what	does	change	is	the	way	the	guidance	is	organized	and presented.	As	a	result,	these	changes	have	a	significant	impact	on	how companies	reference	GAAP	in	their	financial	statements	and	in	their	accounting policies	for	financial	statements	issued	for	interim	and	annual	periods	ending after	September	15,	2009.

					Citigroup	is	providing	references	to	the	Codification	topics	alongside references	to	the	predecessor	standards.

# Investments in Certain Entities that Calculate Net Asset Value per Share

As	of	December	31,	2009,	the	Company	adopted	Accounting	Standards	Update (ASU)	No.	2009-12,	Investments	in	Certain	Entities	that	Calculate	Net	Asset Value	per	Share	(or	its	Equivalent),	which	provides	guidance	on	measuring	the fair	value	of	certain	alternative	investments.	The	ASU	permits	entities	to	use	net asset	value	as	a	practical	expedient	to	measure	the	fair	value	of	their	investments in	certain	investment	funds.	The	ASU	also	requires	additional	disclosures regarding	the	nature	and	risks	of	such	investments	and	provides	guidance	on	the classification	of	such	investments	as	Level	2	or	Level	3	of	the	fair	value hierarchy.	This	ASU	did	not	have	a	material	impact	on	the	Company's accounting	for	its	investments	in	alternative	investment	funds.

# Interim Disclosures about Fair Value of Financial Instruments

Disclosures	about	Fair	Value	of	Financial	Instruments,	(now	ASC	825-10-50- 10,	Financial	Instruments:	Fair	Value	of	Financial	Instruments).	This	FSP requires	disclosing	qualitative	and	quantitative	information	about	the	fair	value of	all	financial	instruments	on	a	quarterly	basis,	including	methods	and significant	assumptions	used	to	estimate	fair	value	during	the	period.	These disclosures	were	previously	only	done	annually.

					The	disclosures	required	by	this	FSP	were	effective	for	the	quarter	ended June	30,	2009.	This	FSP	has	no	effect	on	how	Citigroup	accounts	for	these instruments.

# Measurement of Fair Value in Inactive Markets

In	April	2009,	the	FASB	issued	FSP	FAS	157-4,	Determining	Fair	Value	When the	Volume	and	Level	of	Activity	for	the	Asset	or	Liability	Have	Significantly Decreased	and	Identifying	Transactions	That	Are	Not	Orderly	(now	ASC	820- 10-35-51A,	Fair	Value	Measurements	and	Disclosures:	Determining	Fair	Value When	the	Volume	and	Level	of	Activity	for	the	Asset	or	Liability	Have Significantly	Decreased).	The	FSP	reaffirms	that	fair	value	is	the	price	that would	be	received	to	sell	an	asset	or	paid	to	transfer	a	liability	in	an	orderly transaction	between	market	participants	at	the	measurement	date	under	current market	conditions.	The	FSP	also	reaffirms	the	need	to	use	judgment	in determining	whether	a	formerly	active	market	has	become	inactive	and	in determining	fair	values	when	the	market	has	become	inactive.	The	adoption	of the	FSP	had	no	effect	on	the	Company's	Consolidated	Financial	Statements.

# Determining Fair Value in Inactive Markets

In	October	2008,	the	FASB	issued	FSP	FAS	157-3,	Determining	Fair	Value	of Financial	Assets	When	the	Market	for	That	Asset	is	Not	Active	(now	ASC	820- 10-35-55A,	Fair	Value	Measurements	and	Disclosures:	Financial	Assets	in	a Market	That	is	Not	Active).	The	FSP	clarifies	that	companies	can	use	internal assumptions	to	determine	the	fair	value	of	a	financial	asset	when	markets	are inactive,	and	do	not	necessarily	have	to	rely	on	broker	quotes.	The	FSP	confirms a	joint	statement	by	the	FASB	and	the	SEC	in	which	they	stated	that	companies can	use	internal	assumptions	when	relevant	market	information	does	not	exist and	provides	an	example	of	how	to	determine	the	fair	value	for	a	financial	asset in	a	non-active	market.	The	FASB	emphasized	that	the	FSP	is	not	new	guidance, but	rather	clarifies	the	principles	in	ASC	820,	Fair	Value	Measurements	and Disclosures	(formerly	SFAS	157).

					Revisions	resulting	from	a	change	in	the	valuation	technique	or	its application	should	be	accounted	for	prospectively	as	a	change	in	accounting estimate.

					The	FSP	was	effective	upon	issuance	and	did	not	have	a	material	impact.

# Measuring Liabilities at Fair Value

As	of	September	30,	2009,	the	Company	adopted	ASU	No.	2009-05,	Measuring Liabilities	at	Fair	Value.	This	ASU	provides	clarification	that	in	circumstances in	which	a	quoted	price	in	an	active	market	for	the	identical	liability	is	not available,	a	reporting	entity	is	required	to	measure	fair	value	using	one	or	more of	the	following	techniques:

					A	valuation	technique	that	uses	quoted	prices	for	similar	liabilities	(or	an identical	liability)	when	traded	as	assets.

					Another	valuation	technique	that	is	consistent	with	the	principles	of	ASC 820.	This	ASU	also	clarifies	that	both	a	quoted	price	in	an	active	market	for	the identical	liability	at	the	measurement	date	and	the	quoted	price	for	the	identical liability	when	traded	as	an	asset	in	an	active	market	when	no	adjustments	to	the quoted	price	of	the	asset	are	required,	are	Level	1	fair	value	measurements. 					This	ASU	did	not	have	a	material	impact	on	the	Company's	fair	value measurements.

# Other-Than-Temporary Impairments on Investment Securities

In	April	2009,	the	FASB	issued	FSP	FAS	115-2	and	FAS	124-2,	Recognition and	Presentation	of	Other-Than-Temporary	Impairments	(FSP	FAS	115-2) (now	ASC	320-10-35-34,	Investments—Debt	and	Equity	Securities:	Recognition of	an	Other-Than-Temporary	Impairment),	which	amends	the	recognition guidance	for	other-than-temporary	impairments	(OTTI)	of	debt	securities	and expands	the	financial	statement	disclosures	for	OTTI	on	debt	and	equity securities.	Citigroup	adopted	the	FSP	in	the	first	quarter	of	2009.

					As	a	result	of	the	FSP,	the	Company's	Consolidated	Statement	of	Income reflects	the	full	impairment	(that	is,	the	difference	between	the	security's amortized	cost	basis	and	fair	value)	on	debt	securities	that	the	Company	intends to	sell	or	would	more-likely-than-not	be	required	to	sell	before	the	expected recovery	of	the	amortized	cost	basis.	For	available-for-	sale	(AFS)	and	held-to- maturity	(HTM)	debt	securities	that	management	has	no	intent	to	sell	and believes	that	it	more-likely-than-not	will	not	be	required	to	sell	prior	to	recovery, only	the	credit	loss	component	of	the	impairment	is	recognized	in	earnings, while	the	rest	of	the	fair	value	loss	is	recognized	in	Accumulated	other comprehensive	income	(AOCI).	The	credit	loss	component	recognized	in earnings	is	identified	as	the	amount	of	principal	cash	flows	not	expected	to	be received	over	the	remaining	term	of	the	security	as	projected	using	the Company's	cash	flow	projections	and	its	base	assumptions.	As	a	result	of	the adoption	of	the	FSP,	Citigroup's	income	in	the	first	quarter	of	2009	was	higher by	$631	million	on	a	pretax	basis	($391	million	on	an	after-tax	basis), respectively,	and	AOCI	was	decreased	by	a	corresponding	amount. 					The	cumulative	effect	of	the	change	included	an	increase	in	the	opening balance	of	Retained	earnings	at	January	1,	2009	of	$665	million	on	a	pretax basis	($413	million	after-tax).	See	Note	16	to	the	Consolidated	Financial Statements	for	disclosures	related	to	the	Company's	investment	securities	and OTTI.

# Business Combinations

In	December	2007,	the	FASB	issued	Statement	No.	141(revised),	Business Combinations	(now	ASC	805-10,	Business	Combinations),	which	is	designed	to improve	the	relevance,	representational	faithfulness,	and	comparability	of	the information	that	a	reporting	entity	provides	in	its	financial	reports	about	a business	combination	and	its	effects.	The	statement	retains	the	fundamental principle	that	the	acquisition	method	of	accounting	(which	was	called	the purchase	method)	be	used	for	all	business	combinations	and	for	an	acquirer	to	be identified	for	each	business	combination.	The	statement	also	retains	the	guidance for	identifying	and	recognizing	intangible	assets	separately	from	goodwill.	The most	significant	changes	are:	(1)	acquisition	costs	and	restructuring	costs	will now	be	expensed;	(2)	stock	consideration	will	be	measured	based	on	the	quoted market	price	as	of	the	acquisition	date	instead	of	the	date	the	deal	is	announced; (3)	contingent	consideration	arising	from	contractual	and	noncontractual contingencies	that	meet	the	more-likely-than-not	recognition	threshold	will	be measured	and	recognized	as	an	asset	or	liability	at	fair	value	at	the	acquisition date	using	a	probability-weighted	discounted	cash	flows	model,	with	subsequent changes	in	fair	value	reflected	in	earnings;	noncontractual	contingencies	that	do not	meet	the	more-likely-than-not	criteria	will	continue	to	be	recognized	when they	are	probable	and	reasonably	estimable;	and	(4)	the	acquirer	will	record	a 100%	step-up	to	fair	value	for	all	assets	and	liabilities,	including	the	minority interest	portion,	and	goodwill	is	recorded	as	if	a	100%	interest	was	acquired. 					Citigroup	adopted	the	standard	on	January	1,	2009,	and	it	is	applied prospectively.

# Noncontrolling Interests in Subsidiaries

In	December	2007,	the	FASB	issued	Statement	No.	160,	Noncontrolling Interests	in	Consolidated	Financial	Statements	(now	ASC	810-10-45-15, Consolidation—Noncontrolling	Interests	in	a	Subsidiary),	which	establishes standards	for	the	accounting	and	reporting	of	noncontrolling	interests	in subsidiaries	(previously	called	minority	interests)	in	consolidated	financial statements	and	for	the	loss	of	control	of	subsidiaries.	The	Standard	requires	that the	equity	interest	of	noncontrolling	shareholders,	partners,	or	other	equity holders	in	subsidiaries	be	presented	as	a	separate	item	in	Citigroup's stockholders'	equity,	rather	than	as	a	liability.	After	the	initial	adoption,	when	a subsidiary	is	deconsolidated,	any	retained	noncontrolling	equity	investment	in the	former	subsidiary	must	be	measured	at	fair	value	at	the	date	of deconsolidation.

					The	gain	or	loss	on	the	deconsolidation	of	the	subsidiary	is	measured	using the	fair	value	of	the	remaining	investment,	rather	than	the	previous	carrying amount	of	that	retained	investment.

					Citigroup	adopted	the	Standard	on	January	1,	2009.	As	a	result,	$2.392 billion	of	noncontrolling	interests	was	reclassified	from	Other	liabilities	to Citigroup's	stockholders'	equity.

# Sale with Repurchase Financing Agreements

In	February	2008,	the	FASB	issued	FASB	Staff	Position	(FSP)	FAS	140-3,

Accounting	for	Transfers	of	Financial	Assets	and	Repurchase	Financing Transactions	(now	ASC	860-10-40-42,	Transfers	and	Servicing:	Repurchase Financing).	This	FSP	provides	implementation	guidance	on	whether	a	security transfer	with	a	contemporaneous	repurchase	financing	involving	the	transferred financial	asset	must	be	evaluated	as	one	linked	transaction	or	two	separate	de- linked	transactions.

					The	FSP	requires	the	recognition	of	the	transfer	and	the	repurchase agreement	as	one	linked	transaction,	unless	all	of	the	following	criteria	are	met: (1)	the	initial	transfer	and	the	repurchase	financing	are	not	contractually contingent	on	one	another;	(2)	the	initial	transferor	has	full	recourse	upon default,	and	the	repurchase	agreement's	price	is	fixed	and	not	at	fair	value;	(3) the	financial	asset	is	readily	obtainable	in	the	marketplace	and	the	transfer	and repurchase	financing	are	executed	at	market	rates;	and	(4)	the	maturity	of	the repurchase	financing	is	before	the	maturity	of	the	financial	asset.	The	scope	of this	FSP	is	limited	to	transfers	and	subsequent	repurchase	financings	that	are entered	into	contemporaneously	or	in	contemplation	of	one	another.

					Citigroup	adopted	the	FSP	on	January	1,	2009.	The	impact	of	adopting	this FSP	was	not	material.

# Enhanced Disclosures of Credit Derivative Instruments and Guarantees

In	September	2008,	the	FASB	issued	FSP	FAS	133-1	and	FIN	45-4, "Disclosures	About	Credit	Derivatives	and	Certain	Guarantees:	An	Amendment of	FASB	Statement	No.	133	and	FASB	Interpretation	No.	45,	and	Clarification of	the	Effective	Date	of	FASB	Statement	No.	161"	(now	ASC	815-10-50-4K, Derivatives	and	Hedging:	Credit	Derivatives)	which	requires	additional disclosures	for	sellers	of	credit	derivative	instruments	and	certain	guarantees. This	FSP	requires	the	disclosure	of	the	maximum	potential	amount	of	future payments,	the	related	fair	value,	and	the	current	status	of	the payment/performance	risk	for	certain	guarantees	and	credit	derivatives	sold.

# Measurement of Impairment for Certain Securities

In	January	2009,	the	FASB	issued	FSP	EITF	99-20-1,	"Amendments	to	the Impairment	Guidance	of	EITF	Issue	99-20"	(now	incorporated	into	ASC	320-

10-35-20,	Investments—Debt	and	Equity	Securities:	Steps	for	Identifying	and Accounting	for	Impairment),	to	achieve	more	consistent	determination	of whether	other-than-temporary	impairments	of	available-for-sale	or	held-to- maturity	debt	securities	have	occurred.

					Prior	guidance	required	entities	to	assess	whether	it	was	probable	that	the holder	would	be	unable	to	collect	all	amounts	due	according	to	the	contractual terms.	The	FSP	eliminates	the	requirement	to	consider	market	participants' views	of	cash	flows	of	a	security	in	determining	whether	or	not	impairment	has occurred.

					The	FSP	is	effective	for	interim	and	annual	reporting	periods	ending	after December	15,	2008	and	is	applied	prospectively.	The	impact	of	adopting	this FSP	was	not	material.

# SEC Staff Guidance on Loan Commitments Recorded at Fair Value Through Earnings

On	January	1,	2008,	the	Company	adopted	Staff	Accounting	Bulletin	No.	109 (SAB	109),	which	requires	that	the	fair	value	of	a	written	loan	commitment	that is	marked-to-market	through	earnings	should	include	the	future	cash	flows related	to	the	loan's	servicing	rights.	However,	the	fair	value	measurement	of	a written	loan	commitment	still	must	exclude	the	expected	net	cash	flows	related to	internally	developed	intangible	assets	(such	as	customer	relationship intangible	assets).	SAB	109	applies	to	two	types	of	loan	commitments:	(1) written	mortgage	loan	commitments	for	loans	that	will	be	held-for-sale	when funded	and	are	marked-to-market	as	derivatives;	and	(2)	other	written	loan commitments	that	are	accounted	for	at	fair	value	through	earnings	under	the	fair value	option.	SAB	109	supersedes	SAB	105,	which	applied	only	to	derivative loan	commitments	and	allowed	the	expected	future	cash	flows	related	to	the associated	servicing	of	the	loan	to	be	recognized	only	after	the	servicing	asset had	been	contractually	separated	from	the	underlying	loan	by	sale	or securitization	of	the	loan	with	servicing	retained.	SAB	109	was	applied prospectively	to	loan	commitments	issued	or	modified	in	fiscal	quarters beginning	after	December	15,	2007.	The	impact	of	adopting	this	SAB	was	not material.

# Netting of Cash Collateral Against Derivative Exposures

During	April	2007,	the	FASB	issued	FSP	FIN	39-1,	"Amendment	of	FASB Interpretation	No.	39"	(now	incorporated	into	ASC	815-10-45,	Derivatives	and Hedging—Other	Presentation	Matters)	modifying	certain	provisions	of	FIN	39, "Offsetting	of	Amounts	Related	to	Certain	Contracts."	This	amendment	clarified the	acceptability	of	the	existing	market	practice	of	offsetting	the	amounts recorded	for	cash	collateral	receivables	or	payables	against	the	fair	value amounts	recognized	for	net	derivative	positions	executed	with	the	same counterparty	under	the	same	master	netting	agreement,	which	was	the Company's	prior	accounting	practice.	Thus,	this	amendment	did	not	affect	the Company's	consolidated	financial	statements.

# Fair Value Measurements

The	Company	elected	to	early	adopt	SFAS	No.	157,	Fair	Value	Measurements (SFAS	157)	(now	ASC	820-10,	Fair	Value	Measurements	and	Disclosures),	as of	January	1,	2007.	The	Statement	defines	fair	value,	expands	disclosure requirements	around	fair	value	and	specifies	a	hierarchy	of	valuation	techniques based	on	whether	the	inputs	to	those	valuation	techniques	are	observable	or unobservable.	Observable	inputs	reflect	market	data	obtained	from	independent sources,	while	unobservable	inputs	reflect	the	Company's	market	assumptions. These	two	types	of	inputs	create	the	following	fair	value	hierarchy:

Level	1:	Quoted	prices	for	identical	instruments	in	active	markets. Level	2:	Quoted	prices	for	similar	instruments	in	active	markets; quoted	prices	for	identical	or	similar	instruments	in	markets	that	are not	active;	and	model-derived	valuations	in	which	all	significant inputs	and	significant	value	drivers	are	observable	in	active	markets. Level	3:	Valuations	derived	from	valuation	techniques	in	which	one or	more	significant	inputs	or	significant	value	drivers	are unobservable.

					This	hierarchy	requires	the	Company	to	use	observable	market	data,	when available,	and	to	minimize	the	use	of	unobservable	inputs	when	determining	fair value.	For	some	products	or	in	certain	market	conditions,	observable	inputs	may not	always	be	available.	For	example,	during	the	market	dislocations	that	started in	the	second	half	of	2007,	certain	markets	became	illiquid,	and	some	key observable	inputs	used	in	valuing	certain	exposures	were	unavailable.	When	and if	these	markets	become	liquid,	the	valuation	of	these	exposures	will	use	the related	observable	inputs	available	at	that	time	from	these	markets.

					Citigroup	is	required	to	take	into	account	its	own	credit	risk	when	measuring the	fair	value	of	derivative	positions	as	well	as	the	other	liabilities	for	which	fair value	accounting	has	been	elected.	The	adoption	of	ASC	820	also	resulted	in some	other	changes	to	the	valuation	techniques	used	by	Citigroup	when determining	fair	value,	most	notably	the	changes	to	the	way	that	the	probability of	default	of	a	counterparty	is	factored	in	and	the	elimination	of	a	derivative valuation	adjustment	which	is	no	longer	necessary.	The	cumulative	effect	at January	1,	2007	of	making	these	changes	was	a	gain	of	$250	million	after-tax ($402	million	pretax),	or	$0.05	per	diluted	share,	which	was	recorded	in	the	first quarter	of	2007	earnings	within	the	Securities	and	Banking	business. 					The	statement	also	precludes	the	use	of	block	discounts	for	instruments traded	in	an	active	market,	which	were	previously	applied	to	large	holdings	of publicly	traded	equity	securities,	and	requires	the	recognition	of	trade-date	gains after	consideration	of	all	appropriate	valuation	adjustments	related	to	certain derivative	trades	that	use	unobservable	inputs	in	determining	their	fair	value. Previous	accounting	guidance	allowed	the	use	of	block	discounts	in	certain circumstances	and	prohibited	the	recognition	of	day-one	gains	on	certain derivative	trades	when	determining	the	fair	value	of	instruments	not	traded	in	an active	market.	The	cumulative	effect	of	these	changes	resulted	in	an	increase	to January	1,	2007	Retained	earnings	of	$75	million.

# Fair Value Option

The	Company	also	early	adopted	SFAS	159,	The	Fair	Value	Option	for Financial	Assets	and	Financial	Liabilities	(SFAS	159)	(now	ASC	825-10-05, Financial	Instruments:	Fair	Value	Option)	as	of	January	1,	2007.	The	fair	value option	provides	an	option	on	an	instrument-by-instrument	basis	for	most financial	assets	and	liabilities	to	be	reported	at	fair	value	with	changes	in	fair value	reported	in	earnings.	After	the	initial	adoption,	the	election	is	made	at	the acquisition	of	a	financial	asset,	a	financial	liability,	or	a	firm	commitment	and	it may	not	be	revoked.	The	fair	value	option	provides	an	opportunity	to	mitigate volatility	in	reported	earnings	that	resulted	prior	to	its	adoption	from	being required	to	apply	fair	value	accounting	to	certain	economic	hedges	(e.g., derivatives)	while	having	to	measure	the	assets	and	liabilities	being economically	hedged	using	an	accounting	method	other	than	fair	value. 					The	Company	elected	to	apply	fair	value	accounting	to	certain	financial instruments	held	at	January	1,	2007	with	future	changes	in	value	reported	in earnings.	The	adoption	of	the	fair	value	option	resulted	in	a	decrease	to	January 1,	2007	Retained	earnings	of	$99	million.

# Leveraged Leases

On	January	1,	2007,	the	Company	adopted	FSP	FAS	13-2,	Accounting	for	a Change	or	Projected	Change	in	the	Timing	of	Cash	Flows	Relating	to	Income Taxes	Generated	by	a	Leverage	Lease	Transaction	(FSP	13-2)	(now

incorporated	into	ASC	840-10-25,	Leases),	which	provides	guidance	regarding changes	or	projected	changes	in	the	timing	of	cash	flows	relating	to	income	taxes generated	by	a	leveraged-lease	transaction.

					Leveraged	leases	can	provide	significant	tax	benefits	to	the	lessor,	primarily as	a	result	of	the	timing	of	tax	payments.	Since	changes	in	the	timing	and/or amount	of	these	tax	benefits	may	have	a	significant	effect	on	the	cash	flows	of	a lease	transaction,	a	lessor	will	be	required	to	perform	a	recalculation	of	a leveraged-lease	when	there	is	a	change	or	projected	change	in	the	timing	of	the realization	of	tax	benefits	generated	by	that	lease.	Previously,	Citigroup	did	not recalculate	the	tax	benefits	if	only	the	timing	of	cash	flows	had	changed.

					The	adoption	of	FSP	13-2	resulted	in	a	decrease	to	January	1,	2007	Retained earnings	of	$148	million.	This	decrease	to	retained	earnings	will	be	recognized in	earnings	over	the	remaining	lives	of	the	leases	as	tax	benefits	are	realized.

# Revisions to the Earnings-per-Share Calculation

In	June	2008,	the	FASB	issued	FSP	EITF	03-6-1,	"Determining	Whether Instruments	Granted	in	Share-Based	Payment	Transactions	are	Participating Securities"	(now	incorporated	into	ASC	260-10-45-59A,	Earnings	Per	Share: Participating	Securities	and	the	Two-Class	Method).	Under	the	FSP,	unvested share-based	payment	awards	that	contain	nonforfeitable	rights	to	dividends	are considered	to	be	a	separate	class	of	common	stock	and	included	in	the	EPS calculation	using	the	"two-class	method."	Citigroup's	restricted	and	deferred share	awards	meet	the	definition	of	a	participating	security.	In	accordance	with the	FSP,	restricted	and	deferred	shares	are	now	included	as	a	separate	class	of common	stock	in	the	basic	and	diluted	EPS	calculation.

					The	following	table	shows	the	effect	of	adopting	the	FSP	on	Citigroup's basic	and	diluted	EPS:

|  | 2009 | 2008							 2007 | 2008							 2007 |
| :--- | :--- | :--- | :--- |
| Basic earnings per share |  |  |  |
| As reported | N/A | $(5.59) | $0.73 |
| Two-class method | $(0.80) | $(5.63) | $0.68 |
| Diluted earnings per share ^(1) |  |  |  |
| As reported | N/A | $(5.59) | $0.72 |
| Two-class method | (0.80) | $(5.63) | $0.67 |

(1)  Diluted EPS is the same as Basic EPS in 2009 and 2008 due to the net loss available to common shareholders. Using actual diluted shares would result in anti-dilution. N/A Not applicable

# Fair Value Disclosures About Pension Plan Assets

In	December	2008,	the	FASB	issued	FSP	FAS	132(R)-1,	Employers' Disclosures	about	Pensions	and	Other	Postretirement	Benefit	Plan	Assets	(now incorporated	into	ASC	715-20-50,	Compensation	and	Benefits—Disclosure).

This	FSP	requires	that	more	detailed	information	about	plan	assets	be	disclosed on	an	annual	basis.	Citigroup	is	required	to	separate	plan	assets	into	the	three	fair value	hierarchy	levels	and	provide	a	roll-forward	of	the	changes	in	fair	value	of plan	assets	classified	as	Level	3.

					The	disclosures	about	plan	assets	required	by	this	FSP	are	effective	for	fiscal years	ending	after	December	15,	2009,	but	have	no	effect	on	the	Consolidated Balance	Sheet	or	Statement	of	Income.

# Additional Disclosures for Derivative Instruments

In	March	2008,	the	FASB	issued	SFAS	No.	161,	Disclosures	about	Derivative Instruments	and	Hedging	Activities,	an	Amendment	to	SFAS	133	(now

incorporated	into	ASC	815-10-50,	Derivatives	and	Hedging—Disclosure).	The Standard	requires	enhanced	disclosures	about	derivative	instruments	and	hedged items	that	are	accounted	for	under	ASC	815	related	interpretations.	The	Standard is	effective	for	all	of	the	Company's	interim	and	annual	financial	statements beginning	with	the	first	quarter	of	2009.	The	Standard	expands	the	disclosure requirements	for	derivatives	and	hedged	items	and	has	no	impact	on	how Citigroup	accounts	for	these	instruments.

# Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock

Derivative	contracts	on	a	company's	own	stock	may	be	accounted	for	as	equity instruments,	rather	than	as	assets	and	liabilities,	only	if	they	are	both	indexed solely	to	the	company's	stock	and	settleable	in	shares.

					In	June	2008,	the	FASB	ratified	the	consensus	reached	by	the	EITF	on	Issue 07-5,	"Determining	Whether	an	Instrument	(or	Embedded	Feature)	Is	Indexed	to an	Entity's	Own	Stock"	(Issue	07-5)	(now	ASC	815-40-15-5,	Derivatives	and Hedging:	Evaluating	Whether	an	Instrument	is	Considered	Indexed	to	an Entity's	Own	Stock).	An	instrument	(or	embedded	feature)	would	not	be considered	indexed	to	an	entity's	own	stock	if	its	settlement	amount	is	affected by	variables	other	than	those	used	to	determine	the	fair	value	of	a	"plain	vanilla" option	or	forward	contract	on	equity	shares,	or	if	the	instrument	contains	a feature	(such	as	a	leverage	factor)	that	increases	exposure	to	those	variables.	An equity-linked	financial	instrument	(or	embedded	feature)	would	not	be considered	indexed	to	the	entity's	own	stock	if	the	strike	price	is	denominated	in a	currency	other	than	the	issuer's	functional	currency.

					This	issue	is	effective	for	Citigroup	on	January	1,	2009	and	did	not	have	a material	impact.

# Equity Method Investment Accounting Considerations

In	November	2008,	the	FASB	ratified	the	consensus	reached	by	the	EITF	on Issue	08-6,	"Equity	Method	Investment	Accounting	Considerations"	(Issue	08- 6)	(now	ASC	323-10,	Investments—Equity	Method	and	Joint	Ventures).	An entity	shall	measure	its	equity	method	investment	initially	at	cost.	Any	other- than-temporary	impairment	of	an	equity	method	investment	should	be recognized	in	accordance	with	Opinion	18.	An	equity	method	investor	shall	not separately	test	an	investee's	underlying	assets	for	impairment.	Share	issuance	by an	investee	shall	be	accounted	for	as	if	the	equity	method	investor	had	sold	a proportionate	share	of	its	investment,	with	gain	or	loss	recognized	in	earnings. 					This	issue	is	effective	for	Citigroup	on	January	1,	2009,	and	did	not	have	a material	impact.

# Accounting for Defensive Intangible Assets

In	November	2008,	the	FASB	ratified	the	consensus	reached	by	the	EITF	on Issue	08-7,	"Accounting	for	Defensive	Intangible	Assets"	(Issue	08-7)	(now

# ASC	350-30-25-5,	Intangibles	—	Goodwill	and	Other:	Defensive	Intangible

Assets).	An	acquired	defensive	asset	shall	be	accounted	for	as	a	separate	unit	of accounting	(i.e.,	an	asset	separate	from	other	assets	of	the	acquirer).	The	useful life	assigned	to	an	acquired	defensive	asset	shall	be	based	on	the	period	during which	the	asset	would	diminish	in	value.	Issue	08-7	states	that	it	would	be	rare for	a	defensive	intangible	asset	to	have	an	indefinite	life.	Issue	08-7	is	effective for	Citigroup	on	January	1,	2009,	and	did	not	have	a	material	impact.

# CVA Accounting Misstatement

The	Company	determined	that	an	error	existed	in	the	process	used	to	value certain	liabilities	for	which	the	Company	elected	the	fair	value	option	(FVO). The	error	related	to	a	calculation	intended	to	measure	the	impact	on	the liability's	fair	value	attributable	to	Citigroup's	credit	spreads.	Because	of	the error	in	the	process,	both	an	initial	Citi	contractual	credit	spread	and	an	initial own-credit	valuation	adjustment	were	being	included	at	the	time	of	issuance	of new	Citi	FVO	debt.	The	own-credit	valuation	adjustment	was	properly	included; therefore,	the	initial	Citi	contractual	credit	spread	should	have	been	excluded. (See	Note	27	for	a	description	of	own-credit	valuation	adjustments.)	The cumulative	effect	of	this	error	from	January	1,	2007	(the	date	that	FAS	157 (ASC	820),	requiring	the	valuation	of	own-credit	for	FVO	liabilities,	was adopted)	through	December	31,	2008	was	to	overstate	income	and	retained earnings	by	$204	million	($330	million	on	a	pretax	basis).	The	impact	of	this adjustment	was	determined	not	to	be	material	to	the	Company's	results	of operations	and	financial	position	for	any	previously	reported	period. Consequently,	in	the	accompanying	financial	statements,	the	cumulative	effect through	December	31,	2008	is	recorded	in	2009.

					The	table	below	summarizes	the	previously	reported	impact	of	CVA	income for	debt	on	which	the	FVO	was	elected	and	the	related	adjustments	to	correct	the process	error	for	the	impacted	reporting	periods.

See also Note 34 to the Consolidated Financial Statements.

# FUTURE APPLICATION OF ACCOUNTING STANDARDS

# Additional Disclosures Regarding Fair Value Measurements

In	January	2010,	the	FASB	issued	ASU	2010-06,	Improving	Disclosures	about Fair	Value	Measurements.	The	ASU	requires	disclosing	the	amounts	of significant	transfers	in	and	out	of	Level	1	and	2	fair	value	measurements	and	to describe	the	reasons	for	the	transfers.	The	disclosures	are	effective	for	reporting periods	beginning	after	December	15,	2009.	Additionally,	disclosures	of	the gross	purchases,	sales,	issuances	and	settlements	activity	in	Level	3	fair	value measurements	will	be	required	for	fiscal	years	beginning	after	December	15, 2010.

In	June	2009,	the	FASB	issued	SFAS	No.	166,	Accounting	for	Transfers	of Financial	Assets,	an	amendment	of	FASB	Statement	No.	140	(SFAS	166),	that will	eliminate	Qualifying	Special	Purpose	Entities	(QSPEs).	SFAS	166	is effective	for	fiscal	years	that	begin	after	November	15,	2009.	This	change	will have	a	significant	impact	on	Citigroup's	Consolidated	Financial	Statements. Beginning	January	1,	2010,	the	Company	will	lose	sales	treatment	for	certain future	asset	transfers	that	would	have	been	considered	sales	under	SFAS	140, and	for	certain	transfers	of	portions	of	assets	that	do	not	meet	the	definition	of participating	interests.

					As	a	result	of	implementing	these	new	accounting	standards,	Citigroup	will consolidate	certain	of	the	VIEs	and	former	QSPEs	with	which	it	currently	has involvement.	An	ongoing	evaluation	of	the	application	of	these	new requirements	could,	with	the	resolution	of	certain	uncertainties,	result	in	the identification	of	additional	VIEs	and	former	QSPEs,	other	than	those	presented below,	needing	to	be	consolidated.	It	is	not	currently	anticipated,	however,	that any	such	newly	identified	VIEs	and	former	QSPEs	would	have	a	significant impact	on	Citigroup's	Consolidated	Financial	Statements	or	capital	position. 					In	accordance	with	SFAS	167,	Citigroup	employed	three	approaches	for consolidating	all	of	the	VIEs	and	former	QSPEs	that	it	consolidated	as	of January	1,	2010.	The	first	approach	requires	initially	measuring	the	assets, liabilities,	and	noncontrolling	interests	of	the	VIEs	and	former	QSPEs	at	their carrying	values	(the	amounts	at	which	the	assets,	liabilities,	and	noncontrolling interests	would	have	been	carried	in	the	Consolidated

Financial	Statements,	if	Citigroup	had	always	consolidated	these	VIEs	and former	QSPEs).	The	second	approach	is	to	use	the	unpaid	principal	amounts, where	using	carrying	values	is	not	practicable.	The	third	approach	is	to	elect	the fair	value	option,	in	which	all	of	the	financial	assets	and	liabilities	of	certain designated	VIEs	and	former	QSPEs	would	be	recorded	at	fair	value	upon adoption	of	SFAS	167	and	continue	to	be	marked	to	market	thereafter,	with changes	in	fair	value	reported	in	earnings.

(1)  Citigroup undertook certain actions during the first and second quarters of 2009 in support of its off-balance-sheet credit card securitization vehicles. As a result of these actions, Citigroup included approximately $82 billion of incremental risk-weighted assets in its risk-based capital ratios as of March 31, 2009 and an additional approximate $900 million as of June 30, 2009. See Note 23 to the Consolidated Financial Statements. (2) The implementation of SFAS 167 will result in the deconsolidation of certain synthetic and cash collateralized debt obligation (CDO) VIEs that were previously consolidated under the requirements of ASC 810 (FIN 46(R)). Upon deconsolidation of these synthetic CDOs, Citigroup's Consolidated Balance Sheet will reflect the recognition of current receivables and payables related to purchased and written credit default swaps entered into with these VIEs, which had previously been eliminated in consolidation. The deconsolidation of certain cash CDOs will have a minimal impact on GAAP assets, but will cause a sizable increase in risk-weighted assets. The impact on risk-weighted assets results from replacing, in Citigroup's trading account, largely investment grade securities owned by these VIEs when consolidated, with Citigroup's holdings of non- investment grade or unrated securities issued by these VIEs when deconsolidated.

							The	preceding	table	reflects:	(i)	the	estimated	portion	of	the	assets	of former	QSPEs	to	which	Citigroup,	acting	as	principal,	had	transferred	assets	and received	sales	treatment	as	of	December	31,	2009	(totaling	approximately	$712.0 billion),	and	(ii)	the	estimated	assets	of	significant	unconsolidated	VIEs	as	of December	31,	2009	with	which	Citigroup	is	involved	(totaling	approximately $219.2	billion)	that	are	required	to	be	consolidated	under	the	new	accounting standards.	Due	to	the	variety	of	transaction	structures	and	the	level	of	Citigroup involvement	in	individual	former	QSPEs	and	VIEs,	only	a	portion	of	the	former QSPEs	and	VIEs	with	which	the	Company	is	involved	are	to	be	consolidated. 							In	addition,	the	cumulative	effect	of	adopting	these	new	accounting standards	as	of	January	1,	2010,	based	on	financial	information	as	of	December 31,	2009,	would	result	in	an	estimated	aggregate	after-tax	charge	to	Retained earnings	of	approximately	$8.3	billion,	reflecting	the	net	effect	of	an	overall pretax	charge	to	Retained	earnings	(primarily	relating	to	the	establishment	of loan	loss	reserves	and	the	reversal	of	residual	interests	held)	of	approximately $13.4	billion	and	the	recognition	of	related	deferred	tax	assets	amounting	to approximately	$5.1	billion.

| Tier 1 Capital | 11.67% | 10.26% | (141)	bps |
| :--- | :--- | :--- | :--- |
| Total Capital | 15.25% | 13.82% | (143)\tbps |

							Among	these	uncertainties,	the	FASB	has	proposed	an	indefinite	deferral of	the	requirements	of	SFAS	167	for	certain	investment	companies.	Without	the proposed	deferral,	the	Company	had	most	recently	estimated	that	approximately $3.3	billion	of	assets	held	by	investment	funds	managed	by	Citigroup	would	be newly	consolidated	upon	the	adoption	of	SFAS	167.	If	the	proposed	deferral were	to	be	finalized	as	currently	contemplated,	the	Company	expects	that	many, if	not	all,	of	the	investment	vehicles	managed	by	Citigroup	would	not	be	subject to	the	requirements	of	SFAS	167.	Nevertheless,	Citigroup	is	continuing	to evaluate	the	potential	impacts	of	the	proposed	requirements	and,	depending	upon the	eventual	resolution	of	specific	implementation	matters,	may	be	required	to consolidate	certain	investment	vehicles,	the	aggregate	assets	of	which	could range	up	to	a	total	of	approximately	$1.2	billion.	The	effect	on	the	Company's regulatory	capital	ratios,	should	consolidation	of	any	or	all	such	noted	investment vehicles	be	required,	is	not	expected	to	be	significant.	The	preceding	tables reflect	the	Company's	view	that	none	of	the	investment	vehicles	managed	by Citigroup	will	be	required	to	be	consolidated	under	SFAS	167.

# Loss-Contingency Disclosures

In	June	2008,	the	FASB	issued	an	exposure	draft	proposing	expanded disclosures	regarding	loss	contingencies.	This	proposal	increases	the	number	of loss	contingencies	subject	to	disclosure	and	requires	substantial	quantitative	and qualitative	information	to	be	provided	about	those	loss	contingencies.	The proposal	will	have	no	impact	on	the	Company's	accounting	for	loss contingencies.

# Investment Company Audit Guide (SOP 07-1)

In	July	2007,	the	AICPA	issued	Statement	of	Position	07-1,	"Clarification	of	the Scope	of	the	Audit	and	Accounting	Guide	for	Investment	Companies	and Accounting	by	Parent	Companies	and	Equity	Method	Investors	for	Investments in	Investment	Companies"	(SOP	07-1)	(now	incorporated	into	ASC	946-10, Financial	Services-Investment	Companies),	which	was	expected	to	be	effective for	fiscal	years	beginning	on	or	after	December	15,	2007.	However,	in	February 2008,	the	FASB	delayed	the	effective	date	indefinitely	by	issuing	an	FSP	SOP 07-1-1,	"Effective	Date	of	AICPA	Statement	of	Position	07-1."	This	statement sets	forth	more	stringent	criteria	for	qualifying	as	an	investment	company	than does	the	predecessor	Audit	Guide.	In	addition,	ASC	946-10	(SOP	07-1) establishes	new	criteria	for	a	parent	company	or	equity	method	investor	to	retain investment	company	accounting	in	their	consolidated	financial	statements. Investment	companies	record	all	their	investments	at	fair	value	with	changes	in value	reflected	in	earnings.	The	Company	is	currently	evaluating	the	potential impact	of	adopting	the	SOP.

# 2. BUSINESS DEVELOPMENTS

# ACQUISITIONS

# North	America

# Acquisition of ABN AMRO Mortgage Group

In	2007,	Citigroup	acquired	ABN	AMRO	Mortgage	Group	(AAMG),	a subsidiary	of	LaSalle	Bank	Corporation	and	ABN	AMRO	Bank	N.V.	AAMG	is a	national	originator	and	servicer	of	prime	residential	mortgage	loans.	As	part	of this	acquisition,	Citigroup	purchased	approximately	$12	billion	in	assets, including	$3	billion	of	mortgage	servicing	rights,	which	resulted	in	the	addition of	approximately	1.5	million	servicing	customers.	Results	for	AAMG	are included	within	Citigroup's	North	America	Regional	Consumer	Banking business	from	March	1,	2007	forward.

# Acquisition of Old Lane Partners, L.P.

In	2007,	the	Company	completed	the	acquisition	of	Old	Lane	Partners,	L.P.	and Old	Lane	Partners,	GP,	LLC	(Old	Lane).	Old	Lane	is	the	manager	of	a	global, multistrategy	hedge	fund	and	a	private	equity	fund.	Results	for	Old	Lane	are included	within	ICG,	from	July	2,	2007	forward.

					On	June	12,	2008,	Citigroup	announced	the	restructuring	of	Old	Lane	and	its multistrategy	hedge	fund	(the	"Fund")	in	anticipation	of	redemptions	by	all unaffiliated,	non-Citigroup	employee	investors.	To	accomplish	this	restructuring, Citigroup	purchased	substantially	all	of	the	assets	of	the	Fund	at	fair	value	on June	30,	2008.	The	fair	value	of	assets	purchased	from	the	Fund	was approximately	$6	billion	at	June	30,	2008.

# Acquisition of BISYS

In	2007,	the	Company	completed	its	acquisition	of	BISYS	Group,	Inc.	(BISYS) for	$1.47	billion	in	cash.	In	addition,	BISYS's	shareholders	received	$18.2 million	in	the	form	of	a	special	dividend	paid	by	BISYS	simultaneously. Citigroup	completed	the	sale	of	the	Retirement	and	Insurance	Services	Divisions of	BISYS	to	affiliates	of	J.C.	Flowers	&	Co.	LLC,	making	the	net	cost	of	the transaction	to	Citigroup	approximately	$800	million.	Citigroup	retained	the	Fund Services	and	Alternative	Investment	Services	businesses	of	BISYS,	which provides	administrative	services	for	hedge	funds,	mutual	funds	and	private equity	funds.	Results	for	BISYS	are	included	within	Transaction	Services business	from	August	1,	2007	forward.

# Acquisition of Automated Trading Desk

In	2007,	Citigroup	completed	its	acquisition	of	Automated	Trading	Desk	(ATD), a	leader	in	electronic	market	making	and	proprietary	trading,	for	approximately $680	million	($102.6	million	in	cash	and	approximately	11.17	million	shares	of Citigroup	common	stock).	ATD	operates	as	a	unit	of	Citigroup's	Global	Equities business,	adding	a	network	of	broker-dealer	customers	to	Citigroup's	diverse base	of	institutional,	broker-dealer	and	retail	customers.	Results	for	ATD	are included	within	Citigroup's	Securities	and	Banking	business	from	October	3, 2007	forward.

# Latin	America

# Acquisition of Grupo Financiero Uno

In	2007,	Citigroup	completed	its	acquisition	of	Grupo	Financiero	Uno	(GFU), the	largest	credit	card	issuer	in	Central	America,	and	its	affiliates.

					The	acquisition	of	GFU,	with	$2.2	billion	in	assets,	expands	the	presence	of Citigroup's	Latin	America	Consumer	Banking	franchise,	enhances	its	credit	card business	in	the	region	and	establishes	a	platform	for	regional	growth	in Consumer	Finance	and	Retail	Banking.	GFU	has	more	than	one	million	retail clients	and	operates	a	distribution	network	of	75	branches	and	more	than	100 mini-branches	and	points	of	sale.	The	results	for	GFU	are	included	within Citigroup's	Latin	America	Regional	Consumer	Banking	businesses	from	March 5,	2007	forward.

# Acquisition of Grupo Cuscatlán

In	2007,	Citigroup	completed	the	acquisition	of	the	subsidiaries	of	Grupo Cuscatlán	for	$1.51	billion	($755	million	in	cash	and	14.2	million	shares	of Citigroup	common	stock)	from	Corporacion	UBC	Internacional	S.A.	Grupo Cuscatlán	is	one	of	the	leading	financial	groups	in	Central	America,	with	assets of	$5.4	billion,	loans	of	$3.5	billion,	and	deposits	of	$3.4	billion.	Grupo Cuscatlán	has	operations	in	El	Salvador,	Guatemala,	Costa	Rica,	Honduras	and Panama.	The	results	of	Grupo	Cuscatlán	are	included	from	May	11,	2007 forward	and	are	recorded	in	Latin	America	Regional	Consumer	Banking.

# Agreement to Establish Partnership with Quiñenco—Banco de Chile

In	2007,	Citigroup	and	Quiñenco	entered	into	a	definitive	agreement	to	establish a	strategic	partnership	that	combined	Citigroup	operations	in	Chile	with	Banco de	Chile's	local	banking	franchise	to	create	a	banking	and	financial	services institution	with	approximately	20%	market	share	of	the	Chilean	banking industry.	The	transaction	closed	on	January	1,	2008.

					Under	the	agreement,	Citigroup	sold	its	Chilean	operations	and	other	assets in	exchange	for	an	approximate	32.96%	stake	in	LQIF,	a	wholly	owned subsidiary	of	Quiñenco	that	controls	Banco	de	Chile,	and	is	accounted	for	under the	equity	method	of	accounting.	As	part	of	the	overall	transaction,	Citigroup also	acquired	the	U.S.	branches	of	Banco	de	Chile	for	approximately	$130 million.	The	new	partnership	calls	for	active	participation	by	Citigroup	in	the management	of	Banco	de	Chile	including	board	representation	at	both	LQIF	and Banco	de	Chile.

					On	January	31,	2010	Citigroup	elected	to	exercise	its	option	to	acquire approximately	8.5%	of	LQIF	for	approximately	$500	million.	The	acquisition	of the	additional	shares	is	expected	to	close	on	April	30,	2010	and	will	increase Citigroup's	ownership	in	LQIF	to	approximately	41.5%.	Citigroup	retains	an option	to	increase	its	ownership	by	an	additional	8.5%	of	LQIF	in	2010	for	an additional	$500	million.

# Acquisition of Bank of Overseas Chinese

In	2007,	Citigroup	completed	its	acquisition	of	Bank	of	Overseas	Chinese (BOOC)	in	Taiwan	for	approximately	$427	million.	BOOC	offers	a	broad	suite of	corporate	banking,	consumer	and	wealth	management	products	and	services to	more	than	one	million	clients	through	55	branches	in	Taiwan.	This	transaction will	strengthen	Citigroup's	presence	in	Asia,	making	it	the	largest	international bank	and	thirteenth	largest	by	total	assets	among	all	domestic	Taiwan	banks. Results	for	BOOC	are	included	in	Citigroup's	Asia	Regional	Consumer	Banking and	Securities	and	Banking	businesses	from	December	1,	2007	forward.

# Acquisition of Egg

In	2007,	Citigroup	completed	its	acquisition	of	Egg	Banking	plc	(Egg),	one	of the	U.K.'s	leading	online	financial	services	providers,	from	Prudential	PLC	for approximately	$1.39	billion.	Egg	offers	various	financial	products	and	services including	online	payment	and	account	aggregation	services,	credit	cards, personal	loans,	savings	accounts,	mortgages,	insurance	and	investments.	Results for	Egg	are	included	in	Citi	Holdings'	LCL	business	from	May	1,	2007	forward.

# Purchase of 20% Equity Interest in Akbank

In	2007,	Citigroup	completed	its	purchase	of	a	20%	equity	interest	in	Akbank	for approximately	$3.1	billion,	accounted	for	under	the	equity	method	of accounting.	Akbank,	the	second-largest	privately	owned	bank	by	assets	in Turkey,	is	a	premier,	full-service	retail,	commercial,	corporate	and	private	bank. 					Sabanci	Holding,	a	34%	owner	of	Akbank	shares,	and	its	subsidiaries	have granted	Citigroup	a	right	of	first	refusal	or	first	offer	over	the	sale	of	any	of	their Akbank	shares	in	the	future.	Subject	to	certain	exceptions,	including	purchases from	Sabanci	Holding	and	its	subsidiaries,	Citigroup	has	otherwise	agreed	not	to increase	its	percentage	ownership	in	Akbank.

# DIVESTITURES

The	following	divestitures	occurred	in	2008	and	2009	and	do	not	qualify	as

# Discontinued	operations:

# Sale of Phibro LLC

On	December	31,	2009	the	Company	sold	100%	of	its	interest	in	Phibro	LLC	to Occidental	Petroleum	Corporation	for	a	purchase	price	equal	to	approximately the	net	asset	value	of	the	business.

					The	decision	to	sell	Phibro	was	the	outcome	of	an	evaluation	of	a	variety	of alternatives	and	is	consistent	with	Citi's	core	strategy	of	a	client-centered business	model.	The	sale	of	Phibro	does	not	affect	Citi's	client-facing commodities	business	lines,	which	will	continue	to	operate	and	serve	the	needs of	Citi's	clients	throughout	the	world.

# Sale of Citi's Nikko Asset Management Business and Trust and Banking Corporation

On	October	1,	2009	the	Company	completed	the	sale	of	its	entire	stake	in	Nikko Asset	Management	("Nikko	AM")	to	the	Sumitomo	Trust	and	Banking	Co.,	Ltd. ("Sumitomo	Trust")	and	completed	the	sale	of	Nikko	Citi	Trust	and	Banking Corporation	to	Nomura	Trust	&	Banking	Co.	Ltd.

					The	Nikko	AM	transaction	was	valued	at	120	billion	yen	(U.S.	$1.3	billion at	an	exchange	rate	of	89.60	yen	to	U.S.	$1.00	as	of	September	30,	2009).	The Company	received	all-cash	consideration	of	75.6	billion	yen	(U.S.	$844	million), after	certain	deal	related	expenses	and	adjustments,	for	its	64%	beneficial ownership	interest	in	Nikko	AM.	Sumitomo	Trust	also	acquired	the	beneficial ownership	interests	in	Nikko	AM	held	by	various	minority	investors	in	Nikko AM,	bringing	Sumitomo	Trust's	total	ownership	stake	in	Nikko	AM	to	98.55% at	closing.

					For	the	sale	of	Nikko	Citi	Trust	and	Banking	Corporation,	the	Company received	all-cash	consideration	of	19	billion	yen	(U.S.	$212	million	at	an exchange	rate	of	89.60	yen	to	U.S.	$1.00	as	of	September	30,	2009)	as	part	of the	transaction,	subject	to	certain	post-closing	purchase	price	adjustments.

# Retail Partner Cards Sales

During	2009,	Citigroup	sold	its	Financial	Institutions	(FI)	and	Diners	Club North	America	credit	card	businesses.	Each	of	these	businesses	are	reflected	in Local	Consumer	Lending.	Total	credit	card	receivables	disposed	of	in	these transactions	was	approximately	$2.2	billion.

# Joint Venture with Morgan Stanley

On	June	1,	2009,	Citi	and	Morgan	Stanley	established	a	joint	venture	(JV)	that combines	the	Global	Wealth	Management	platform	of	Morgan	Stanley	with Citigroup's	Smith	Barney,	Quilter	and	Australia	private	client	networks.	Citi sold	100%	of	these	businesses	to	Morgan	Stanley	in	exchange	for	a	49%	stake	in the	JV	and	an	upfront	cash	payment	of	$2.75	billion.	The	Brokerage	and	Asset Management	business	recorded	a	pretax	gain	of	approximately	$11.1	billion ($6.7	billion	after-tax)	on	this	sale.	Both	Morgan	Stanley	and	Citi	will	access	the JV	for	retail	distribution,	and	each	firm's	institutional	businesses	will	continue	to execute	order	flow	from	the	JV.

					Citigroup's	49%	ownership	in	the	JV	is	recorded	as	an	equity	method investment.	In	determining	the	value	of	its	49%	interest	in	the	JV,	Citigroup utilized	the	assistance	of	an	independent	third-party	valuation	firm	and	utilized both	the	income	and	the	market	approaches.

# Sale of Citigroup Technology Services Limited

On	December	23,	2008,	Citigroup	announced	an	agreement	with	Wipro	Limited to	sell	all	of	Citigroup's	interest	in	Citi	Technology	Services	Ltd.	(CTS), Citigroup's	India-based	captive	provider	of	technology	infrastructure	support and	application	development,	for	all-cash	consideration	of	approximately	$127 million.	A	substantial	portion	of	the	proceeds	from	this	sale	will	be	recognized over	the	period	in	which	Citigroup	has	a	service	contract	with	Wipro	Limited. This	transaction	closed	on	January	20,	2009	and	a	loss	of	approximately	$7 million	was	booked	at	that	time.

# Sale of Upromise Cards Portfolio

During	2008,	the	Company	sold	substantially	all	of	the	Upromise	Cards portfolio	to	Bank	of	America	for	an	after-tax	gain	of	$127	million	($201	million pretax).	The	portfolio	sold	had	balances	of	approximately	$1.2	billion	of	credit card	receivables.	This	transaction	is	reflected	in	the	North	America	Regional Consumer	Banking	business	results.

# Sale of CitiStreet

On	July	1,	2008,	Citigroup	and	State	Street	Corporation	completed	the	sale	of CitiStreet,	a	benefits	servicing	business,	to	ING	Group	in	an	all-cash	transaction valued	at	$900	million.	CitiStreet	is	a	joint	venture	formed	in	2000	that,	prior	to the	sale,	was	owned	50%	each	by	Citigroup	and	State	Street.	The	transaction closed	on	July	1,	2008,	and	generated	an	after-tax	gain	of	$222	million	($347 million	pretax).

# Divestiture of Diners Club International

On	June	30,	2008,	Citigroup	completed	the	sale	of	Diners	Club	International (DCI)	to	Discover	Financial	Services,	resulting	in	an	after-tax	gain	of approximately	$56	million	($111	million	pretax).

					Citigroup	will	continue	to	issue	Diners	Club	cards	and	support	its	brand	and products	through	ownership	of	its	many	Diners	Club	card	issuers	around	the world.

# Sale of Citigroup Global Services Limited

In	2008,	Citigroup	sold	all	of	its	interest	in	Citigroup	Global	Services	Limited (CGSL)	to	Tata	Consultancy	Services	Limited	(TCS)	for	all-cash	consideration of	approximately	$515	million,	resulting	in	an	after-tax	gain	of	$192	million ($263	million	pretax).	CGSL	was	the	Citigroup	captive	provider	of	business process	outsourcing	services	solely	within	the	Banking	and	Financial	Services sector.

					In	addition	to	the	sale,	Citigroup	signed	an	agreement	with	TCS	for	TCS	to provide,	through	CGSL,	process	outsourcing	services	to	Citigroup	and	its affiliates	in	an	aggregate	amount	of	$2.5	billion	over	a	period	of	9.5	years.

# Sale of Nikko Cordial

On	October	1,	2009	the	Company	announced	the	successful	completion	of	the sale	of	Nikko	Cordial	Securities	to	Sumitomo	Mitsui	Banking	Corporation.	The transaction	had	a	total	cash	value	to	Citi	of	776	billion	yen	(U.S.	$8.7	billion	at an	exchange	rate	of	89.60	yen	to	U.S.	$1.00	as	of	September	30,	2009).	The	cash value	is	composed	of	the	purchase	price	for	the	transferred	business	of	545 billion	yen,	the	purchase	price	for	certain	Japanese-listed	equity	securities	held by	Nikko	Cordial	Securities	of	30	billion	yen,	and	201	billion	yen	of	excess	cash derived	through	the	repayment	of	outstanding	indebtedness	to	Citi.	After considering	the	impact	of	foreign	exchange	hedges	of	the	proceeds	of	the transaction,	the	sale	resulted	an	immaterial	gain	in	2009.	A	total	of	about	7,800 employees	are	included	in	the	transaction.

					The	Nikko	Cordial	operations	had	total	assets	and	total	liabilities	of approximately	$24	billion	and	$16	billion,	respectively,	at	the	time	of	sale, which	were	reflected	in	Citi	Holdings	prior	to	the	sale.

					Results	for	all	of	the	Nikko	Cordial	businesses	sold	are	reported	as Discontinued	operations	for	all	periods	presented.

					Summarized	financial	information	for	Discontinued	operations,	including cash	flows,	related	to	the	sale	of	Nikko	Cordial	is	as	follows:

# Sale of Citigroup's German Retail Banking Operations

On	December	5,	2008,	Citigroup	sold	its	German	retail	banking	operations	to Crédit	Mutuel	for	5.2	billion	Euro	in	cash	plus	the	German	retail	bank's operating	net	earnings	accrued	in	2008	through	the	closing.	The	sale	resulted	in an	after-tax	gain	of	approximately	$3.9	billion,	including	the	after-tax	gain	on	the foreign	currency	hedge	of	$383	million	recognized	during	the	fourth	quarter	of 2008.

					The	sale	does	not	include	the	corporate	and	investment	banking	business	or the	Germany-based	European	data	center.

					The	German	retail	banking	operations	had	total	assets	and	total	liabilities	as of	November	30,	2008	of	$15.6	billion	and	$11.8	billion,	respectively.

					Results	for	all	of	the	German	retail	banking	businesses	sold,	as	well	as	the net	gain	recognized	in	2008	from	this	sale,	are	reported	as	Discontinued operations	for	all	periods	presented.

					Summarized	financial	information	for	Discontinued	operations,	including cash	flows,	related	to	the	sale	of	the	German	retail	banking	operations	is	as follows:

# CitiCapital

On	July	31,	2008,	Citigroup	sold	substantially	all	of	CitiCapital,	the	equipment finance	unit	in	North	America.	The	total	proceeds	from	the	transaction	were approximately	$12.5	billion	and	resulted	in	an	after-tax	loss	to	Citigroup	of	$305 million.	This	loss	is	included	in	Income	from	discontinued	operations	on	the Company's	Consolidated	Statement	of	Income	for	the	second	quarter	of	2008. The	assets	and	liabilities	for	CitiCapital	totaled	approximately	$12.9	billion	and $0.5	billion,	respectively,	at	June	30,	2008.

					This	transaction	encompassed	seven	CitiCapital	equipment	finance	business lines,	including	Healthcare	Finance,	Private	Label	Equipment	Finance,	Material Handling	Finance,	Franchise	Finance,	Construction	Equipment	Finance,	Bankers Leasing,	and	CitiCapital	Canada.	CitiCapital's	Tax	Exempt	Finance	business	was not	part	of	the	transaction	and	was	retained	by	Citigroup.

					CitiCapital	had	approximately	1,400	employees	and	160,000	customers throughout	North	America.

					Results	for	all	of	the	CitiCapital	businesses	sold,	as	well	as	the	net	loss recognized	in	2008	from	this	sale,	are	reported	as	Discontinued	operations	for	all periods	presented.

					Summarized	financial	information	for	Discontinued	operations,	including cash	flows,	related	to	the	sale	of	CitiCapital	is	as	follows:

# Combined	Results	for	Discontinued	Operations

The	following	is	summarized	financial	information	for	the	Nikko	Cordial business,	German	retail	banking	operations	and	CitiCapital	business. Additionally,	contingency	consideration	payments	of	$29	million	pretax	($19 million	after-tax)	were	received	during	2009	related	to	the	sale	of	Citigroup's Asset	Management	business,	which	was	sold	in	December	2005.	Also,	in relation	to	the	sale	of	its	Life	Insurance	and	Annuity	business	in	2005,	the Company	fulfilled	its	previously	agreed	upon	obligations	with	regard	to	its remaining	10%	economic	interest	in	the	long-term	care	business	that	it	had	sold to	the	predecessor	of	Genworth	Financial	in	2000.	The	reimbursement	resulted	in a	pretax	loss	of	$50	million	($33	million	after-tax)	at	December	31,	2008.	Both the	Asset	Management	payment	received	and	the	Life	Insurance	and	Annuity payment	made	are	included	in	these	balances.

# 4. BUSINESS SEGMENTS

Citigroup	is	a	diversified	bank	holding	company	whose	businesses	provide	a broad	range	of	financial	services	to	consumer	and	corporate	customers	around the	world.	The	Company's	activities	are	conducted	through	the	Regional Consumer	Banking,	Institutional	Clients	Group	(ICG),	Citi	Holdings	and Corporate/Other	business	segments.

					The	Regional	Consumer	Banking	segment	includes	a	global,	full-service consumer	franchise	delivering	a	wide	array	of	banking,	credit	card	lending,	and investment	services	through	a	network	of	local	branches,	offices	and	electronic delivery	systems.

					The	businesses	included	in	the	Company's	ICG	segment	provide corporations,	governments,	institutions	and	investors	in	approximately	100 countries	with	a	broad	range	of	banking	and	financial	products	and	services.

					The	Citi	Holdings	segment	is	composed	of	the	Brokerage	and	Asset Management,	Local	Consumer	Lending	and	Special	Asset	Pool.

					Corporate/Other	includes	net	treasury	results,	unallocated	corporate expenses,	offsets	to	certain	line-item	reclassifications	(eliminations),	the	results of	discontinued	operations	and	unallocated	taxes.

					The	accounting	policies	of	these	reportable	segments	are	the	same	as	those disclosed	in	Note	1	to	the	Consolidated	Financial	Statements.

The	following	table	presents	certain	information	regarding	the	Company's	continuing	operations	by	segment:

| identifiable assets in billions | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Regional Consumer Banking | $22,771 | $ 25,674 | $ 26,643 | $(386) | $136 | $2,122 | $1,891 | $(3,140) | $5,589 | $213 | $199 |
| Institutional Clients Group | 37,435 | 34,881 | 33,454 | 5,261 | 2,746 | 3,116 | 12,888 | 9,305 | 8,969 | 866 | 803 |
| \t\t\t\t\t\t\tSubtotal\tCiticorp | 60,206 | 60,555 | 60,097 | 4,875 | 2,882 | 5,238 | 14,779 | 6,165 | 14,558 | 1,079 | 1,002 |
| Citi Holdings | 30,635 | (6,698) | 19,513 | (7,239) | (22,621) | (6,338) | (8,239) | (36,012) | (8,692) | 547 | 715 |
| Corporate/Other | (10,556) | (2,258) | (2,310) | (4,369) | (587) | (1,446) | (7,606) | (2,182) | (2,674) | 231 | 221 |
| Total | $80,285 | $ 51,599 | $ 77,300 | $ (6,733) | $ (20,326) | $ (2,546) | $(1,066) | $ (32,029) | $3,192 | $ 1,857 | $ 1,938 |

(2) Includes pretax provisions (credits) for credit losses and for benefits and claims in the Regional Consumer Banking results of $7.1 billion, $6.1 billion and $3.3 billion; in the ICG results of $1.7 billion, $1.9 billion and $557 million; and in the Citi Holdings results of $31.4 billion, $26.7 billion and $14.1 billion for 2009, 2008 and 2007, respectively.

(3) Corporate/Other reflects the restructuring charge, net of changes in estimates, of $1.5 billion for 2008 and $1.5 billion for 2007. Of the total charges, $890 million and $724 million is attributable to Citicorp; $267 million and $642 million to Citi Holdings; and $373 million and $131 million to Corporate/Other, for 2008 and 2007, respectively. See Note 10 to the Consolidated Financial Statements for further discussion.

# 5. INTEREST REVENUE AND EXPENSE

For	the	years	ended	December	31,	2009,	2008	and	2007,	respectively,	interest revenue	and	expense	consisted	of	the	following:

| In millions of dollars | 2009 | 2008 (1) | 2007 (1) |
| :--- | :--- | :--- | :--- |
| Interest revenue |  |  |  |
| Loan interest, including fees | $47,457 | $62,336 | $63,201 |
| Deposits with banks | 1,478 | 3,074 | 3,097 |
| Federal funds sold and securities |  |  |  |
| \t\t\t\t\t\t\tpurchased\tunder\tagreements\tto\tresell | 3,084 | 9,150 | 18,341 |
| Investments, including dividends | 13,119 | 10,718 | 13,423 |
| Trading account assets (2) | 10,723 | 17,446 | 18,474 |
| Other interest | 774 | 3,775 | 4,811 |
| Total interest revenue | $76,635 | $106,499 | $121,347 |
| Interest expense |  |  |  |
| Deposits (3) | $10,146 | $20,271 | $28,402 |
| Federal funds purchased and |  |  |  |
| \t\t\t\t\t\t\tsecurities\tloaned\tor\tsold\tunder |  |  |  |
| \t\t\t\t\t\t\tagreements\tto\trepurchase | 3,433 | 11,265 | 23,003 |
| Trading account liabilities (2) | 289 | 1,257 | 1,420 |
| Short-term borrowings | 1,425 | 3,911 | 7,023 |
| Long-term debt | 12,428 | 16,046 | 16,110 |
| Total interest expense | $27,721 | $52,750 | $75,958 |
| Net interest revenue | $48,914 | $53,749 | $45,389 |
| Provision for loan losses | 38,760 | 33,674 | 16,832 |
| Net interest revenue after |  |  |  |
| \t\t\t\t\t\t\tprovision\tfor\tloan\tlosses | $10,154 | $20,075 | $28,557 |

(2) Interest expense on Trading account liabilities of ICG is reported as a reduction of interest revenue from Trading account assets.

(3) Includes FDIC deposit insurance fees and charges.

# 6. COMMISSIONS AND FEES

Commissions	and	fees	revenue	includes	charges	to	customers	for	credit	and	bank cards,	including	transaction-processing	fees	and	annual	fees;	advisory	and	equity and	debt	underwriting	services;	lending	and	deposit-related	transactions,	such	as loan	commitments,	standby	letters	of	credit	and	other	deposit	and	loan	servicing activities;	investment	management-related	fees,	including	brokerage	services	and custody	and	trust	services;	and	insurance	fees	and	commissions.

					The	following	table	presents	commissions	and	fees	revenue	for	the	years ended	December	31:

| In millions of dollars | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Credit cards and bank cards | $4,110 | $4,517 | $5,036 |
| Investment banking | 3,466 | 2,284 | 5,228 |
| Smith Barney | 837 | 2,836 | 3,265 |
| ICG trading-related | 1,729 | 2,322 | 2,706 |
| Transaction services | 1,306 | 1,423 | 1,166 |
| Other consumer | 1,343 | 1,211 | 649 |
| Checking-related | 1,043 | 1,134 | 1,108 |
| Other ICG | 531 | 747 | 295 |
| Primerica | 314 | 415 | 455 |
| Loan servicing (1) | 1,858 | (1,731) | 560 |
| Corporate finance (2) | 697 | (4,876) | (667) |
| Other | (118) | 84 | 267 |
| Total commissions and fees | $17,116 | $10,366 | $20,068 |

(1)						Includes fair value adjustments on mortgage servicing assets. The mark-to-market on the underlying economic hedges of the MSRs is included in Other revenue.

(2) Includes write-downs of approximately $4.9 billion in 2008 and $1.5 billion in 2007, net of underwriting fees, on funded and unfunded highly leveraged finance commitments, recorded at fair value and reported as loans held for sale in Other assets. Write-downs were recorded on all highly leveraged finance commitments where there was value impairment, regardless of funding date.

# 7. PRINCIPAL TRANSACTIONS

Principal	transactions	revenue	consists	of	realized	and	unrealized	gains	and losses	from	trading	activities.	Trading	activities	include	revenues	from	fixed income,	equities,	credit	and	commodities	products,	as	well	as	foreign	exchange transactions.	Not	included	in	the	table	below	is	the	impact	of	net	interest	revenue related	to	trading	activities,	which	is	an	integral	part	of	trading	activities' profitability.	The	following	table	presents	principal	transactions	revenue	for	the years	ended	December	31:

(1)						Includes revenues from government securities and corporate debt, municipal securities, preferred stock, mortgage securities, and other debt instruments. Also includes spot and forward trading of currencies and exchange-traded and over-the-counter (OTC) currency options, options on fixed income securities, interest rate swaps, currency swaps, swap options, caps and floors, financial futures, OTC options, and forward contracts on fixed income securities.

(2) Includes revenues from foreign exchange spot, forward, option and swap contracts, as well as translation gains and losses.

(3) Includes revenues from common, preferred and convertible preferred stock, convertible corporate debt, equity-linked notes, and exchange-traded and OTC equity options and warrants.

(4) Primarily includes revenues from crude oil, refined oil products, natural gas, and other commodities trades.

(5) Includes revenues from structured credit products.

# 8. INCENTIVE PLANS

The	Company	has	adopted	a	number	of	equity	compensation	plans	under	which it	administers	stock	options,	restricted	or	deferred	stock	awards,	stock payments	and	stock	purchase	programs.	The	award	programs	are	used	to	attract, retain	and	motivate	officers,	employees	and	non-employee	directors,	to	provide incentives	for	their	contributions	to	the	long-term	performance	and	growth	of	the Company,	and	to	align	their	interests	with	those	of	stockholders.	The	plans	are administered	by	the	Personnel	and	Compensation	Committee	of	the	Citigroup Board	of	Directors	(the	Committee),	which	is	composed	entirely	of	independent non-employee	directors.	Since	April	19,	2005,	all	equity	awards	have	been pursuant	to	stockholder-approved	plans.

					At	December	31,	2009,	approximately	580.33	million	shares	were authorized	and	available	for	grant	under	Citigroup's	2009	Stock	Incentive	Plan, and	approximately	66.45	million	shares	were	available	for	purchase	under Citigroup's	2000	Stock	Purchase	Plan.	The	final	purchase	date	for	the	last offering	under	the	stock	purchase	plan	was	in	2005	and	the	plan	will	expire	by its	terms	on	April	30,	2010.	Citigroup's	general	practice	is	to	deliver	shares	from treasury	stock	upon	the	exercise	or	vesting	of	equity	awards.

					The	following	table	shows	components	of	compensation	expense	relating	to the	Company's	stock-based	compensation	programs	as	recorded	during	2009, 2008	and	2007:

| In millions of dollars | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Charges for estimated awards to |  |  |  |
| retirement-eligible employees | $207 | $110 | $467 |
| Option expense | 55 | 29 | 86 |
| Amortization of deferred cash awards | 113 | — | — |
| Amortization of MC LTIP awards (1) | 19 | 18 | 18 |
| Amortization of salary stock awards | 162 | — | — |
| Amortization of restricted and deferred |  |  |  |
| \t\t\t\t\t\t\tstock\tawards\t(2) | \t 1,543 | 3,133 | 2,728 |
| Total | $2,099 | $3,290 | $3,299 |

(1)						Management Committee Long-Term Incentive Plan (MC LTIP) awards were granted in 2007. The awards expired in December 2009 without the issuance of shares.

(2) Represents amortization of expense over the remaining life of all unvested restricted and deferred stock awards granted to all employees prior to 2006. The 2009, 2008 and 2007 periods also include amortization expense for all unvested awards to non-retirement- eligible employees on or after January 1, 2006. Amortization includes estimated forfeitures of awards.

# Stock Award Programs

Citigroup	issues	(and	has	issued)	shares	of	its	common	stock	in	the	form	of restricted	stock	awards,	deferred	stock	awards,	and	stock	payments	pursuant	to the	2009	Stock	Incentive	Plan	(and	predecessor	plans)	to	its	officers,	employees and	non-employee	directors.

					Citigroup's	primary	stock	award	program	is	the	Capital	Accumulation Program	(CAP).	Generally,	CAP	awards	of	restricted	or	deferred	stock constitute	a	percentage	of	annual	incentive	compensation	and	vest	ratably	over four-year	periods,	beginning	on	the	first	anniversary	of	the	award	date. 					Continuous	employment	within	Citigroup	is	generally	required	to	vest	in CAP	and	other	stock	award	programs.	Typically,	full	or	partial	vesting	is provided	for	participants	whose	employment	is	terminated	involuntarily	during the	vesting	period	for	a	reason	other	than	"gross	misconduct,"	who	meet specified	age	and	service	requirements	(retirement-eligible	participants),	or	who die	or	become	disabled	during	the	vesting	period.	Post-employment	vesting	by retirement-eligible	participants	is	generally	conditioned	upon	their	refraining from	competing	with	Citigroup	during	the	remaining	vesting	period.

					Generally,	in	order	to	reduce	the	use	of	shares	under	Citigroup's	stockholder- approved	stock	incentive	plan,	the	percentages	of	total	annual	incentives awarded	pursuant	to	CAP	in	2009	and	2010	were	reduced	and	were	instead awarded	as	deferred	cash	awards	in	the	U.S.	and	the	U.K.	The	deferred	cash awards	are	subject	to	two-year	and	four-year	vesting	schedules,	but	the	other terms	and	conditions	are	the	same	as	CAP	awards.	The	deferred	cash	awards earn	a	return	during	the	vesting	period	based	on	LIBOR;	in	2010	only,	a	portion of	the	deferred	cash	award	was	denominated	as	a	stock	unit,	the	value	of	which will	fluctuate	based	on	the	price	of	Citi	common	stock.	In	both	cases,	only	cash will	be	delivered	at	vesting.

					In	2009	and	prior	years,	CAP	awards	were	granted	to	Smith	Barney	financial advisors	and	employees	of	certain	other	businesses	with	two-year	vesting schedules	(FA	CAP).

					From	2003	to	2007,	Citigroup	granted	annual	stock	awards	under	its Citigroup	Ownership	Program	(COP)	to	a	broad	base	of	employees	who	were not	eligible	for	CAP.	The	COP	awards	of	restricted	or	deferred	stock	vest	after three	years,	but	otherwise	have	terms	similar	to	CAP.

					Non-employee	directors	receive	part	of	their	compensation	in	the	form	of deferred	stock	awards	that	vest	in	two	years,	and	may	elect	to	receive	part	of their	retainer	in	the	form	of	a	stock	payment,	which	they	may	elect	to	defer. 					From	time	to	time,	restricted	or	deferred	stock	awards	are	made	to	induce talented	employees	to	join	Citigroup	or	as	special	retention	awards	to	key employees.	Vesting	periods	vary,	but	are	generally	two	to	four	years.	Generally, recipients	must	remain	employed	through	the	vesting	dates	to	receive	the	shares awarded,	except	in	cases	of	death,	disability,	or	involuntary	termination	other than	for	"gross	misconduct."	Unlike	CAP,	these	awards	do	not	usually	provide for	post-employment	vesting	by	retirement-eligible	participants.

					For	all	stock	awards,	during	the	applicable	vesting	period,	the	shares awarded	are	not	issued	to	participants	(in	the	case	of	a	deferred	stock	award)	or cannot	be	sold	or	transferred	by	the	participants	(in	the	case	of	a	restricted	stock award),	until	after	the	vesting	conditions	have	been	satisfied.	Recipients	of deferred	stock	awards	do	not	have	any	stockholder	rights	until	shares	are delivered	to	them,	but	they	generally	are	entitled	to	receive	dividend-equivalent payments	during	the	vesting	period.	Recipients	of	restricted	stock	awards	are entitled	to	a	limited	voting	right	and	to	receive	dividend	equivalent	payments during	the	vesting	period.	Once	a	stock	award	vests,	the	shares	become	freely transferable	(but	certain	executives	are	required	to	hold	the	shares	subject	to	a stock	ownership	commitment).

					Compensation	in	respect	of	2009	performance	to	certain	officers	and	highly- compensated	employees	(other	than	the	CEO,	who	received	no	incentive compensation)	was	administered	pursuant	to	structures	approved	by	the	Special Master	for	TARP	Executive	Compensation	(Special	Master).	Pursuant	to	such structures,	the	affected	employees	did	not	participate	in	CAP	and	instead received	equity	compensation	in	the	form	of	salary	stock	payments	(which become	transferrable	in	monthly	installments	over	periods	of	either	one	year	or three	years	beginning	in	January	2010),	and	incentive	awards	in	the	form	of fully-vested	stock	payments,	long-term	restricted	stock	(LTRS)	and	other restricted	and	deferred	stock	awards	subject	to	vesting	requirements	and	sale restrictions.	The	LTRS	awards	generally	will	not	vest	unless	the	employee remains	employed	until	January	20,	2013,	and	vested	shares	will	become transferable	only	in	25%	installments	as	each	25%	of	Citi's	TARP	obligations	is repaid.	The	awards	are	also	subject	to	clawback	provisions.	Similar	to	CAP awards,	the	LTRS	awards	will	vest	in	the	event	of	the	recipient's	death	or disability,	but	vesting	upon	retirement	or	a	change	in	control	are	not	provided. The	other	restricted	and	deferred	stock	awards	vest	ratably	over	three	years pursuant	to	terms	similar	to	CAP	awards,	but	vested	shares	are	subject	to	sale restrictions	until	the	later	of	the	first	anniversary	of	the	regularly	scheduled vesting	date,	or	January	20,	2013.

					Unearned	compensation	expense	associated	with	the	CAP,	COP	and	the other	restricted	and	deferred	stock	awards	described	above	represents	the	market value	of	Citigroup	common	stock	at	the	date	of	grant	and	is	recognized	as	a charge	to	income	ratably	over	the	vesting	period,	except	for	those	awards granted	to	retirement-eligible	employees.	The	charge	to	income	for	awards	made to	retirement-eligible	employees	is	accelerated	based	on	the	dates	the	retirement rules	are	met.	Beginning	in	2006,	stock	awards	to	retirement-eligible	employees are	recognized	in	the	year	prior	to	the	grant	in	the	same	manner	as	cash	incentive compensation	is	accrued.

					In	connection	with	its	agreement	to	repay	$20	billion	of	its	TARP	obligations to	the	U.S.	Treasury	Department	in	December	2009,	Citigroup	announced	that $1.7	billion	of	incentive	compensation	that	would	have	otherwise	been	awarded in	cash	to	employees	in	respect	of	2009	performance	would	instead	be	awarded as	"common	stock	equivalent"	(CSE)	awards.	CSE	awards	are	denominated	in U.S.	dollars	or	in	local	currency	and	will	be	paid	in	April	2010.	CSEs	are	subject to	forfeiture	only	if	employment	is	terminated	for	reason	of	"gross	misconduct" on	or	prior	to	the	payment	date.	If	stockholders	approve	in	April	2010,	the	CSEs will	be	paid	in	fully	transferable

shares	of	Citigroup	common	stock.	The	number	of	shares	to	be	delivered	will equal	the	CSE	award	value	divided	by	the	then	fair	market	value	of	the	common stock.	For	CSEs	awarded	to	certain	employees	whose	compensation	structure was	approved	by	the	Special	Master,	50%	of	the	shares	to	be	delivered	in	April 2010	will	be	subject	to	restrictions	on	sale	and	transfer	until	January	20,	2011.	In lieu	of	2010	CAP	awards,	certain	retirement-eligible	employees	were	instead awarded	CSEs	payable	in	April	2010,	but	any	shares	that	are	to	be	delivered	in April	2010	(subject	to	stockholder	approval)	will	be	subject	to	restrictions	on	sale or	transfer	that	will	lapse	in	four	equal	annual	installments	beginning	January	20, 2011.	CSE	awards	have	generally	been	accrued	as	compensation	expenses	in	the year	2009	and	will	be	recorded	as	a	liability	from	the	January	2010	grant	date until	the	settlement	date	in	April	2010.	If	stockholders	approve	delivery	of Citigroup	stock	for	the	CSE	awards,	CSE	awards	will	likely	be	paid	as	new issues	of	common	stock	as	an	exception	to	the	Company's	practice	of	delivering shares	from	treasury	stock,	and	the	recorded	liability	will	be	reclassified	as equity	at	that	time.

					In	January	2009,	members	of	the	Management	Executive	Committee	(except the	CEO	and	CFO)	received	30%	of	their	incentive	awards	for	2008	as performance	vesting-equity	awards.	These	awards	vest	50%	if	the	price	of Citigroup	common	stock	meets	a	price	target	of	$10.61,	and	50%	for	a	price target	of	$17.85,	in	each	case	on	or	prior	to	January	14,	2013.	The	price	target will	be	met	only	if	the	NYSE	closing	price	equals	or	exceeds	the	applicable	price target	for	at	least	20	NYSE	trading	days	within	any	period	of	30	consecutive NYSE	trading	days	ending	on	or	before	January	14,	2013.	Any	shares	that	have not	vested	by	such	date	will	vest	according	to	a	fraction,	the	numerator	of	which is	the	share	price	on	the	delivery	date	and	the	denominator	of	which	is	the	price target	of	the	unvested	shares.	No	dividend	equivalents	are	paid	on	unvested awards.	Fair	value	of	the	awards	is	recognized	as	compensation	expense	ratably over	the	vesting	period.

					On	July	17,	2007,	the	Committee	approved	the	Management	Committee Long-Term	Incentive	Plan	(MC	LTIP)	(pursuant	to	the	terms	of	the	shareholder- approved	1999	Stock	Incentive	Plan)	under	which	participants	received	an equity	award	that	could	be	earned	based	on	Citigroup's	performance	against various	metrics	relative	to	peer	companies	and	publicly-stated	return	on	equity (ROE)	targets	measured	at	the	end	of	each	calendar	year	beginning	with	2007. The	final	expense	for	each	of	the	three	consecutive	calendar	years	was	adjusted based	on	the	results	of	the	ROE	tests.	No	awards	were	earned	for	2009,	2008	or 2007	and	no	shares	were	issued	because	performance	targets	were	not	met.	No new	awards	were	made	under	the	MC	LTIP	since	the	initial	award	in	July	2007. 					CAP	participants	in	2008,	2007,	2006	and	2005,	and	FA	CAP	participants	in those	years	and	in	2009,	could	elect	to	receive	all	or	part	of	their	award	in	stock options.	The	figures	presented	in	the	stock	option	program	tables	(see	"Stock Option	Programs"	below)	include	options	granted	in	lieu	of	CAP	and	FA	CAP stock	awards	in	those	years.

					A	summary	of	the	status	of	Citigroup's	unvested	stock	awards	at	December 31,	2009	and	changes	during	the	12	months	ended	December	31,	2009	are presented	below:

| Unvested stock awards | Shares | fair value |
| :--- | :--- | :--- |
| Unvested at January 1, 2009 | 226,210,859 | $36.23 |
| New awards | 162,193,923 | $4.35 |
| Cancelled awards | (51,873,773) | $26.59 |
| Deleted awards | (568,377) | $13.91 |
| Vested awards (1) | (148,011,884) | $25.96 |
| Unvested at December 31, 2009 | 187,950,748 | $19.53 |

(1)						The weighted-average market value of the vestings during 2009 was approximately $3.64 per share.

					At	December	31,	2009,	there	was	$1.6	billion	of	total	unrecognized compensation	cost	related	to	unvested	stock	awards	net	of	the	forfeiture provision.	That	cost	is	expected	to	be	recognized	over	a	weighted-average	period of	1.3	years.

# Stock Option Programs

The	Company	has	a	number	of	stock	option	programs	for	its	non-employee directors,	officers	and	employees.	Generally,	in	January	2008,	2007	and	2006, stock	options	were	granted	only	to	CAP	and	FA	CAP	participants	who	elected	to receive	stock	options	in	lieu	of	restricted	or	deferred	stock	awards,	and	to	non- employee	directors	who	elected	to	receive	their	compensation	in	the	form	of	a stock	option	grant.	Beginning	in	2009,	CAP	participants,	and	directors	may	no longer	elect	to	receive	stock	options.	Occasionally,	stock	options	also	may	be granted	as	sign-on	awards.	All	stock	options	are	granted	on	Citigroup	common stock	with	exercise	prices	that	are	no	less	than	the	fair	market	value	at	the	time	of grant	(which	is	defined	under	the	plan	to	be	the	NYSE	closing	price	on	the trading	day	immediately	preceding	the	grant	date,	or	on	the	grant	date	for	grants to	certain	officers).	Generally,	options	granted	from	2003	through	2009	have six-year	terms,	and	vest	ratably	over	three-	or	four-year	periods;	however, directors'	options	cliff	vest	after	two	years,	and	vesting	schedules	for	sign-on grants	may	vary.	The	sale	of	shares	acquired	through	the	exercise	of	employee stock	options	granted	from	2003	through	2008	(and	FA	CAP	options	granted	in 2009)	is	restricted	for	a	two-year	period	(and	may	be	subject	to	the	stock ownership	commitment	of	senior	executives	thereafter).

					Prior	to	2003,	Citigroup	options,	including	options	granted	since	the	date	of the	merger	of	Citicorp	and	Travelers	Group,	Inc.,	generally	vested	at	a	rate	of 20%	per	year	over	five	years	(with	the	first	vesting	date	occurring	12	to	18 months	following	the	grant	date)	and	had	10-year	terms.	Certain	options,	mostly granted	prior	to	January	1,	2003,	and	with	10-year	terms,	permit	an	employee exercising	an	option	under	certain	conditions	to	be	granted	new	options	(reload options)	in	an	amount	equal	to	the	number	of	common	shares	used	to	satisfy	the exercise	price	and	the	withholding	taxes	due	upon	exercise.	The	reload	options are	granted	for	the	remaining	term	of	the	related	original	option	and	vest	after	six months.	Reload	options	may	in	turn	be	exercised	using	the	reload	method,	given certain	conditions.	An	option	may	not	be	exercised	using	the	reload	method unless	the	market	price	on	the	date	of	exercise	is	at	least	20%	greater	than	the option	exercise	price.

					On	October	29,	2009,	Citigroup	made	a	one-time	broad-based	option	grant	to employees	worldwide.	The	options	have	a	six-year	term,	and	generally	vest	in three	equal	installments	over	three	years,	beginning	on	the	first	anniversary	of the	grant	date.	The	options	were	awarded	with	a	strike	price	equal	to	the	NYSE closing	price	on	the	trading	day	immediately	preceding	the	date	of	grant	($4.08). The	CEO	and	other	employees	whose	2009	compensation	was	subject to	structures	approved	by	the	Special	Master	did	not	participate	in	this	grant. 					In	January	2009,	members	of	the	Management	Executive	Committee received	10%	of	their	awards	as	performance-priced	stock	options,	with	an exercise	price	that	placed	the	awards	significantly	"out	of	the	money"	on	the	date of	grant.	Half	of	each	executive's	options	have	an	exercise	price	of	$17.85	and half	have	an	exercise	price	of	$10.61.	The	options	were	granted	on	a	day	on which	Citi's	closing	price	was	$4.53.	The	options	have	a	10-year	term	and	vest ratably	over	a	four-year	period.

					On	January	22,	2008,	Vikram	Pandit,	CEO,	was	awarded	stock	options	to purchase	three	million	shares	of	common	stock.	The	options	vest	25%	per	year beginning	on	the	first	anniversary	of	the	grant	date	and	expire	on	the	tenth anniversary	of	the	grant	date.	One-third	of	the	options	have	an	exercise	price equal	to	the	NYSE	closing	price	of	Citigroup	stock	on	the	grant	date	($24.40), one-third	have	an	exercise	price	equal	to	a	25%	premium	over	the	grant-date closing	price	($30.50),	and	one-third	have	an	exercise	price	equal	to	a	50% premium	over	the	grant	date	closing	price	($36.60).	The	first	installment	of	these options	vested	on	January	22,	2009.	These	options	do	not	have	a	reload	feature. 					From	1997-2002,	a	broad	base	of	employees	participated	in	annual	option grant	programs.	The	options	vested	over	five-year	periods,	or	cliff	vested	after five	years,	and	had	10-year	terms	but	no	reload	features.	No	grants	have	been made	under	these	programs	since	2002.

Information	with	respect	to	stock	option	activity	under	Citigroup	stock	option	programs	for	the	years	ended	December	31,	2009,	2008	and	2007	is	as	follows:

|  |  |  | 2009 |  |  | 2008 |  |  | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Weighted- |  |  | Weighted- |  |  | Weighted- |  |
|  |  | average | Intrinsic |  | average | Intrinsic |  | average | Intrinsic |
|  |  | exercise | value |  | exercise | value |  | exercise | value |
|  | Options | price | per share | Options | price | per share | Options | price | per share |
| Outstanding, beginning of period | 143,860,657 | $41.84 | $— | 172,767,122 | $43.08 | $— | 212,067,917 | $41.87 | $13.83 |
| Granted—original | 321,244,728 | 4.27 | — | 18,140,448 | 24.70 | — | 2,178,136 | 54.21 | — |
| Granted—reload | — | — | — | 15,984 | 28.05 | — | 3,093,370 | 52.66 | — |
| Forfeited or exchanged | (39,285,305) | 36.98 | — | (24,080,659) | 42.19 | — | (8,796,402) | 46.26 | 1.52 |
| Expired | (21,775,274) | 36.21 | — | \t (20,441,584) | 38.88 | — | (843,256) | 43.40 | 4.38 |
| Exercised | — | — | — | (2,540,654) | 22.36 | — | (34,932,643) | 36.62 | 11.16 |
| Outstanding, end of period | 404,044,806 | $12.75 | $— | 143,860,657 | $41.84 | $— | 172,767,122 | $43.08 | $— |
| Exercisable at end of period | 78,939,093 |  |  | 123,654,795 |  |  | 165,024,814 |  |  |

The	following	table	summarizes	the	information	about	stock	options	outstanding	under	Citigroup	stock	option	programs	at	December	31,	2009:

|  | Number | contractual life | Weighted-average | Number | Weighted-average |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Range of exercise prices | outstanding | remaining | exercise price\t\t\t\t\t\t\texercisable | exercise price\t\t\t\t\t\t\texercisable | exercise price |
| $2.97–$9.99 | 310,267,922 | 5.8 years | $4.08 | 232,964 | $5.89 |
| $10.00–$19.99 | 5,718,033 | 8.6 years | 14.75 | 257,547 | 15.74 |
| $20.00–$29.99 | 10,765,908 | 4.5 years | 24.52 | 3,518,919 | 24.81 |
| $30.00–$39.99 | 6,340,854 | 3.8 years | 34.66 | 4,836,471 | 35.01 |
| $40.00–$49.99 | 63,222,120 | 1.0 years | 46.17 | 62,878,916 | 46.16 |
| $50.00–$56.41 | 7,729,969 | 2.0 years | 52.12 | 7,214,276 | 51.96 |
|  | 404,044,806 | 5.0 years | $12.76 | 78,939,093 | $44.83 |

As	of	December	31,	2009,	there	was	$445.6	million	of	total	unrecognized compensation	cost	related	to	stock	options;	this	cost	is	expected	to	be	recognized over	a	weighted-average	period	of	1.9	years.

# Fair Value Assumptions

Reload	options	are	treated	as	separate	grants	from	the	related	original	grants. Pursuant	to	the	terms	of	currently	outstanding	reloadable	options,	upon	exercise of	an	option,	if	employees	use	previously	owned	shares	to	pay	the	exercise	price and	surrender	shares	otherwise	to	be	received	for	related	tax	withholding,	they will	receive	a	reload	option	covering	the	same	number	of	shares	used	for	such purposes,	but	only	if	the	market	price	on	the	date	of	exercise	is	at	least	20% greater	than	the	option	exercise	price.	Reload	options	vest	after	six	months	and carry	the	same	expiration	date	as	the	option	that	gave	rise	to	the	reload	grant. The	exercise	price	of	a	reload	grant	is	the	fair-market	value	of	Citigroup common	stock	on	the	date	the	underlying	option	is	exercised.	Reload	options	are intended	to	encourage	employees	to	exercise	options	at	an	earlier	date	and	to retain	the	shares	acquired.	The	result	of	this	program	is	that	employees	generally will	exercise	options	as	soon	as	they	are	able	and,	therefore,	these	options	have shorter	expected	lives.	Shorter	option	lives	result	in	lower	valuations.	However, such	values	are	expensed	more	quickly	due	to	the	shorter	vesting	period	of reload	options.	In	addition,

since	reload	options	are	treated	as	separate	grants,	the	existence	of	the	reload feature	results	in	a	greater	number	of	options	being	valued.	Shares	received through	option	exercises	under	the	reload	program,	as	well	as	certain	other options,	are	subject	to	restrictions	on	sale.

					Additional	valuation	and	related	assumption	information	for	Citigroup option	programs	is	presented	below.	Citigroup	uses	a	lattice-type	model	to	value stock	options.

N/A		Not	applicable

# 9. RETIREMENT BENEFITS

The	Company	has	several	non-contributory	defined-benefit	pension	plans covering	certain	U.S.	employees	and	has	various	defined-benefit	pension	and termination-indemnity	plans	covering	employees	outside	the	United	States.	The U.S.	qualified	defined-benefit	plan	provides	benefits	under	a	cash	balance formula.	However,	employees	satisfying	certain	age	and	service	requirements remain	covered	by	a	prior	final-average	pay	formula	under	that	plan.	Effective January	1,	2008,	the	U.S.	qualified	pension	plan	was	frozen	for	most	employees. Accordingly,	no	additional	compensation-based	contributions	were	credited	to the	cash-balance	plan	for	existing	plan	participants	during	2008	or	2009. However,	certain	employees	covered	under	the

prior	final-pay	plan	continue	to	accrue	benefits.	The	Company	also	offers postretirement	health	care	and	life	insurance	benefits	to	certain	eligible	U.S. retired	employees,	as	well	as	to	certain	eligible	employees	outside	the	United States.

					The	following	tables	summarize	the	components	of	net	(benefit)	expense recognized	in	the	Consolidated	Statement	of	Income	and	the	funded	status	and amounts	recognized	in	the	Consolidated	Balance	Sheet	for	the	Company's	U.S. qualified	pension	plan,	postretirement	plans	and	plans	outside	the	United	States. The	Company	uses	a	December	31	measurement	date	for	the	U.S.	plans	as	well as	the	plans	outside	the	United	States.

# Net (Benefit) Expense

|  |  |  |  | Pension plans | Pension plans | Pension plans |  |  |  | Postretirement benefit plans | Postretirement benefit plans | Postretirement benefit plans |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | U.S. plans (1) | U.S. plans (1) |  | Non-U.S. plans | Non-U.S. plans |  |  | U.S. plans |  | Non-U.S. plans | Non-U.S. plans |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 | 2008 | 2007\t\t\t\t\t 2009\t\t\t\t\t 2008\t\t\t\t\t 2007\t\t\t\t\t 2009 | 2007\t\t\t\t\t 2009\t\t\t\t\t 2008\t\t\t\t\t 2007\t\t\t\t\t 2009 | 2007\t\t\t\t\t 2009\t\t\t\t\t 2008\t\t\t\t\t 2007\t\t\t\t\t 2009 | 2007\t\t\t\t\t 2009\t\t\t\t\t 2008\t\t\t\t\t 2007\t\t\t\t\t 2009 | 2007\t\t\t\t\t 2009\t\t\t\t\t 2008\t\t\t\t\t 2007\t\t\t\t\t 2009 | 2008 | 2007 |
| Benefits earned during the year | $18 | $23 | $301 | $148 | $201 | $202 | $1 | $1 | $1 | $26 | $36 | $27 |
| Interest cost on benefit obligation | 649 | 674 | 641 | 301 | 354 | 318 | 61 | 62 | 59 | 89 | 96 | 75 |
| Expected return on plan assets | (912) | (949) | (889) | (336) | (487) | (477) | (10) | (12) | (12) | (77) | (109) | (103) |
| Amortization of unrecognized |  |  |  |  |  |  |  |  |  |  |  |  |
| Net transition obligation | — | — | — | (1) | 1 | 2 | — | — | — | — | — | — |
| Prior service cost (benefit) | (1) | (2) | (3) | 4 | 4 | 3 | (1) | — | (3) | — | — | — |
| Net actuarial loss | 10 | — | 84 | 60 | 24 | 39 | 2 | 4 | 3 | 18 | 21 | 13 |
| Curtailment (gain) loss (2) | 47 | 56 | — | 22 | 108 | 36 | — | 16 | 9 | — | — | — |
| Net (benefit) expense | $ (189) | $ (198) | $134 | $198 | $205 | $123 | $53 | $71 | $57 | $56 | $44 | $12 |

(2) The 2009 curtailment loss in the non-U.S pension plans includes $18 million gain reflecting the sale of Citigroup's Nikko operations. See Note 3 to the Consolidated Financial Statements for further discussion of the sale of Nikko operations.

The	estimated	net	actuarial	loss,	prior	service	cost	and	net	transition	obligation that	will	be	amortized	from	Accumulated	other	comprehensive	income	(loss)	into net	expense	in	2010	are	approximately	$104	million,	$2	million	and	$(2)	million, respectively,	for	defined-benefit	pension	plans.	For	postretirement	plans,	the estimated	2010	net	actuarial	loss	and	prior	service	cost	amortizations	are approximately	$21	million	and	$(3)	million,	respectively.

# Net Amount Recognized

|  |  |  | Pension plans | Pension plans |  | Post retirement benefit plans | Post retirement benefit plans | Post retirement benefit plans |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | U.S. plans (1) | Non-U.S. plans | Non-U.S. plans |  | U.S. plans | Non-U.S. plans | Non-U.S. plans |
| In millions of dollars | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| Change in projected benefit obligation |  |  |  |  |  |  |  |  |
| Projected benefit obligation at beginning of year | $11,010 | $11,029 | $4,563 | $6,007 | $1,062 | $1,042 | $937 | $1,193 |
| Benefits earned during the year | 18 | 23 | 148 | 201 | 1 | 1 | 26 | 36 |
| Interest cost on benefit obligation | 649 | 674 | 301 | 354 | 60 | 62 | 89 | 96 |
| Plan amendments | — | — | (2) | 2 | — | — | (4) | — |
| Actuarial loss (gain) | 559 | (167) | 533 | (625) | 43 | 1 | 57 | (79) |
| Benefits paid | (1,105) | (607) | (225) | (282) | (93) | (72) | (42) | (41) |
| Expected Medicare Part D subsidy | — | — | — | — | 13 | 11 | — | — |
| Acquisitions | — | — | — | 206 | — | — | — | — |
| Divestitures | — | — | (170) | (380) | — | — | — | — |
| Settlements | — | — | (94) | (65) | — | — | — | — |
| Curtailments (2) | 47 | 58 | 13 | 3 | — | 17 | (3) | (2) |
| Foreign exchange impact | — | — | 333 | (858) | — | — | 81 | (266) |
| Projected benefit obligation at year end | $11,178 | $11,010 | $5,400 | $4,563 | $1,086 | $1,062 | $1,141 | $937 |
| Change in plan assets |  |  |  |  |  |  |  |  |
| Plan assets at fair value at beginning of year | $11,516 | $12,840 | $4,536 | $6,629 | $143 | $191 | $671 | $1,008 |
| Actual return on plan assets | (488) | (730) | 728 | (883) | (7) | (7) | 194 | (182) |
| Company contributions (3) | 11 | 13 | 382 | 286 | 71 | 31 | 91 | 72 |
| Employee contributions | — | — | 5 | 6 | — | — | — | — |
| Acquisitions | — | — | — | 165 | — | — | — | — |
| Divestitures | — | — | (122) | (380) | — | — | — | — |
| Settlements | — | — | (95) | (57) | — | — | — | — |
| Benefits paid | (1,105) | (607) | (225) | (282) | (93) | (72) | (42) | (42) |
| Foreign exchange impact | — | — | 383 | (948) | — | — | 53 | (185) |
| Plan assets at fair value at year end | $9,934 | $11,516 | $5,592 | $4,536 | $114 | $143 | $967 | $671 |
| Funded status of the plan at year end (4) | $(1,244) | $506 | $192 | $(27) | $(972) | $(919) | $(174) | $(266) |
| Net amount recognized |  |  |  |  |  |  |  |  |
| Benefit asset | $ — | $506 | $684 | $511 | $ — | $— | $57 | $— |
| Benefit liability | (1,244) | — | (492) | (538) | (972) | (919) | (231) | (266) |
| Net amount recognized on the balance sheet | $(1,244) | $506 | $192 | $(27) | $(972) | $(919) | $(174) | $(266) |
| Amounts recognized in Accumulated |  |  |  |  |  |  |  |  |
| other comprehensive income (loss) |  |  |  |  |  |  |  |  |
| Net transition obligation | $ — | $— | $(4) | $(5) | $— | $— | $1 | $1 |
| Prior service cost (benefit) | (2) | (4) | 23 | 29 | (10) | (10) | (5) | (1) |
| Net actuarial loss | 3,927 | 1,978 | 1,280 | 1,219 | 99 | 41 | 393 | 442 |
| Net amount recognized in equity—pretax | $3,925 | $1,974 | $1,299 | $1,243 | $89 | $31 | $389 | $442 |
| Accumulated benefit obligation at year end | $11,129 | $10,937 | $4,902 | $4,145 | $1,086 | $1,062 | $1,141 | $937 |

(1)						The U.S. plans exclude nonqualified pension plans, for which the aggregate projected benefit obligation was $637 million and $586 million and the aggregate accumulated benefit obligation was $636 million and $580 million at December 31, 2009 and 2008, respectively. These plans are unfunded. As such, the funded status of these plans is $(637) million and $(586) million at December 31, 2009 and 2008, respectively. Accumulated other comprehensive income (loss) reflects pretax charges of $137 million and $72 million at December 31, 2009 and 2008, respectively, that primarily relate to net actuarial loss.

(2) Changes in projected benefit obligation due to curtailments in the non-U.S. pension plans in 2009 include $(3) million and $(9) million in curtailment gains and $16 million and $12 million in special termination costs during 2009 and 2008, respectively.

(3) Company contributions to the U.S. pension plan include $11 million and $13 million during 2009 and 2008, respectively, relating to certain investment advisory fees and administrative costs that were absorbed by the Company. Company contributions to the non-U.S. pension plans include $29 million and $55 million of benefits directly paid by the Company during 2009 and 2008, respectively.

(4) The U.S. qualified pension plan is fully funded under specified ERISA funding rules as of January 1, 2009 and projected to be fully funded under these rules as of December 31, 2009.

# The	following	table	shows	the	change	in	Accumulated	other	comprehensive

| In millions of dollars | 2009 | 2008							Change | 2008							Change |
| :--- | :--- | :--- | :--- |
| Other assets |  |  |  |
| Prepaid benefit cost | $741 | $ 1,017 | $(276) |
| Other liabilities |  |  |  |
| Accrued benefit liability | 3,576 | 2,309 | 1,267 |
| Funded status (1) | $(2,835) | $(1,292) | $ (1,543) |
| Change in deferred taxes, net |  |  | $513 |
| Amortization and other |  |  | 184 |
| Change in accumulated other |  |  |  |
| comprehensive income (loss) |  |  | $(846) |

(1)						Funded status consists of Net amount recognized on the balance sheet of the U.S. qualified and nonqualified pension and postretirement benefit plans, as well as the non- U.S. pension and postretirement plans.

					At	the	end	of	2009	and	2008,	for	both	qualified	and	nonqualified	plans	and for	both	funded	and	unfunded	plans,	the	aggregate	projected	benefit	obligation (PBO),	the	aggregate	accumulated	benefit	obligation	(ABO),	and	the	aggregate fair	value	of	plan	assets	for	pension	plans	with	a	projected	benefit	obligation	in excess	of	plan	assets,	and	pension	plans	with	an	accumulated	benefit	obligation in	excess	of	plan	assets,	were	as	follows:

|  |  | PBO exceeds fair value of plan | PBO exceeds fair value of plan | PBO exceeds fair value of plan |  | ABO exceeds fair value of plan | ABO exceeds fair value of plan | ABO exceeds fair value of plan |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | assets | assets |  |  | assets | assets |
|  |  | U.S. plans(1) | Non-U.S. plans | Non-U.S. plans |  | U.S. plans(1) | Non-U.S. plans | Non-U.S. plans |
| In millions of dollars | 2009\t\t\t\t\t\t\t 2008 | 2009\t\t\t\t\t\t\t 2008 | 2009 | 2008 | 2009\t\t\t\t\t\t\t 2008 | 2009\t\t\t\t\t\t\t 2008 | 2009 | 2008 |
| Projected benefit obligation | $ 11,815 | $ 586 | \t$ 1,662 | $ 1,866 | $ 11,815 | $ 586 | $ 1,288 | \t$ 1,374 |
| Accumulated benefit obligation | 11,765 | 580 | 1,414 | 1,640 | 11,765 | 580 | 1,127 | 1,231 |
| Fair value of plan assets | 9,934 | — | 1,169 | 1,328 | 9,934 | — | 842 | 875 |

(1)						In 2009, the PBO and ABO of the U.S. plans include $11,178 million and $11,129 million, respectively, relating to the qualified plan and $637 million and $636 million, respectively, relating to the nonqualified plans. The PBO and ABO of the U.S. qualified pension plan did not exceed fair value of plan assets at December 31, 2008 and were not included in the 2008 benefit obligations summarized above.

					At	December	31,	2009,	combined	accumulated	benefit	obligations	for	the U.S.	and	non-U.S.	pension	plans,	excluding	U.S.	nonqualified	plans,	exceeded plan	assets	by	$0.5	billion.	At	December	31,	2008,	combined	plan	assets	for	the U.S.	and	non-U.S.	pension	plans,	excluding	U.S.	nonqualified	plans,	exceeded the	accumulated	benefit	obligations	by	$1.0	billion.

# Assumptions

The	discount	rate	and	future	rate	of	compensation	assumptions	used	in determining	pension	and	postretirement	benefit	obligations	and	net	benefit expense	for	the	Company's	plans	are	shown	in	the	following	table:

(1)						Weighted-average rates for the U.S. plans equal the stated rates.

(2) Effective January 1, 2008, the U.S. qualified pension plan was frozen. Only the future compensation increases for the grandfathered employees will affect future pension expense and obligations. Future compensation increase rates for small groups of employees were 4% or 6%.

A	one-percentage-point	change	in	the	discount	rates	would	have	the	following effects	on	pension	expense:

|  |  | One-percentage-point increase | One-percentage-point increase |  | One-percentage-point decrease | One-percentage-point decrease |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008\t\t\t\t\t\t\t\t\t\t\t\t 2007\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008 | 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008\t\t\t\t\t\t\t\t\t\t\t\t 2007\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008 | 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008\t\t\t\t\t\t\t\t\t\t\t\t 2007\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008 | 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008\t\t\t\t\t\t\t\t\t\t\t\t 2007\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008 | 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008\t\t\t\t\t\t\t\t\t\t\t\t 2007\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008 | 2007 |
| Effect on pension expense for U.S. plans (1) | $14 | $36 | $25 | $ (27) | $ (24) | $(5) |
| Effect on pension expense for non-U.S. plans | (40) | (58) | (59) | 62 | 94 | 80 |

(1)						Due to the freeze of the U.S. qualified pension plan commencing January 1, 2008, the majority of the prospective service cost has been eliminated and the gain/loss amortization period was changed to the life expectancy for inactive participants. As a result, pension expense for the U.S. qualified pension plan is driven more by interest costs than service costs, and an increase in the discount rate would increase pension expense, while a decrease in the discount rate would decrease pension expense.

# Assumed	health-care	cost-trend	rates	were	as	follows:

A	one-percentage-point	change	in	assumed	health-care	cost-trend	rates	would have	the	following	effects:

| interest cost for U.S. plans | $3 | $3 | $(3) | $(2) |
| :--- | :--- | :--- | :--- | :--- |
| Effect on accumulated |  |  |  |  |
| \t\t\t\t\t\t\tpostretirement\tbenefit |  |  |  |  |
| obligation for U.S. plans | 60 | 47 | (49) | (41) |

					Citigroup	considers	the	expected	rate	of	return	to	be	a	long-term	assessment of	return	expectations,	based	on	each	plan's	expected	asset	allocation,	and	does not	anticipate	changing	this	assumption	annually	unless	there	are	significant changes	in	economic	conditions	or	portfolio	composition.	Market	performance over	a	number	of	earlier	years	is	evaluated	covering	a	wide	range	of	economic conditions	to	determine	whether	there	are	sound	reasons	for	projecting	any	past trends.

					The	expected	long-term	rates	of	return	on	assets	used	in	determining	the Company's	pension	expense	are	shown	below:

| Rate of return on assets |  |  |
| :--- | :--- | :--- |
| U.S. plans (1) | 7.75% | 8.00% |
| Non-U.S. plans |  |  |
| Range | 2.50 to 13.0 | 3.14 to 12.5 |
| Weighted average | 7.31 | 7.62 |

(1)						Weighted-average rates for the U.S. plans equal the stated rates. As of December 31, 2008, the Company lowered its expected rate of return to 7.75%.

A	one-percentage-point	change	in	the	expected	rates	of	return	would	have	the following	effects	on	pension	expense:

|  |  | One-percentage-point increase | One-percentage-point increase |  | One-percentage-point decrease | One-percentage-point decrease |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008\t\t\t\t\t\t\t\t\t\t\t\t 2007 | 2007\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008\t\t\t\t\t\t\t\t\t\t\t\t 2007 | 2007\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008\t\t\t\t\t\t\t\t\t\t\t\t 2007 | 2007\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008\t\t\t\t\t\t\t\t\t\t\t\t 2007 |
| Effect on pension expense for U.S. plans | $ (109) | $ (118) | $ (118) | $ 109 | \t$ 118 | \t$ 118 |
| Effect on pension expense for non-U.S. plans | (44) | (66) | (59) | 44 | 66 | 59 |

# Plan Assets

Citigroup's	pension	and	postretirement	plans'	asset	allocations	for	the	U.S.	plans	at	the	end	of	2009	and	2008,	and	the	target	allocations	for	2010	by	asset	category	based on	asset	fair	values,	are	as	follows:

|  | Target asset | U.S. pension assets | U.S. pension assets | U.S. postretirement assets | U.S. postretirement assets |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | allocation | at December 31 | at December 31 |  | at\tDecember\t31 |
| Asset category (1) | 2010\t\t\t\t\t\t\t\t\t\t\t\t2009\t\t\t\t\t\t\t\t\t\t\t\t2008 | 2010\t\t\t\t\t\t\t\t\t\t\t\t2009\t\t\t\t\t\t\t\t\t\t\t\t2008 | 2010\t\t\t\t\t\t\t\t\t\t\t\t2009\t\t\t\t\t\t\t\t\t\t\t\t2008 | 2009 | 2008 |
| Equity securities (2) | 0 to 34% | 12% | 6% | 12% | 6% |
| Debt securities | 30 to 67 | 40 | 42 | 39 | 42 |
| Real estate | 0 to 7 | 5 | 6 | 5 | 6 |
| Private equity | 0 to 15 | 16 | 17 | 16 | 17 |
| Other investments | 8 to 34 | 27 | 29 | 28 | 29 |
| Total |  | 100% | 100% | 100% | 100% |

(1)						Target asset allocations for the U.S. plans are set by investment strategy, not by investment product. For example, private equities with an underlying investment in real estate are classified in the real estate asset category, not private equity.

(2) Equity securities in the U.S. pension plans include no Citigroup common stock at the end of 2009 and 2008.

					Third-party	investment	managers	and	third-party	affiliated	advisors	provide their	respective	services	to	Citigroup's	U.S.	pension	plans.	Assets	are	rebalanced as	the	Pension	Plan	Investment	Committee	deems	appropriate.	Citigroup's investment	strategy,	with	respect	to	its	pension	assets,	is	to	maintain	a	globally diversified	investment	portfolio	across	several	asset	classes,	targeting	an	annual rate	of	return	of	7.75%	that,	when	combined	with	Citigroup's	contributions

to	the	plans,	will	maintain	the	plans'	ability	to	meet	all	required	benefit obligations.

					Citigroup's	pension	and	postretirement	plans'	weighted-average	asset allocations	for	the	non-U.S.	plans	and	the	actual	ranges	at	the	end	of	2009	and 2008,	and	the	weighted-average	target	allocations	for	2010	by	asset	category based	on	asset	fair	values,	are	as	follows:

|  | Weighted-average | Actual range | Actual range | Weighted-average | Weighted-average |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | target asset allocation | at December 31 | at December 31 | at December 31 | at December 31 |
| Asset category | 2010 | 2009 | 2008\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008 | 2008\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008 | 2008\t\t\t\t\t\t\t\t\t\t\t\t 2009\t\t\t\t\t\t\t\t\t\t\t\t 2008 |
| Equity securities | 23% | 0 to 64% | 0 to 57% | 34% | 34% |
| Debt securities | 67 | 0 to 99 | 0 to 86 | 55\n55 | 55\n55 |
| Real estate | 1 | 0 to 29 | 0 to 40 | 1\n1 | 1\n1 |
| Other investments | 9 | 0 to 100 | 0 to 100 | 10 |  |
| Total | 100% |  |  | 100% | 100% |

|  | Weighted-average |  | Actual range | Weighted-average | Weighted-average |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | target asset allocation |  | at December 31 | at December 31 | at December 31 |
| Asset category | 2010 | 2009 | 2008 | \t\t\t\t\t\t\t 2009 | 2008 |
| Equity securities | 39% | 0 to 53% | 0 to 53% | 52% | 52% |
| Debt securities | 41 | 0 to 100 | 36 to 100 | 37 | 37 |
| Other investments | 20 | 0 to 11 | 0 to 11 | 11 | 11 |
| Total | 100% |  |  | 100% | 100% |

# Fair Value Disclosure

# Plan	assets	by	detailed	asset	categories	and	the	fair	value	hierarchy	are	as	follows:

| U.S. equity | $531 | $— | $1 | $532 |
| :--- | :--- | :--- | :--- | :--- |
| \t\t\t\t\t\t\tNon-U.S.\tequity | 310 | — | 1 | 311 |
| Mutual funds | 199 | — | — | 199 |
| Debt securities |  |  |  |  |
| \t\t\t\t\t\t\tU.S.\ttreasuries | 1,263 | — | — | 1,263 |
| \t\t\t\t\t\t\tU.S.\tagency | — | 124 | — | 124 |
| \t\t\t\t\t\t\tU.S.\tcorporate\tbonds | — | 809 | 1 | 810 |
| \t\t\t\t\t\t\tNon-U.S.\tgovernment\tdebt | — | 350 | — | 350 |
| \t\t\t\t\t\t\tNon-U.S.\tcorporate\tbonds | — | 218 | — | 218 |
| \t\t\t\t\t\t\tState\tand\tmunicipal\tdebt | — | 41 | — | 41 |
| Hedge funds | — | 1,398 | 1,235 | 2,633 |
| Asset backed securities | — | 33 | — | 33 |
| Mortgage backed securities | — | 33 | — | 33 |
| Annuity contracts | — | — | 215 | 215 |
| Private equity | — | — | 2,539 | 2,539 |
| Other investments (2) | (14) | 18 | 148 | 152 |
| Real estate | 9 | — | — | 9 |
| Total investments | $2,298 | $3,024 | $4,140 | $9,462 |
| Cash and cash equivalents | $108 | $478 | $— | $586 |
| Total assets | $2,406 | $3,502 | $4,140 | \t $10,048 |

(1)						The investments of the U.S. pension and postretirement benefit plans are commingled in a trust. At December 31, 2009, the allocable interests of the U.S. pension and postretirement benefit plans were 98.9% and 1.1%, respectively.

(2)						Other investments classified as Level 1 include futures carried at fair value.

| Asset categories | Level 1 | Level 2 | Level 3 | Total |
| :--- | :--- | :--- | :--- | :--- |
| Equity securities |  |  |  |  |
| U.S. equity | \t\t$— | $19 | \t\t\t\t\t\t\t\t\t$— | $19 |
| \t\t\t\t\t\t\tNon-U.S.\tequity | 323 | 422 | — | 745 |
| Mutual funds | 922 | 2,035 | — | 2,957 |
| Debt securities |  |  |  |  |
| \t\t\t\t\t\t\tU.S.\tTreasuries | — | 19 | — | 19 |
| \t\t\t\t\t\t\tNon-U.S.\tgovernment\tdebt | 1 | 1,159 | — | 1,160 |
| \t\t\t\t\t\t\tNon-U.S.\tcorporate\tbonds | — | 292 | 87 | 379 |
| \t\t\t\t\t\t\tState\tand\tmunicipal\tdebt | — | 13 | — | 13 |
| Hedge funds | — | — | 13 | 13 |
| Real estate | — | — | 14 | 14 |
| Total investments | $1,246 | $3,959 | $114 | $5,319 |
| Cash and cash equivalents | $30 | $16 | $— | $46 |
| Total assets | $1,276 | $3,975 | $114 | $5,365 |

(1)						The assets of the non-U.S. plans include assets of the top five countries, which make up 82% of all non-U.S. plan assets at December 31, 2009.

# Level 3 Roll Forward

The	reconciliations	of	the	beginning	and	ending	balances	during	the	period	for	Level	3	assets	are	as	follows:

# Investment Strategy

Citigroup's	global	pension	and	postretirement	funds'	investment	strategies	are	to invest	in	a	prudent	manner	for	the	exclusive	purpose	of	providing	benefits	to participants.	The	investment	strategies	are	targeted	to	produce	a	total	return	that, when	combined	with	Citigroup's	contributions	to	the	funds,	will	maintain	the funds'	ability	to	meet	all	required	benefit	obligations.	Risk	is	controlled	through diversification	of	asset	types	and	investments	in	domestic	and	international equities,	fixed-income	securities	and	cash.	The	target	asset	allocation	in	most locations	outside	the	U.S.	is	to	have	the	majority	of	the	assets	in	either	equity	or debt	securities.	These	allocations	may	vary	by	geographic	region	and	country depending	on	the	nature	of	applicable	obligations	and	various	other	regional considerations.	The	wide	variation	in	the	actual	range	of	plan	asset	allocations for	the	funded	non-U.S.	plans	is	a	result	of	differing	local	statutory	requirements and	economic	conditions.	For	example,	in	certain	countries	local	law	requires that	all	pension	plan	assets	must	be	invested	in	fixed-income	investments, government	funds,	or	local-country	securities.

# Significant Concentrations of Risk in Plan Assets

The	assets	of	Citigroup's	pension	plans	are	diversified	to	limit	the	impact	of	any individual	investment.	The	U.S.	pension	plan	is	diversified	across	multiple	asset classes,	with	publicly	traded	fixed	income,	hedge	funds	and	private	equity representing	the	most	significant	asset	allocations.	Investments	in	these	three asset	classes	are	further	diversified	across	funds,	managers,

strategies,	vintages,	sectors	and	geographies,	depending	on	the	specific characteristics	of	each	asset	class.	The	pension	assets	for	Citigroup's	largest	non- U.S.	plans	are	primarily	invested	in	publicly-traded	fixed	income	and	publicly- traded	equity	securities.

# Risk	management	practices

Risk	management	oversight	for	Citigroup's	U.S.	pension	plans	and	largest	non- U.S.	pension	plans	is	performed	by	Citigroup's	Independent	Risk	Management Regional	Units.	The	risk	oversight	function	covers	market	risk,	credit	risk	and operational	risk.	Although	the	specific	components	of	risk	oversight	are	tailored to	the	requirements	of	each	region	and	of	each	country,	the	following	risk management	elements	are	common	to	all	regions:

Periodic	asset	liability	management	and	strategic	asset	allocation studies

Monitoring	of	funding	levels	and	funding	ratios Monitoring	compliance	with	asset	allocation	guidelines Monitoring	asset	class	performance	against	asset	class	benchmarks Monitoring	investor	manager	performance	against	benchmarks Quarterly	risk	capital	measurement

Risk	management	for	the	remaining	non-U.S.	pension	assets	and	liabilities	is performed	by	Citigroup's	local	country	management.

# Contributions

Citigroup's	pension	funding	policy	for	U.S.	plans	and	non-U.S.	plans	is generally	to	fund	to	applicable	minimum	funding	requirements	rather	than	to	the amounts	of	accumulated	benefit	obligations.	For	the	U.S.	plans,	the	Company may	increase	its	contributions	above	the	minimum	required	contribution	under ERISA,	if	appropriate	to	its	tax	and	cash	position	and	the	plans'	funded	position. For	the	U.S.	pension	plans,	at	December	31,	2009,	there	were	no	minimum required	cash	contributions,	and	no	discretionary	or	non-cash	contributions	are currently	planned.	For	the	non-U.S.	pension	plans,	discretionary	cash contributions	in	2010	are	anticipated	to	be	approximately	$160	million.	In addition,	the	Company	expects	to	contribute	$35	million	of	benefits	to	be directly	paid	by	the	Company	for	its	unfunded	non-U.S.	pension	and postretirement	plans.	For	the	U.S.	postretirement	benefit	plans,	there	are	no expected	or	required	contributions	for	2010.	For	the	non-U.S.	postretirement benefit	plans,	expected	cash	contributions	for	2010	are	$72	million	including	$3 million	of	benefits	to	be	directly	paid	by	the	Company.	These	estimates	are subject	to	change,	since	contribution	decisions	are	affected	by	various	factors, such	as	market	performance	and	regulatory	requirements;	in	addition, management	has	the	ability	to	change	funding	policy.

# Estimated Future Benefit Payments

The	Company	expects	to	pay	the	following	estimated	benefit	payments	in	future years:

|  | Pension | Pension | Postretirement |
| :--- | :--- | :--- | :--- |
| In millions of dollars | benefits | benefits | benefits |
| 2010 | $727 | $327 | $45 |
| 2011 | 739 | 290 | 47 |
| 2012 | 760 | 295 | 50 |
| 2013 | 774 | 302 | 54 |
| 2014 | 788 | 316 | 57 |
| 2015–2019 | 4,113 | \t1,815 | 357 |

# Prescription Drugs

In	December	2003,	the	Medicare	Prescription	Drug	Improvement	and Modernization	Act	of	2003	(the	"Act	of	2003")	was	enacted.	The	Act	of	2003 established	a	prescription	drug	benefit	under	Medicare	known	as	"Medicare	Part D,"	and	a	federal	subsidy	to	sponsors	of	U.S.	retiree	health-care	benefit	plans that	provide	a	benefit	that	is	at	least	actuarially	equivalent	to	Medicare	Part	D. The	benefits	provided	to	certain	participants	are	at	least	actuarially	equivalent	to Medicare	Part	D	and,	accordingly,	the	Company	is	entitled	to	a	subsidy. 					The	expected	subsidy	reduced	the	accumulated	postretirement	benefit obligation	(APBO)	by	approximately	$148	million	and	$142	million	as	of January	1,	2009	and	2008,	respectively,	and	the	postretirement	expense	by approximately	$13	million	and	$17	million	for	2009	and	2008,	respectively.

					The	following	table	shows	the	estimated	future	benefit	payments	without	the effect	of	the	subsidy	and	the	amounts	of	the	expected	subsidy	in	future	years:

Under	the	Citigroup	401(k)	plan,	a	defined-contribution	plan,	eligible	U.S. employees	received	matching	contributions	up	to	6%	of	their	compensation	in 2009,	subject	to	statutory	limits.	Effective	January	7,	2010,	the	maximum amount	of	matching	contributions	paid	on	employee	deferral	contributions	made into	this	plan	will	be	reduced	from	6%	to	4%	of	eligible	pay	for	all	employees. The	matching	contribution	is	invested	according	to	participants'	individual elections.	Additionally,	for	eligible	employees	whose	compensation	is	$100,000 or	less,	a	fixed	contribution	of	up	to	2%	of	compensation	is	provided.

					The	pretax	expense	associated	with	this	plan	amounted	to	approximately $442	million	and	$580	million	in	2009	and	2008,	respectively.	The	decrease	in expense	from	2008	to	2009	reflects	the	reduction	in	participants	due	to	the Morgan	Stanley	Smith	Barney	joint	venture	and	other	reductions	in	workforce.

# 10. RESTRUCTURING

In	the	fourth	quarter	of	2008,	Citigroup	recorded	a	pretax	restructuring	expense of	$1.581	billion	related	to	the	implementation	of	a	Company-wide	re- engineering	plan.	For	the	year	ended	December	31,	2009,	Citigroup	recorded	a pretax	net	restructuring	release	of	$110	million	composed	of	a	gross	charge	of $86	million	and	a	credit	of	$196	million	due	to	changes	in	estimates.	The charges	related	to	the	2008	Re-engineering	Projects	Restructuring	Initiative	are reported	in	Restructuring	on	the	Company's	Consolidated	Statement	of	Income and	are	recorded	in	each	segment.

					In	2007,	the	Company	completed	a	review	of	its	structural	expense	base	in	a Company-wide	effort	to	create	a	more	streamlined	organization,	reduce	expense growth,	and	provide	investment	funds	for	future	growth	initiatives.	As	a	result	of this	review,	a	pretax	restructuring	charge	of	$1.4	billion	was	recorded	in Corporate/Other	during	the	first	quarter	of	2007.	Additional	net	charges	of	$151 million	were	recognized	in	subsequent	quarters	throughout	2007,	and	net releases	of	$31	million	and	$3	million	in	2008	and	2009,	respectively,	due	to changes	in	estimates.	The	charges	related	to

the	2007	Structural	Expense	Review	Restructuring	Initiative	are	reported	in Restructuring	on	the	Company's	Consolidated	Statement	of	Income.

					The	primary	goals	of	the	2008	Re-engineering	Projects	Restructuring Initiative	and	the	2007	Structural	Expense	Review	Restructuring	Initiative	were:

eliminate	layers	of	management/improve	workforce	management; consolidate	certain	back-office,	middle-office	and	corporate	functions; increase	the	use	of	shared	services;

expand	centralized	procurement;	and

continue	to	rationalize	operational	spending	on	technology.

					The	implementation	of	these	restructuring	initiatives	also	caused	certain related	premises	and	equipment	assets	to	become	redundant.	The	remaining depreciable	lives	of	these	assets	were	shortened,	and	accelerated	depreciation charges	began	in	the	second	quarter	of	2007	and	fourth	quarter	of	2008	for	the 2007	and	2008	initiatives,	respectively,	in	addition	to	normal	scheduled depreciation.

					The	following	tables	detail	the	Company's	restructuring	reserves.

# 2008 Re-engineering Projects Restructuring Charges

|  |  |  |  |  | Contract | Asset |  | Employee |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  |  |  | termination | write- |  | termination | Total |  |
| In millions of dollars | ASC 712 | (1) | ASC 420 | (2) | costs | downs | (3) | cost | Citigroup | (4) |
| Total Citigroup (pretax) |  |  |  |  |  |  |  |  |  |  |
| Original restructuring charge | $1,254 |  | $79 | $79 | $55 | $ 123 |  | $19 | $1,530 |  |
| Utilization | $(114) |  | $(3) |  | $(2) | $(100) |  | $— | $(219) |  |
| Balance at December 31, 2008 | $1,140 |  | $76 |  | $53 | $23 | $23 | $19 | $1,311 |  |
| Additional charge | 24 |  | 29 |  | 23 | 10 |  | — | 86 | 86 |
| Foreign exchange | 14 |  | — |  | 3 | (11) |  | (1) | 5 |  |
| Utilization | (882) |  | (102) |  | (33) | (14) |  | (6) | (1,037) |  |
| Changes in estimates | (175) |  | (3) |  | (5) | (5) |  | (8) | (196) |  |
| Balance at December 31, 2009 | $121 |  | $— |  | $41 | $3 |  | $4 | $169 |  |

(1)						Accounted for in accordance with ASC 712,  Compensation – Nonretirement Postemployment Benefits (formerly SFAS No. 112, Employer's Accounting for Post Employment Benefits (SFAS 112)).

(2)						Accounted for in accordance with ASC 420,  Exit or Disposal Cost Obligations (formerly SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities (SFAS 146)).

(3)						Accounted for in accordance with ASC 360,  Property, Plant and Equipment (formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144)).

(4)						Total Citigroup charge in the table above does not include a $51 million one-time pension curtailment charge related to this restructuring initiative, which is recorded as part of the Company's Restructuring charge in the Consolidated Statement of Income at December 31, 2008.

# 2007 Structural Expense Review Restructuring Charges

|  |  |  | Contract | Asset | Employee |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | termination | write- | termination | Total |
| In millions of dollars | ASC 712 (1) | ASC 420 (2) | costs | downs (3) | cost | Citigroup |
| Total Citigroup (pretax) |  |  |  |  |  |  |
| Original restructuring charge | $950 | $ 11 | $25 | $ 352 | $39 | $1,377 |
| Additional charge | $42 | $ 96 | $29 | $27 | $11 | $205 |
| Foreign exchange | 19 | — | 2 | — | — | 21 |
| Utilization | (547) | (75) | (28) | (363) | (33) | (1,046) |
| Changes in estimates | (39) | — | (6) | (1) | (8) | (54) |
| Balance at December 31, 2007 | $ 425 | $ 32 | $22 | $15 | $9 | $503 |
| Additional charge | $10 | $ 14 | $43 | $6 | $— | $73 |
| Foreign exchange | (11) | — | (4) | — | — | (15) |
| Utilization | (288) | (34) | (22) | (7) | (6) | (357) |
| Changes in estimates | (93) | (2) | (2) | (4) | (3) | (104) |
| Balance at December 31, 2008 | $43 | $ 10 | $37 | $10 | $— | $100 |
| Foreign exchange | (1) | \t — | (1) | — | — | (2) |
| Utilization | (41) | (10) | (35) | (9) | — | (95) |
| Changes in estimates | (1) | — | (1) | (1) | — | (3) |
| Balance at December 31, 2009 | $— | $ — | $— | $— | $— | $— |

					The	total	restructuring	reserve	balance	and	total	charges	as	of	December	31, 2009	and	2008	related	to	the	2008	Re-engineering	Projects	Restructuring Initiatives	are	presented	below	by	business	in	the	following

tables.	These	charges	are	reported	in	Restructuring	on	the	Company's Consolidated	Statement	of	Income	and	are	recorded	in	each	business.

# 2008 Re-engineering Projects

(1)						Amounts shown net of $196 million related to changes in estimates recorded during 2009.

(2)						Excludes pension curtailment charges of $51 million recorded during the fourth quarter of 2008.

(1)						Represents the total charges incurred since inception and excludes pension curtailment charges of $51 million recorded during 2008.

| In millions of dollars | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Current |  |  |  |
| Federal | $(1,711) | $(4,582) | $(2,260) |
| Foreign | 3,101 | 4,762 | 3,566 |
| State | (414) | 29 | 75 |
| Total current income taxes | $976 | $209 | $ 1,381 |
| Deferred |  |  |  |
| Federal | $(6,892) | $(16,583) | $(2,109) |
| Foreign | (182) | (1,794) | (1,042) |
| State | (635) | (2,158) | (776) |
| Total deferred income taxes | $(7,709) | $(20,535) | $(3,927) |
| Provision (benefit) for income tax on |  |  |  |
| continuing operations before |  |  |  |
| \t\t\t\t\t\t\tnoncontrolling\tinterests\t(1) | $(6,733) | $(20,326) | $(2,546) |
| Provision (benefit) for income taxes on |  |  |  |
| \t\t\t\t\t\t\tdiscontinued\toperations | (106) | (79) | 344 |
| Provision (benefit) for income taxes on |  |  |  |
| \t\t\t\t\t\t\tcumulative\teffect\tof\taccounting\tchanges | — | — | (109) |
| Income tax expense (benefit) reported in |  |  |  |
| \t\t\t\t\t\t\tstockholders'\tequity\trelated\tto: |  |  |  |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tForeign\tcurrency\ttranslation | (415) | (2,116) | 565 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tSecurities\tavailable-for-sale | 2,765 | (5,468) | (759) |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tEmployee\tstock\tplans | 1,351 | 449 | (410) |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tCash\tflow\thedges | \t 1,165 | (1,354) | \t(1,705) |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tPension\tliability\tadjustments | (513) | (918) | 426 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tTax\ton\texchange\toffer\tbooked\tto |  |  |  |
| retained earnings | 3,523 | — | — |
| Income taxes before noncontrolling interests | $ 1,037 | $(29,812) | $(4,194) |

					The	reconciliation	of	the	federal	statutory	income	tax	rate	to	the	Company's effective	income	tax	rate	applicable	to	income	from	continuing	operations (before	noncontrolling	interests	and	the	cumulative	effect	of	accounting changes)	for	the	years	ended	December	31	was	as	follows:

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Federal statutory rate | 35.0% | 35.0% | 35.0% |
| State income taxes, net of federal benefit | 8.4 | 2.7 | (70.4) |
| Foreign income tax rate differential | 26.0 | 1.2 | (217.2) |
| Audit settlements (1) | 4.4 | — | — |
| Goodwill | 0.5 | (2.2) | 0.6 |
| Tax advantaged investments | 11.8 | 1.8 | (100.9) |
| Other, net | 0.2 | 0.3 | (41.2) |
| Effective income tax rate (2) | 86.3% | 38.8% | (394.1)% |

(1)							 For 2009, relates to the conclusion of the audit of various issues in the Company's 2003 – 2005 U.S. federal tax audit and a tax benefit relating to the release of tax reserves on interchange fees.

(2)							 The Company recorded an income tax benefit for 2007. The effective tax rate (benefit) of (394)% primarily resulted from pretax losses in the Company's ICG and N.A. Regional Consumer Banking businesses (the U.S. is a higher tax rate jurisdiction). In addition, the tax benefits of permanent differences, including the tax benefit for not providing U.S. income taxes on the earnings of certain foreign subsidiaries that are indefinitely invested, favorably impacted the Company's effective tax rate.

# Deferred	income	taxes	at	December	31	related	to	the	following:

| In millions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Deferred tax assets |  |  |
| Credit loss deduction | $14,987 | $11,242 |
| Deferred compensation and employee benefits | 3,626 | 4,367 |
| Restructuring and settlement reserves | 794 | 1,134 |
| Unremitted foreign earnings | 7,140 | 4,371 |
| Investments | — | 5,312 |
| Cash flow hedges | 1,906 | 3,071 |
| Tax credit and net operating loss carryforwards | 20,787 | 18,424 |
| Intangibles | 1,598 | — |
| Other deferred tax assets | 1,753 | 4,158 |
| Gross deferred tax assets | $52,591 | $52,079 |
| Valuation allowance | — | — |
| Deferred tax assets after valuation allowance | $52,591 | $52,079 |
| Deferred tax liabilities |  |  |
| Investments | $ (1,863) | $— |
| Deferred policy acquisition costs |  |  |
| and value of insurance in force | (791) | (805) |
| Fixed assets and leases | (677) | (2,209) |
| Interest related items | (683) | (543) |
| Intangibles | — | (2,365) |
| Credit valuation adjustment on Company-issued debt | (264) | (1,473) |
| Other deferred tax liabilities | (2,261) | (215) |
| Gross deferred tax liabilities | $ (6,539) | $ (7,610) |
| Net deferred tax asset | $46,052 | $44,469 |

# 					The	following	is	a	roll-forward	of	the	Company's	unrecognized	tax	benefits.

| In millions of dollars | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Total unrecognized tax benefits at January 1, | $3,468 | $3,698 | $3,144 |
| Net amount of increases for current year's tax positions | 195 | 254 | 1,100 |
| Gross amount of increases for prior years' tax positions | 392 | 252 | 120 |
| Gross amount of decreases for prior years' tax positions | (870) | (581) | (341) |
| Amounts of decreases relating to settlements | (104) | (21) | (349) |
| Reductions due to lapse of statutes of limitation | (12) | (30) | (50) |
| Foreign exchange, acquisitions and dispositions | 10 | (104) | 74 |
| Total unrecognized tax benefits at December 31, | $3,079 | $3,468 | $3,698 |

					Total	amount	of	unrecognized	tax	benefits	at	December	31,	2009,	2008	and 2007	that,	if	recognized,	would	affect	the	effective	tax	rate	are	$2.2	billion,	$2.4 billion	and	$1.9	billion,	respectively.	The	remainder	of	the	uncertain	tax positions	have	offsetting	amounts	in	other	jurisdictions	or	are	temporary differences.

					Interest	and	penalties	(not	included	in	the	"unrecognized	tax	benefits"	above)

are	a	component	of	the	Provision	for	income	taxes.

|  |  | 2009 |  | 2008 |  | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | Pretax | \t Net of tax | Pretax | Net of tax | Pretax | Net of tax |
| Total interest and penalties in the balance sheet at January 1, | \t $663 | $420 | $ 618 | $389 | $532 | $335 |
| Total interest and penalties in the statement of operations | (250) | (154) | \t 114 | 81 | 93 | 58 |
| Total interest and penalties in the balance sheet at December 31, (1) | 370 | 239 | \t 663 | 420 | 618 | 389 |

(1)						Includes $9 million for foreign penalties.

					The	Company	is	currently	under	audit	by	the	Internal	Revenue	Service	and other	major	taxing	jurisdictions	around	the	world.	It	is	thus	reasonably	possible that	significant	changes	in	the	gross	balance	of	unrecognized	tax	benefits	may occur	within	the	next	12	months	but	the	Company	does	not	expect	such	audits	to result	in	amounts	that	would	cause	a	significant	change	to	its	effective	tax	rate, other	than	the	following	item.	The	Company	expects	to	conclude	the	IRS	audit of	its	U.S.	Federal	consolidated	income	tax	returns	for	the	years	2003-2005 within	the	next	12	months.	The	gross	uncertain	tax	positions	at	December	31, 2009	for	the	items	expected	to	be	resolved	is	approximately	$66	million	plus gross	interest	of	$10	million.	The	potential	tax	benefit	to	continuing	operations could	be	approximately	$72	million.

					The	following	are	the	major	tax	jurisdictions	in	which	the	Company	and	its affiliates	operate	and	the	earliest	tax	year	subject	to	examination:

					Foreign	pretax	earnings	approximated	$6.8	billion	in	2009,	$10.3	billion	in 2008,	and	$9.1	billion	in	2007	($0.6	billion	loss,	$4.4	billion	profit,	and	$0.8 billion	profit	of	which,	respectively,	are	in	discontinued	operations).	As	a	U.S. corporation,	Citigroup	and	its	U.S.	subsidiaries	are	subject	to	U.S.	taxation currently	on	all	foreign	pretax	earnings	earned	by	a	foreign	branch.	Pretax earnings	of	a	foreign	subsidiary	or	affiliate	are	subject	to	U.S.	taxation	when effectively	repatriated.	The	Company	provides	income	taxes	on	the	undistributed earnings	of	non-U.S.	subsidiaries	except	to	the	extent	that	such	earnings	are indefinitely	invested	outside	the	United	States.	At	December	31,	2009,	$27.3 billion	of	accumulated	undistributed	earnings	of	non-U.S.	subsidiaries	were indefinitely	invested.	At	the	existing	U.S.	federal	income	tax	rate,	additional taxes	(net	of	U.S.	foreign	tax	credits)	of	$7.4	billion	would	have	to	be	provided	if such	earnings	were	remitted	currently.	The	current	year's	effect	on	the	income tax	expense	from	continuing	operations	is	included	in	the	"Foreign	income	tax rate	differential"	line	in	the	reconciliation	of	the	federal	statutory	rate	to	the Company's	effective	income	tax	rate.

					Income	taxes	are	not	provided	for	on	the	Company's	savings	bank	base	year bad	debt	reserves	that	arose	before	1988	because	under	current	U.S.	tax	rules such	taxes	will	become	payable	only	to	the	extent	such	amounts	are	distributed in	excess	of	limits	prescribed	by	federal	law.	At	December	31,	2009,	the	amount of	the	base	year	reserves	totaled	approximately	$358	million	(subject	to	a	tax	of $125	million).

					The	Company	has	no	valuation	allowance	on	deferred	tax	assets	at December	31,	2009	and	December	31,	2008.

# In billions of dollars

| Net Operating Loss (NOL) | $5.8 | $4.6 |
| :--- | :--- | :--- |
| Foreign Tax Credit (FTC) | 12.0 | 10.5 |
| General Business Credit (GBC) | 1.2 | 0.6 |
| Future Tax Deductions and Credits | 17.5 | 19.9 |
| Other | 0.5 | 0.9 |
| Total U.S. Federal | $36.3 | $36.5 |
| State and Local |  |  |
| New York NOLs | $0.9 | $1.2 |
| Other State NOLs | 0.4 | 0.4 |
| Future Tax Deductions | 3.0 | 2.7 |
| Total State and Local | $4.3 | $4.3 |
| Foreign |  |  |
| APB 23 Subsidiary NOLs | 0.7 | 0.2 |
| Non-APB 23 Subsidiary NOLs | 0.4 | 0.9 |
| Future Tax Deductions | 4.4 | 2.6 |
| Total Foreign | $5.5 | $3.7 |
| Total | $46.1 | $44.5 |

					The	following	table	summarizes	the	amounts	of	tax	carryforwards	and	their expiry	dates	as	of	December	31,	2009:

					With	respect	to	the	New	York	NOLs,	the	Company	has	recorded	a	net deferred	tax	asset	of	$0.9	billion,	along	with	less	significant	net	operating	losses in	various	other	states	for	which	the	Company	has	recorded	a	deferred	tax	asset of	$0.4	billion	and	which	expire	between	2012	and	2029.	In	addition,	the Company	has	recorded	deferred	tax	assets	in	foreign	subsidiaries,	for	which	an assertion	has	been	made	that	the	earnings	have	been	indefinitely	reinvested,	for net	operating	loss	carryforwards	of	$607	million	(which	expire	2012	-	2019)	and $69	million	(with	no	expiration).

					Although	realization	is	not	assured,	the	Company	believes	that	the realization	of	the	recognized	net	deferred	tax	asset	of	$46.1	billion	is	more	likely than	not	based	on	expectations	as	to	future	taxable	income	in	the	jurisdictions	in which	the	DTAs	arise	and	available	tax	planning	strategies,	as	defined	in	ASC 740,	Income	Taxes,	(formerly	SFAS	109)	that	could	be	implemented	if	necessary to	prevent	a	carryforward	from	expiring.	Included	in	the	net	U.S.	Federal	DTA of	$36.3	billion	are	$5	billion	in	DTLs	that	will	reverse	in	the	relevant carryforward	period	and	may	be	used	to	support	the	DTA	,	and	$0.5	billion	in compensation	deductions,	which	reduced	additional	paid-in	capital	in	January, 2010	and	for	which	no	adjustment	was	permitted	to	such	DTA	at	December	31, 2009	because	the	related	stock	compensation	was	not	yet	deductible	to	the Company.	In	general,	the	Company	would	need	to	generate	approximately	$86 billion	of	taxable	income	during	the	respective	carryforward	periods	to	fully realize	its	U.S.	Federal,	state	and	local	DTAs.

					As	a	result	of	the	recent	losses	incurred,	the	Company	is	in	a	three-year cumulative	pretax	loss	position	at	December	31,	2009.	A	cumulative	loss position	is	considered	significant	negative	evidence	in	assessing	the	realizability of	a	DTA.	The	Company	has	concluded	that	there	is	sufficient	positive	evidence to	overcome	this	negative	evidence.	The	positive	evidence	includes	two	means by	which	the	Company	is	able	to	fully	realize	its	DTA.	First,	the	Company forecasts	sufficient	taxable	income	in	the	carryforward	period,	exclusive	of	tax planning	strategies,	even	under	stressed	scenarios.	Secondly,	the	Company	has sufficient	tax	planning	strategies,	including	potential	sales	of	businesses	and assets,	in	which	it	could	realize	the	excess

of	appreciated	value	over	the	tax	basis	of	its	assets,	in	an	amount	sufficient	to fully	realize	its	DTA.	The	amount	of	the	DTA	considered	realizable,	however, could	be	significantly	reduced	in	the	near	term	if	estimates	of	future	taxable income	during	the	carryforward	period	are	significantly	lower	than	forecasted due	to	deterioration	in	market	conditions.

					Based	upon	the	foregoing	discussion,	as	well	as	tax	planning	opportunities and	other	factors	discussed	below,	the	U.S.	Federal	and	New	York	State	and City	net	operating	loss	carryforward	period	of	20	years	provides	enough	time	to utilize	the	DTAs	pertaining	to	the	existing	net	operating	loss	carryforwards	and any	NOL	that	would	be	created	by	the	reversal	of	the	future	net	deductions which	have	not	yet	been	taken	on	a	tax	return.

					The	U.S.	foreign	tax	credit	carryforward	period	is	10	years.	In	addition, utilization	of	foreign	tax	credits	in	any	year	is	restricted	to	35%	of	foreign	source taxable	income	in	that	year.	Further,	overall	domestic	losses	that	the	Company has	incurred	of	approximately	$45	billion	are	allowed	to	be	reclassified	as foreign	source	income	to	the	extent	of	50%	of	domestic	source	income	produced in	subsequent	years	and	such	resulting	foreign	source	income	is	in	fact	sufficient to	cover	the	foreign	tax	credits	being	carried	forward.	As	such,	the	foreign source	taxable	income	limitation	will	not	be	an	impediment	to	the	foreign	tax credit	carryforward	usage	as	long	as	the	Company	can	generate	sufficient domestic	taxable	income	within	the	10-year	carryforward	period.

					Regarding	the	estimate	of	future	taxable	income,	the	Company	has	projected its	pretax	earnings,	predominantly	based	upon	the	"core"	businesses	that	the Company	intends	to	conduct	going	forward.	These	"core"	businesses	have produced	steady	and	strong	earnings	in	the	past.	During	2008	and	2009,	the "core"	businesses	were	negatively	affected	by	the	large	increase	in	consumer credit	losses	during	this	sharp	economic	downturn	cycle.	The	Company	has already	taken	steps	to	reduce	its	cost	structure.	Taking	these	items	into	account, the	Company	is	projecting	that	it	will	generate	sufficient	pretax	earnings	within the	10-year	carryforward	period	alluded	to	above	to	be	able	to	fully	utilize	the foreign	tax	credit	carryforward,	in	addition	to	any	foreign	tax	credits	produced	in such	period.

					The	Company	has	also	examined	tax	planning	strategies	available	to	it	which would	be	employed,	if	necessary,	to	prevent	a	carryforward	from	expiring.	These strategies	include	repatriating	low	taxed	foreign	earnings	for	which	an	assertion that	the	earnings	have	been	indefinitely	reinvested	has	not	been	made, accelerating	taxable	income	into	or	deferring	deductions	out	of	the	latter	years	of the	carryforward	period	with	reversals	to	occur	after	the	carryforward	period	(for example,	selling	appreciated	intangible	assets	and	electing	straight-line depreciation),	holding	onto	available-for-sale	debt	securities	with	losses	until they	mature	and	selling	certain	assets	which	produce	tax	exempt	income,	while purchasing	assets	which	produce	fully	taxable	income.	In	addition,	the	sale	or restructuring	of	certain	businesses,	can	produce	significant	taxable	income within	the	relevant	carryforward	periods.

					The	Company's	ability	to	utilize	its	deferred	tax	assets	to	offset	future taxable	income	may	be	significantly	limited	if	the	Company	experiences	an "ownership	change,"	as	defined	in	Section	382	of	the	Internal	Revenue	Code	of 1986,	as	amended	(the	"Code").	In	general,	an	ownership	change	will	occur	if there	is	a	cumulative	change	in	Citi's	ownership	by	"5%	shareholders"	(as defined	in	the	Code)	that	exceeds	50	percentage	points	over	a	rolling	three-year period.	The	common	stock	issued	pursuant	to	the	exchange	offers	in	July,	2009 and	the	common	stock	and	tangible	equity	units	issued	in	December,	2009	as part	of	Citigroup's	TARP	repayment	did	not	result	in	an	ownership	change	under the	Code.	However,	these	common	stock	issuances	have	materially	increased	the risk	that	Citigroup	will	experience	an	ownership	change	in	the	future.	On	June	9, 2009,	the	board	of	directors	of	Citigroup	adopted	a	tax	benefits	preservation	plan (the	"Plan").	This	Plan	is	subject	to	the	shareholders'	approval	at	the	2010 Annual	Meeting.	The	purpose	of	the	Plan	is	to	minimize	the	likelihood	of	an ownership	change	occurring	for	Section	382	purposes.	Despite	adoption	of	the Plan,	future	transactions	in	our	stock	that	may	not	be	in	our	control	may	cause Citi	to	experience	an	ownership	change	and	thus	limit	the	Company's	ability	to utilize	its	deferred	tax	asset	and	reduce	its	stockholders'	equity.

The	following	is	a	reconciliation	of	the	income	and	share	data	used	in	the	basic	and	diluted	earnings-per-share	computations	for	the	years	ended	December	31:

| In millions, except per-share amounts | 2009 | 2008 (1) | 2007 (1) |
| :--- | :--- | :--- | :--- |
| Income (loss) before attribution of noncontrolling interests | $(1,066) | $(32,029) | $3,192 |
| Noncontrolling interests | 95 | (343) | 283 |
| Net income (loss) from continuing operations (for EPS purposes) | $(1,161) | $(31,686) | $2,909 |
| Income (loss) from discontinued operations, net of taxes | (445) | 4,002 | 708 |
| Citigroup's net income (loss) | $(1,606) | $(27,684) | $3,617 |
| Impact of the public and private preferred stock exchange offers | (3,242) | — | — |
| Preferred dividends | (2,988) | (1,695) | (36) |
|  | (1,285) | — | — |
| Preferred stock Series H discount accretion | (123) | (37) | — |
| Net income (loss) available to common shareholders | $(9,244) | $(29,416) | $3,581 |
| Dividends allocated to participating securities, net of forfeitures | (2) | (221) | (261) |
| Net income (loss) allocated to common shareholders for basic EPS (2) | $(9,246) | $(29,637) | $3,320 |
| Effect of dilutive securities | 540 | 877 | — |
| Net income (loss) allocated to common shareholders for diluted EPS (2) | $(8,706) | $(28,760) | $3,320 |
| Weighted-average common shares outstanding applicable to basic EPS | 11,568.3 | 5,265.4 | 4,905.8 |
| Effect of dilutive securities |  |  |  |
| Convertible securities | 312.2 | 503.2 | — |
| \t\t\t\t\t\t\tOptions | 0.2 | 0.3 | 18.2 |
| \t\t\t\t\t\t\tTDECs | 218.3 | — | — |
| Adjusted weighted-average common shares outstanding applicable to diluted EPS (3) | 12,099.0 | 5,768.9 | 4,924.0 |
| Basic earnings per share ^(3) |  |  |  |
| Income (loss) from continuing operations | $(0.76) | $(6.39) | $0.53 |
| Discontinued operations | (0.04) | 0.76 | 0.15 |
| Net income (loss) | $(0.80) | $(5.63) | $0.68 |
| Diluted earnings per share ^(3) |  |  |  |
| Income (loss) from continuing operations | $(0.76) | $(6.39) | $0.53 |
| Discontinued operations | (0.04) | 0.76 | 0.14 |
| Net income (loss) | $(0.80) | $(5.63) | $0.67 |

(2)						Due to the net loss available to common shareholders in 2009 and 2008, loss available to common stockholders for basic EPS was used to calculate diluted EPS. Adding back the effect of dilutive securities would result in anti-dilution.

(3)						Due to the net loss available to common shareholders in 2009 and 2008, basic shares were used to calculate diluted EPS. Adding dilutive securities to the denominator would result in anti- dilution.

					During	2009,	2008	and	2007,	weighted-average	options	to	purchase	157.9 million,	156.1	million	and	76.3	million	shares	of	common	stock,	respectively, were	outstanding	but	not	included	in	the	computation	of	earnings	per	common share,	because	the	weighted-average	exercise	prices	of	$28.12,	$41.19	and $50.40,	respectively,	were	greater	than	the	average	market	price	of	the Company's	common	stock.	Additionally,	warrants	to	purchase	210,084,034 shares	of	common	stock	issued	to	the	U.S.	Treasury	as	part	of	TARP	on November	28,	2008,	the	warrants	to	purchase	188,501,414	shares	of	common stock	issued	to	the	U.S.	Treasury	as	part	of	TARP	on	December	31,	2008,	and the	warrants	to	purchase	66,531,728	shares	of	common	stock

issued	to	the	U.S.	Treasury	as	consideration	for	the	loss-sharing	agreement	on January	15,	2009	were	not	included	in	the	computation	of	earnings	per	common share,	because	the	warrants'	exercise	prices	were	greater	than	the	average	market price	of	the	Company's	common	stock.	In	addition,	equity	awards	granted	under the	Management	Committee	Long-Term	Incentive	Plan	(MC	LTIP)	of approximately	3	million,	8	million	and	16	million	in	2009,	2008	and	2007, respectively,	were	not	included	in	the	computation	of	earnings	per	common share	because	the	performance	targets	under	the	terms	of	the	awards	were	not met.

# 13. FEDERAL FUNDS/SECURITIES BORROWED, LOANED, AND SUBJECT TO REPURCHASE

# AGREEMENTS

Federal	funds	sold	and	securities	borrowed	or	purchased	under	agreements	to resell,	at	their	respective	fair	values,	consisted	of	the	following:

| In millions of dollars at December 31, | 2009 | 2008 |
| :--- | :--- | :--- |
| Federal funds sold | $4 | $— |
| Securities purchased under agreements to resell | \t 105,165 | 78,701 |
| Deposits paid for securities borrowed | 116,853 | 105,432 |
| Total | $222,022 | $184,133 |

					A	majority	of	the	deposits	paid	for	securities	borrowed	and	deposits	received for	securities	loaned	are	recorded	at	the	amount	of	cash	advanced	or	received	and are	collateralized	principally	by	government	and	government-agency	securities and	corporate	debt	and	equity	securities.	The	remaining	portion	is	recorded	at fair	value	as	the	Company	elected	fair	value	options	for	certain	securities borrowed	and	loaned	portfolios.	With	respect	to	securities	loaned,	the	Company receives	cash	collateral	in	an	amount	generally	in	excess	of	the	market	value	of securities	loaned.	The	Company	monitors	the	market	value	of	securities borrowed	and	securities	loaned	daily,	and	additional	collateral	is	obtained	as necessary.	Securities	borrowed	and	securities	loaned	are	reported	net	by counterparty,	when	applicable.

					Federal	funds	purchased	and	securities	loaned	or	sold	under	agreements	to repurchase,	at	their	respective	fair	values,	consisted	of	the	following:

| In millions of dollars at December 31, | 2009 | 2008 |
| :--- | :--- | :--- |
| Federal funds purchased | $2,877 | $5,755 |
| Securities sold under agreements to repurchase | 125,561 | 177,585 |
| Deposits received for securities loaned | 25,843 | 21,953 |
| Total | $154,281 | $205,293 |

The	resale	and	repurchase	agreements	represent	collateralized	financing transactions	used	to	generate	net	interest	income	and	facilitate	trading	activity. These	instruments	are	collateralized	principally	by	government	and	government- agency	securities	and	generally	have	terms	ranging	from	overnight	to	up	to	a year.

					It	is	the	Company's	policy	to	take	possession	of	the	underlying	collateral, monitor	its	market	value	relative	to	the	amounts	due	under	the	agreements	and, when	necessary,	require	prompt	transfer	of	additional	collateral	or	reduction	in the	balance	in	order	to	maintain	contractual	margin	protection.	In	the	event	of counterparty	default,	the	financing	agreement	provides	the	Company	with	the right	to	liquidate	the	collateral	held.

					The	majority	of	the	resale	and	repurchase	agreements	are	recorded	at	fair value.	The	remaining	portion	is	carried	at	the	amount	of	cash	initially	advanced or	received,	plus	accrued	interest,	as	specified	in	the	respective	agreements. Resale	agreements	and	repurchase	agreements	are	reported	net	by	counterparty, when	applicable.	Excluding	the	impact	of	the	allowable	netting,	resale agreements	totaled	$166.0	billion	and	$114.0	billion	at	December	31,	2009	and 2008,	respectively.

# 14. BROKERAGE RECEIVABLES AND BROKERAGE PAYABLES

The	Company	has	receivables	and	payables	for	financial	instruments	purchased from	and	sold	to	brokers,	dealers	and	customers.	The	Company	is	exposed	to	risk of	loss	from	the	inability	of	brokers,	dealers	or	customers	to	pay	for	purchases	or to	deliver	the	financial	instruments	sold,	in	which	case	the	Company	would	have to	sell	or	purchase	the	financial	instruments	at	prevailing	market	prices.	Credit risk	is	reduced	to	the	extent	that	an	exchange	or	clearing	organization	acts	as	a counterparty	to	the	transaction.

					The	Company	seeks	to	protect	itself	from	the	risks	associated	with	customer activities	by	requiring	customers	to	maintain	margin	collateral	in	compliance with	regulatory	and	internal	guidelines.	Margin	levels	are	monitored	daily,	and customers	deposit	additional	collateral	as	required.	Where	customers	cannot meet	collateral	requirements,	the	Company	will	liquidate	sufficient	underlying financial	instruments	to	bring	the	customer	into	compliance	with	the	required margin	level.

					Exposure	to	credit	risk	is	impacted	by	market	volatility,	which	may	impair the	ability	of	clients	to	satisfy	their	obligations	to	the	Company.	Credit	limits	are established	and	closely	monitored	for	customers	and	brokers	and	dealers engaged	in	forwards,	futures	and	other	transactions	deemed	to	be	credit sensitive.

					Brokerage	receivables	and	brokerage	payables,	which	arise	in	the	normal course	of	business,	consisted	of	the	following	at	December	31:

| In millions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Receivables from customers | $24,721 | $26,297 |
| Receivables from brokers, dealers, and clearing |  |  |
| organizations | 8,913 | 17,981 |
| Total brokerage receivables | $33,634 | \t$44,278 |
| Payables to customers | $41,262 | $54,167 |
| Payables to brokers, dealers, and clearing |  |  |
| organizations | 19,584 | \t 16,749 |
| Total brokerage payables | $60,846 | $70,916 |

Trading	account	assets	and	Trading	account	liabilities,	at	fair	value,	consisted	of the	following	at	December	31:

| In millions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Trading account assets |  |  |
| Mortgage-backed securities |  |  |
| U.S. government sponsored agency guaranteed | $20,638 | $32,981 |
| Prime | 1,156 | 1,416 |
| Alt-A | 1,229 | 913 |
| Subprime | 9,734 | 14,552 |
| Non-U.S. residential | 2,368 | 2,447 |
| Commercial | 3,455 | 2,501 |
| Total mortgage-backed securities | $38,580 | $54,810 |
| U.S. Treasury and federal agencies |  |  |
| U.S. Treasuries | $28,938 | $7,370 |
| Agency and direct obligations | 2,041 | 4,017 |
| Total U.S. Treasury and federal agencies | $30,979 | $11,387 |
| State and municipal securities | $7,147 | $9,510 |
| Foreign government securities | 72,769 | 57,422 |
| Corporate | 51,985 | 54,654 |
| Derivatives (1) | 58,879 | 115,289 |
| Equity securities | 46,221 | 48,503 |
| Other debt securities | 36,213 | 26,060 |
| Total trading account assets | $342,773 | $377,635 |
| Trading account liabilities |  |  |
| Securities sold, not yet purchased | $73,406 | $50,693 |
| Derivatives (1) | 64,106 | \t115,107 |
| Total trading account liabilities | $137,512 | $165,800 |

(1)						Presented net, pursuant to master netting agreements. See Note 24 to the Consolidated Financial Statements for a discussion regarding the accounting and reporting for derivatives.

| In millions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Securities available-for-sale | $239,599 | $175,189 |
| Debt securities held-to-maturity (1) | 51,527 | 64,459 |
| Non-marketable equity securities carried at fair value (2) | 6,830 | 9,262 |
| Non-marketable equity securities carried at cost (3) | 8,163 | 7,110 |
| Total investments | $306,119 | $256,020 |

(2)						Unrealized gains and losses for non-marketable equity securities carried at fair value are recognized in earnings.

(3)						Non-marketable equity securities carried at cost primarily consist of shares issued by the Federal Reserve Bank, Federal Home Loan Bank, foreign central banks and various clearing houses of which Citigroup is a member.

# Securities Available-for-Sale

The	amortized	cost	and	fair	value	of	securities	available-for-sale	at	December	31,	2009	and	December	31,	2008	were	as	follows:

|  |  |  |  | 2009 |  |  |  | 2008 (1) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Gross | Gross |  |  | Gross | Gross |  |
|  | Amortized | unrealized | unrealized |  | Amortized | unrealized | unrealized |  |
| In millions of dollars | cost | gains | losses | Fair value | cost | gains | losses | Fair value |
| Debt securities available-for-sale |  |  |  |  |  |  |  |  |
| Mortgage-backed securities |  |  |  |  |  |  |  |  |
| U.S. government-agency guaranteed | $20,625 | $339 | $50 | $20,914 | $23,527 | $261 | $67 | $23,721 |
| Prime | 7,291 | 119 | 932 | 6,478 | 8,475 | 3 | 2,965 | 5,513 |
| Alt-A | 538 | 93 | 4 | 627 | 54 | — | 9 | 45 |
| Subprime | 1 | — | — | 1 | 38 | — | 21 | 17 |
| Non-U.S. residential | 258 | — | 3 | 255 | 185 | 2 | — | 187 |
| Commercial | 883 | 10 | 100 | 793 | 519 | — | 134 | 385 |
| Total mortgage-backed securities | $29,596 | $561 | $1,089 | $29,068 | $32,798 | $266 | $3,196 | $29,868 |
| U.S. Treasury and federal agency securities |  |  |  |  |  |  |  |  |
| U.S. Treasury | 26,857 | 36 | 331 | 26,562 | 3,465 | 125 | — | 3,590 |
| Agency obligations | 27,714 | 46 | 208 | 27,552 | 20,237 | 215 | 77 | 20,375 |
| Total U.S. Treasury and federal agency |  |  |  |  |  |  |  |  |
| securities | $54,571 | $82 | $539 | $54,114 | $23,702 | $340 | $77 | $23,965 |
| State and municipal | 16,677 | 147 | 1,214 | 15,610 | 18,156 | 38 | 4,370 | 13,824 |
| Foreign government | 101,987 | 860 | 328 | 102,519 | 79,505 | 945 | 408 | 80,042 |
| Corporate | 20,024 | 435 | 146 | 20,313 | 10,646 | 65 | 680 | 10,031 |
| Other debt securities | 12,268 | 71 | 170 | 12,169 | 11,784 | 36 | 224 | 11,596 |
| Total debt securities available-for-sale | $235,123 | $2,156 | $3,486 | $233,793 | $ 176,591 | $1,690 | $8,955 | $ 169,326 |
| Marketable equity securities available-for-sale | $4,089 | $1,929 | $212 | $5,806 | $5,768 | $554 | $459 | $5,863 |
| Total securities available-for-sale | $239,212 | $4,085 | $3,698 | $239,599 | $ 182,359 | $2,244 | $9,414 | $ 175,189 |

					At	December	31,	2009,	the	cost	of	approximately	5,000	investments	in equity	and	fixed-income	securities	exceeded	their	fair	value	by	$3.698	billion.	Of the	$3.698	billion,	the	gross	unrealized	loss	on	equity	securities	was	$212 million.	Of	the	remainder,	$1.756	billion	represents	fixed-income	investments that	have	been	in	a	gross-unrealized-loss	position	for	less	than	a	year	and,	of these,	44%	are	rated	investment	grade;	$1.730	billion	represents	fixed-income investments	that	have	been	in	a	gross-unrealized-loss	position	for	a	year	or	more and,	of	these,	96%	are	rated	investment	grade.

					Available-for-sale	mortgage-backed	securities-portfolio	fair	value	balance	of $29.068	billion	consists	of	$20.914	billion	of	government-sponsored	agency securities,	and	$8.154	billion	of	privately	sponsored	securities	of	which	the majority	is	backed	by	mortgages	that	are	not	Alt-A	or	subprime.

					The	decrease	in	gross	unrealized	losses	on	mortgage-backed	securities	was primarily	related	to	a	tightening	of	market	spreads,	reflecting	a	decrease	in risk/liquidity	premiums.	The	decrease	in	gross	unrealized	losses	on	state	and municipal	debt	securities	was	the	result	of	recovery	in	the	municipal	markets,	as liquidity	increased	and	municipal	bond	yields	decreased.

					As	discussed	in	more	detail	below,	the	Company	conducts	and	documents periodic	reviews	of	all	securities	with	unrealized	losses	to	evaluate	whether	the impairment	is	other	than	temporary.	Any	credit-related	impairment	related	to debt	securities	the	Company	does	not	plan	to	sell	and	is	not	likely	to	be	required to	sell	is	recognized	in	the	Consolidated	Statement	of

Income,	with	the	non-credit-related	impairment	recognized	in	OCI.	For	other impaired	debt	securities,	the	entire	impairment	is	recognized	in	the	Consolidated Statement	of	Income.

					The	table	below	shows	the	fair	value	of	investments	in	available-for-sale securities	that	have	been	in	an	unrealized	loss	position	for	less	than	12	months	or for	12	months	or	longer	as	of	December	31,	2009	and	2008:

|  | Less than 12 months | Less than 12 months |  | 12 months or longer |  | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Gross |  | Gross |  | Gross |
|  | Fair | unrealized | Fair | unrealized | Fair | unrealized |
| In\tmillions\tof\tdollars | value | losses | value | losses | value | losses |
| December 31, 2009 |  |  |  |  |  |  |
| Securities available-for-sale |  |  |  |  |  |  |
| Mortgage-backed\tsecurities |  |  |  |  |  |  |
| \t\t\t\t\t\t\tU.S.\tgovernment-agency\tguaranteed | $6,793 | $47 | $263 | $3 | $7,056 | $50 |
| \t\t\t\t\t\t\tPrime | 5,074 | 905 | 228 | 27 | 5,302 | 932 |
| \t\t\t\t\t\t\tAlt-A | 106 | — | 35 | 4 | 141 | 4 |
| \t\t\t\t\t\t\tSubprime | — | — | — | — | — | — |
| \t\t\t\t\t\t\tNon-U.S.\tresidential | 250 | 3 | — | — | 250 | 3 |
| \t\t\t\t\t\t\tCommercial | 93 | 2 | 259 | 98 | 352 | 100 |
| Total\tmortgage-backed\tsecurities | $12,316 | $957 | $785 | $132 | $13,101 | $1,089 |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities |  |  |  |  |  |  |
| \t\t\t\t\t\t\tU.S.\tTreasury | 4,653 | 224 | 19,033 | 107 | 23,686 | 331 |
| \t\t\t\t\t\t\tAgency\tobligations | \t17,957 | 208 | 7 | — | 17,964 | 208 |
| Total\tU.S.\tTreasury\tand\tfederal\tagency\tsecurities | $22,610 | $432 | $19,040 | $107 | $41,650 | $539 |
| State\tand\tmunicipal | 754 | 97 | 10,630 | \t1,117 | 11,384 | \t1,214 |
| Foreign\tgovernment | 39,241 | 217 | 10,398 | 111 | 49,639 | 328 |
| Corporate | 1,165 | 47 | 907 | 99 | 2,072 | 146 |
| Other\tdebt\tsecurities | 655 | 6 | 1,633 | 164 | 2,288 | 170 |
| Marketable\tequity\tsecurities\tavailable-for-sale | 102 | 4 | 2,526 | 208 | 2,628 | 212 |
| Total securities available-for-sale | $76,843 | $1,760 | $45,919 | $1,938 | $122,762 | $3,698 |
| December 31, 2008 (1) |  |  |  |  |  |  |
| Securities available-for-sale |  |  |  |  |  |  |
| Mortgage-backed\tsecurities |  |  |  |  |  |  |
| \t\t\t\t\t\t\tU.S.\tgovernment-agency\tguaranteed | $5,281 | $9 | $432 | $58 | $5,713 | $67 |
| \t\t\t\t\t\t\tPrime | 2,258 | \t1,127 | 3,108 | \t1,838 | 5,366 | \t2,965 |
| \t\t\t\t\t\t\tAlt-A | 38 | 8 | 5 | 1 | 43 | 9 |
| \t\t\t\t\t\t\tSubprime | — | — | 15 | 21 | 15 | 21 |
| \t\t\t\t\t\t\tNon-U.S.\tresidential | 10 | — | — | — | 10 | — |
| \t\t\t\t\t\t\tCommercial | 213 | 33 | 233 | 101 | 446 | 134 |
| Total\tmortgage-backed\tsecurities | $7,800 | $1,177 | $3,793 | $2,019 | $11,593 | $3,196 |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities |  |  |  |  |  |  |
| \t\t\t\t\t\t\tU.S.\tTreasury | — | — | — | — | — | — |
| \t\t\t\t\t\t\tAgency\tobligations | 1,654 | 76 | 1 | 1 | 1,655 | 77 |
| Total\tU.S.\tTreasury\tand\tfederal\tagency\tsecurities | $1,654 | $76 | $1 | $1 | $1,655 | $77 |
| State\tand\tmunicipal | \t12,827 | \t3,872 | 3,762 | 498 | 16,589 | \t4,370 |
| Foreign\tgovernment | 10,697 | 201 | 9,080 | 207 | 19,777 | 408 |
| Corporate | 1,985 | 270 | 4,393 | 410 | 6,378 | 680 |
| Other\tdebt\tsecurities | 944 | 96 | 303 | 128 | 1,247 | 224 |
| Marketable\tequity\tsecurities\tavailable-for-sale | 3,254 | 386 | 102 | 73 | 3,356 | 459 |
| Total securities available-for-sale | $39,161 | $6,078 | $21,434 | $3,336 | $60,595 | $9,414 |

					The	following	table	presents	the	amortized	cost	and	fair	value	of	debt securities	available-for-sale	by	contractual	maturity	dates	as	of	December	31, 2009:

| In millions of dollars | cost			 Fair value | cost			 Fair value |
| :--- | :--- | :--- |
| Mortgage-backed securities (1) |  |  |
| Due within 1 year | $2 | $3 |
| After 1 but within 5 years | 16 | 16 |
| After 5 but within 10 years | 626 | 597 |
| After 10 years (2) | 28,952 | 28,452 |
| Total | $29,596 | $29,068 |
| U.S. Treasury and federal agencies |  |  |
| Due within 1 year | $5,357 | $5,366 |
| After 1 but within 5 years | 35,912 | 35,618 |
| After 5 but within 10 years | 8,815 | 8,773 |
| After 10 years (2) | 4,487 | 4,357 |
| Total | $54,571 | $54,114 |
| State and municipal |  |  |
| Due within 1 year | $7 | $8 |
| After 1 but within 5 years | 119 | 129 |
| After 5 but within 10 years | 340 | 359 |
| After 10 years (2) | 16,211 | 15,114 |
| Total | $16,677 | $15,610 |
| Foreign government |  |  |
| Due within 1 year | $32,223 | $32,365 |
| After 1 but within 5 years | 61,165 | 61,426 |
| After 5 but within 10 years | 7,844 | 7,845 |
| After 10 years (2) | 755 | 883 |
| Total | $101,987 | $102,519 |
| All\tother\t(3) |  |  |
| Due within 1 year | $4,243 | $4,244 |
| After 1 but within 5 years | 14,286 | 14,494 |
| After 5 but within 10 years | 9,483 | 9,597 |
| After 10 years (2) | 4,280 | 4,147 |
| Total | $32,292 | $32,482 |
| Total debt securities available-for-sale | $235,123 | $233,793 |

(1)  Includes mortgage-backed securities of U.S. federal agencies.

(2)  Investments with no stated maturities are included as contractual maturities of greater than 10 years. Actual maturities may differ due to call or prepayment rights.

(3)  Includes corporate securities and other debt securities.

# The	following	table	presents	interest	and	dividends	on	investments:

| In millions of dollars | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Taxable interest | $11,970 | $9,407 | $12,169 |
| Interest exempt from U.S. federal income tax | 864 | 836 | 897 |
| Dividends | 285 | 475 | 357 |
| Total interest and dividends | $13,119 | $10,718 | $13,423 |

					The	following	table	presents	realized	gains	and	losses	on	investments:

| In millions of dollars | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Gross realized investment gains | $2,090 | $ 837 | $1,435 |
| Gross realized investment losses | (94) | \t(158) | (267) |
| Net realized gains (losses) | $1,996 | $ 679 | $1,168 |

# Debt Securities Held-to-Maturity

During	the	fourth	quarter	of	2008,	the	Company	reviewed	portfolios	of	debt securities	classified	in	Trading	account	assets	and	available-for-sale	securities, and	identified	positions	where	there	had	been	a	change	of	intent	to	hold	the	debt securities	for	much	longer	periods	of	time	than	originally	anticipated.	The Company	believed	that	the	expected	cash	flows	to	be	generated	from	holding	the assets	significantly	exceed	their	current	fair	value,	which	had	been	significantly and	adversely	impacted	by	the	reduced	liquidity	in	the	global	financial	markets. 					Transfers	of	securities	out	of	the	trading	category	must	be	rare.	Citigroup made	a	number	of	transfers	out	of	the	trading	and	available-for-sale	categories	in order	to	better	reflect	the	revised	intentions	of	the	Company	in	response	to	the recent	significant	deterioration	in	market	conditions,	which	were	especially	acute during	the	fourth	quarter	of	2008.	These	rare	market	conditions	were	not foreseen	at	the	initial	purchase	date	of	the	securities.	Most	of	the	debt	securities previously	classified	as	trading	were	bought	and	held	principally	for	the	purpose of	selling	them	in	the	short	term,	many	in	the	context	of	Citigroup's	acting	as	a market	maker.	At	the	date	of	acquisition,	most	of	these	positions	were	liquid, and	the	Company	expected	active	and	frequent	buying	and	selling	with	the objective	of	generating	profits	on	short-term	differences	in	price.	However, subsequent	declines	in	value	of	these	securities	were	primarily	related	to	the ongoing	widening	of	market	credit	spreads	reflecting	increased	risk	and	liquidity premiums	that	buyers	were	demanding.	As	market	liquidity	decreased,	the primary	buyers	for	these	securities	typically	demanded	returns	on	investments that	were	significantly	higher	than	previously	experienced.

					Reclassification	of	debt	securities	were	made	at	fair	value	on	the	date	of transfer.	The	December	31,	2008	carrying	value	of	the	securities	transferred from	Trading	account	assets	and	available-for-sale	securities	was	$33.3	billion and	$27.0	billion,	respectively.	The	Company	purchased	an	additional	$4.2 billion	of	held-to-maturity	securities	during	the	fourth	quarter	of	2008,	in accordance	with	prior	commitments.

The	carrying	value	and	fair	value	of	securities	held-to-maturity	(HTM)	at	December	31,	2009	and	December	31,	2008	were	as	follows:

|  |  |  | loss |  |  | Gross | Gross |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Amortized | Amortized | recognized\t\t\t\t\t\t\t Carrying\t\t\t\t\t\t\t unrecognized\t\t\t\t\t\t\t unrecognized | recognized\t\t\t\t\t\t\t Carrying\t\t\t\t\t\t\t unrecognized\t\t\t\t\t\t\t unrecognized | recognized\t\t\t\t\t\t\t Carrying\t\t\t\t\t\t\t unrecognized\t\t\t\t\t\t\t unrecognized | recognized\t\t\t\t\t\t\t Carrying\t\t\t\t\t\t\t unrecognized\t\t\t\t\t\t\t unrecognized | recognized\t\t\t\t\t\t\t Carrying\t\t\t\t\t\t\t unrecognized\t\t\t\t\t\t\t unrecognized | Fair |
| In millions of dollars | cost | (1) | in AOCI | value | (2) | gains | losses | value |
| December 31, 2009 |  |  |  |  |  |  |  |  |
| Debt securities held-to-maturity |  |  |  |  |  |  |  |  |
| Mortgage-backed securities |  |  |  |  |  |  |  |  |
| U.S. government-agency guaranteed | $— |  | $ — | $ — |  | $— | $— | $ — |
| Prime | 6,118 |  | 1,151 | 4,967 |  | 317 | 5 | 5,279 |
| Alt-A | 14,710 |  | 4,276 | 10,434 |  | 905 | 243 | 11,096 |
| Subprime | 1,087 |  | 128 | 959 |  | 77 | 100 | 936 |
| Non-U.S. residential | 9,002 |  | 1,119 | 7,883 |  | 469 | 134 | 8,218 |
| Commercial | 1,303 |  | 45 | 1,258 |  | 1 | 208 | 1,051 |
| Total mortgage-backed securities | $32,220 |  | $6,719 | $25,501 |  | $1,769 | $690 | $26,580 |
| U.S. Treasury and federal agency securities |  |  |  |  |  |  |  |  |
| U.S. Treasury | — |  | — | — |  | — | — | — |
| Agency and direct obligations | — |  | — | — |  | — | — | — |
| Total U.S. Treasury and federal agency securities | $ — |  | $ — | $ — |  | $— | $— | $— |
| State and municipal | 3,067 |  | 147 | 2,920 |  | 92 | 113 | 2,899 |
| Corporate | 7,457 |  | 264 | 7,193 |  | 524 | 182 | 7,535 |
| Asset-backed securities | 16,348 |  | 435 | 15,913 |  | 567 | 496 | 15,984 |
| Other debt securities | — |  | — | — |  | — | — | — |
| Total debt securities held-to-maturity | $59,092 |  | $7,565 | $51,527 |  | $2,952 | $1,481 | $52,998 |
| December 31, 2008 |  |  |  |  |  |  |  |  |
| Debt securities held-to-maturity |  |  |  |  |  |  |  |  |
| Mortgage-backed securities |  |  |  |  |  |  |  |  |
| U.S. government-agency guaranteed | $ — |  | $ — | $ — |  | $— | $— | $ — |
| Prime | 7,481 |  | 1,436 | 6,045 |  | — | 623 | 5,422 |
| Alt-A | 16,658 |  | 4,216 | 12,442 |  | 23 | 1,802 | 10,663 |
| Subprime | 1,368 |  | 125 | 1,243 |  | 15 | 163 | 1,095 |
| Non-U.S. residential | 10,496 |  | 1,128 | 9,368 |  | 5 | 397 | 8,976 |
| Commercial | 1,021 |  | — | 1,021 |  | — | 130 | 891 |
| Total mortgage-backed securities | $37,024 |  | $6,905 | $30,119 |  | $43 | $3,115 | $27,047 |
| U.S. Treasury and federal agency securities |  |  |  |  |  |  |  |  |
| U.S. Treasury | 1 |  | — | 1 |  | — | — | 1 |
| Agency and direct obligations | — |  | — | — |  | — | — | — |
| Total U.S. Treasury and federal agency securities | $1 |  | $ — | $1 |  | $— | $— | $1 |
| State and municipal | 3,371 |  | 183 | 3,188 |  | 14 | 253 | 2,949 |
| Corporate | 6,906 |  | 175 | 6,731 |  | 130 | 305 | 6,556 |
| Asset-backed securities | 22,698 |  | 415 | 22,283 |  | 86 | 555 | 21,814 |
| Other debt securities | 2,478 |  | 341 | 2,137 |  | — | 127 | 2,010 |
| Total debt securities held-to-maturity | $72,478 |  | $8,019 | $64,459 |  | $273 | $4,355 | $60,377 |

(1)  For securities transferred to HTM from Trading account assets, amortized cost is defined as the fair value amount of the securities at the date of transfer plus any accretion income and less any impairments recognized in earnings subsequent to transfer. For securities transferred to HTM from AFS, amortized cost is defined as the original purchase cost, plus or minus any accretion or amortization of interest, less any impairment previously recognized in earnings.

(2)  HTM securities are carried on the Consolidated Balance Sheet at amortized cost and the changes in the value of these securities, other than impairment charges, are not reported on the financial statements.

					The	net	unrealized	losses	classified	in	Accumulated	other	comprehensive income	(AOCI)	relate	to	debt	securities	reclassified	from	AFS	investments	to HTM	investments,	and	to	additional	declines	in	fair	value	for	HTM	securities that	suffer	credit	impairment.	The	balance	was	$7.6	billion	as	of	December	31, 2009,	compared	to	$8.0	billion	as	of	December	31,	2008.	This	balance	is amortized	over	the	remaining	life	of	the	related	securities	as	an	adjustment

of	yield	in	a	manner	consistent	with	the	accretion	of	discount	on	the	same transferred	debt	securities.	This	will	have	no	impact	on	the	Company's	net income	because	the	amortization	of	the	unrealized	holding	loss	reported	in	equity will	offset	the	effect	on	interest	income	of	the	accretion	of	the	discount	on	these securities.

The	table	below	shows	the	fair	value	of	investments	in	HTM	that	have	been	in	an	unrecognized	loss	position	for	less	than	12	months	or	for	12	months	or	longer	as	of December	31,	2009	and	December	31,	2008:

|  | Less than 12 months | Less than 12 months | 12 months or longer | 12 months or longer |  | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Gross |  | Gross |  | Gross |
|  | Fair | unrecognized | Fair | unrecognized | Fair | unrecognized |
| In millions of dollars | value | losses | value | losses | value | losses |
| December 31, 2009 |  |  |  |  |  |  |
| Debt securities held-to-maturity |  |  |  |  |  |  |
| Mortgage-backed securities | $— | $— | $16,923 | $690 | $16,923 | $690 |
| State and municipal | 755 | 79 | 713 | 34 | 1,468 | 113 |
| Corporate | — | — | 1,519 | 182 | 1,519 | 182 |
| Asset-backed securities | 348 | 18 | 5,460 | 478 | 5,808 | 496 |
| Other debt securities | — | — | — | — | — | — |
| Total debt securities held-to-maturity | $1,103 | $97 | $24,615 | $1,384 | $25,718 | $1,481 |
| December 31, 2008 |  |  |  |  |  |  |
| Debt securities held-to-maturity |  |  |  |  |  |  |
| Mortgage-backed securities | $2,348 | $631 | $24,236 | $2,484 | $26,584 | $3,115 |
| State and municipal | 2,499 | 253 | — | — | 2,499 | 253 |
| Corporate | 23 | — | 4,107 | 305 | 4,130 | 305 |
| Asset-backed securities | 9,051 | 381 | 4,164 | 174 | 13,215 | 555 |
| Other debt securities | 439 | — | 5,246 | 127 | 5,685 | 127 |
| Total debt securities held-to-maturity | $14,360 | $1,265 | $37,753 | $3,090 | $52,113 | $4,355 |

					Excluded	from	the	gross	unrecognized	losses	presented	in	the	above	table	are the	$7.6	billion	and	$8.0	billion	of	gross	unrealized	losses	recorded	in	AOCI related	to	the	HTM	securities	that	were	reclassified	from	AFS	investments	as	of December	31,	2009	and	December	31,	2008,	respectively.

Approximately	$6.8	billion	and	$5.2	billion	of	these	unrealized	losses	relate	to securities	that	have	been	in	a	loss	position	for	12	months	or	longer	at	December 31,	2009	and	December	31,	2008,	respectively.

The	following	table	presents	the	carrying	value	and	fair	value	of	HTM	debt	securities	by	contractual	maturity	dates	as	of	December	31,	2009	and	December	31,	2008:

|  | December 31, 2009 | December 31, 2009 | December 31, 2008 | December 31, 2008 |
| :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | Carrying value | Fair value | Carrying value | Fair value |
| Mortgage-backed securities |  |  |  |  |
| Due within 1 year | $1 | $1 | $88 | $65 |
| After 1 but within 5 years | 466 | 385 | 363 | 282 |
| After 5 but within 10 years | 697 | 605 | 513 | 413 |
| After 10 years (1) | 24,337 | 25,589 | 29,155 | 26,287 |
| Total | $25,501 | $26,580 | $30,119 | $27,047 |
| State and municipal |  |  |  |  |
| Due within 1 year | $6 | $6 | $86\t $ | 86 |
| After 1 but within 5 years | 53 | 79 | 105 | 105 |
| After 5 but within 10 years | 99 | 99 | 112 | 106 |
| After 10 years (1) | 2,762 | 2,715 | 2,885 | 2,652 |
| Total | $2,920 | $2,899 | $3,188 | $2,949 |
| All\tother\t(2) |  |  |  |  |
| Due within 1 year | $4,652 | $4,875 | $4,482 | $4,505 |
| After 1 but within 5 years | 3,795 | 3,858 | 10,892 | 10,692 |
| After 5 but within 10 years | 6,240 | 6,526 | 6,358 | 6,241 |
| After 10 years (1) | 8,419 | 8,260 | 9,420 | 8,943 |
| Total | $23,106 | $23,519 | $31,152 | $30,381 |
| Total debt securities held-to-maturity | $51,527 | $52,998 | $64,459 | $60,377 |

(2)  Includes asset-backed securities and all other debt securities.

# Evaluating Investments for Other-Than-Temporary Impairments

The	Company	conducts	and	documents	periodic	reviews	of	all	securities	with unrealized	losses	to	evaluate	whether	the	impairment	is	other	than	temporary. Prior	to	January	1,	2009,	these	reviews	were	conducted	pursuant	to	FASB	Staff Position	No.	FAS	115-1,	The	Meaning	of	Other-Than-Temporary	Impairment and	its	Application	to	Certain	Investments	(now	incorporated	into	ASC	320-10- 35,	Investments—Debt	and	Equity	Securities—Subsequent	Measurement).	Any unrealized	loss	identified	as	other	than	temporary	was	recorded	directly	in	the Consolidated	Statement	of	Income.	As	of	January	1,	2009,	the	Company	adopted FSP	FAS	115-2	and	FAS	124-2	(now	incorporated	into	ASC	320-10-35-34,

# Investments—Debt	and	Equity	Securities:	Recognition	of	an	Other-Than-

Temporary	Impairment).	This	guidance	amends	the	impairment	model	for	debt securities;	the	impairment	model	for	equity	securities	was	not	affected. 					Under	the	new	guidance	for	debt	securities,	other-than-temporary impairment	is	recognized	in	earnings	for	debt	securities	which	the	Company	has an	intent	to	sell	or	which	the	Company	believes	it	is	more-likely-than-not	that	it will	be	required	to	sell	prior	to	recovery	of	the	amortized	cost	basis.	For	those securities	which	the	Company	does	not	intend	to	sell	or	expect	to	be	required	to sell,	credit-related	impairment	is	recognized	in	earnings,	with	the	non-credit- related	impairment	recorded	in	AOCI.

					An	unrealized	loss	exists	when	the	current	fair	value	of	an	individual	security is	less	than	its	amortized	cost	basis.	Unrealized	losses	that	are	determined	to	be temporary	in	nature	are	recorded,	net	of	tax,	in	AOCI	for	AFS	securities,	while such	losses	related	to	HTM	securities	are	not	recorded,	as	these	investments	are carried	at	their	amortized	cost.	For	securities	transferred	to	HTM	from	Trading account	assets,	amortized	cost	is	defined	as	the	fair	value	of	the	securities	at	the date	of	transfer,	plus	any	accretion	income	and	less	any	impairment	recognized in	earnings	subsequent	to	transfer.	For	securities	transferred	to	HTM	from	AFS, amortized	cost	is	defined	as	the	original	purchase	cost,	plus	or	minus	any accretion	or	amortization	of	a	purchase	discount	or	premium,	less	any impairment	recognized	in	earnings	subsequent	to	transfer.

					Regardless	of	the	classification	of	the	securities	as	AFS	or	HTM,	the Company	has	assessed	each	position	for	impairment.

					Factors	considered	in	determining	whether	a	loss	is	temporary	include:

the	length	of	time	and	the	extent	to	which	fair	value	has	been	below cost;

the	severity	of	the	impairment;

the	cause	of	the	impairment	and	the	financial	condition	and	near-term prospects	of	the	issuer;

activity	in	the	market	of	the	issuer	which	may	indicate	adverse	credit conditions;	and

the	Company's	ability	and	intent	to	hold	the	investment	for	a	period	of time	sufficient	to	allow	for	any	anticipated	recovery.

					The	Company's	review	for	impairment	generally	entails:

identification	and	evaluation	of	investments	that	have	indications	of possible	impairment;

analysis	of	individual	investments	that	have	fair	values	less	than

amortized	cost,	including	consideration	of	the	length	of	time	the

investment	has	been	in	an	unrealized	loss	position	and	the	expected recovery	period;

discussion	of	evidential	matter,	including	an	evaluation	of	factors	or triggers	that	could	cause	individual	investments	to	qualify	as	having other-than-temporary	impairment	and	those	that	would	not	support

# other-than-temporary	impairment;	and

documentation	of	the	results	of	these	analyses,	as	required	under business	policies.

					For	equity	securities,	management	considers	the	various	factors	described above,	including	its	intent	and	ability	to	hold	the	equity	security	for	a	period	of time	sufficient	for	recovery	to	amortized	cost.	Where	management	lacks	that intent	or	ability,	the	security's	decline	in	fair	value	is	deemed	to	be	other	than temporary	and	is	recorded	in	earnings.	AFS	equity	securities	deemed	other-than- temporarily	impaired	are	written	down	to	fair	value,	with	the	full	difference between	fair	value	and	amortized	cost	recognized	in	earnings.

					For	debt	securities	that	are	not	deemed	to	be	credit	impaired,	management assesses	whether	it	intends	to	sell	or	whether	it	is	more-likely-than-not	that	it would	be	required	to	sell	the	investment	before	the	expected	recovery	of	the amortized	cost	basis.	In	most	cases,	management	has	asserted	that	it	has	no intent	to	sell	and	that	it	believes	it	is	not	likely	to	be	required	to	sell	the investment	before	recovery	of	its	amortized	cost	basis.	Where	such	an	assertion has	not	been	made,	the	security's	decline	in	fair	value	is	deemed	to	be	other	than temporary	and	is	recorded	in	earnings.

					For	debt	securities,	a	critical	component	of	the	evaluation	for	other-than- temporary	impairments	is	the	identification	of	credit	impaired	securities,	where management	does	not	expect	to	receive	cash	flows	sufficient	to	recover	the	entire amortized	cost	basis	of	the	security.	For	securities	purchased	and	classified	as AFS	with	the	expectation	of	receiving	full	principal	and	interest	cash	flows,	this analysis	considers	the	likelihood	of	receiving	all	contractual	principal	and interest.	For	securities	reclassified	out	of	the	trading	category	in	the	fourth quarter	of	2008,	the	analysis	considers	the	likelihood	of	receiving	the	expected principal	and	interest	cash	flows	anticipated	as	of	the	date	of	reclassification	in the	fourth	quarter	of	2008.	The	extent	of	the	Company's	analysis	regarding credit	quality	and	the	stress	on	assumptions	used	in	the	analysis	have	been refined	for	securities	where	the	current	fair	value	or	other	characteristics	of	the security	warrant.	The	paragraphs	below	describe	the	Company's	process	for identifying	credit	impairment	in	security	types	with	the	most	significant unrealized	losses	as	of	December	31,	2009.

# Mortgage-backed	securities

For	U.S.	mortgage-backed	securities	(and	in	particular	for	Alt-A	and	other mortgage-backed	securities	that	have	significant	unrealized	losses	as	a percentage	of	amortized	cost),	credit	impairment	is	assessed	using	a	cash	flow model	that	estimates	the	cash	flows	on	the	underlying	mortgages,	using	the security-specific	collateral	and	transaction	structure.	The	model	estimates	cash flows	from	the	underlying	mortgage	loans	and	distributes	those	cash	flows	to various	tranches	of	securities,	considering	the	transaction	structure	and	any subordination	and	credit	enhancements	that	exist	in	that	structure.	The	cash	flow model	incorporates	actual	cash	flows	on	the	mortgage-backed	securities	through the	current	period	and	then	projects	the	remaining	cash	flows	using	a	number	of assumptions,	including	default	rates,	prepayment	rates,	and	recovery	rates	(on foreclosed	properties).

					Management	develops	specific	assumptions	using	as	much	market	data	as possible	and	includes	internal	estimates	as	well	as	estimates	published	by	rating agencies	and	other	third-party	sources.	Default	rates	are	projected	by	considering current	underlying	mortgage	loan	performance,	generally	assuming	the	default of	(1)	10%	of	current	loans,	(2)	25%	of	30–59	day	delinquent	loans,	(3)	75%	of 60–90	day	delinquent	loans	and	(4)	100%	of	91+	day	delinquent	loans.	These estimates	are	extrapolated	along	a	default	timing	curve	to	estimate	the	total lifetime	pool	default	rate.	Other	assumptions	used	contemplate	the	actual collateral	attributes,	including	geographic	concentrations,	rating	agency	loss projections,	rating	actions	and	current	market	prices.

					The	key	base	assumptions	for	mortgage-backed	securities	as	of	December 31,	2009	are	in	the	table	below:

					In	addition,	cash	flow	projections	are	developed	using	more	stressful parameters,	and	management	assesses	the	results	of	those	stress	tests	(including the	severity	of	any	cash	shortfall	indicated	and	the	likelihood	of	the	stress scenarios	actually	occurring	based	on	the	underlying	pool's	characteristics	and performance)	to	assess	whether	management	expects	to	recover	the	amortized cost	basis	of	the	security.	If	cash	flow	projections	indicate	that	the	Company does	not	expect	to	recover	its	amortized	cost	basis,	the	Company	recognizes	the estimated	credit	loss	in	earnings.

# State	and	municipal	securities

Citigroup's	AFS	state	and	municipal	bonds	consist	mainly	of	bonds	that	are financed	through	Tender	Option	Bond	programs.	The	process	for	identifying credit	impairment	for	bonds	in	this	program	as	well	as	for	bonds	that	were previously	financed	in	this	program	is	largely	based	on	third-party	credit	ratings. Individual	bond	positions	must	meet	minimum	ratings	requirements,	which	vary based	on	the	sector	of	the	bond	issuer.	The	average	portfolio	rating,	ignoring	any insurance,	is	Aa3/AA-.

					Citigroup	monitors	the	bond	issuer	and	insurer	ratings	on	a	daily	basis.	In	the event	of	a	downgrade	of	the	bond	below	the	Aa3/AA-,	the	subject	bond	is specifically	reviewed	for	potential	shortfall	in	contractual	principal	and	interest. Citigroup	has	not	recorded	any	credit	impairments	on	bonds	held	as	part	of	the Tender	Option	Bond	program	or	on	bonds	that	were	previously	held	as	part	of the	Tender	Option	Bond	program.

					The	remainder	of	Citigroup's	AFS	state	and	municipal	bonds,	outside	of	the above,	are	specifically	reviewed	for	credit	impairment	based	on	instrument- specific	estimates	of	cash	flows,	probability	of	default	and	loss	given	default.

|  | December 31, 2009 |
| :--- | :--- |
| Prepayment rate | 3–8 CRR |
| Loss severity (1) | 45%–75% |
| Unemployment rate | 10% |
| Peak-to-trough housing price decline | 32.3% |

(1)  Loss severity rates are estimated considering collateral characteristics and generally range from 45%–60% for prime bonds, 50%–70% for Alt-A bonds, and 65%–75% for subprime bonds.

# Recognition and Measurement of Other-Than-Temporary Impairment

The	following	table	presents	the	total	other-than-temporary	impairments	recognized	during	the	12	months	ended	December	31,	2009:

| Other-Than-Temporary Impairments (OTTI) on Investments | Year ended December 31, 2009 | Year ended December 31, 2009 | Year ended December 31, 2009 |
| :--- | :--- | :--- | :--- |
| In millions of dollars | AFS | HTM | Total |
| Impairment losses related to securities that the Company does not intend to sell nor will |  |  |  |
| likely be required to sell |  |  |  |
| Total OTTI losses recognized during the year ended December 31, 2009 | $468 | $6,600 | $7,068 |
| Less: portion of OTTI loss recognized in AOCI (before taxes) | 60 | 4,296 | 4,356 |
| Net impairment losses recognized in earnings for securities that the Company does not intend |  |  |  |
| to sell nor will likely be required to sell | $408 | $2,304 | $2,712 |
| OTTI losses recognized in earnings for securities that the Company intends to sell or more- |  |  |  |
| likely-than-not will be required to sell before recovery | 194 | — | 194 |
| Total impairment losses recognized in earnings | $602 | $2,304 | $2,906 |

The	following	is	a	12-month	roll-forward	of	the	credit-related	position	recognized	in	earnings	for	AFS	and	HTM	debt	securities	held	as	of	December	31,	2009:

|  |  | Credit impairments | Credit impairments | Reductions due to |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | recognized in | recognized in | sales of credit |  |
|  |  | earnings on | earnings on | impaired |  |
|  | December 31, 2008 | securities not | securities that have | securities sold or | Dec. 31, 2009 |
| In millions of dollars | balance | previously impaired | been previously impaired | matured | balance |
| AFS debt securities |  |  |  |  |  |
| Mortgage-backed securities |  |  |  |  |  |
| Prime | $— | $242 | $— | $ — | $242 |
| Alt-A | — | 1 | — | — | 1 |
| Commercial real estate | 1 | 1 | — | — | 2 |
| Total mortgage-backed securities | 1 | 244 | — | — | 245 |
| Foreign government | — | 21 | — | (1) | 20 |
| Corporate | 53 | 59 | 26 | (1) | 137 |
| Asset-backed securities | — | 4 | 5 | — | 9 |
| Other debt securities | — | 49 | — | — | 49 |
| Total OTTI credit losses recognized for |  |  |  |  |  |
| AFS debt securities | $54 | $377 | $31 | $(2) | $460 |
| HTM debt securities |  |  |  |  |  |
| Mortgage-backed securities |  |  |  |  |  |
| Prime | $8 | $161 | $1 | $ — | $170 |
| Alt-A | 1,091 | 1,450 | 28 | — | 2,569 |
| Subprime | 85 | 120 | 5 | — | 210 |
| Non-U.S. residential | 28 | 68 | — | — | 96 |
| Commercial real estate | 4 | — | 5 | — | 9 |
| Total mortgage-backed securities | 1,216 | 1,799 | 39 | — | 3,054 |
| State and municipal | — | 7 | — | — | 7 |
| Corporate | — | 408 | 16 | (73) | 351 |
| Asset-backed securities | 17 | 31 | — | — | 48 |
| Other debt securities | — | 3 | 1 | — | 4 |
| Total OTTI credit losses recognized for |  |  |  |  |  |
| HTM debt securities | $1,233 | $2,248 | $56 | $(73) | $3,464 |

# Investments in Alternative Investment Funds

The	Company	holds	investments	in	certain	hedge	funds,	private	equity	funds, fund	of	funds	and	real	estate	funds,	and	includes	both	funds	that	are	managed	by the	Company	and	funds	managed	by	third	parties.	These

investments	are	generally	classified	as	non-marketable	equity	securities	carried at	fair	value.	The	fair	value	of	these	investments	has	been	estimated	using	the	net asset	value	(NAV)	per	share	of	the	Company's	ownership	interest	in	the	funds, where	it	is	not	probable	that	the	Company	will	sell	an	investment	at	a	price	other than	NAV.

|  | Fair |  | Monthly, quarterly, | Redemption notice |
| :--- | :--- | :--- | :--- | :--- |
| In millions of dollars at December 31, 2009 | value | Unfunded commitments | annually | period |
| Hedge funds | $80 | $ — |  | 10–95 days |
| Private equity funds | 1,516 | 702 | — | — |
| Real estate funds (1) | 123 | 37 | — | — |
| Total | $1,719 | $739 |  |  |

(1)							This category includes several real estate funds that invest primarily in commercial real estate in the U.S., Europe and Asia. These investments can never be redeemed with the funds. Distributions from each fund will be received as the underlying investments in the funds are liquidated. It is estimated that the underlying assets of the fund will be liquidated over a period of several years as market conditions allow. While certain assets within the portfolio may be sold, no specific assets have been identified for sale. Because it is not probable that any individual investment will be sold, the fair value of each individual investment has been estimated using the net asset value of the Company's ownership interest in the partners' capital. There is no standard redemption frequency nor is a prior notice period required. The investee fund's management must approve of the buyer before the sale of the investments can be completed.

(1)							The Company classifies consumer and corporate loans based on the segment and sub- segment that manages the loans. See Note 1 to the Consolidated Financial Statements. (2)							Loans secured primarily by real estate.

(3)							Includes loans not otherwise separately categorized. (4)							The unearned income in 2008 includes loans that were transferred in that period from the held-for-sale category to the held-for-investment category at a discount to par.

					Included	in	the	previous	loan	table	are	lending	products	whose	terms	may give	rise	to	additional	credit	issues.	Credit	cards	with	below-market	introductory interest	rates,	multiple	loans	supported	by	the	same	collateral	(e.g.,	home	equity loans),	and	interest-only	loans	are	examples	of	such	products.	However,	these products	are	not	material	to	Citigroup's	financial	position	and	are	closely managed	via	credit	controls	that	mitigate	their	additional	inherent	risk.

					Impaired	loans	are	those	where	Citigroup	believes	it	is	probable	that	it	will not	collect	all	amounts	due	according	to	the	original	contractual	terms	of	the loan.	Impaired	loans	include	corporate	non-accrual	loans	as	well	as	smaller- balance	homogeneous	loans	whose	terms	have	been	modified	due	to	the borrower's	financial	difficulties	and	Citigroup	granted	a	concession	to	the borrower.	Such	modifications	may	include	interest	rate	reductions	and/or principal	forgiveness.	Valuation	allowances	for	these	loans	are	estimated considering	all	available	evidence	including,	as	appropriate,	the	present	value	of the	expected	future	cash	flows	discounted	at	the	loan's	original	contractual effective	rate,	the	secondary	market	value	of	the	loan	and	the	fair	value	of collateral	less	disposal	costs.	These	totals	exclude	smaller-balance	homogeneous loans	that	have	not	been	modified	and	are	carried	on	a	non-accrual	basis,	as	well as	substantially	all	loans	modified	for	periods	of	12	months	or	less.	At	December 31,	2009,	loans	included	in	those	short-term	programs	amounted	to	$10.1 billion.

					The	following	table	presents	information	about	impaired	loans:

(1)  Prior to 2008, the Company's financial accounting systems did not separately track impaired smaller-balance, homogeneous consumer loans whose terms were modified due to the borrowers' financial difficulties and it was determined that a concession was granted to the borrower. At December 31, 2009 and 2008, such modified impaired consumer loans amounted to $15.899 and $8.151 billion, respectively. However, information derived from the Company's risk management systems indicates that the amounts of such outstanding modified loans, including those modified prior to 2008, approximated $18.1 billion, $12.3 billion and $7.0 billion at December 31, 2009, 2008 and 2007, respectively.

(2)  Excludes loans purchased for investment purposes.

(3)  Included in the Allowance for loan losses.

					In	addition,	included	in	the	loan	table	are	purchased	distressed	loans,	which are	loans	that	have	evidenced	significant	credit	deterioration	subsequent	to origination	but	prior	to	acquisition	by	Citigroup.	In	accordance	with	SOP	03-3, the	difference	between	the	total	expected	cash	flows	for	these	loans	and	the initial	recorded	investments	is	recognized	in	income	over	the	life	of	the	loans using	a	level	yield.	Accordingly,	these	loans	have	been	excluded	from	the impaired	loan	information	presented	above.	In	addition,	per	SOP	03-3, subsequent	decreases	to	the	expected	cash	flows	for	a	purchased	distressed	loan require	a	build	of	an	allowance	so	the	loan

retains	its	level	yield.	However,	increases	in	the	expected	cash	flows	are	first recognized	as	a	reduction	of	any	previously	established	allowance	and	then recognized	as	income	prospectively	over	the	remaining	life	of	the	loan	by increasing	the	loan's	level	yield.	Where	the	expected	cash	flows	cannot	be reliably	estimated,	the	purchased	distressed	loan	is	accounted	for	under	the	cost recovery	method.

					The	carrying	amount	of	the	purchased	distressed	loan	portfolio	at	December 31,	2009	was	$825	million	net	of	an	allowance	of	$95	million.

The	changes	in	the	accretable	yield,	related	allowance	and	carrying	amount	net	of	accretable	yield	for	2009	are	as	follows:

|  | Accretable | amount of loan |  |
| :--- | :--- | :--- | :--- |
| In millions of dollars | yield | receivable | Allowance |
| Beginning balance | $92 | $1,510 | $122 |
| Purchases (1) | 14 | 329 | — |
| Disposals/payments received | (5) | (967) | — |
| Accretion | (52) | 52 | — |
| Builds (reductions) to the allowance | (21) | 1 | (27) |
| Increase to expected cash flows | 10 | 2 | — |
| FX/Other | (11) | (7) | — |
| Balance, December 31, 2009 (2) | $27 | $920 | $95 |

(1)  The balance reported in the column "Carrying amount of loan receivable" consists of $87 million of purchased loans accounted for under the level-yield method and $242 million under the cost- recovery method. These balances represent the fair value of these loans at their acquisition date. The related total expected cash flows for the level-yield loans were $101 million at their acquisition dates.

(2)  The balance reported in the column "Carrying amount of loan receivable" consists of $561 million of loans accounted for under the level-yield method and $359 million accounted for under the cost-recovery method. 184

| In millions of dollars | 2009 | 2008 | (1) | 2007 | (1) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Allowance for loan losses at beginning of year | $ 29,616 | $ 16,117 | $ 16,117 | $8,940 |  |
| \t\t\tGross credit losses | (32,784) | (20,760) |  | (11,864) |  |
| \t\t\tGross recoveries | 2,043 | 1,749 |  | 1,938 |  |
| Net credit (losses) recoveries (NCLs) | $(30,741) | $(19,011) |  | $(9,926) |  |
| \t\t\tNCLs | $ 30,741 | $ 19,011 |  | $9,926 |  |
| \t\t\tNet reserve builds (releases) | 5,741 | 11,297 |  | 6,550 |  |
| \t\t\tNet specific reserve builds (releases) | 2,278 | 3,366 |  | 356 |  |
| Total provision for credit losses | $ 38,760 | $ 33,674 |  | $ 16,832 |  |
| Other, net (2) | (1,602) | (1,164) |  | 271 |  |
| Allowance for loan losses at end of year | $ 36,033 | $ 29,616 |  | $ 16,117 |  |
| Allowance for credit losses on unfunded lending commitments at beginning of year (3) | $887 | $1,250 |  | $1,100 |  |
| Provision for unfunded lending commitments | 244 | (363) |  | 150 |  |
| Allowance for credit losses on unfunded lending commitments at end of year (3) | $1,157 | $887 |  | $1,250 |  |
| Total allowance for loans, leases, and unfunded lending commitments | $ 37,190 | $ 30,503 |  | $ 17,367 | $ 17,367 |

(2)  2009 primarily includes reductions to the loan loss reserve of approximately $543 million related to securitizations, approximately $402 million related to the sale or transfers to held-for-sale of U.S. Real Estate Lending Loans, and $562 million related to the transfer of the U.K. Cards portfolio to held-for-sale. 2008 primarily includes reductions to the loan loss reserve of approximately $800 million related to FX translation, $102 million related to securitizations, $244 million for the sale of the German retail banking operation, $156 million for the sale of CitiCapital, partially offset by additions of $106 million related to the Cuscatlán and Bank of Overseas Chinese acquisitions. 2007 primarily includes reductions to the loan loss reserve of $475 million related to securitizations and transfers to loans held-for-sale, and reductions of $83 million related to the transfer of the U.K. CitiFinancial portfolio to held-for-sale, offset by additions of $610 million related to the acquisitions of Egg, Nikko Cordial, Grupo Cuscatlán and Grupo Financiero Uno.

(3)  Represents additional credit loss reserves for unfunded corporate lending commitments and letters of credit recorded in Other liabilities on the Consolidated Balance Sheet.

# 19. GOODWILL AND INTANGIBLE ASSETS

The	changes	in	Goodwill	during	2008	and	2009	were	as	follows:

| In millions of dollars |  |
| :--- | :--- |
| Balance at December 31, 2007 | $41,053 |
| Sale of German retail bank | $ (1,047) |
| Sale of CitiCapital | (221) |
| Sale of Citigroup Global Services Limited | (85) |
| Purchase accounting adjustments—BISYS | (184) |
| Purchase of the remaining shares of Nikko Cordial—net of purchase accounting adjustments | 287 |
| Acquisition of Legg Mason Private Portfolio Group | 98 |
| Foreign exchange translation | (3,116) |
| Impairment of goodwill | (9,568) |
| Smaller acquisitions, purchase accounting adjustments and other | (85) |
| Balance at December 31, 2008 | $27,132 |
| Sale of Smith Barney | $ (1,146) |
| Sale of Nikko Cordial Securities | (558) |
| Sale of Nikko Asset Management | (433) |
| Foreign exchange translation | 547 |
| Smaller acquisitions/divestitures, purchase accounting adjustments and other | (150) |
| Balance at December 31, 2009 | $25,392 |

The	changes	in	Goodwill	by	segment	during	2008	and	2009	were	as	follows:

|  | Consumer | Institutional |  | Corporate/ |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | Banking\t\t\t\t\t\t\t Clients Group\t\t\t\t\t\t\t Citi Holdings | Banking\t\t\t\t\t\t\t Clients Group\t\t\t\t\t\t\t Citi Holdings | Banking\t\t\t\t\t\t\t Clients Group\t\t\t\t\t\t\t Citi Holdings | Other | Total |
| Balance at December 31, 2007 (1) | $19,751 | $9,288 | $12,014 | $— | $41,053 |
| Goodwill acquired during 2008 | $88 | $108 | $1,492 | $— | $1,688 |
| Goodwill disposed of during 2008 | — | — | (1,378) | — | (1,378) |
| Goodwill impaired during 2008 | (6,547) | — | (3,021) | — | (9,568) |
| Other (1) | (4,006) | 775 | (1,432) | — | (4,663) |
| Balance at December 31, 2008 (1) | $9,286 | $10,171 | $7,675 | $— | $27,132 |
| Goodwill acquired during 2009 | $— | $ — | $— | $— | $ — |
| Goodwill disposed of during 2009 | — | (39) | (2,248) | — | (2,287) |
| Other (1) | 307 | 225 | 15 | — | 547 |
| Balance at December 31, 2009 | $9,593 | $10,357 | $5,442 | $— | $25,392 |

(1)  Other changes in Goodwill primarily reflect foreign exchange effects on non-dollar-denominated goodwill, as well as purchase accounting adjustments.

					Goodwill	impairment	testing	is	performed	at	a	level	below	the	business segments	(referred	to	as	a	reporting	unit).	The	changes	in	the	organizational structure	in	2009	resulted	in	the	creation	of	new	reporting	segments.	As	a	result, commencing	with	the	second	quarter	of	2009,	the	Company	has	identified	new reporting	units	as	required	under	ASC	350,	Intangibles—Goodwill	and	Other. Goodwill	affected	by	the	reorganization	has	been	reassigned	from	10	reporting units	to	nine,	using	a	fair	value	approach.	During	2009,	goodwill	was	allocated	to disposals	and	tested	for	impairment	under	the	new	reporting	units.	The	Company performed	goodwill	impairment	testing	for	all	reporting	units	as	of	April	1,	2009 and	July	1,	2009.	Additionally,	the	Company	performed	an	interim	goodwill impairment	test	for	the	Local	Consumer	Lending—Cards	reporting	unit	as	of November	30,	2009.	No	goodwill	was	written	off	due	to	impairment	in	2009.

					During	2008,	the	share	prices	of	financial	stocks	continued	to	be	very volatile	and	were	under	considerable	pressure	in	sustained	turbulent	markets.	In this	environment,	Citigroup's	market	capitalization	remained	below	book	value for	most	of	the	period	and	the	Company	performed	goodwill	impairment	testing for	all	reporting	units	as	of	February	28,	2008,	July	1,	2008	and	December	31, 2008.	The	results	of	the	first	step	of	the	impairment	test	showed	no	indication	of impairment	in	any	of	the	reporting	units	at	any	of	the	periods	except	December 31,	2008	and,	accordingly,	the	Company	did	not	perform	the	second	step	of	the impairment	test,	except	for	the	test	performed	as	of	December	31,	2008.	As	of December	31,	2008,	there	was	an	indication	of	impairment	in	the	North	America Consumer	Banking,	Latin	America	Consumer	Banking,	and	Local	Consumer Lending—Other	reporting	units	and,	accordingly,	the	second	step	of	testing	was performed	on	these	reporting	units.

					Based	on	the	results	of	the	second	step	of	testing,	at	December	31,	2008,	the Company	recorded	a	$9.6	billion	pretax	($8.7	billion	after-tax)	goodwill impairment	charge	in	the	fourth	quarter	of	2008,	representing	most	of	the goodwill	allocated	to	these	reporting	units.	The	primary	cause	for	the	goodwill impairment	at	December	31,	2008	in	the	above	reporting	units	was	rapid deterioration	in	the	financial	markets,	as	well	as	in	the	global	economic	outlook particularly	during	the	period	beginning	mid-November	through	year-end	2008. The	more	significant	fair	value	adjustments	in	the	pro	forma	purchase	price allocation	in	the	second	step	of	testing	were	to	fair	value	loans	and	debt	and	were made	to	identify	and	value	identifiable	intangibles.	The	adjustments	to	measure the	assets,	liabilities	and	intangibles	were	for	the	purpose	of	measuring	the implied	fair	value	of	goodwill	and	such	adjustments	are	not	reflected	in	the Consolidated	Balance	Sheet.

					The	following	table	shows	reporting	units	with	goodwill	balances	and	the excess	of	fair	value	as	a	percentage	over	allocated	book	value	as	of	December 31,	2009.

# In millions of dollars

| Reporting unit (1) | allocated book value | Goodwill |
| :--- | :--- | :--- |
| North\tAmerica\tRegional\tConsumer\tBanking | 174% | $2,453 |
| EMEA Regional Consumer Banking | 163 | 255 |
| Asia Regional Consumer Banking | 303 | 5,533 |
| Latin\tAmerica\tRegional\tConsumer\tBanking | 215 | 1,352 |
| Securities and Banking | 203 | 8,784 |
| Transaction Services | 2,079 | 1,573 |
| Brokerage and Asset Management | 161 | 759 |
| Local Consumer Lending—Cards | 112 | 4,683 |

(1)  Local Consumer Lending—Other is excluded from the table as there is no goodwill allocated to it.

					While	no	impairment	was	noted	in	step	one	of	the	Company's	Local Consumer	Lending—Cards	reporting	unit	impairment	test	at	November	30, 2009,	goodwill	present	in	that	reporting	unit	may	be	particularly	sensitive	to further	deterioration	in	economic	conditions.	Under	the	market	approach	for valuing	this	reporting	unit,	the	earnings	multiples	and	transaction	multiples	were selected	from	multiples	obtained	using	data	from	guideline	companies	and acquisitions.	The	selection	of	the	actual	multiple	considers	operating performance	and	financial	condition	such	as	return	on	equity	and	net	income growth	of	Local	Consumer	Lending—Cards	as	compared	to	the	guideline companies	and	acquisitions.	For	the	valuation	under	the	income	approach,	the Company	utilized	a	discount	rate,	which	it	believes	reflects	the	risk	and uncertainty	related	to	the	projected	cash	flows,	and	selected	2012	as	the	terminal year.

					Small	deterioration	in	the	assumptions	used	in	the	valuations,	in	particular the	discount	rate	and	growth	rate	assumptions	used	in	the	net	income	projections, could	significantly	affect	the	Company's	impairment	evaluation	and,	hence, results.	If	the	future	were	to	differ	adversely	from	management's	best	estimate	of key	economic	assumptions	and	associated	cash	flows	were	to	decrease	by	a	small margin,	the	Company	could	potentially	experience	future	material	impairment charges	with	respect	to	$4,683	million	of	goodwill	remaining	in	our	Local Consumer	Lending—Cards	reporting	unit.	Any	such	charges,	by	themselves, would	not	negatively	affect	the	Company's	Tier	1,	Tier	1	Common	and	Total Capital	regulatory	ratios,	its	Tangible	Common	Equity	or	the	Company's liquidity	position.

The	components	of	intangible	assets	were	as	follows:

|  |  | December 31, 2009 | December 31, 2009 |  | December 31, 2008 | December 31, 2008 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Gross |  | Net | Gross |  | Net |
|  | carrying | Accumulated | carrying | carrying | Accumulated | carrying |
| In millions of dollars | amount | amortization | amount | amount | amortization | amount |
| Purchased credit card relationships | $8,148 | $4,838 | $3,310 | $8,443 | $4,513 | $3,930 |
| Core deposit intangibles | 1,373 | 791 | 582 | 1,345 | 662 | 683 |
| Other customer relationships | 675 | 176 | 499 | 4,031 | 168 | 3,863 |
| Present value of future profits | 418 | 280 | 138 | 415 | 264 | 151 |
| Indefinite-lived\tintangible\tassets | 569 | — | 569 | 1,474 | — | 1,474 |
| Other (1) | 4,977 | 1,361 | 3,616 | 5,343 | 1,285 | 4,058 |
| Intangible assets (excluding MSRs) | $ 16,160 | $7,446 | $8,714 | $21,051 | $6,892 | $14,159 |
| Mortgage servicing rights (MSRs) | 6,530 | — | 6,530 | 5,657 | — | 5,657 |
| Total intangible assets | $ 22,690 | $7,446 | $ 15,244 | $26,708 | $6,892 | $19,816 |

(1)							Includes contract-related intangible assets.

					In	2009,	Citigroup	added	$302	million	in	other	intangibles,	with	a	weighted-average	amortization	period	of	13	years.

The	changes	in	intangible	assets	during	2009	were	as	follows:

|  | Net carrying |  |  |  |  | Net carrying |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | amount at |  |  |  | FX | amount at |
|  | December 31, | Acquisitions/ |  |  | and\t\t\t\t\t\t\t December 31, | and\t\t\t\t\t\t\t December 31, |
| In millions of dollars | 2008 | divestitures\t\t\t\t\t\t\t Amortization | divestitures\t\t\t\t\t\t\t Amortization | Impairments | other (1) | 2009 |
| Purchased credit card relationships | $3,930 | $(72) | $(595) | $ — | $47 | $3,310 |
| Core deposit intangibles | 683 | — | (115) | (3) | 17 | 582 |
| Other customer relationships | 3,863 | (3,253) | (164) | — | 53 | 499 |
| Present value of future profits | 151 | — | (13) | — | — | 138 |
| Indefinite-lived intangible assets | 1,474 | (967) | — | — | 62 | 569 |
| Other | 4,058 | (108) | (292) | (53) | 11 | 3,616 |
| Intangible\tassets\t(excluding\tMSRs) | $14,159 | $(4,400) | $(1,179) | $(56) | $ 190 | $8,714 |
| Mortgage servicing rights (MSRs) (2) | 5,657 |  |  |  |  | 6,530 |
| Total intangible assets | $19,816 |  |  |  |  | $15,244 |

(1)  Includes foreign exchange translation and purchase accounting adjustments.

(2)  See Note 23 to the Consolidated Financial Statements for the roll-forward of mortgage servicing rights.

Short-term	borrowings	consist	of	commercial	paper	and	other	borrowings	with weighted	average	interest	rates	as	follows:

					Borrowings	under	bank	lines	of	credit	may	be	at	interest	rates	based	on LIBOR,	CD	rates,	the	prime	rate,	or	bids	submitted	by	the	banks.	Citigroup	pays commitment	fees	for	its	lines	of	credit.

					Some	of	Citigroup's	non-bank	subsidiaries	have	credit	facilities	with Citigroup's	subsidiary	depository	institutions,	including	Citibank,	N.A. Borrowings	under	these	facilities	must	be	secured	in	accordance	with	Section 23A	of	the	Federal	Reserve	Act.

					CGMHI	has	committed	financing	with	an	unaffiliated	bank.	At	December 31,	2009,	CGMHI	had	drawn	down	the	full	$125	million	available,	which	is guaranteed	by	Citigroup.	It	also	has	substantial	borrowing	agreements	consisting of	facilities	that	CGMHI	has	been	advised	are	available,	but	where	no contractual	lending	obligation	exists.	These	arrangements	are	reviewed	on	an ongoing	basis	to	ensure	flexibility	in	meeting	CGMHI's	short-term requirements.

# Long-Term Debt

(2) At December 31, 2009 and 2008, collateralized advances from the Federal Home Loan Bank are $24.1 billion and $67.4 billion, respectively.

					CGMHI	has	a	syndicated	five-year	committed	uncollateralized	revolving line	of	credit	facility	with	unaffiliated	banks	totaling	$3.0	billion,	which	was undrawn	at	December	31,	2009	and	matures	in	2011.	CGMHI	also	has committed	long-term	financing	facilities	with	unaffiliated	banks.	At	December 31,	2009,	CGMHI	had	drawn	down	the	full	$900	million	available	under	these facilities,	of	which	$150	million	is	guaranteed	by	Citigroup.	Generally,	a	bank can	terminate	these	facilities	by	giving	CGMHI	one	year	prior	notice.

					CGMHI	also	has	substantial	borrowing	arrangements	consisting	of	facilities that	CGMHI	has	been	advised	are	available,	but	where	no	contractual	lending obligation	exists.	These	arrangements	are	reviewed	on	an	ongoing	basis	to ensure	flexibility	in	meeting	CGMHI's	short-term	requirements.

					The	Company	issues	both	fixed	and	variable	rate	debt	in	a	range	of currencies.	It	uses	derivative	contracts,	primarily	interest	rate	swaps,	to effectively	convert	a	portion	of	its	fixed	rate	debt	to	variable	rate	debt

and	variable	rate	debt	to	fixed	rate	debt.	The	maturity	structure	of	the	derivatives generally	corresponds	to	the	maturity	structure	of	the	debt	being	hedged.	In addition,	the	Company	uses	other	derivative	contracts	to	manage	the	foreign exchange	impact	of	certain	debt	issuances.	At	December	31,	2009,	the Company's	overall	weighted	average	interest	rate	for	long-term	debt	was	3.51% on	a	contractual	basis	and	3.91%	including	the	effects	of	derivative	contracts.

Aggregate	annual	maturities	of	long-term	debt	obligations	(based	on	final	maturity	dates)	including	trust	preferred	securities	are	as	follows:

| In millions of dollars | 2010 | 2011 | 2012 | 2013 | 2014						Thereafter | 2014						Thereafter |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Citigroup parent company | $18,030 | $20,435 | $29,706 | $17,775 | $18,916 | $92,942 |
| Other Citigroup subsidiaries | 18,710 | 29,316 | 17,214 | 5,177 | 12,202 | 14,675 |
| Citigroup Global Markets Holdings Inc. | 1,315 | 1,030 | 1,686 | 388 | 522 | 8,481 |
| Citigroup Funding Inc. | 9,107 | 8,875 | 20,738 | 4,792 | 3,255 | 8,732 |
| Total | $47,162 | $59,656 | $69,344 | $28,132 | $34,895 | $124,830 |

					Long-term	debt	at	December	31,	2009	and	December	31,	2008	includes $19,345	million	and	$24,060	million,	respectively,	of	junior	subordinated	debt. The	Company	formed	statutory	business	trusts	under	the	laws	of	the	state	of Delaware.	The	trusts	exist	for	the	exclusive	purposes	of	(i)	issuing	trust	securities representing	undivided	beneficial	interests	in	the	assets	of	the	Trust;	(ii) investing	the	gross	proceeds	of	the	trust	securities	in	junior	subordinated deferrable	interest	debentures	(subordinated	debentures)	of	its	parent;	and	(iii) engaging	in	only	those	activities	necessary	or	incidental	thereto.	Upon	approval from	the	Federal	Reserve,	Citigroup	has	the	right	to	redeem	these	securities. 					Citigroup	has	contractually	agreed	not	to	redeem	or	purchase	(i)	the	6.50% Enhanced	Trust	Preferred	securities	of	Citigroup	Capital	XV	before	September 15,	2056,	(ii)	the	6.45%	Enhanced	Trust	Preferred	securities	of	Citigroup	Capital XVI	before	December	31,	2046,	(iii)	the	6.35%	Enhanced	Trust	Preferred securities	of	Citigroup	Capital	XVII	before	March	15,	2057,	(iv)	the	6.829% Fixed	Rate/Floating	Rate	Enhanced	Trust	Preferred	securities	of	Citigroup Capital	XVIII	before	June	28,	2047,	(v)	the	7.250%	Enhanced	Trust	Preferred securities	of	Citigroup	Capital	XIX	before	August	15,	2047,	(vi)	the	7.875% Enhanced	Trust	Preferred	securities	of	Citigroup	Capital

XX	before	December	15,	2067,	and	(vii)	the	8.300%	Fixed	Rate/Floating	Rate Enhanced	Trust	Preferred	securities	of	Citigroup	Capital	XXI	before	December 21,	2067,	unless	certain	conditions,	described	in	Exhibit	4.03	to	Citigroup's Current	Report	on	Form	8-K	filed	on	September	18,	2006,	in	Exhibit	4.02	to Citigroup's	Current	Report	on	Form	8-K	filed	on	November	28,	2006,	in	Exhibit 4.02	to	Citigroup's	Current	Report	on	Form	8-K	filed	on	March	8,	2007,	in Exhibit	4.02	to	Citigroup's	Current	Report	on	Form	8-K	filed	on	July	2,	2007,	in Exhibit	4.02	to	Citigroup's	Current	Report	on	Form	8-K	filed	on	August	17, 2007,	in	Exhibit	4.2	to	Citigroup's	Current	Report	on	Form	8-K	filed	on November	27,	2007,	and	in	Exhibit	4.2	to	Citigroup's	Current	Report	on	Form 8-K	filed	on	December	21,	2007,	respectively,	are	met.	These	agreements	are	for the	benefit	of	the	holders	of	Citigroup's	6.00%	junior	subordinated	deferrable interest	debentures	due	2034.	Citigroup	owns	all	of	the	voting	securities	of	these subsidiary	trusts.	These	subsidiary	trusts	have	no	assets,	operations,	revenues	or cash	flows	other	than	those	related	to	the	issuance,	administration,	and repayment	of	the	subsidiary	trusts	and	the	subsidiary	trusts'	common	securities. These	subsidiary	trusts'	obligations	are	fully	and	unconditionally	guaranteed	by Citigroup.

The	following	table	summarizes	the	financial	structure	of	each	of	the	Company's	subsidiary	trusts	at	December	31,	2009:

# 	Junior subordinated debentures owned by trust

| Trust securities |  |  |  |  | Common |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| with distributions |  |  |  |  | shares |  |  | Redeemable |
| guaranteed by\nCitigroup | Issuance\ndate | Securities\nissued | Liquidation\nvalue | Coupon\nrate | issued\nto parent | Amount\t(1) | Maturity | by issuer\nbeginning |
| In millions of dollars, except share amounts |  |  |  |  |  |  |  |  |
| Citigroup Capital III | Dec. 1996 | 194,053 | $ 194 | 7.625% | 6,003 | $200 | Dec. 1, 2036 | Not redeemable |
| Citigroup Capital VII | July 2001 | 35,885,898 | 897 | 7.125% | 1,109,874 | 925 | July 31, 2031 | July 31, 2006 |
| Citigroup Capital VIII | Sept. 2001 | 43,651,597 | 1,091 | 6.950% | \t1,350,050 | 1,125 | Sept. 15, 2031 | Sept. 17, 2006 |
| Citigroup Capital IX | Feb. 2003 | 33,874,813 | 847 | 6.000% | 1,047,675 | 873 | Feb. 14, 2033 | Feb. 13, 2008 |
| Citigroup Capital X | Sept. 2003 | 14,757,823 | 369 | 6.100% | 456,428 | 380 | Sept. 30, 2033 | Sept. 30, 2008 |
| Citigroup Capital XI | Sept. 2004 | 18,387,128 | 460 | 6.000% | 568,675 | 474 | Sept. 27, 2034 | Sept. 27, 2009 |
| Citigroup Capital XIV | June 2006 | 12,227,281 | 306 | 6.875% | 40,000 | 307 | June 30, 2066 | June 30, 2011 |
| Citigroup Capital XV | Sept. 2006 | 25,210,733 | 630 | 6.500% | 40,000 | 631 | Sept. 15, 2066 | Sept. 15, 2011 |
| Citigroup Capital XVI | Nov. 2006 | 38,148,947 | 954 | 6.450% | 20,000 | 954 | Dec. 31, 2066 | Dec. 31, 2011 |
| Citigroup Capital XVII | Mar. 2007 | 28,047,927 | 701 | 6.350% | 20,000 | 702 | Mar. 15, 2067 | Mar. 15, 2012 |
| Citigroup Capital XVIII | June 2007 | 99,901 | 162 | 6.829% | 50 | 162 | June 28, 2067 | June 28, 2017 |
| Citigroup Capital XIX | Aug. 2007 | 22,771,968 | 569 | 7.250% | 20,000 | 570 | Aug. 15, 2067 | Aug. 15, 2012 |
| Citigroup Capital XX | Nov. 2007 | 17,709,814 | 443 | 7.875% | 20,000 | 443 | Dec. 15, 2067 | Dec. 15, 2012 |
| Citigroup Capital XXI | Dec. 2007 | 2,345,801 | 2,346 | 8.300% | 500 | 2,346 | Dec. 21, 2077 | Dec. 21, 2037 |
| Citigroup Capital XXX | Nov. 2007 | 1,875,000 | 1,875 | 6.455% | 10 | 1,875 | Sept. 15, 2041 | Sept. 15, 2013 |
| Citigroup Capital XXXI | Nov. 2007 | 1,875,000 | 1,875 | 6.700% | 10 | 1,875 | Mar. 15, 2042 | Mar. 15, 2014 |
| Citigroup Capital XXXII | Nov. 2007 | 1,875,000 | 1,875 | 6.935% | 10 | 1,875 | Sept. 15, 2042 | Sept. 15, 2014 |
| Citigroup Capital XXXIII | July 2009 | 5,259,000 | 5,259 | 8.000% | 100 | 5,259 | July 30, 2039 | July 30, 2014 |
|  |  |  |  | \t3 mo. LIB |  |  |  |  |
| Adam Capital Trust III | Dec. 2002 | 17,500 | 18 | +335\tbp. | 542 | 18 | Jan. 7, 2033 | Jan. 7, 2008 |
|  |  |  |  | \t3 mo. LIB |  |  |  |  |
| Adam Statutory Trust III | Dec. 2002 | 25,000 | 25 | +325\tbp. | 774 | 26 | Dec. 26, 2032 | Dec. 26, 2007 |
|  |  |  |  | \t3 mo. LIB |  |  |  |  |
| Adam Statutory Trust IV | Sept. 2003 | 40,000 | 40 | +295\tbp. | 1,238 | 41 | Sept. 17, 2033 | Sept. 17, 2008 |
|  |  |  |  | \t3 mo. LIB |  |  |  |  |
| Adam Statutory Trust V | Mar. 2004 | 35,000 | 35 | +279\tbp. | 1,083 | 36 | Mar. 17, 2034 | Mar. 17, 2009 |
| Total obligated |  |  | $20,971 |  |  | $21,097 |  |  |

(1)						Represents the proceeds received from the Trust at the date of issuance.

					In	each	case,	the	coupon	rate	on	the	debentures	is	the	same	as	that	on	the trust	securities.	Distributions	on	the	trust	securities	and	interest	on	the	debentures are	payable	quarterly,	except	for	Citigroup	Capital	III,	Citigroup	Capital	XVIII and	Citigroup	Capital	XXI	on	which	distributions	are	payable	semiannually. 					During	the	third	quarter	of	2009,	pursuant	to	the	"Exchange	Offers," Citigroup	converted	$5.8	billion	liquidation	value	of	trust	preferred	securities across	Citigroup	Capital	III,	Citigroup	Capital	VII,	Citigroup	Capital	VIII,

Citigroup	Capital	IX,	Citigroup	Capital	X,	Citigroup	Capital	XI,	Citigroup Capital	XIV,	Citigroup	Capital	XV,	Citigroup	Capital	XVI,	Citigroup	Capital XVII,	Citigroup	Capital	XVIII,	Citigroup	Capital	XIX,	Citigroup	Capital	XX and	Citigroup	Capital	XXI	to	common	stock	and	issued	$27.1	billion	of Citigroup	Capital	XXXIII	trust	preferred	securities	to	the	U.S.	government	in exchange	for	the	Series	G	and	I	of	preferred	stock.

# 21. PREFERRED STOCK AND STOCKHOLDERS' EQUITY

The	following	table	summarizes	the	Company's	Preferred	Stock	outstanding	at	December	31,	2009	and	December	31,	2008:

|  |  | Redemption |  | Convertible to |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | price per |  | approximate |  |  |
|  |  | depositary | Number | number of |  |  |
|  |  | share / | of | Citigroup |  |  |
|  | Dividend | preference | depositary | common shares at | December 31, | December 31, |
|  | rate | share | shares | \t\tDecember 31, 2009 | 2009 | 2008 |
| Series A (1) | 7.000% | $50 | — | $        — | $— | $6,880 |
| Series B (1) | 7.000% | 50 | — | — | — | 3,000 |
| Series C (1) | 7.000% | 50 | — | — | — | 1,000 |
| Series D (1) | 7.000% | 50 | — | — | — | 750 |
| Series E (2) | 8.400% | 1,000 | 121,254 | — | 121 | 6,000 |
| Series F (3) | 8.500% | 25 | 2,863,369 | — | 71 | 2,040 |
| Series H (4) | 5.000% | 1,000,000 | — | — | — | 23,727 |
| Series I (5) | 8.000% | 1,000,000 | — | — | — | 19,513 |
| Series J (1) | 7.000% | 50 | — | — | — | 450 |
| Series K (1) | 7.000% | 50 | — | — | — | 400 |
| Series L1 (1) | 7.000% | 50 | — | — | — | 5 |
| Series N (1) | 7.000% | 50 | — | — | — | 15 |
| Series T (6) | 6.500% | 50 | 453,981 | 672,959 | 23 | 3,169 |
| Series AA (7) | 8.125% | 25 | 3,870,330 | — | 97 | 3,715 |
|  |  |  |  | 672,959 | $312 | $70,664 |

(1) Issued on January 23, 2008 as depositary shares, each representing a 1/1,000th interest in a share of the corresponding series of Non-Cumulative Convertible Preferred Stock. Under the terms of pre-existing conversion price reset agreements with holders of Series A, B, C, D, J, K, L1 and N (the "Old Preferred Stock"), on February 17, 2009, Citigroup exchanged shares of new preferred stock Series A1, B1, C1, D1, J1, K1, L2 and N1 (the "New Preferred Stock") for an equal number of shares of Old Preferred Stock. All shares of the Old Preferred Stock were canceled. During the third quarter of 2009, pursuant to the "Exchange Offers", Citigroup converted the entire notional value of the New Preferred Stock to common stock.

(2) Issued on April 28, 2008 as depositary shares, each representing a 1/25th interest in a share of the corresponding series of Fixed Rate/Floating Rate Non-Cumulative Preferred Stock.

Redeemable in whole or in part on or after April 30, 2018. Dividends are payable semi-annually for the first 10 years until April 30, 2018 at $42.70 per depositary share and thereafter quarterly at a floating rate when, as and if declared by the Company's Board of Directors. During the third quarter of 2009, pursuant to the "Exchange Offers", Citigroup converted $5,879 million notional value of Series E Preferred Stock to common stock.

(3) Issued on May 13, 2008 and May 28, 2008 as depositary shares, each representing a 1/1,000th interest in a share of the corresponding series of Non-Cumulative Preferred Stock. Redeemable in whole or in part on or after June 15, 2013. The dividend of $0.53 per depositary share is payable quarterly when, as and if declared by the Company's Board of Directors. During the third quarter of 2009, pursuant to the "Exchange Offers", Citigroup converted $1,969 million notional value of Series F Preferred Stock to common stock.

(4) Issued on October 28, 2008 as Cumulative Preferred Stock to the United States Treasury under the Troubled Asset Relief Program. During the third quarter of 2009, pursuant to the "Exchange Offers", the entire notional value of the Preferred Stock was converted to common stock.

(5) Issued on December 31, 2008 as Cumulative Preferred Stock to the United States Treasury under the Troubled Asset Relief Program. During the third quarter of 2009, pursuant to the "Exchange Offers", the entire notional value of the Preferred Stock was converted to Citigroup Capital XXXIII trust preferred securities maturing July 30, 2039.

(6) Issued on January 23, 2008 and January 29, 2008 as depositary shares, each representing a 1/1,000th interest in a share of the corresponding series of Non-Cumulative Convertible Preferred Stock. Redeemable in whole or in part on or after February 15, 2015. Convertible into Citigroup common stock at a conversion rate of approximately 1,482.3503 per share, which is subject to adjustment under certain conditions. The dividend or in $0.81 per depositary share is payable quarterly when, as and if declared by the Company's Board of Directors. Redemption is subject to a capital replacement covenant. During the third quarter of 2009, pursuant to the "Exchange Offers", Citigroup converted $3,146 million notional value of Series T Preferred Stock to common stock.

(7) Issued on January 25, 2008 as depositary shares, each representing a 1/1,000th interest in a share of the corresponding series of Non-Cumulative Preferred Stock. Redeemable in whole or in part on or after February 15, 2018. The dividend of $0.51 per depositary share is payable quarterly when, as and if declared by the Company's Board of Directors. Redemption is subject to a capital replacement covenant. During the third quarter of 2009, pursuant to the "Exchange Offers", Citigroup converted $3,618 million notional value of Series AA Preferred Stock to common stock.

# Regulatory Capital

Citigroup	is	subject	to	risk	based	capital	and	leverage	guidelines	issued	by	the Board	of	Governors	of	the	Federal	Reserve	System	(FRB).	Its	U.S.	insured depository	institution	subsidiaries,	including	Citibank,	N.A.,	are	subject	to similar	guidelines	issued	by	their	respective	primary	federal	bank	regulatory agencies.	These	guidelines	are	used	to	evaluate	capital	adequacy	and	include	the required	minimums	shown	in	the	following	table.

					The	regulatory	agencies	are	required	by	law	to	take	specific	prompt	actions with	respect	to	institutions	that	do	not	meet	minimum	capital	standards.	As	of December	31,	2009	and	2008,	all	of	Citigroup's	U.S.	insured	subsidiary depository	institutions	were	"well	capitalized."

					At	December	31,	2009,	regulatory	capital	as	set	forth	in	guidelines	issued	by the	U.S.	federal	bank	regulators	is	as	follows:

|  | Required | capitalized |  |  |
| :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | \t\t\tminimum | minimum | Citigroup\t(3)Citibank, N.A.(3) | Citigroup\t(3)Citibank, N.A.(3) |
| Tier 1 Capital |  |  | $ 127,034 | $96,833 |
| Total Capital (1) |  |  | 165,983 | 110,625 |
| Tier 1 Capital ratio | 4.0% | 6.0% | 11.67% | 13.16% |
| Total Capital ratio (1) | 8.0 | 10.0 | 15.25 | 15.03 |
| Leverage ratio (2) | 3.0 | 5.0 (3) | 6.89 | 8.31 |

(1)						Total Capital includes Tier 1 Capital and Tier 2 Capital.

(2) Tier 1 Capital divided by adjusted average total assets.

(3) Applicable only to depository institutions. For bank holding companies to be "well capitalized," they must maintain a minimum Leverage ratio of 3%.

# Banking Subsidiaries—Constraints on Dividends

There	are	various	legal	limitations	on	the	ability	of	Citigroup's	subsidiary depository	institutions	to	extend	credit,	pay	dividends	or	otherwise	supply	funds to	Citigroup	and	its	non-bank	subsidiaries.	Currently,	the	approval	of	the	Office of	the	Comptroller	of	the	Currency,	in	the	case	of	national	banks,	or	the	Office	of Thrift	Supervision,	in	the	case	of	federal	savings	banks,	is	required	if	total dividends	declared	in	any	calendar	year	exceed	amounts	specified	by	the applicable	agency's	regulations.	State-chartered	depository	institutions	are subject	to	dividend	limitations	imposed	by	applicable	state	law.

					In	determining	the	dividends,	each	depository	institution	must	also	consider its	effect	on	applicable	risk-based	capital	and	leverage	ratio	requirements,	as well	as	policy	statements	of	the	federal	regulatory	agencies	that	indicate	that banking	organizations	should	generally	pay	dividends	out	of	current	operating earnings.	Citigroup	did	not	receive	any	dividends	from	its	banking	subsidiaries during	2009.

# Non-Banking Subsidiaries

Citigroup	also	receives	dividends	from	its	non-bank	subsidiaries.	These	non- bank	subsidiaries	are	generally	not	subject	to	regulatory	restrictions	on dividends.

					The	ability	of	CGMHI	to	declare	dividends	can	be	restricted	by	capital considerations	of	its	broker-dealer	subsidiaries.

|  |  | capital or | minimum |
| :--- | :--- | :--- | :--- |
| Subsidiary | Jurisdiction | equivalent | requirement |
| Citigroup Global | U.S. Securities and |  |  |
| \t\t\t\t\t\t\tMarkets\tInc. | \t\t\t\t\t\t\tExchange |  |  |
|  | \t\t\t\t\t\t\tCommission |  |  |
|  | \t\t\t\t\t\t\tUniform\tNet |  |  |
|  | \t\t\t\t\t\t\tCapital\tRule |  |  |
|  | (Rule 15c3-1) | $10,886 | $10,218 |
| Citigroup Global | United Kingdom's |  |  |
| \t\t\t\t\t\t\tMarkets\tLimited | \t\t\t\t\t\t\tFinancial |  |  |
|  | \t\t\t\t\t\t\tServices |  |  |
|  | Authority | $ 6,409 | $ 3,081 |

# 22. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes	in	each	component	of	"Accumulated	Other	Comprehensive	Income	(Loss)"	for	the	three-year	period	ended	December	31,	2009	are	as	follows:

|  | Net	unrealized | translation |  |  | Accumulated |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | gains\t(losses) | adjustment, |  | Pension | other |
|  | on investment | net of | Cash flow | liability | comprehensive |
| In millions of dollars | securities | hedges | hedges | adjustments | income (loss) |
| Balance, January 1, 2007 | $1,092 | $(2,796) | $(61) | $(1,786) | $(3,551) |
| Change in net unrealized gains (losses) on investment securities, net of taxes | 138 | — | — | — | 138 |
| Less: Reclassification adjustment for net gains included in net income, net of taxes | (759) | — | — | — | (759) |
| Foreign currency translation adjustment, net of taxes ^(1) | — | 2,024 | — | — | 2,024 |
| Cash flow hedges, net of taxes (2) | — | — | (3,102) | — | (3,102) |
| Pension liability adjustment, net of taxes (3) | — | — | — | 590 | 590 |
| Change | $(621) | $ 2,024 | $(3,102) | $590 | $(1,109) |
| Balance, December 31, 2007 | $471 | $(772) | $(3,163) | $(1,196) | $(4,660) |
| Change in net unrealized gains (losses) on investment securities, net of taxes | \t(11,422) | — | — | — | (11,422) |
| Less: Reclassification adjustment for net losses included in net income, net of taxes | 1,304 | — | — | — | 1,304 |
| Foreign currency translation adjustment, net of taxes (1) | — | (6,972) | — | — | (6,972) |
| Cash flow hedges, net of taxes ^(2) | — | — | (2,026) | — | (2,026) |
| Pension liability adjustment, net of taxes (3) | — | — | — | (1,419) | (1,419) |
| Change | $(10,118) | $(6,972) | $(2,026) | $(1,419) | $(20,535) |
| Balance, December 31, 2008 | $(9,647) | $(7,744) | $(5,189) | $(2,615) | $(25,195) |
| Cumulative effect of accounting change (ASC 320-10-35/FSP FAS 115-2 |  |  |  |  |  |
| \t\t\tand FAS 124-2) | (413) | — | — | — | (413) |
| Balance, January 1, 2009 | $(10,060) | $(7,744) | $(5,189) | $(2,615) | $(25,608) |
| Change in net unrealized gains (losses) on investment securities, net of taxes | 5,268 | — | — | — | 5,268 |
| Less: Reclassification adjustment for net losses included in net income, net of taxes | 445 | — | — | — | 445 |
| Foreign currency translation adjustment, net of taxes ^(1) | — | (203) | — | — | (203) |
| Cash flow hedges, net of taxes (2) | — | — | 2,007 | — | 2,007 |
| Pension liability adjustment, net of taxes (3) | — | — | — | (846) | (846) |
| Change | $5,713 | $(203) | $ 2,007 | $(846) | $6,671 |
| Balance, December 31, 2009 (4) | $(4,347) | $(7,947) | $(3,182) | $(3,461) | $(18,937) |

(1)						Reflects,	among	other	items:	the	movements	in	the	British	pound,	Euro,	Japanese	yen,	Korean	won,	Polish	zloty	and	Mexican	peso	against	the	U.S.	dollar,	and	changes	in	related	tax	effects and	hedges.

(2) Primarily driven by Citigroup's pay fixed/receive floating interest rate swap programs that are hedging the floating rates on deposits and long-term debt.

(3) Reflects adjustments to the funded status of pension and postretirement plans, which is the difference between the fair value of the plan assets and the projected benefit obligation.

(4) The December 31, 2009 balance of $(4.3) billion for net unrealized losses on investment securities consists of $(4.7) billion for those investments classified as held-to-maturity and $0.4 billion for those classified as available-for-sale.

# 23. SECURITIZATIONS AND VARIABLE INTEREST ENTITIES

Citigroup	and	its	subsidiaries	are	involved	with	several	types	of	off-balance- sheet	arrangements,	including	special	purpose	entities	(SPEs).	See	Note	1	to	the Consolidated	Financial	Statements	for	a	discussion	of	impending	accounting changes	to	the	accounting	for	transfers	and	servicing	of	financial	assets	and Consolidation	of	Variable	Interest	Entities,	including	the	elimination	of Qualifying	SPEs.

# Uses of SPEs

An	SPE	is	an	entity	designed	to	fulfill	a	specific	limited	need	of	the	company that	organized	it.

					The	principal	uses	of	SPEs	are	to	obtain	liquidity	and	favorable	capital treatment	by	securitizing	certain	of	Citigroup's	financial	assets,	to	assist	clients in	securitizing	their	financial	assets,	and	to	create	investment	products	for	clients. SPEs	may	be	organized	in	many	legal	forms	including	trusts,	partnerships	or corporations.	In	a	securitization,	the	company	transferring	assets	to	an	SPE converts	those	assets	into	cash	before	they	would	have	been	realized	in	the normal	course	of	business,	through	the	SPE's	issuance	of	debt	and	equity instruments,	certificates,	commercial	paper	and	other	notes	of	indebtedness, which	are	recorded	on	the	balance	sheet	of	the	SPE	and	not	reflected	on	the transferring	company's	balance	sheet,	assuming	applicable	accounting requirements	are	satisfied.	Investors	usually	have	recourse	to	the	assets	in	the SPE	and	often	benefit	from	other	credit	enhancements,	such	as	a	collateral account	or	over-collateralization	in	the	form	of	excess	assets	in	the	SPE,	or	from a	liquidity	facility,	such	as	a	line	of	credit,	liquidity	put	option	or	asset	purchase agreement.	The	SPE	can	typically	obtain	a	more	favorable	credit	rating	from rating	agencies	than	the	transferor	could	obtain	for	its	own	debt	issuances, resulting	in	less	expensive	financing	costs.	The	SPE	may	also	enter	into derivative	contracts	in	order	to	convert	the	yield	or	currency	of	the	underlying assets	to	match	the	needs	of	the	SPE	investors	or	to	limit	or	change	the	credit risk	of	the	SPE.	Citigroup	may	be	the	provider	of	certain	credit	enhancements	as well	as	the	counterparty	to	any	related	derivative	contracts.

					SPEs	may	be	Qualifying	SPEs	(QSPEs)	or	Variable	Interest	Entities	(VIEs) or	neither.

# Qualifying	SPEs

QSPEs	are	a	special	class	of	SPEs	that	have	significant	limitations	on	the	types of	assets	and	derivative	instruments	they	may	own	or	enter	into	and	the	types and	extent	of	activities	and	decision-making	they	may	engage	in.	Generally, QSPEs	are	passive	entities	designed	to	purchase	assets	and	pass	through	the	cash flows	from	those	assets	to	the	investors	in	the	QSPE.	QSPEs	may	not	actively manage	their	assets	through	discretionary	sales	and	are	generally	limited	to making	decisions	inherent	in	servicing	activities	and	issuance	of	liabilities. QSPEs	are	generally	exempt	from	consolidation	by	the	transferor	of	assets	to	the QSPE	and	any	investor	or	counterparty.

VIEs	are	entities	that	have	either	a	total	equity	investment	that	is	insufficient	to permit	the	entity	to	finance	its	activities	without	additional	subordinated financial	support	or	whose	equity	investors	lack	the	characteristics	of	a controlling	financial	interest	(i.e.,	ability	to	make	significant	decisions	through voting	rights,	right	to	receive	the	expected	residual	returns	of	the	entity	and obligation	to	absorb	the	expected	losses	of	the	entity).	Investors	that	finance	the VIE	through	debt	or	equity	interests	or	other	counterparties	that	provide	other forms	of	support,	such	as	guarantees,	subordinated	fee	arrangements,	or	certain types	of	derivative	contracts,	are	variable	interest	holders	in	the	entity.	The variable	interest	holder,	if	any,	that	will	absorb	a	majority	of	the	entity's expected	losses,	receive	a	majority	of	the	entity's	expected	residual	returns,	or both,	is	deemed	to	be	the	primary	beneficiary	and	must	consolidate	the	VIE. Consolidation	of	a	VIE	is	determined	based	primarily	on	variability	generated	in scenarios	that	are	considered	most	likely	to	occur,	rather	than	based	on	scenarios that	are	considered	more	remote.	Certain	variable	interests	may	absorb significant	amounts	of	losses	or	residual	returns	contractually,	but	if	those scenarios	are	considered	very	unlikely	to	occur,	they	may	not	lead	to consolidation	of	the	VIE.

					All	of	these	facts	and	circumstances	are	taken	into	consideration	when determining	whether	the	Company	has	variable	interests	that	would	deem	it	the primary	beneficiary	and,	therefore,	require	consolidation	of	the	related	VIE	or otherwise	rise	to	the	level	where	disclosure	would	provide	useful	information	to the	users	of	the	Company's	financial	statements.	In	some	cases,	it	is	qualitatively clear	based	on	the	extent	of	the	Company's	involvement	or	the	seniority	of	its investments	that	the	Company	is	not	the	primary	beneficiary	of	the	VIE.	In	other cases,	a	more	detailed	and	quantitative	analysis	is	required	to	make	such	a determination.

					The	Company	generally	considers	the	following	types	of	involvement	to	be significant:

assisting	in	the	structuring	of	a	transaction	and	retaining	any	amount of	debt	financing	(e.g.,	loans,	notes,	bonds	or	other	debt	instruments) or	an	equity	investment	(e.g.,	common	shares,	partnership	interests	or warrants);

writing	a	"liquidity	put"	or	other	liquidity	facility	to	support	the issuance	of	short-term	notes;

writing	credit	protection	(e.g.,	guarantees,	letters	of	credit,	credit default	swaps	or	total	return	swaps	where	the	Company	receives	the total	return	or	risk	on	the	assets	held	by	the	VIE);	or certain	transactions	where	the	Company	is	the	investment	manager and	receives	variable	fees	for	services.

					In	various	other	transactions,	the	Company	may	act	as	a	derivative counterparty	(for	example,	interest	rate	swap,	cross-currency	swap,	or	purchaser of	credit	protection	under	a	credit	default	swap	or	total	return	swap	where	the Company	pays	the	total	return	on	certain	assets	to	the	SPE);	may	act	as underwriter	or	placement	agent;	may	provide	administrative,	trustee,	or	other services;	or	may	make	a	market	in	debt	securities	or	other	instruments	issued	by VIEs.	The	Company	generally	considers	such	involvement,	by	itself,	"not significant."

					Citigroup's	involvement	with	QSPEs	and	consolidated	and	unconsolidated	VIEs	with	which	the	Company	holds	significant	variable	interests	as	of	December	31,

|  | involvement |  |  | Significant |  |  |  |  | Guarantees |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | with SPE | QSPE | Consolidated | unconsolidated |  | Debt | Equity | Funding | and |
|  | assets | assets | VIE assets | VIE assets | (4) | investments | investments | commitments | derivatives |
| Citicorp |  |  |  |  |  |  |  |  |  |
| Credit card securitizations | $78,833 | $78,833 | $— | $— |  | $— | $— | $— | $— |
| Mortgage securitizations | 81,953 | 81,953 | — | — |  | — | — | — | — |
| Citi-administered |  |  |  |  |  |  |  |  |  |
| asset-backed |  |  |  |  |  |  |  |  |  |
| commercial paper |  |  |  |  |  |  |  |  |  |
| conduits (ABCP) | 22,648 | — | — | 22,648 |  | 70 | — | 22,204 | 374 |
| Third-party commercial |  |  |  |  |  |  |  |  |  |
| paper conduits | 3,718 | — | — | 3,718 |  | — | — | 353 | — |
| Collateralized debt |  |  |  |  |  |  |  |  |  |
| obligations (CDOs) | 2,785 | — | — | 2,785 |  | 21 | — | — | — |
| Collateralized loan |  |  |  |  |  |  |  |  |  |
| obligations (CLOs) | 5,409 | — | — | 5,409 |  | 120 | — | — | — |
| Asset-based financing | 19,612 | — | 1,279 | 18,333 |  | 4,469 | 44 | 549 | 159 |
| Municipal securities tender |  |  |  |  |  |  |  |  |  |
| option bond |  |  |  |  |  |  |  |  |  |
| trusts (TOBs) | 19,455 | 705 | 9,623 | 9,127 |  | — | — | 6,304 | 537 |
| Municipal investments | 225 | — | 11 | 214 |  | 206 | 13 | 18 | — |
| Client intermediation | 8,607 | — | 2,749 | 5,858 |  | 881 | — | — | — |
| Investment funds | 93 | — | 39 | 54 |  | 9 | — | — | 1 |
| Trust preferred securities | 19,345 | — | — | 19,345 |  | — | 128 | — | — |
| Other | 7,380 | 1,808 | 1,838 | 3,734 |  | 365 | — | 33 | 48 |
| Total | $270,063 | $163,299 | $15,539 | $91,225 |  | $6,141 | $185 | $29,461 | $1,119 |
| Citi Holdings |  |  |  |  |  |  |  |  |  |
| Credit card securitizations | $42,274 | $42,274 | $ — | $— |  | $ — | $— | $ — | $— |
| Mortgage securitizations | 491,500 | 491,500 | — | — |  | — | — | — | — |
| Student loan securitizations | 14,343 | 14,343 | — | — |  | — | — | — | — |
| Citi-administered |  |  |  |  |  |  |  |  |  |
| asset-backed |  |  |  |  |  |  |  |  |  |
| commercial paper |  |  |  |  |  |  |  |  |  |
| conduits (ABCP) | 13,777 | — | 98 | 13,679 |  | — | — | 13,660 | 18 |
| Third-party commercial |  |  |  |  |  |  |  |  |  |
| paper conduits | 5,776 | — | — | 5,776 |  | 187 | — | 252 | — |
| Collateralized debt |  |  |  |  |  |  |  |  |  |
| obligations (CDOs) | 24,157 | — | 7,614 | 16,543 |  | 930 | — | — | 228 |
| Collateralized loan |  |  |  |  |  |  |  |  |  |
| obligations (CLOs) | 13,515 | — | 142 | 13,373 |  | 1,357 | — | 19 | 282 |
| Asset-based financing | 52,598 | — | 370 | 52,228 |  | 17,006 | 68 | 1,311 | — |
| Municipal securities |  |  |  |  |  |  |  |  |  |
| tender option |  |  |  |  |  |  |  |  |  |
| bond trusts (TOBs) | 1,999 | — | 1,999 | — |  | — | — | — | — |
| Municipal investments | 16,045 | — | 882 | 15,163 |  | 85 | 2,037 | 386 | — |
| Client intermediation | 675 | — | 230 | 445 |  | 43 | — | — | 353 |
| Investment funds | 10,178 | — | 1,037 | 9,141 |  | — | 175 | 93 | — |
| Other | 3,732 | 610 | 1,472 | 1,650 |  | 235 | 112 | 257 | — |
| Total | $690,569 | $548,727 | $13,844 | $127,998 |  | $19,843 | $2,392 | $15,978 | $881 |
| Total Citigroup | $960,632 | $712,026 | $29,383 | $219,223 |  | $25,984 | $2,577 | $45,439 | $2,000 |

(1)						The definition of maximum exposure to loss is included in the text that follows.

(2) Included in Citigroup's December 31, 2009 Consolidated Balance Sheet.

(3) Not included in Citigroup's December 31, 2009 Consolidated Balance Sheet. See "Future Applications of Accounting Standards" in Note 1 to the Consolidated Financial Statements for discussion of the impact of implementation of SFAS 166 and SFAS 167, which will cause the maximum exposure to loss in Significant unconsolidated VIEs to decrease significantly.

(4) A significant unconsolidated VIE is an entity where the Company has any variable interest considered to be significant, regardless of the likelihood of loss or the notional amount of exposure.

| to loss in significant<br>unconsolidated VIEs<br>	(3)<br>(continued) | Total<br>involvement<br>with SPEs | QSPE<br>assets | Consolidated<br>VIE assets | Significant<br>unconsolidated VIE<br> (2)<br>assets | loss in significant<br>unconsolidated<br>VIE assets | (3) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| $— | $78,254 | $78,254 | $ — | $— | $— |  |
| — | 84,953 | 84,953 | — | — | — |  |
| 22,648 | 36,108 | — | — | 36,108 | 36,108 |  |
| 353 | 10,589 | — | — | 10,589 | 579 |  |
| 21 | 4,042 | — | — | 4,042 | 12 |  |
| 120 | 3,343 | — | — | 3,343 | 2 |  |
| 5,221 | 16,930 | — | 1,629 | 15,301 | 4,556 |  |
| 6,841 | 27,047 | 5,964 | 12,135 | 8,948 | 7,884 |  |
| 237 | 593 | — | — | 593 | 35 |  |
| 881 | 8,332 | — | 3,480 | 4,852 | 1,476 |  |
| 10 | 71 | — | 45 | 26 | 31 |  |
| 128 | 23,899 | — | — | 23,899 | 162 |  |
| 446 | 10,394 | 3,737 | 2,419 | 4,238 | 370 |  |
| $36,906 | $304,555 | $172,908 | $19,708 | $111,939 | $51,215 |  |
| $— | $45,613 | $45,613 | $— | $— | $— |  |
| — | 586,410 | 586,407 | 3 | — | — |  |
| — | 15,650 | 15,650 | — | — | — |  |
| 13,678 | 23,527 | — | — | 23,527 | 23,527 |  |
| 439 | 10,166 | — | — | 10,166 | 820 |  |
| 1,158 | 26,018 | — | 11,466 | 14,552 | 1,461 |  |
| 1,658 | 19,610 | — | 122 | 19,488 | 1,680 |  |
| 18,385 | 85,224 | — | 2,218 | 83,006 | 23,676 |  |
| — | 3,024 | 540 | 2,484 | — | — |  |
| 2,508 | 16,545 | — | 866 | 15,679 | 2,915 |  |
| 396 | 1,132 | — | 331 | 801 | 61 |  |
| 268 | 10,330 | — | 2,084 | 8,246 | 158 |  |
| 604 | 9,472 | 1,014 | 4,306 | 4,152 | 892 |  |
| $39,094 | $852,721 | $649,224 | $23,880 | $179,617 | $55,190 |  |
| $76,000 | $1,157,276 | $822,132 | $43,588 | $291,556 | $106,405 |  |

# 					This	table	does	not	include:

certain	venture	capital	investments	made	by	some	of	the	Company's private	equity	subsidiaries,	as	the	Company	accounts	for	these investments	in	accordance	with	the	Investment	Company	Audit Guide;

certain	limited	partnerships	where	the	Company	is	the	general	partner and	the	limited	partners	have	the	right	to	replace	the	general	partner	or liquidate	the	funds;

certain	investment	funds	for	which	the	Company	provides	investment management	services	and	personal	estate	trusts	for	which	the Company	provides	administrative,	trustee	and/or	investment management	services;

VIEs	structured	by	third	parties	where	the	Company	holds	securities in	inventory.	These	investments	are	made	on	arm's-length	terms;	and transferred	assets	to	a	VIE	where	the	transfer	did	not	qualify	as	a	sale and	where	the	Company	did	not	have	any	other	involvement	that	is deemed	to	be	a	variable	interest	with	the	VIE.	These	transfers	are accounted	for	as	secured	borrowings	by	the	Company.

					The	asset	balances	for	consolidated	VIEs	represent	the	carrying	amounts	of the	assets	consolidated	by	the	Company.	The	carrying	amount	may	represent	the amortized	cost	or	the	current	fair	value	of	the	assets	depending	on	the	legal	form of	the	asset	(e.g.,	security	or	loan)	and	the	Company's	standard	accounting policies	for	the	asset	type	and	line	of	business.

# Funding	Commitments	for	Significant	Unconsolidated	VIEs—Liquidity Facilities	and	Loan	Commitments

					The	following	table	presents	the	notional	amount	of	liquidity	facilities	and loan	commitments	that	are	classified	as	funding	commitments	in	the	SPE	table as	of	December	31,	2009:

					The	asset	balances	for	unconsolidated	VIEs	where	the	Company	has significant	involvement	represent	the	most	current	information	available	to	the Company.	In	most	cases,	the	asset	balances	represent	an	amortized	cost	basis without	regard	to	impairments	in	fair	value,	unless	fair	value	information	is readily	available	to	the	Company.	For	VIEs	that	obtain	asset	exposures synthetically	through	derivative	instruments	(for	example,	synthetic	CDOs),	the table	includes	the	full	original	notional	amount	of	the	derivative	as	an	asset.

					The	maximum	funded	exposure	represents	the	balance	sheet	carrying	amount of	the	Company's	investment	in	the	VIE.	It	reflects	the	initial	amount	of	cash invested	in	the	VIE	plus	any	accrued	interest	and	is	adjusted	for	any	impairments in	value	recognized	in	earnings	and	any	cash	principal	payments	received.	The maximum	exposure	of	unfunded	positions	represents	the	remaining	undrawn committed	amount,	including	liquidity	and	credit	facilities	provided	by	the Company,	or	the	notional	amount	of	a	derivative	instrument	considered	to	be	a variable	interest,	adjusted	for	any	declines	in	fair	value	recognized	in	earnings. In	certain	transactions,	the	Company	has	entered	into	derivative	instruments	or other	arrangements	that	are	not	considered	variable	interests	in	the	VIE	(e.g., interest	rate	swaps,	cross-currency	swaps,	or	where	the	Company	is	the purchaser	of	credit	protection	under	a	credit	default	swap	or	total	return	swap where	the	Company	pays	the	total	return	on	certain	assets	to	the	SPE). Receivables	under	such	arrangements	are	not	included	in	the	maximum	exposure amounts.

| In millions of dollars | Liquidity Facilities | Loan Commitments |
| :--- | :--- | :--- |
| Citicorp |  |  |
| Citi-administered asset-backed commercial paper conduits (ABCP) | $20,486 | $1,718 |
| Third-party commercial paper conduits | 353 | — |
| Asset-based financing | — | 549 |
| Municipal securities tender option bond trusts (TOBs) | 6,304 | — |
| Municipal investments | — | 18 |
| Other | 10 | 23 |
| Total Citicorp | $27,153 | $2,308 |
| Citi Holdings |  |  |
| Citi-administered asset-backed commercial paper conduits (ABCP) | $11,978 | $1,682 |
| Third-party commercial paper conduits | 252 | — |
| Collateralized loan obligations (CLOs) | — | 19 |
| Asset-based financing | — | 1,311 |
| Municipal investments | — | 386 |
| Investment Funds | — | 93 |
| Other | — | 257 |
| Total Citi Holdings | $12,230 | $3,748 |
| Total Citigroup funding commitments | $39,383 | $6,056 |

# Citicorp's	Consolidated	VIEs—Balance	Sheet	Classification

The	following	table	presents	the	carrying	amounts	and	classifications	of consolidated	assets	that	are	collateral	for	consolidated	VIE	obligations:

| In billions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Cash | $ — | $0.7 |
| Trading account assets | 3.7 | 4.3 |
| Investments | 9.8 | 12.5 |
| Loans | 0.1 | 0.5 |
| Other assets | 1.9 | 1.7 |
| Total assets of consolidated VIEs | $15.5 | $19.7 |

The	following	table	presents	the	carrying	amounts	and	classification	of	the	third- party	liabilities	of	the	consolidated	VIEs:

| In billions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Short-term borrowings | $9.5 | $14.2 |
| Long-term debt | 4.6 | 5.6 |
| Other liabilities | 0.1 | 0.9 |
| Total liabilities of consolidated VIEs | $14.2 | $20.7 |

# Citi	Holdings'	Consolidated	VIEs—Balance	Sheet	Classification

| In billions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Cash | $0.7 | $1.2 |
| Trading account assets | 9.5 | 16.6 |
| Investments | 2.7 | 3.3 |
| Loans | 0.4 | 2.1 |
| Other assets | 0.5 | 0.7 |
| Total assets of consolidated VIEs | $13.8 | $23.9 |

| In billions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Trading account liabilities | $0.2 | $0.5 |
| Short-term borrowings | 2.6 | 2.8 |
| Long-term debt | 0.3 | 1.2 |
| Other liabilities | 1.3 | 2.1 |
| Total liabilities of consolidated VIEs | $4.4 | $6.6 |

					The	consolidated	VIEs	included	in	the	tables	above	represent	hundreds	of separate	entities	with	which	the	Company	is	involved.	In	general,	the	third-party investors	in	the	obligations	of	consolidated	VIEs	have	legal	recourse	only	to	the assets	of	the	VIEs	and	do	not	have	such	recourse	to	the	Company,	except	where the	Company	has	provided	a	guarantee	to	the	investors	or	is	the	counterparty	to certain	derivative	transactions	involving	the	VIE.	In	addition,	the	assets	are generally	restricted	only	to	pay	such	liabilities.	Thus,	the	Company's	maximum legal	exposure	to	loss	related	to	consolidated	VIEs	is	significantly	less	than	the carrying	value	of	the	consolidated	VIE	assets	due	to	outstanding	third-party financing.	Intercompany	assets	and	liabilities	are	excluded	from	the	table.

# Citicorp's	Significant	Interests	in	Unconsolidated	VIEs—Balance	Sheet Classification

The	following	tables	present	the	carrying	amounts	and	classification	of significant	interests	in	unconsolidated	VIEs:

| In billions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Trading account assets | $3.2 | $1.9 |
| Investments | 0.2 | 0.2 |
| Loans | 2.3 | 3.5 |
| Other assets | 0.5 | 0.4 |
| Total assets of significant\n\t\t\t\t\t\t\tinterests in unconsolidated VIEs | $6.2 | $6.0 |

|  | December 31, | December 31, |
| :--- | :--- | :--- |
| In billions of dollars | 2009 | 2008 |
| Long-term debt | $0.5 | $0.4 |
| Total liabilities of significant\n\t\t\t\t\t\t\tinterests in unconsolidated VIEs | $0.5 | $0.4 |

# Citi	Holdings'	Significant	Interests	in	Unconsolidated	VIEs—Balance	Sheet Classification

| In billions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Trading account assets | $3.1 | $4.4 |
| Investments | 9.1 | 10.8 |
| Loans | 10.5 | 12.4 |
| Other assets | 0.1 | — |
| Total assets of significant\n\t\t\tinterests in unconsolidated VIEs | $22.8 | $27.6 |

| In billions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Trading account liabilities | $— | $0.2 |
| Other liabilities | 0.4 | 0.6 |
| Total liabilities of significant\n\t\t\tinterests in unconsolidated VIEs | $0.4 | $0.8 |

# Credit	Card	Securitizations

The	Company	securitizes	credit	card	receivables	through	trusts	that	are established	to	purchase	the	receivables.	Citigroup	sells	receivables	into	the	QSPE trusts	on	a	non-recourse	basis.	Credit	card	securitizations	are	revolving securitizations;	that	is,	as	customers	pay	their	credit	card	balances,	the	cash proceeds	are	used	to	purchase	new	receivables	and	replenish	the	receivables	in the	trust.	The	Company	relies	on	securitizations	to	fund	a	significant	portion	of its	managed	North	America	Cards	business.

The	following	table	reflects	amounts	related	to	the	Company's	securitized	credit card	receivables:

|  |  | Citicorp | Citi Holdings | Citi Holdings |
| :--- | :--- | :--- | :--- | :--- |
| In billions of dollars at December 31 | 2009 | 2008 | 2009 | 2008 |
| Principal amount of credit card receivables in trusts | $78.8 | $78.3 | $42.3 | $45.7 |
| Ownership interests in principal amount of trust credit card receivables |  |  |  |  |
| Sold to investors via trust-issued securities | 66.5 | 68.2 | 28.2 | 30.0 |
| \t\t\t\t\t\t\tRetained by Citigroup as trust-issued securities | 5.0 | 1.2 | 10.1 | 5.4 |
| \t\t\t\t\t\t\tRetained by Citigroup via non-certificated interests recorded as consumer loans | 7.3 | 8.9 | 4.0 | 10.3 |
| Total ownership interests in principal amount of trust credit card receivables | $78.8 | $78.3 | $42.3 | $45.7 |
| Other amounts recorded on the balance sheet related to interests retained in the trusts |  |  |  |  |
| \t\t\t\t\t\t\tOther retained interests in securitized assets | $1.4 | $1.2 | $1.6 | $2.0 |
| Residual interest in securitized assets (1) | 0.3 | 0.3 | 1.2 | 1.4 |
| \t\t\t\t\t\t\tAmounts payable to trusts | 1.2 | 1.0 | 0.8 | 0.7 |

(1)						2009 balances include net unbilled interest of $0.3 billion for Citicorp and $0.4 billion for Citi Holdings. December 31, 2008 balances included net unbilled interest of $0.3 billion for Citicorp and $0.3 billion for Citi Holdings.

# Credit	Card	Securitizations—Citicorp

In	the	years	ended	December	31,	2009,	2008	and	2007,	the	Company	recorded net	gains	(losses)	from	securitization	of	Citicorp's	credit	card	receivables	of $349	million,	$(1,007)	million	and	$416	million,	respectively.	Net	gains	(losses) reflect	the	following:

incremental	gains	(losses)	from	new	securitizations;

the	reversal	of	the	allowance	for	loan	losses	associated	with receivables	sold;

net	gains	on	replenishments	of	the	trust	assets	offset	by	other-than- temporary	impairments;	and

changes	in	fair	value	for	the	portion	of	the	residual	interest	classified as	trading	assets.

					The	following	table	summarizes	selected	cash	flow	information	related	to Citicorp's	credit	card	securitizations	for	the	years	ended	December	31,	2009, 2008	and	2007:

| In billions of dollars | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Proceeds from new securitizations | $16.3 | $11.8 | $19.3 |
| Proceeds from collections reinvested in |  |  |  |
| new receivables | \t 144.4 | 165.6 | 176.7 |
| Contractual servicing fees received | 1.3 | 1.3 | 1.2 |
| Cash flows received on retained |  |  |  |
| \t\t\t\t\t\t\tinterests\tand\tother\tnet\tcash\tflows | 3.1 | 3.9 | 5.1 |

					As	of	December	31,	2009	and	December	31,	2008,	the	residual	interest	in securitized	credit	card	receivables	was	valued	at	$0	for	Citicorp.	Considering	the residual	interest	was	written	down	to	$0	at	December	31,	2008,	key	assumptions used	in	measuring	its	fair	value	at	the	date	of	sale	or	securitization	are	not provided	for	2009,	but	are	provided	for	2008.	The	below	table	reflects	these assumptions:

					At	December	31,	2009,	the	sensitivity	of	the	fair	value	to	adverse	changes	of 10%	and	20%	in	each	of	the	key	assumptions	were	as	follows:

|  | Residual | Retained | retained |
| :--- | :--- | :--- | :--- |
| In millions of dollars | interest | certificates | interests |
| Carrying value of retained interests | $— | $5,008 | $1,650 |
| Discount rates |  |  |  |
| Adverse change of 10% | $— | $(4) | $(1) |
| Adverse change of 20% | — | (8) | (2) |
| Constant prepayment rate |  |  |  |
| Adverse change of 10% | $— | $— | $— |
| Adverse change of 20% | — | — | — |
| Anticipated net credit losses |  |  |  |
| Adverse change of 10% | $— | $— | $(35) |
| Adverse change of 20% | — | — | (69) |

# Managed Loans—Citicorp

After	securitization	of	credit	card	receivables,	the	Company	continues	to maintain	credit	card	customer	account	relationships	and	provides	servicing	for receivables	transferred	to	the	trusts.	As	a	result,	the	Company	considers	the securitized	credit	card	receivables	to	be	part	of	the	business	it	manages. 					Managed-basis	(Managed)	presentations	are	non-GAAP	financial	measures. Managed	presentations	include	results	from	both	the	on-balance-sheet	loans	and off-balance-sheet	loans,	and	exclude	the	impact	of	card	securitization	activity. Managed	presentations	assume	that	securitized	loans	have	not	been	sold	and present	the	results	of	the	securitized	loans	in	the	same	manner	as	Citigroup's owned	loans.	Citigroup's	management	believes	that	Managed	presentations provide	a	greater	understanding	of	ongoing	operations	and	enhance comparability	of	those	results	in	prior	periods	as	well	as	demonstrating	the effects	of	unusual	gains	and	charges	in	the	current	period.	Management	further believes	that	a	meaningful	analysis	of	the	Company's	financial	performance requires	an	understanding	of	the	factors	underlying	that	performance	and	that investors	find	it	useful	to	see	these	non-GAAP	financial	measures	to	analyze financial	performance	without	the	impact	of	unusual	items	that	may	obscure trends	in	Citigroup's	underlying	performance.

					The	following	tables	present	a	reconciliation	between	the	Managed	basis	and on-balance-sheet	credit	card	portfolios	and	the	related	delinquencies	(loans which	are	90	days	or	more	past	due)	and	credit	losses,	net	of	recoveries.

| In	millions	of	dollars,	except | December 31,					December 31, | December 31,					December 31, |
| :--- | :--- | :--- |
| loans in billions | 2009 | 2008 |
| Loan amounts, at period end |  |  |
| On balance sheet | $44.0 | $45.5 |
| Securitized amounts | 71.6 | 69.5 |
| Total managed loans | $115.6 | $115.0 |
| Delinquencies, at period end |  |  |
| On balance sheet | $1,146 | $1,126 |
| Securitized amounts | 1,902 | 1,543 |
| Total managed delinquencies | $3,048 | $2,669 |

| years ended December 31, | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| On balance sheet | $3,841 | $2,866 | $1,921 |
| Securitized amounts | 6,932 | 4,300 | 2,733 |
| Total managed | $10,773 | $7,166 | $4,654 |

# Credit	Card	Securitizations—Citi	Holdings

The	Company	recorded	net	gains	(losses)	from	securitization	of	Citi	Holdings' credit	card	receivables	of	$(586)	million,	$(527)	million,	and	$668	million	for the	years	ended	December	31,	2009,	2008	and	2007,	respectively.

					The	following	table	summarizes	selected	cash	flow	information	related	to Citi	Holdings'	credit	card	securitizations	for	the	years	ended	December	31, 2009,	2008	and	2007:

| In billions of dollars | 2009				 2008				 2007 | 2009				 2008				 2007 | 2009				 2008				 2007 |
| :--- | :--- | :--- | :--- |
| Proceeds from new securitizations | $29.4 | $16.9 | $17.0 |
| Proceeds from collections reinvested |  |  |  |
| \t\t\t\t\t\t\tin new receivables | 46.0 | 49.1 | 41.3 |
| Contractual servicing fees received | 0.7 | 0.7 | 0.9 |
| Cash flows received on retained |  |  |  |
| \t\t\t\t\t\t\tinterests and other net cash flows | 2.6 | 3.3 | 2.5 |

					Key	assumptions	used	in	measuring	the	fair	value	of	the	residual	interest	at the	date	of	sale	or	securitization	of	Citi	Holdings'	credit	card	receivables	for	the years	ended	December	31,	2009	and	2008,	respectively,	are	as	follows:

					The	constant	prepayment	rate	assumption	range	reflects	the	projected payment	rates	over	the	life	of	a	credit	card	balance,	excluding	new	card purchases.	This	results	in	a	high	payment	in	the	early	life	of	the	securitized balances	followed	by	a	much	lower	payment	rate,	which	is	depicted	in	the disclosed	range.

					The	effect	of	two	negative	changes	in	each	of	the	key	assumptions	used	to determine	the	fair	value	of	retained	interests	is	required	to	be	disclosed.	The negative	effect	of	each	change	must	be	calculated	independently,	holding	all other	assumptions	constant.	Because	the	key	assumptions	may	not	in	fact	be independent,	the	net	effect	of	simultaneous	adverse	changes	in	the	key assumptions	may	be	less	than	the	sum	of	the	individual	effects	shown	below.

					At	December	31,	2009,	the	key	assumptions	used	to	value	retained	interests and	the	sensitivity	of	the	fair	value	to	adverse	changes	of	10%	and	20%	in	each of	the	key	assumptions	were	as	follows:

|  |  |  | Other |
| :--- | :--- | :--- | :--- |
|  | Residual | Retained | retained |
| In millions of dollars | interest | certificates | interests |
| Carrying value of retained interests | $786 | $9,995 | $2,024 |
| Discount rates |  |  |  |
| Adverse change of 10% | $(42) | $(10) | $(6) |
| Adverse change of 20% | (83) | (20) | (12) |
| Constant prepayment rate |  |  |  |
| Adverse change of 10% | $(49) | $— | $— |
| Adverse change of 20% | (93) | — | — |
| Anticipated net credit losses |  |  |  |
| Adverse change of 10% | $(361) | $— | $(48) |
| Adverse change of 20% | (715) | — | (95) |

# Managed Loans—Citi Holdings

# Funding, Liquidity Facilities and Subordinated Interests

Citigroup	securitizes	credit	card	receivables	through	three	securitization	trusts— Citibank	Credit	Card	Master	Trust	("Master	Trust"),	which	is	part	of	Citicorp, and	the	Citibank	OMNI	Master	Trust	("Omni	Trust")	and	Broadway	Credit	Card Trust	("Broadway	Trust"),	which	are	part	of	Citi	Holdings.

					Master	Trust	issues	fixed-	and	floating-rate	term	notes	as	well	as	commercial paper.	Some	of	the	term	notes	are	issued	to	multi-seller	commercial	paper conduits.	In	2009,	the	Master	Trust	has	issued	$4.3	billion	of	notes	that	are eligible	for	the	Term	Asset-Backed	Securities	Loan	Facility	(TALF)	program, where	investors	can	borrow	from	the	Federal	Reserve	using	the	trust	securities	as collateral.	The	weighted	average	maturity	of	the	term	notes	issued	by	the	Master Trust	was	3.6	years	as	of	December	31,	2009	and	3.8	years	as	of	December	31, 2008.

# Master	Trust	liabilities

|  | December 31, | December 31, |
| :--- | :--- | :--- |
| In billions of dollars | 2009 | 2008 |
| Term notes issued to |  |  |
| multi-seller CP conduits | $0.8 | $1.0 |
| Term notes issued to other |  |  |
| third parties | 51.2 | 56.2 |
| Term notes retained by |  |  |
| Citigroup affiliates | 5.0 | 1.2 |
| Commercial paper | 14.5 | 11.0 |
| Total Master Trust |  |  |
| liabilities | $71.5 | $69.4 |

					Both	Omni	and	Broadway	Trusts	issue	fixed-	and	floating-rate	term	notes, some	of	which	are	purchased	by	multi-seller	commercial	paper	conduits.	The Omni	Trust	also	issues	commercial	paper.	From	time	to	time,	a	portion	of	the Omni	Trust	commercial	paper	has	been	purchased	by	the	Federal	Reserve's Commercial	Paper	Funding	Facility	(CPFF).	In	addition,	some	of	the	multi-seller conduits	that	hold	Omni	Trust	term	notes	have	placed	commercial	paper	with CPFF.	The	total	amount	of	Omni	Trust	liabilities	funded	directly	or	indirectly through	the	CPFF	was	$2.5	billion	at	December	31,	2009	and	$6.9	billion	at December	31,	2008.

					The	weighted	average	maturity	of	the	third-party	term	notes	issued	by	the Omni	Trust	was	2.0	years	as	of	December	31,	2009	and	0.5	years	as	of December	31,	2008.	The	weighted	average	maturity	of	the	third-party	term	notes issued	by	the	Broadway	Trust	was	2.5	years	as	of	December	31,	2009	and	3.3 years	as	of	December	31,	2008.

# Omni	Trust	liabilities

|  | December 31, | December 31, |
| :--- | :--- | :--- |
| In billions of dollars | 2009 | 2008 |
| Term notes issued to multi- |  |  |
| seller commercial paper |  |  |
| conduits | $13.1 | $17.8 |
| Term notes issued to other |  |  |
| third parties | 9.2 | 2.3 |
| Term notes retained by |  |  |
| Citigroup affiliates | 9.8 | 5.1 |
| Commercial paper | 4.4 | 8.5 |
| Total Omni Trust |  |  |
| liabilities | $36.5 | $33.7 |

# Broadway	Trust	liabilities

|  | December 31, | December 31, |
| :--- | :--- | :--- |
| In billions of dollars | 2009 | 2008 |
| Term notes issued to multi- |  |  |
| seller commercial paper |  |  |
| conduits | $0.5 | $0.4 |
| Term notes issued to other |  |  |
| third parties | 1.0 | 1.0 |
| Term notes retained by |  |  |
| Citigroup affiliates | 0.3 | 0.3 |
| Total Broadway Trust |  |  |
| liabilities | $1.8 | $1.7 |

					Citibank	(South	Dakota),	N.A.	is	the	sole	provider	of	full	liquidity	facilities to	the	commercial	paper	programs	of	the	Master	and	Omni	Trusts.	Both	of	these facilities,	which	represent	contractual	obligations	on	the	part	of	Citibank	(South Dakota),	N.A.	to	provide	liquidity	for	the	issued	commercial	paper,	are	made available	on	market	terms	to	each	of	the	trusts.	The	liquidity	facilities	require Citibank	(South	Dakota),	N.A.	to	purchase	the	commercial	paper	issued	by	each trust	at	maturity,	if	the	commercial	paper	does	not	roll	over,	as	long	as	there	are available	credit	enhancements	outstanding,	typically	in	the	form	of	subordinated notes.	The	liquidity	commitment	related	to	the	Omni	Trust	commercial	paper programs	amounted	to	$4.4	billion	at	December	31,	2009	and	$8.5	billion	at December	31,	2008.	The	liquidity	commitment	related	to	the	Master	Trust commercial	paper	program	amounted	to	$14.5	billion	at	December	31,	2009	and $11.0	billion	at	December	31,	2008.	As	of	December	31,	2009	and	December 31,	2008,	none	of	the	Master	Trust	or	Omni	Trust	liquidity	commitments	were drawn.

					In	addition,	Citibank	(South	Dakota),	N.A.	provides	liquidity	to	a	third-party, non-consolidated	multi-seller	commercial	paper	conduit,	which	is	not	a	VIE.	The commercial	paper	conduit	has	acquired	notes	issued	by	the	Omni	Trust.	Citibank (South	Dakota),	N.A.	provides	the	liquidity	facility	on	market	terms.	Citibank (South	Dakota),	N.A.	will	be	required	to	act	in	its	capacity	as	liquidity	provider as	long	as	there	are	available	credit	enhancements	outstanding	and	if:	(1)	the conduit	is	unable	to	roll	over	its	maturing	commercial	paper;	or	(2)	Citibank (South	Dakota),	N.A.	loses	its	A-1/P-1	credit	rating.	The	liquidity	commitment to	the	third-party	conduit	was	$2.5	billion	at	December	31,	2009	and	$3.6	billion at	December	31,	2008.	As	of	December	31,	2009	and	December	31,	2008,	none of	this	liquidity	commitment	was	drawn.

					During	the	first	half	of	2009,	all	three	of	Citigroup's	primary	credit	card securitization	trusts—Master	Trust,	Omni	Trust,	and	Broadway	Trust—had bonds	placed	on	ratings	watch	with	negative	implications	by	rating	agencies.	As a	result	of	the	ratings	watch	status,	certain	actions	were	taken	by	Citi	with respect	to	each	of	the	trusts.	In	general,	the	actions	subordinated	certain	senior interests	in	the	trust	assets	that	were	retained	by	Citi,	which	effectively	placed these	interests	below	investor	interests	in	terms	of	priority	of	payment.

					As	a	result	of	these	actions,	based	on	the	applicable	regulatory	capital	rules, Citigroup	began	including	the	sold	assets	for	all	three	of	the	credit	card securitization	trusts	in	its	risk-weighted	assets	for	purposes	of	calculating	its risk-based	capital	ratios	during	2009.	The	increase	in	risk-weighted

assets	occurred	in	the	quarter	during	2009	in	which	the	respective	actions	took place.	The	effect	of	these	changes	increased	Citigroup's	risk-weighted	assets	by approximately	$82	billion,	and	decreased	Citigroup's	Tier	1	Capital	ratio	by approximately	100	basis	points	each	as	of	March	31,	2009,	with	respect	to	the Master	and	Omni	Trusts.	The	inclusion	of	the	Broadway	Trust	increased Citigroup's	risk-weighted	assets	by	an	additional	approximately	$900	million	at June	30,	2009.	All	bond	ratings	for	each	of	the	trusts	have	been	affirmed	by	the rating	agencies,	and	no	downgrades	have	occurred	as	of	December	31,	2009.

# Mortgage	Securitizations

The	Company	provides	a	wide	range	of	mortgage	loan	products	to	a	diverse customer	base.	In	connection	with	the	securitization	of	these	loans,	the Company's	U.S.	Consumer	mortgage	business	retains	the	servicing	rights,	which entitles	the	Company	to	a	future	stream	of	cash	flows	based	on	the	outstanding principal	balances	of	the	loans	and	the	contractual	servicing	fee.	Failure	to service	the	loans	in	accordance	with	contractual	requirements	may	lead	to	a termination	of	the	servicing	rights	and	the	loss	of	future	servicing	fees.	In	non- recourse	servicing,	the	principal	credit	risk	to	the	Company	is	the	cost	of temporary	advances	of	funds.	In	recourse	servicing,	the	servicer	agrees	to	share credit	risk	with	the	owner	of	the	mortgage	loans,	such	as	FNMA	or	FHLMC,	or with	a	private	investor,	insurer	or	guarantor.	Losses	on	recourse	servicing	occur primarily	when	foreclosure	sale	proceeds	of	the	property	underlying	a	defaulted mortgage	loan	are	less	than	the	outstanding	principal	balance	and	accrued interest	of	the	loan	and	the	cost	of	holding	and	disposing	of	the	underlying property.	The	Company's	mortgage	loan	securitizations	are	primarily	non- recourse,	thereby	effectively	transferring	the	risk	of	future	credit	losses	to	the purchasers	of	the	securities	issued	by	the	trust.	Securities	and	Banking	and Special	Asset	Pool	retain	servicing	for	a	limited	number	of	their	mortgage securitizations.

					The	Company's	Consumer	business	provides	a	wide	range	of	mortgage	loan products	to	its	customers.	Once	originated,	the	Company	often	securitizes	these loans	through	the	use	of	QSPEs.	These	QSPEs	are	funded	through	the	issuance of	Trust	Certificates	backed	solely	by	the	transferred	assets.	These	certificates have	the	same	average	life	as	the	transferred	assets.	In	addition	to	providing	a source	of	liquidity	and	less	expensive	funding,	securitizing	these	assets	also reduces	the	Company's	credit	exposure	to	the	borrowers.	These	mortgage	loan securitizations	are	primarily	non-recourse.	However,	the	Company	generally retains	the	servicing	rights	and	in	certain	instances	retains	investment	securities, interest-only	strips	and	residual	interests	in	future	cash	flows	from	the	trusts.

# Mortgage	Securitizations—Citicorp

The	following	tables	summarize	selected	cash	flow	information	related	to	mortgage	securitizations	for	the	years	ended	December	31,	2009,	2008	and	2007:

|  |  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- | :--- |
|  |  |  | Agency- and | Agency- and |
|  | U.S. agency- | Non-agency- | non-agency- | non-agency- |
|  | sponsored | sponsored | sponsored | sponsored |
| In billions of dollars | mortgages | mortgages | mortgages | mortgages |
| Proceeds from new securitizations | $12.1 | $3.6 | $6.3 | $40.1 |
| Contractual servicing fees received | — | — | — | — |
| Cash flows received on retained interests and other net cash flows | 0.1 | — | 0.2 | 0.3 |

					Gains	(losses)	recognized	on	the	securitization	of	U.S.	agency-sponsored mortgages	during	2009	were	$(2)	million.	For	the	year	ended	December	31, 2009,	gains	(losses)	recognized	on	the	securitization	of	non-agency-sponsored mortgages	were	$20	million.

					Agency	and	non-agency	securitization	gains	(losses)	for	the	years	ended December	31,	2008	and	2007	were	$(15)	million	and	$145	million,	respectively. 					Key	assumptions	used	in	measuring	the	fair	value	of	retained	interests	at	the date	of	sale	or	securitization	of	mortgage	receivables	for	the	years	ended December	31,	2009	and	2008	are	as	follows:

					The	range	in	the	key	assumptions	for	retained	interests	in	Securities	and Banking	is	due	to	the	different	characteristics	of	the	interests	retained	by	the Company.	The	interests	retained	by	Securities	and	Banking	range	from	highly rated	and/or	senior	in	the	capital	structure	to	unrated	and/or	residual	interests. 					The	effect	of	adverse	changes	of	10%	and	20%	in	each	of	the	key assumptions	used	to	determine	the	fair	value	of	retained	interests	is	disclosed below.	The	negative	effect	of	each	change	is	calculated	independently,	holding all	other	assumptions	constant.	Because	the	key	assumptions	may	not	in	fact	be independent,	the	net	effect	of	simultaneous	adverse	changes	in	the	key assumptions	may	be	less	than	the	sum	of	the	individual	effects	shown	below.

|  | U.S. agency- | agency- |
| :--- | :--- | :--- |
|  | sponsored | sponsored |
| In millions of dollars | mortgages\t\t\t\t\t\t mortgages | mortgages\t\t\t\t\t\t mortgages |
| Carrying value of retained interests | $651 | $624 |
| Discount rates |  |  |
| Adverse change of 10% | $(9) | $(17) |
| Adverse change of 20% | (17) | (33) |
| Constant prepayment rate |  |  |
| Adverse change of 10% | $(10) | $(3) |
| Adverse change of 20% | (15) | (6) |
| Anticipated net credit losses |  |  |
| Adverse change of 10% | $— | $(32) |
| Adverse change of 20% | — | (60) |

# Mortgage	Securitizations—Citi	Holdings

|  |  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- | :--- |
|  |  |  | Agency- and | Agency- and |
|  | U.S. agency- | Non-agency- | non-agency- | non-agency- |
|  | sponsored | sponsored | sponsored | sponsored |
| In billions of dollars | mortgages | mortgages | mortgages | mortgages |
| Proceeds from new securitizations | $70.1 | $— | $81.7 | $107.2 |
| Contractual servicing fees received | 1.3 | 0.1 | 1.4 | 1.7 |
| Cash flows received on retained interests and other net cash flows | 0.3 | 0.1 | 0.7 | 0.3 |

					The	Company	did	not	recognize	gains	(losses)	on	the	securitization	of	U.S. agency-	and	non-agency-sponsored	mortgages	in	the	year	ended	December	31, 2009.	There	were	gains	from	the	securitization	of	agency-	and	non-agency- sponsored	mortgages	of	$73	million	and	$(27)	million	in	the	years	ended December	31,	2008	and	2007,	respectively.

					Key	assumptions	used	in	measuring	the	fair	value	of	retained	interests	at	the date	of	sale	or	securitization	of	mortgage	receivables	for	the	years	ended December	31,	2009	and	2008	are	as	follows:

|  | sponsored mortgages						sponsored mortgages | sponsored mortgages						sponsored mortgages | sponsored mortgages |
| :--- | :--- | :--- | :--- |
| Discount rate | 7.9% to 15.0% | N/A | 4.5% to 18.2% |
| Constant prepayment rate | 2.8% to 18.2% | N/A | 3.6% to 32.9% |
| Anticipated net credit losses | 0.0% to 0.1% | N/A | — |

					The	range	in	the	key	assumptions	for	retained	interests	in	Special	Asset	Pool and	Local	Consumer	Lending	is	due	to	the	different	characteristics	of	the interests	retained	by	the	Company.	The	interests	retained	by	Securities	and Banking	range	from	highly	rated	and/or	senior	in	the	capital	structure	to	unrated and/or	residual	interests.

					The	effect	of	adverse	changes	of	10%	and	20%	in	each	of	the	key assumptions	used	to	determine	the	fair	value	of	retained	interests	is	disclosed below.	The	negative	effect	of	each	change	is	calculated	independently,	holding all	other	assumptions	constant.	Because	the	key	assumptions	may	not	in	fact	be independent,	the	net	effect	of	simultaneous	adverse	changes	in	the	key assumptions	may	be	less	than	the	sum	of	the	individual	effects	shown	below. 					At	December	31,	2009,	the	key	assumptions	used	to	value	retained	interests and	the	sensitivity	of	the	fair	value	to	adverse	changes	of	10%	and	20%	in	each of	the	key	assumptions	were	as	follows:

|  | U.S. agency- | Non-agency- |
| :--- | :--- | :--- |
|  | sponsored | sponsored |
|  | mortgages | mortgages |
| Discount rate | 11.9% | 1.4% to 44.1% |
| Constant prepayment rate | 12.6% | 5.0% to 32.8% |
| Anticipated net credit losses | 0.1% | 0.3% to 70.0% |
| Weighted average life | 6.5 years | 0.1 to 9.4 years |

|  | U.S. agency- | Non-agency- |
| :--- | :--- | :--- |
|  | sponsored | sponsored |
| In millions of dollars | mortgages | mortgages |
| Carrying value of retained interests | $6,273 | $992 |
| Discount rates |  |  |
| Adverse change of 10% | $(227) | $(38) |
| Adverse change of 20% | (439) | (74) |
| Constant prepayment rate |  |  |
| Adverse change of 10% | $(322) | $(41) |
| Adverse change of 20% | (622) | (83) |
| Anticipated net credit losses |  |  |
| Adverse change of 10% | $(12) | $(45) |
| Adverse change of 20% | (25) | (88) |

# Mortgage Servicing Rights

The	fair	value	of	capitalized	mortgage	servicing	rights	(MSRs)	was	$6.5	billion and	$5.7	billion	at	December	31,	2009	and	2008,	respectively.	The	MSRs correspond	to	principal	loan	balances	of	$555	billion	and	$662	billion	as	of December	31,	2009	and	2008,	respectively.	The	following	table	summarizes	the changes	in	capitalized	MSRs	for	the	years	ended	December	31,	2009	and	2008:

| In millions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| Balance, beginning of year | $ 5,657 | $ 8,380 |
| Originations | 1,035 | 1,311 |
| Purchases | — | 1 |
| Changes in fair value of MSRs due to changes |  |  |
| in inputs and assumptions | 1,546 | (2,682) |
| Transfer to Trading account assets | — | (163) |
| Other changes (1) | (1,708) | (1,190) |
| Balance, end of year | $ 6,530 | $ 5,657 |

# (1)  Represents changes due to customer payments and passage of time.

					The	market	for	MSRs	is	not	sufficiently	liquid	to	provide	participants	with quoted	market	prices.	Therefore,	the	Company	uses	an	option-adjusted	spread valuation	approach	to	determine	the	fair	value	of	MSRs.	This	approach	consists of	projecting	servicing	cash	flows	under	multiple	interest	rate	scenarios	and discounting	these	cash	flows	using	risk-adjusted	discount	rates.	The	key assumptions	used	in	the	valuation	of	MSRs	include	mortgage	prepayment	speeds and	discount	rates.	The	model	assumptions	and	the	MSRs'	fair	value	estimates are	compared	to	observable	trades	of	similar	MSR	portfolios	and	interest-only security	portfolios,	as	available,	as	well	as	to	MSR	broker	valuations	and industry	surveys.	The	cash	flow	model	and	underlying	prepayment	and	interest rate	models	used	to	value	these	MSRs	are	subject	to	validation	in	accordance with	the	Company's	model	validation	policies.

					The	fair	value	of	the	MSRs	is	primarily	affected	by	changes	in	prepayments that	result	from	shifts	in	mortgage	interest	rates.	In	managing	this	risk,	the Company	economically	hedges	a	significant	portion	of	the	value	of	its	MSRs through	the	use	of	interest	rate	derivative	contracts,	forward	purchase commitments	of	mortgage-backed	securities	and	purchased	securities	classified as	trading.

					The	Company	receives	fees	during	the	course	of	servicing	previously securitized	mortgages.	The	amounts	of	these	fees	for	the	years	ended	December 31,	2009,	2008	and	2007	were	as	follows:

| In millions of dollars | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Servicing fees | $1,635 | $2,121 | $1,683 |
| Late fees | 93 | 123 | 90 |
| Ancillary fees | 77 | 81 | 61 |
| Total MSR fees | $1,805 | $2,325 | $1,834 |

					These	fees	are	classified	in	the	Consolidated	Statement	of	Income	as Commissions	and	fees.

# Student	Loan	Securitizations

Through	the	Company's	Local	Consumer	Lending	business	within	Citi Holdings,	the	Company	maintains	programs	to	securitize	certain	portfolios	of student	loan	assets.	Under	these	securitization	programs,	transactions	qualifying as	sales	are	off-balance-sheet	transactions	in	which	the	loans	are	removed	from the	Consolidated	Financial	Statements	of	the	Company	and	sold	to	a	QSPE. These	QSPEs	are	funded	through	the	issuance	of	pass-through	term	notes collateralized	solely	by	the	trust	assets.	For	these	off-balance-sheet securitizations,	the	Company	generally	retains	interests	in	the	form	of subordinated	residual	interests	(i.e.,	interest-only	strips)	and	servicing	rights. 					Under	terms	of	the	trust	arrangements,	the	Company	has	no	obligations	to provide	financial	support	and	has	not	provided	such	support.	A	substantial portion	of	the	credit	risk	associated	with	the	securitized	loans	has	been transferred	to	third-party	guarantors	or	insurers	either	under	the	Federal	Family Education	Loan	Program,	authorized	by	the	U.S.	Department	of	Education	under the	Higher	Education	Act	of	1965,	as	amended,	or	private	credit	insurance. 					The	following	tables	summarize	selected	cash	flow	information	related	to student	loan	securitizations	for	the	years	ended	December	31,	2009,	2008	and 2007:

| In billions of dollars | 2009						2008						2007 | 2009						2008						2007 | 2009						2008						2007 |
| :--- | :--- | :--- | :--- |
| Proceeds from new securitizations | $— | $ 2.0 | $ 2.9 |
| Contractual servicing fees received | 0.1 | 0.1 | 0.1 |
| Cash flows received on retained interests and\n\t\t\tother net cash flows | 0.2 | 0.1 | 0.1 |

					The	Company	did	not	recognize	any	gains	or	losses	during	2009.	The Company	recognized	a	gain	of	$1	million	during	the	year	ended	December	31, 2008	and	$71	million	during	the	year	ended	December	31,	2007.

					Key	assumptions	used	in	measuring	the	fair	value	of	the	residual	interest	at the	date	of	sale	or	securitization	of	Citi	Holdings'	student	loan	receivables	for the	years	ended	December	31,	2009	and	2008,	respectively,	are	as	follows:

| In millions of dollars | Retained interests |
| :--- | :--- |
| Carrying value of retained interests | $997 |
| Discount rates |  |
| Adverse change of 10% | $(29) |
| Adverse change of 20% | (57) |
| Constant prepayment rate |  |
| Adverse change of 10% | $(4) |
| Adverse change of 20% | (8) |
| Anticipated net credit losses |  |
| Adverse change of 10% | $(5) |
| Adverse change of 20% | (10) |

# On-Balance-Sheet Securitizations—Citi Holdings

The	Company	engages	in	on-balance-sheet	securitizations.	These	are securitizations	that	do	not	qualify	for	sales	treatment;	thus,	the	assets	remain	on the	Company's	balance	sheet.	The	following	table	presents	the	carrying	amounts and	classification	of	consolidated	assets	and	liabilities	transferred	in	transactions from	the	Consumer	credit	card,	student	loan,	mortgage	and	auto	businesses, accounted	for	as	secured	borrowings:

|  | December 31, | December 31, |
| :--- | :--- | :--- |
| In billions of dollars | 2009 | 2008 |
| Cash | $0.7 | $0.3 |
| Available-for-sale securities | 0.1 | 0.1 |
| Loans | 24.8 | 7.5 |
| Allowance for loan losses | (0.2) | (0.1) |
| Other | 0.8 | — |
| Total assets | $26.2 | $7.8 |
| Long-term debt | $20.9 | $6.3 |
| Other liabilities | 2.1 | 0.3 |
| Total liabilities | $23.0 | $6.6 |

					All	assets	are	restricted	from	being	sold	or	pledged	as	collateral.	The	cash flows	from	these	assets	are	the	only	source	used	to	pay	down	the	associated liabilities,	which	are	non-recourse	to	the	Company's	general	assets.

# Citi-Administered	Asset-Backed	Commercial	Paper	Conduits

The	Company	is	active	in	the	asset-backed	commercial	paper	conduit	business	as administrator	of	several	multi-seller	commercial	paper	conduits,	and	also	as	a service	provider	to	single-seller	and	other	commercial	paper	conduits	sponsored by	third	parties.

					The	multi-seller	commercial	paper	conduits	are	designed	to	provide	the Company's	customers	access	to	low-cost	funding	in	the	commercial	paper markets.	The	conduits	purchase	assets	from	or	provide	financing	facilities	to customers	and	are	funded	by	issuing	commercial	paper	to	third-party	investors. The	conduits	generally	do	not	purchase	assets	originated	by	the	Company.	The funding	of	the	conduit	is	facilitated	by	the	liquidity	support	and	credit enhancements	provided	by	the	Company.

					As	administrator	to	the	conduits,	the	Company	is	responsible	for	selecting and	structuring	assets	purchased	or	financed	by	the	conduits,	making	decisions regarding	the	funding	of	the	conduits,	including	determining	the	tenor	and	other features	of	the	commercial	paper	issued,	monitoring	the	quality	and	performance of	the	conduits'	assets,	and	facilitating	the	operations	and	cash	flows	of	the conduits.	In	return,	the	Company	earns	structuring	fees	from	customers	for individual	transactions	and	earns	an	administration	fee	from	the	conduit,	which is	equal	to	the	income	from	client	program	and	liquidity	fees	of	the	conduit	after payment	of	interest	costs	and	other	fees.	This	administration	fee	is	fairly	stable, since	most	risks	and	rewards	of	the	underlying	assets	are	passed	back	to	the customers	and,	once	the	asset	pricing	is	negotiated,	most	ongoing	income,	costs and	fees	are	relatively	stable	as	a	percentage	of	the	conduit's	size.

					The	conduits	administered	by	the	Company	do	not	generally	invest	in	liquid securities	that	are	formally	rated	by	third	parties.	The	assets	are	privately negotiated	and	structured	transactions	that	are	designed	to	be	held	by	the	conduit, rather	than	actively	traded	and	sold.	The	yield	earned	by	the	conduit	on	each asset	is	generally	tied	to	the	rate	on	the	commercial	paper	issued	by	the	conduit, thus	passing	interest	rate	risk	to	the	client.	Each	asset	purchased	by	the	conduit	is structured	with	transaction-specific	credit	enhancement	features	provided	by	the third-party	seller,	including	over	collateralization,	cash	and	excess	spread collateral	accounts,	direct	recourse	or	third-party	guarantees.	These	credit enhancements	are	sized	with	the	objective	of	approximating	a	credit	rating	of	A or	above,	based	on	the	Company's	internal	risk	ratings.

					Substantially	all	of	the	funding	of	the	conduits	is	in	the	form	of	short-term commercial	paper,	with	a	weighted	average	life	generally	ranging	from	30	to	45 days.	As	of	December	31,	2009	and	December	31,	2008,	the	weighted	average life	of	the	commercial	paper	issued	was	approximately	43	days	and	37	days, respectively.	In	addition,	the	conduits	have	issued	subordinate	loss	notes	and equity	with	a	notional	amount	of	approximately	$76	million	and	varying remaining	tenors	ranging	from	six	months	to	six	years.

					The	primary	credit	enhancement	provided	to	the	conduit	investors	is	in	the form	of	transaction-specific	credit	enhancement	described	above.	In	addition, there	are	generally	two	additional	forms	of	credit	enhancement	that	protect	the commercial	paper	investors	from	defaulting	assets.	First,	the	subordinate	loss notes	issued	by	each	conduit	absorb	any	credit	losses	up	to	their	full	notional amount.	It	is	expected	that	the	subordinate	loss	notes	issued	by	each unconsolidated	conduit	are	sufficient	to	absorb	a	majority	of	the	expected	losses from	each	conduit,	thereby	making	the	single	investor	in	the	subordinate	loss note	the	primary	beneficiary.	Second,	each	conduit	has	obtained	a	letter	of	credit from	the	Company,	which	is	generally	8–10%	of	the	conduit's	assets.	The	letters of	credit	provided	by	the	Company	total	approximately	$3.4	billion	and	are included	in	the	Company's	maximum	exposure	to	loss.	The	net	result	across	all multi-seller	conduits	administered	by	the	Company	is	that,	in	the	event	defaulted assets	exceed	the	transaction-specific	credit	enhancement	described	above,	any losses	in	each	conduit	are	allocated	in	the	following	order:

subordinate	loss	note	holders,

the	Company,	and

the	commercial	paper	investors.

					The	Company	also	provides	the	conduits	with	two	forms	of	liquidity agreements	that	are	used	to	provide	funding	to	the	conduits	in	the	event	of	a market	disruption,	among	other	events.	Each	asset	of	the	conduit	is	supported	by a	transaction-specific	liquidity	facility	in	the	form	of	an	asset	purchase agreement	(APA).	Under	the	APA,	the	Company	has	agreed	to	purchase	non- defaulted	eligible	receivables	from	the	conduit	at	par.	Any	assets	purchased under	the	APA	are	subject	to	increased	pricing.	The	APA	is	not	designed	to provide	credit	support	to	the	conduit,	as	it	generally	does	not	permit	the	purchase of	defaulted	or	impaired	assets	and	generally	reprices	the	assets	purchased	to consider	potential	increased	credit	risk.	The	APA	covers	all	assets	in	the	conduits and	is	considered	in	the	Company's	maximum	exposure	to	loss.	In	addition,	the Company	provides	the	conduits	with	program-wide	liquidity	in	the	form	of short-term	lending	commitments.	Under	these	commitments,	the	Company	has agreed	to	lend	to	the	conduits	in	the	event	of	a	short-term	disruption	in	the commercial	paper	market,	subject	to	specified	conditions.	The	total	notional exposure	under	the	program-wide	liquidity	agreement	is	$11.3	billion	and	is considered	in	the	Company's	maximum	exposure	to	loss.	The	Company	receives fees	for	providing	both	types	of	liquidity	agreement	and	considers	these	fees	to be	on	fair	market	terms.

					Finally,	the	Company	is	one	of	several	named	dealers	in	the	commercial paper	issued	by	the	conduits	and	earns	a	market-based	fee	for	providing	such services.	Along	with	third-party	dealers,	the	Company	makes	a	market	in	the commercial	paper	and	may	from	time	to	time	fund	commercial	paper	pending sale	to	a	third	party.	On	specific	dates	with	less	liquidity	in	the	market,	the Company	may	hold	in	inventory	commercial	paper	issued	by

conduits	administered	by	the	Company,	as	well	as	conduits	administered	by	third parties.	The	amount	of	commercial	paper	issued	by	its	administered	conduits held	in	inventory	fluctuates	based	on	market	conditions	and	activity.	As	of December	31,	2009,	the	Company	owned	$70	million	of	the	commercial	paper issued	by	its	administered	conduits.

					The	Company	is	required	to	analyze	the	expected	variability	of	the	conduit quantitatively	to	determine	whether	the	Company	is	the	primary	beneficiary	of the	conduit.	The	Company	performs	this	analysis	on	a	quarterly	basis.	For conduits	where	the	subordinate	loss	notes	or	third-party	guarantees	are	sufficient to	absorb	a	majority	of	the	expected	loss	of	the	conduit,	the	Company	does	not consolidate.	In	circumstances	where	the	subordinate	loss	notes	or	third-party guarantees	are	insufficient	to	absorb	a	majority	of	the	expected	loss,	the Company	consolidates	the	conduit	as	its	primary	beneficiary	due	to	the additional	credit	enhancement	provided	by	the	Company.	In	conducting	this analysis,	the	Company	considers	three	primary	sources	of	variability	in	the conduit:	credit	risk,	interest	rate	risk	and	fee	variability.

					The	Company	models	the	credit	risk	of	the	conduit's	assets	using	a	Credit Value	at	Risk	(C-VAR)	model.	The	C-VAR	model	considers	changes	in	credit spreads	(both	within	a	rating	class	as	well	as	due	to	rating	upgrades	and downgrades),	name-specific	changes	in	credit	spreads,	credit	defaults	and recovery	rates	and	diversification	effects	of	pools	of	financial	assets.	The	model incorporates	data	from	independent	rating	agencies	as	well	as	the	Company's own	proprietary	information	regarding	spread	changes,	ratings	transitions	and losses	given	default.	Using	this	credit	data,	a	Monte	Carlo	simulation	is performed	to	develop	a	distribution	of	credit	risk	for	the	portfolio	of	assets owned	by	each	conduit,	which	is	then	applied	on	a	probability-weighted	basis	to determine	expected	losses	due	to	credit	risk.	In	addition,	the	Company continuously	monitors	the	specific	credit	characteristics	of	the	conduit's	assets and	the	current	credit	environment	to	confirm	that	the	C-VAR	model	used continues	to	incorporate	the	Company's	best	information	regarding	the	expected credit	risk	of	the	conduit's	assets.

					The	Company	also	analyzes	the	variability	in	the	fees	that	it	earns	from	the conduit	using	monthly	actual	historical	cash	flow	data	to	determine	average	fee and	standard	deviation	measures	for	each	conduit.	Because	any	unhedged interest	rate	and	foreign-currency	risk	not	contractually	passed	on	to	customers	is absorbed	by	the	fees	earned	by	the	Company,	the	fee	variability	analysis incorporates	those	risks.

					The	fee	variability	and	credit	risk	variability	are	then	combined	into	a	single distribution	of	the	conduit's	overall	returns.	This	return	distribution	is	updated and	analyzed	on	at	least	a	quarterly	basis	to	ensure	that	the	amount	of	the subordinate	loss	notes	issued	to	third	parties	is	sufficient	to	absorb	greater	than 50%	of	the	total	expected	variability	in	the	conduit's	returns.	The	expected variability	absorbed	by	the	subordinate	loss	note	investors	is	therefore	measured to	be	greater	than	the	expected	variability	absorbed	by	the	Company	through	its liquidity	arrangements	and	other	fees	earned,	and	the

investors	in	commercial	paper	and	medium-term	notes.	While	the	notional amounts	of	the	subordinate	loss	notes	are	quantitatively	small	compared	to	the size	of	the	conduits,	this	is	reflective	of	the	fact	that	most	of	the	substantive	risks of	the	conduits	are	absorbed	by	the	enhancements	provided	by	the	sellers (customers)	and	other	third	parties	that	provide	transaction-level	credit enhancement.	Because	these	risks	and	related	enhancements	are	generally required	to	be	excluded	from	the	analysis,	the	remaining	risks	and	expected variability	are	quantitatively	small.	The	calculation	of	variability	focuses primarily	on	expected	variability,	rather	than	the	risks	associated	with	extreme outcomes	(for	example,	large	levels	of	default)	that	are	expected	to	occur	very infrequently.	So	while	the	subordinate	loss	notes	are	sized	appropriately compared	to	expected	losses,	they	do	not	provide	significant	protection	against extreme	or	unusual	credit	losses.	Where	such	credit	losses	occur	or	become expected	to	occur,	the	Company	would	consolidate	the	conduit	due	to	the additional	credit	enhancement	provided	by	the	Company.

# Third-Party	Commercial	Paper	Conduits

The	Company	also	provides	liquidity	facilities	to	single-	and	multi-seller conduits	sponsored	by	third	parties.	These	conduits	are	independently	owned	and managed	and	invest	in	a	variety	of	asset	classes,	depending	on	the	nature	of	the conduit.	The	facilities	provided	by	the	Company	typically	represent	a	small portion	of	the	total	liquidity	facilities	obtained	by	each	conduit,	and	are collateralized	by	the	assets	of	each	conduit.	As	of	December	31,	2009,	the notional	amount	of	these	facilities	was	approximately	$792	million,	and	$187 million	was	funded	under	these	facilities.

# Collateralized	Debt	and	Loan	Obligations

A	collateralized	debt	obligation	(CDO)	is	an	SPE	that	purchases	a	pool	of	assets consisting	of	asset-backed	securities	and	synthetic	exposures	through	derivatives on	asset-backed	securities	and	issues	multiple	tranches	of	equity	and	notes	to investors.	A	third-party	manager	is	typically	retained	by	the	CDO	to	select	the pool	of	assets	and	manage	those	assets	over	the	term	of	the	CDO.	The	Company earns	fees	for	warehousing	assets	prior	to	the	creation	of	a	CDO,	structuring CDOs	and	placing	debt	securities	with	investors.	In	addition,	the	Company	has retained	interests	in	many	of	the	CDOs	it	has	structured	and	makes	a	market	in those	issued	notes.

					A	cash	CDO,	or	arbitrage	CDO,	is	a	CDO	designed	to	take	advantage	of	the difference	between	the	yield	on	a	portfolio	of	selected	assets,	typically residential	mortgage-backed	securities,	and	the	cost	of	funding	the	CDO	through the	sale	of	notes	to	investors.	"Cash	flow"	CDOs	are	vehicles	in	which	the	CDO passes	on	cash	flows	from	a	pool	of	assets,	while	"market	value"	CDOs	pay	to investors	the	market	value	of	the	pool	of	assets	owned	by	the	CDO	at	maturity. Both	types	of	CDOs	are	typically	managed	by	a	third-party	asset	manager.	In these	transactions,	all	of	the	equity	and	notes	issued	by	the	CDO	are	funded,	as the	cash	is	needed	to	purchase	the	debt	securities.	In	a	typical	cash	CDO,	a	third- party	investment	manager	selects	a

portfolio	of	assets,	which	the	Company	funds	through	a	warehouse	financing arrangement	prior	to	the	creation	of	the	CDO.	The	Company	then	sells	the	debt securities	to	the	CDO	in	exchange	for	cash	raised	through	the	issuance	of	notes. The	Company's	continuing	involvement	in	cash	CDOs	is	typically	limited	to investing	in	a	portion	of	the	notes	or	loans	issued	by	the	CDO	and	making	a market	in	those	securities,	and	acting	as	derivative	counterparty	for	interest	rate or	foreign	currency	swaps	used	in	the	structuring	of	the	CDO.

					A	synthetic	CDO	is	similar	to	a	cash	CDO,	except	that	the	CDO	obtains exposure	to	all	or	a	portion	of	the	referenced	assets	synthetically	through derivative	instruments,	such	as	credit	default	swaps.	Because	the	CDO	does	not need	to	raise	cash	sufficient	to	purchase	the	entire	referenced	portfolio,	a substantial	portion	of	the	senior	tranches	of	risk	is	typically	passed	on	to	CDO investors	in	the	form	of	unfunded	liabilities	or	derivative	instruments.	Thus,	the CDO	writes	credit	protection	on	select	referenced	debt	securities	to	the	Company or	third	parties	and	the	risk	is	then	passed	on	to	the	CDO	investors	in	the	form	of funded	notes	or	purchased	credit	protection	through	derivative	instruments.	Any cash	raised	from	investors	is	invested	in	a	portfolio	of	collateral	securities	or investment	contracts.	The	collateral	is	then	used	to	support	the	CDO's obligations	on	the	credit	default	swaps	written	to	counterparties.	The	Company's continuing	involvement	in	synthetic	CDOs	generally	includes	purchasing	credit protection	through	credit	default	swaps	with	the	CDO,	owning	a	portion	of	the capital	structure	of	the	CDO	in	the	form	of	both	unfunded	derivative	positions (primarily	super-senior	exposures	discussed	below)	and	funded	notes,	entering into	interest-rate	swap	and	total-return	swap	transactions	with	the	CDO,	lending to	the	CDO,	and	making	a	market	in	those	funded	notes.

					A	collateralized	loan	obligation	(CLO)	is	substantially	similar	to	the	CDO transactions	described	above,	except	that	the	assets	owned	by	the	SPE	(either cash	instruments	or	synthetic	exposures	through	derivative	instruments)	are corporate	loans	and	to	a	lesser	extent	corporate	bonds,	rather	than	asset-backed debt	securities.

# Consolidation

The	Company	has	retained	significant	portions	of	the	"super-senior"	positions issued	by	certain	CDOs.	These	positions	are	referred	to	as	"super-senior" because	they	represent	the	most	senior	positions	in	the	CDO	and,	at	the	time	of structuring,	were	senior	to	tranches	rated	AAA	by	independent	rating	agencies. These	positions	include	facilities	structured	in	the	form	of	short-term commercial	paper,	where	the	Company	wrote	put	options	("liquidity	puts")	to certain	CDOs.	Under	the	terms	of	the	liquidity	puts,	if	the	CDO	was	unable	to issue	commercial	paper	at	a	rate	below	a	specified	maximum	(generally	LIBOR +	35	bps	to	LIBOR	+	40	bps),	the	Company	was	obligated	to	fund	the	senior tranche	of	the	CDO	at	a	specified	interest	rate.	As	of	December	31,	2009,	the Company	had	purchased	all	$25	billion	of	the	commercial	paper	subject	to	these liquidity	puts.

					Since	inception	of	many	CDO	transactions,	the	subordinate	tranches	of	the CDOs	have	diminished	significantly	in	value	and	in	rating.	The	declines	in	value of	the	subordinate	tranches	and	in	the	super	senior	tranches	indicate	that	the super-senior	tranches	are	now	exposed	to	a	significant	portion	of	the	expected losses	of	the	CDOs,	based	on	current	market	assumptions.	The	Company evaluates	these	transactions	for	consolidation	when	reconsideration	events	occur. 					Upon	a	reconsideration	event,	the	Company	is	at	risk	for	consolidation	only if	the	Company	owns	a	majority	of	either	a	single	tranche	or	a	group	of	tranches that	absorb	the	remaining	risk	of	the	CDO.	Due	to	reconsideration	events	during 2007,	2008	and	2009,	the	Company	has	consolidated	24	of	the	39	CDOs/CLOs in	which	the	Company	holds	a	majority	of	the	senior	interests	of	the	transaction. 					The	Company	continues	to	monitor	its	involvement	in	unconsolidated	VIEs and	if	the	Company	were	to	acquire	additional	interests	in	these	vehicles	or	if	the CDOs'	contractual	arrangements	were	to	be	changed	to	reallocate	expected losses	or	residual	returns	among	the	various	interest	holders,	the	Company	may be	required	to	consolidate	the	CDOs.	For	cash	CDOs,	the	net	result	of	such consolidation	would	be	to	gross	up	the	Company's	balance	sheet	by	the	current fair	value	of	the	subordinate	securities	held	by	third	parties,	which	amounts	are not	considered	material.	For	synthetic	CDOs,	the	net	result	of	such	consolidation may	reduce	the	Company's	balance	sheet	by	eliminating	intercompany derivative	receivables	and	payables	in	consolidation.

# Key Assumptions and Retained Interests—Citi Holdings

The	key	assumptions,	used	for	the	securitization	of	CDOs	and	CLOs	during	the year	ended	December	31,	2009,	in	measuring	the	fair	value	of	retained	interests at	the	date	of	sale	or	securitization	are	as	follows:

					The	effect	of	two	negative	changes	in	discount	rates	used	to	determine	the fair	value	of	retained	interests	is	disclosed	below.

| In millions of dollars | CDOs						 CLOs | CDOs						 CLOs |
| :--- | :--- | :--- |
| Carrying value of retained interests | $186 | $ 714 |
| Discount rates |  |  |
| Adverse change of 10% | $(25) | $(11) |
| Adverse change of 20% | (47) | (22) |

# Asset-Based	Financing—Citicorp

The	Company	provides	loans	and	other	forms	of	financing	to	VIEs	that	hold assets.	Those	loans	are	subject	to	the	same	credit	approvals	as	all	other	loans originated	or	purchased	by	the	Company.	Financings	in	the	form	of	debt securities	or	derivatives	are,	in	most	circumstances,	reported	in	Trading	account assets	and	accounted	for	at	fair	value	through	earnings.

					The	primary	types	of	Citicorp's	asset-based	financing,	total	assets	of	the unconsolidated	VIEs	with	significant	involvement	and	the	Company's	maximum exposure	to	loss	at	December	31,	2009	are	shown	below.	For	the	Company	to realize	that	maximum	loss,	the	VIE	(borrower)	would	have	to	default	with	no recovery	from	the	assets	held	by	the	VIE.

| In billions of dollars | assets | exposure |
| :--- | :--- | :--- |
| Type |  |  |
| Commercial and other real estate | $0.5 | $— |
| Hedge funds and equities | 5.9 | 3.1 |
| Airplanes, ships and other assets | 11.9 | 2.1 |
| Total | $18.3 | $5.2 |

# Asset-Based	Financing—Citi	Holdings

					The	primary	types	of	Citi	Holdings'	asset-based	financing,	total	assets	of	the unconsolidated	VIEs	with	significant	involvement	and	the	Company's	maximum exposure	to	loss	at	December	31,	2009	are	shown	below.	For	the	Company	to realize	that	maximum	loss,	the	VIE	(borrower)	would	have	to	default	with	no recovery	from	the	assets	held	by	the	VIE.

|  | Total | Maximum |
| :--- | :--- | :--- |
| In billions of dollars | assets | exposure |
| Type |  |  |
| Commercial and other real estate | $36.1 | $7.5 |
| Hedge funds and equities | 2.2 | 0.8 |
| Corporate loans | 8.2 | 7.0 |
| Airplanes, ships and other assets | 5.7 | 3.1 |
| Total | $52.2 | $18.4 |

					The	following	table	summarizes	selected	cash	flow	information	related	to asset-based	financing	for	the	years	ended	December	31,	2009,	2008	and	2007:

# Municipal	Securities	Tender	Option	Bond	(TOB)	Trusts

The	Company	sponsors	TOB	trusts	that	hold	fixed-	and	floating-rate,	tax-exempt securities	issued	by	state	or	local	municipalities.	The	trusts	are	typically	single- issuer	trusts	whose	assets	are	purchased	from	the	Company	and	from	the secondary	market.	The	trusts	issue	long-term	senior	floating	rate	notes	(Floaters) and	junior	residual	securities	(Residuals).	The	Floaters	have	a	long-term	rating based	on	the	long-term	rating	of	the	underlying	municipal	bond	and	a	short-term rating	based	on	that	of	the	liquidity	provider	to	the	trust.	The	Residuals	are generally	rated	based	on	the	long-term	rating	of	the	underlying	municipal	bond and	entitle	the	holder	to	the	residual	cash	flows	from	the	issuing	trust.

					The	Company	sponsors	three	kinds	of	TOB	trusts:	customer	TOB	trusts, proprietary	TOB	trusts	and	QSPE	TOB	trusts.

Customer	TOB	trusts	are	trusts	through	which	customers	finance investments	in	municipal	securities	and	are	not	consolidated	by	the Company.	Proprietary	and	QSPE	TOB	trusts,	on	the	other	hand, provide	the	Company	with	the	ability	to	finance	its	own	investments in	municipal	securities.

Proprietary	TOB	trusts	are	generally	consolidated,	in	which	case	the financing	(the	Floaters)	is	recognized	on	the	Company's	balance	sheet as	a	liability.	However,	certain	proprietary	TOB	trusts	are	not consolidated	by	the	Company,	where	the	Residuals	are	held	by	hedge funds	that	are	consolidated	and	managed	by	the	Company.	The	assets and	the	associated	liabilities	of	these	TOB	trusts	are	not	consolidated by	the	hedge	funds	(and,	thus,	are	not	consolidated	by	the	Company) under	the	application	of	ASC	946,	Financial	Service—Investment Companies,	which	precludes	consolidation	of	owned	investments.	The Company	consolidates	the	hedge	funds,	because	the	Company	holds controlling	financial	interests	in	the	hedge	funds.	Certain	of	the Company's	equity	investments	in	the	hedge	funds	are	hedged	with derivatives	transactions	executed	by	the	Company	with	third	parties referencing	the	returns	of	the	hedge	fund.

QSPE	TOB	trusts	provide	the	Company	with	the	same	exposure	as proprietary	TOB	trusts	and	are	not	consolidated	by	the	Company.

					Credit	rating	distribution	is	based	on	the	external	rating	of	the	municipal bonds	within	the	TOB	trusts,	including	any	credit	enhancement	provided	by monoline	insurance	companies	or	the	Company	in	the	primary	or	secondary markets,	as	discussed	below.	The	total	assets	for	proprietary	TOB	Trusts (consolidated	and	non-consolidated)	includes	$0.7	billion	of	assets	where	the Residuals	are	held	by	a	hedge	fund	that	is	consolidated	and	managed	by	the Company.

					The	TOB	trusts	fund	the	purchase	of	their	assets	by	issuing	Floaters	along with	Residuals,	which	are	frequently	less	than	1%	of	a	trust's	total	funding.	The tenor	of	the	Floaters	matches	the	maturity	of	the	TOB	trust	and	is	equal	to	or shorter	than	the	tenor	of	the	municipal	bond	held	by	the	trust,	and	the	Floaters bear	interest	rates	that	are	typically	reset	weekly	to	a	new	market	rate	(based	on the	SIFMA	index).	Floater	holders	have	an	option	to	tender	the	Floaters	they hold	back	to	the	trust	periodically.	Customer	TOB	trusts	issue	the	Floaters	and Residuals	to	third	parties.	Proprietary	and	QSPE	TOB	trusts	issue	the	Floaters	to third	parties	and	the	Residuals	are	held	by	the	Company.

					Approximately	$2.2	billion	of	the	municipal	bonds	owned	by	TOB	trusts have	an	additional	credit	guarantee	provided	by	the	Company.	In	all	other	cases, the	assets	are	either	unenhanced	or	are	insured	with	a	monoline	insurance provider	in	the	primary	market	or	in	the	secondary	market.	While	the	trusts	have not	encountered	any	adverse	credit	events	as	defined	in	the	underlying	trust agreements,	certain	monoline	insurance	companies	have	experienced downgrades.	In	these	cases,	the	Company	has	proactively	managed	the	TOB programs	by	applying	additional	secondary	market	insurance	on	the	assets	or proceeding	with	orderly	unwinds	of	the	trusts.

					The	Company,	in	its	capacity	as	remarketing	agent,	facilitates	the	sale	of	the Floaters	to	third	parties	at	inception	of	the	trust	and	facilitates	the	reset	of	the Floater	coupon	and	tenders	of	Floaters.	If	Floaters	are	tendered	and	the Company	(in	its	role	as	remarketing	agent)	is	unable	to	find	a	new	investor within	a	specified	period	of	time,	it	can	declare	a	failed	remarketing	(in	which case	the	trust	is	unwound)	or	may	choose	to	buy	the	Floaters	into	its	own inventory	and	may	continue	to	try	to	sell	it	to	a	third-party	investor.	While	the level	of	the	Company's	inventory	of	Floaters	fluctuates,	the	Company	held	none of	the	Floater	inventory	related	to	the	customer,	proprietary	and	QSPE	TOB programs	as	of	December	31,	2009.

					If	a	trust	is	unwound	early	due	to	an	event	other	than	a	credit	event	on	the underlying	municipal	bond,	the	underlying	municipal	bond	is	sold	in	the secondary	market.	If	there	is	an	accompanying	shortfall	in	the	trust's	cash	flows to	fund	the	redemption	of	the	Floaters	after	the	sale	of	the	underlying	municipal bond,	the	trust	draws	on	a	liquidity	agreement	in	an	amount	equal	to	the	shortfall. Liquidity	agreements	are	generally	provided	to	the	trust	directly	by	the Company.	For	customer	TOBs	where	the	Residual	is	less	than	25%	of	the	trust's capital	structure,	the	Company

has	a	reimbursement	agreement	with	the	Residual	holder	under	which	the Residual	holder	reimburses	the	Company	for	any	payment	made	under	the liquidity	arrangement.	Through	this	reimbursement	agreement,	the	Residual holder	remains	economically	exposed	to	fluctuations	in	value	of	the	municipal bond.	These	reimbursement	agreements	are	actively	margined	based	on	changes in	value	of	the	underlying	municipal	bond	to	mitigate	the	Company's counterparty	credit	risk.	In	cases	where	a	third	party	provides	liquidity	to	a proprietary	or	QSPE	TOB	trust,	a	similar	reimbursement	arrangement	is	made whereby	the	Company	(or	a	consolidated	subsidiary	of	the	Company)	as Residual	holder	absorbs	any	losses	incurred	by	the	liquidity	provider.	As	of December	31,	2009,	liquidity	agreements	provided	with	respect	to	customer TOB	trusts	totaled	$6.2	billion,	offset	by	reimbursement	agreements	in	place with	a	notional	amount	of	$4.6	billion.	The	remaining	exposure	relates	to	TOB transactions	where	the	Residual	owned	by	the	customer	is	at	least	25%	of	the bond	value	at	the	inception	of	the	transaction.	In	addition,	the	Company	has provided	liquidity	arrangements	with	a	notional	amount	of	$0.2	billion	to	QSPE TOB	trusts	and	other	non-consolidated	proprietary	TOB	trusts	described	above. 					The	Company	considers	the	customer	and	proprietary	TOB	trusts	(excluding QSPE	TOB	trusts)	to	be	VIEs.	Because	third-party	investors	hold	the	Residual and	Floater	interests	in	the	customer	TOB	trusts,	the	Company's	involvement and	variable	interests	include	only	its	role	as	remarketing	agent	and	liquidity provider.	On	the	basis	of	the	variability	absorbed	by	the	customer	through	the reimbursement	arrangement	or	significant	residual	investment,	the	Company does	not	consolidate	the	Customer	TOB	trusts.	The	Company's	variable	interests in	the	Proprietary	TOB	trusts	include	the	Residual	as	well	as	the	remarketing	and liquidity	agreements	with	the	trusts.	On	the	basis	of	the	variability	absorbed through	these	contracts	(primarily	the	Residual),	the	Company	generally consolidates	the	Proprietary	TOB	trusts.	Finally,	certain	proprietary	TOB	trusts and	QSPE	TOB	trusts	are	not	consolidated	by	application	of	specific	accounting literature.	For	the	nonconsolidated	proprietary	TOB	trusts	and	QSPE	TOB	trusts, the	Company	recognizes	only	its	residual	investment	on	its	balance	sheet	at	fair value	and	the	third-party	financing	raised	by	the	trusts	is	off	balance	sheet. 					The	following	table	summarizes	selected	cash	flow	information	related	to Citicorp's	municipal	bond	securitizations	for	the	years	ended	December	31, 2009,	2008	and	2007:

					The	following	table	summarizes	selected	cash	flow	information	related	to Citi	Holdings'	municipal	bond	securitizations	for	the	years	ended	December	31, 2009,	2008	and	2007:

# Municipal	Investments

Municipal	investment	transactions	represent	partnerships	that	finance	the construction	and	rehabilitation	of	low-income	affordable	rental	housing.	The Company	generally	invests	in	these	partnerships	as	a	limited	partner	and	earns	a return	primarily	through	the	receipt	of	tax	credits	earned	from	the	affordable housing	investments	made	by	the	partnership.

# Client	Intermediation

Client	intermediation	transactions	represent	a	range	of	transactions	designed	to provide	investors	with	specified	returns	based	on	the	returns	of	an	underlying security,	referenced	asset	or	index.	These	transactions	include	credit-linked	notes and	equity-linked	notes.	In	these	transactions,	the	SPE	typically	obtains exposure	to	the	underlying	security,	referenced	asset	or	index	through	a derivative	instrument,	such	as	a	total-return	swap	or	a	credit-default	swap.	In turn	the	SPE	issues	notes	to	investors	that	pay	a	return	based	on	the	specified underlying	security,	referenced	asset	or	index.	The	SPE	invests	the	proceeds	in	a financial	asset	or	a	guaranteed	insurance	contract	(GIC)	that	serves	as	collateral for	the	derivative	contract	over	the	term	of	the	transaction.	The	Company's involvement	in	these	transactions	includes	being	the	counterparty	to	the	SPE's derivative	instruments	and	investing	in	a	portion	of	the	notes	issued	by	the	SPE. In	certain	transactions,	the	investor's	maximum	risk	of	loss	is	limited	and	the Company	absorbs	risk	of	loss	above	a	specified	level.

					The	Company's	maximum	risk	of	loss	in	these	transactions	is	defined	as	the amount	invested	in	notes	issued	by	the	SPE	and	the	notional	amount	of	any	risk of	loss	absorbed	by	the	Company	through	a	separate	instrument	issued	by	the SPE.	The	derivative	instrument	held	by	the	Company	may	generate	a	receivable from	the	SPE	(for	example,	where	the	Company	purchases	credit	protection from	the	SPE	in	connection	with	the	SPE's	issuance	of	a	credit-linked	note), which	is	collateralized	by	the	assets	owned	by	the	SPE.	These	derivative instruments	are	not	considered	variable	interests	and	any	associated	receivables are	not	included	in	the	calculation	of	maximum	exposure	to	the	SPE.

# Structured	Investment	Vehicles

Structured	Investment	Vehicles	(SIVs)	are	SPEs	that	issue	junior	notes	and senior	debt	(medium-term	notes	and	short-term	commercial	paper)	to	fund	the purchase	of	high	quality	assets.	The	Company	acts	as	manager	for	the	SIVs. 					In	order	to	complete	the	wind-down	of	the	SIVs,	the	Company	purchased	the remaining	assets	of	the	SIVs	in	November	2008.	The	Company	funded	the purchase	of	the	SIV	assets	by	assuming	the	obligation	to	pay	amounts	due	under the	medium-term	notes	issued	by	the	SIVs,	as	the	medium-term	notes	mature.

# Investment	Funds

The	Company	is	the	investment	manager	for	certain	investment	funds	that	invest in	various	asset	classes	including	private	equity,	hedge	funds,	real	estate,	fixed income	and	infrastructure.	The	Company	earns	a	management	fee,	which	is	a percentage	of	capital	under	management,	and	may	earn	performance	fees.	In addition,	for	some	of	these	funds	the	Company	has	an	ownership	interest	in	the investment	funds.

					The	Company	has	also	established	a	number	of	investment	funds	as opportunities	for	qualified	employees	to	invest	in	private	equity	investments.	The Company	acts	as	investment	manager	to	these	funds	and	may	provide	employees with	financing	on	both	recourse	and	non-recourse	bases	for	a	portion	of	the employees'	investment	commitments.

# Trust	Preferred	Securities

The	Company	has	raised	financing	through	the	issuance	of	trust	preferred securities.	In	these	transactions,	the	Company	forms	a	statutory	business	trust and	owns	all	of	the	voting	equity	shares	of	the	trust.	The	trust	issues	preferred equity	securities	to	third-party	investors	and	invests	the	gross	proceeds	in	junior subordinated	deferrable	interest	debentures	issued	by	the	Company.	These	trusts have	no	assets,	operations,	revenues	or	cash	flows	other	than	those	related	to	the issuance,	administration	and	repayment	of	the	preferred	equity	securities	held	by third-party	investors.	These	trusts'	obligations	are	fully	and	unconditionally guaranteed	by	the	Company.

					Because	the	sole	asset	of	the	trust	is	a	receivable	from	the	Company	and	the proceeds	to	the	Company	from	the	receivable	exceed	the	Company's	investment in	the	VIE's	equity	shares,	the	Company	is	not	permitted	to	consolidate	the trusts,	even	though	the	Company	owns	all	of	the	voting	equity	shares	of	the	trust, has	fully	guaranteed	the	trusts'	obligations,	and	has	the	right	to	redeem	the preferred	securities	in	certain	circumstances.	The	Company	recognizes	the subordinated	debentures	on	its	balance	sheet	as	long-term	liabilities.

# 24. DERIVATIVES ACTIVITIES

In	the	ordinary	course	of	business,	Citigroup	enters	into	various	types	of derivative	transactions.	These	derivative	transactions	include:

Futures	and	forward	contracts	which	are	commitments	to	buy	or	sell at	a	future	date	a	financial	instrument,	commodity	or	currency	at	a contracted	price	and	may	be	settled	in	cash	or	through	delivery. Swap	contracts	which	are	commitments	to	settle	in	cash	at	a	future date	or	dates	that	may	range	from	a	few	days	to	a	number	of	years, based	on	differentials	between	specified	financial	indices,	as	applied to	a	notional	principal	amount.

Option	contracts	which	give	the	purchaser,	for	a	fee,	the	right,	but	not the	obligation,	to	buy	or	sell	within	a	limited	time	a	financial instrument,	commodity	or	currency	at	a	contracted	price	that	may	also be	settled	in	cash,	based	on	differentials	between	specified	indices	or prices.

					Citigroup	enters	into	these	derivative	contracts	relating	to	interest	rate, foreign	currency,	commodity,	and	other	market/credit	risks	for	the	following reasons:

Trading	Purposes—Customer	Needs:	Citigroup	offers	its	customers derivatives	in	connection	with	their	risk-management	actions	to transfer,	modify	or	reduce	their	interest	rate,	foreign	exchange	and other	market/	credit	risks	or	for	their	own	trading	purposes.	As	part	of this	process,	Citigroup	considers	the	customers'	suitability	for	the	risk involved	and	the	business	purpose	for	the	transaction.	Citigroup	also manages	its	derivative-risk	positions	through	offsetting	trade activities,	controls	focused	on	price	verification,	and	daily	reporting	of positions	to	senior	managers.

Trading	Purposes—Own	Account:	Citigroup	trades	derivatives	for	its own	account	and	as	an	active	market	maker.	Trading	limits	and	price verification	controls	are	key	aspects	of	this	activity.

Hedging:	Citigroup	uses	derivatives	in	connection	with	its	risk- management	activities	to	hedge	certain	risks	or	reposition	the	risk profile	of	the	Company.	For	example,	Citigroup	may	issue	fixed-rate long-term	debt	and	then	enter	into	a	receive-fixed,	pay-variable-rate interest	rate	swap	with	the	same	tenor	and	notional	amount	to	convert the	interest	payments	to	a	net	variable-rate	basis.	This	strategy	is	the most	common	form	of	an	interest	rate	hedge,	as	it	minimizes	interest cost	in	certain	yield	curve	environments.	Derivatives	are	also	used	to manage	risks	inherent	in	specific	groups	of	on-balance-sheet	assets and	liabilities,	including	investments,	corporate	and	consumer	loans, deposit	liabilities,	as	well	as	other	interest-sensitive	assets	and liabilities.	In	addition,	foreign-exchange	contracts	are	used	to	hedge non-U.S.-dollar-denominated	debt,	foreign-currency-denominated available-for-sale	securities,	net	capital	exposures	and	foreign- exchange	transactions.

					Derivatives	may	expose	Citigroup	to	market,	credit	or	liquidity	risks	in excess	of	the	amounts	recorded	on	the	Consolidated	Balance	Sheet.	Market	risk on	a	derivative	product	is	the	exposure	created	by	potential	fluctuations	in interest	rates,	foreign-exchange	rates	and	other	factors	and	is	a	function	of	the type	of	product,	the	volume	of	transactions,	the	tenor	and	terms	of	the agreement,	and	the	underlying	volatility.	Credit	risk	is	the	exposure	to	loss	in	the event	of	nonperformance	by	the	other	party	to	the	transaction	where	the	value	of any	collateral	held	is	not	adequate	to	cover	such	losses.	The	recognition	in earnings	of	unrealized	gains	on	these	transactions	is	subject	to	management's assessment	as	to	collectability.	Liquidity	risk	is	the	potential	exposure	that	arises when	the	size	of	the	derivative	position	may	not	be	able	to	be	rapidly	adjusted	in periods	of	high	volatility	and	financial	stress	at	a	reasonable	cost.

					Information	pertaining	to	the	volume	of	derivative	activity	is	provided	in	the tables	below.	The	notional	amounts,	for	both	long	and	short	derivative	positions, of	Citigroup's	derivative	instruments	as	of	December	31,	2009	are	presented	in the	table	below.

# Derivative Notionals

# Hedging instruments under

| In millions of dollars at December 31, 2009 |  | derivatives | hedges |
| :--- | :--- | :--- | :--- |
| Interest rate contracts |  |  |  |
| Swaps | $128,797 | $20,571,814 | $107,193 |
| Futures and forwards | — | 3,366,927 | 65,597 |
| Written options | — | 3,616,240 | 11,050 |
| Purchased options | — | 3,590,032 | 28,725 |
| Total interest rate contract notionals | $128,797 | $31,145,013 | $212,565 |
| Foreign exchange contracts |  |  |  |
| Swaps | $81,018 | $855,560 | $95,472 |
| Futures and forwards | 47,671 | 1,946,802 | 1,432 |
| Written options | — | 409,991 | — |
| Purchased options | 17,718 | 387,786 | 882 |
| Total foreign exchange contract notionals | $146,407 | $3,600,139 | $97,786 |
| Equity contracts |  |  |  |
| Swaps | $— | $59,391 | $— |
| Futures and forwards | — | 14,627 | — |
| Written options | — | 410,002 | — |
| Purchased options | — | 377,961 | 275 |
| Total equity contract notionals | $— | $861,981 | $275 |
| Commodity and other contracts |  |  |  |
| Swaps | $— | $25,956 | $— |
| Futures and forwards | — | 91,582 | — |
| Written options | — | 37,952 | — |
| Purchased options | — | 40,324 | — |
| Total commodity and other contract notionals | $— | $195,814 | $— |
| Credit derivatives (3) |  |  |  |
| Protection sold | $— | $1,214,053 | $— |
| Protection purchased | 6,981 | 1,325,981 | — |
| Total credit derivatives | $6,981 | $2,540,034 | $— |
| Total derivative notionals | $282,185 | $38,342,981 | $310,626 |

(1) Derivatives in hedge accounting relationships accounted for under ASC 815 (SFAS 133) are recorded in either Other assets/liabilities or Trading account assets/liabilities on the Consolidated Balance Sheet.

(2) Management hedges represent derivative instruments used in certain economic hedging relationships that are identified for management purposes, but for which hedge accounting is not applied. These derivatives are recorded in Other assets/liabilities on the Consolidated Balance Sheet.

(3) Credit derivatives are arrangements designed to allow one party (protection buyer) to transfer the credit risk of a "reference asset" to another party (protection seller). These arrangements allow a protection seller to assume the credit risk associated with the reference asset without directly purchasing that asset. The Company has entered into credit derivatives positions for purposes such as risk management, yield enhancement, reduction of credit concentrations and diversification of overall risk.

# Derivative Mark-to-Market (MTM) Receivables/Payables

|  | Derivatives classified in trading | Derivatives classified in trading | Derivatives classified in other | Derivatives classified in other |
| :--- | :--- | :--- | :--- | :--- |
|  | account assets/liabilities\n(1) | account assets/liabilities\n(1) |  | assets/liabilities |
| In\tmillions\tof\tdollars\tat\tDecember\t31,\t2009 | Assets | Liabilities | Assets | Liabilities |
| Derivative instruments designated as ASC 815 (SFAS 133) hedges |  |  |  |  |
| Interest rate contracts | $304 | $87 | $4,267 | $2,898 |
| Foreign\texchange\tcontracts | 753 | 1,580 | 3,599 | 1,416 |
| Total derivative instruments designated as ASC 815 (SFAS 133) hedges | $1,057 | $1,667 | $7,866 | $4,314 |
| Other derivative instruments |  |  |  |  |
| Interest rate contracts | $454,974 | $449,551 | $2,882 | $3,022 |
| Foreign exchange contracts | 71,005 | 70,584 | 1,498 | 2,381 |
| Equity contracts | 18,132 | 40,612 | 6 | 5 |
| Commodity and other contracts | 16,698 | 15,492 | — | — |
| Credit derivatives (2) | 92,792 | 82,424 | — | — |
| Total other derivative instruments | $653,601 | $658,663 | $4,386 | $5,408 |
| Total derivatives | $654,658 | $660,330 | $12,252 | $9,722 |
| Cash collateral paid/received | 48,561 | 38,611 | 263 | 4,950 |
| Less: Netting agreements and market value adjustments | (644,340) | (634,835) | (4,224) | (4,224) |
| Net receivables/payables | $58,879 | $64,106 | $8,291 | $10,448 |

(1)						The trading derivatives fair values are presented in Note 15 to the Consolidated Financial Statements.

(2) The credit derivatives trading assets are composed of $68,558 million related to protection purchased and $24,234 million related to protection sold as of December 31, 2009. The credit derivatives trading liabilities are composed of $24,162 million related to protection purchased and $58,262 million related to protection sold as of December 31, 2009.

					All	derivatives	are	reported	on	the	balance	sheet	at	fair	value.	In	addition, where	applicable,	all	such	contracts	covered	by	master	netting	agreements	are reported	net.	Gross	positive	fair	values	are	netted	with	gross	negative	fair	values by	counterparty	pursuant	to	a	valid	master	netting	agreement.	In	addition, payables	and	receivables	in	respect	of	cash	collateral	received	from	or	paid	to	a given	counterparty	are	included	in	this	netting.	However,	non-cash	collateral	is not	included.

					As	of	December	31,	2009,	the	amount	of	payables	in	respect	of	cash collateral	received	that	was	netted	with	unrealized	gains	from	derivatives	was $30	billion,	while	the	amount	of	receivables	in	respect	of	cash	collateral	paid that	was	netted	with	unrealized	losses	from	derivatives	was	$41	billion.

					The	amounts	recognized	in	Principal	transactions	in	the	Consolidated Statement	of	Income	for	the	year	ended	December	31,	2009	related	to derivatives	not	designated	in	a	qualifying	hedging	relationship	as	well	as	the underlying	non-derivative	instruments	are	included	in	the	table	below.	Citigroup has	elected	to	present	this	disclosure	by	business	classification,	showing derivative	gains	and	losses	related	to	its	trading	activities	together	with	gains	and losses	related	to	non-derivative	instruments	within	the	same	trading	portfolios,	as this	better	represents	the	way	these	portfolios	are	risk	managed.

(1)						Also see Note 7 to the Consolidated Financial Statements.

	The	amounts	recognized	in	Other	revenue	in	the	Consolidated	Statement	of Income	for	the	year	ended	December	31,	2009	related	to	derivatives	not designated	in	a	qualifying	hedging	relationship	and	not	recorded	within

Trading	account	assets	or	Trading	account	liabilities	are	shown	below.	The	table below	does	not	include	the	offsetting	gains/losses	on	the	hedged	items, which	amounts	are	also	recorded	in	Other	revenue.

(1)						Non-designated derivatives are derivative instruments not designated in qualifying hedging relationships.

# Accounting for Derivative Hedging

Citigroup	accounts	for	its	hedging	activities	in	accordance	with	ASC	815, Derivatives	and	Hedging	(formerly	SFAS	133).	As	a	general	rule,	hedge accounting	is	permitted	for	those	situations	where	the	Company	is	exposed	to	a particular	risk,	such	as	interest-rate	or	foreign-exchange	risk,	that	causes	changes in	the	fair	value	of	an	asset	or	liability,	or	variability	in	the	expected	future	cash flows	of	an	existing	asset,	liability	or	a	forecasted	transaction	that	may	affect earnings.

					Derivative	contracts	hedging	the	risks	associated	with	the	changes	in	fair value	are	referred	to	as	fair	value	hedges,	while	contracts	hedging	the	risks affecting	the	expected	future	cash	flows	are	called	cash	flow	hedges.	Hedges	that utilize	derivatives	or	debt	instruments	to	manage	the	foreign	exchange	risk associated	with	equity	investments	in	non-U.S.-dollar	functional	currency foreign	subsidiaries	(net	investment	in	a	foreign	operation)	are	called	net investment	hedges.

					If	certain	hedging	criteria	specified	in	ASC	815	are	met,	including	testing	for hedge	effectiveness,	special	hedge	accounting	may	be	applied.	The	hedge effectiveness	assessment	methodologies	for	similar	hedges	are	performed	in	a similar	manner	and	are	used	consistently	throughout	the	hedging	relationships. For	fair	value	hedges,	the	changes	in	value	of	the	hedging	derivative,	as	well	as the	changes	in	value	of	the	related	hedged	item	due	to	the	risk	being	hedged,	are reflected	in	current	earnings.	For	cash	flow	hedges	and	net	investment	hedges, the	changes	in	value	of	the	hedging	derivative	are	reflected	in	Accumulated	other comprehensive	income	(loss)	in	Citigroup's	stockholders'	equity,	to	the	extent the	hedge	is	effective.	Hedge	ineffectiveness,	in	either	case,	is	reflected	in current	earnings.

					For	asset/liability	management	hedging,	the	fixed-rate	long-term	debt	may be	recorded	at	amortized	cost	under	current	U.S.	GAAP.	However,	by	electing	to use	ASC	815	(SFAS	133)	hedge	accounting,	the	carrying	value	of	the	debt	is adjusted	for	changes	in	the	benchmark	interest	rate,	with	any	such	changes	in value	recorded	in	current	earnings.	The	related	interest-rate	swap	is	also recorded	on	the	balance	sheet	at	fair	value,	with	any	changes

in	fair	value	reflected	in	earnings.	Thus,	any	ineffectiveness	resulting	from	the hedging	relationship	is	recorded	in	current	earnings.	Alternatively,	an	economic hedge,	which	does	not	meet	the	ASC	815	hedging	criteria,	would	involve	only recording	the	derivative	at	fair	value	on	the	balance	sheet,	with	its	associated changes	in	fair	value	recorded	in	earnings.	The	debt	would	continue	to	be	carried at	amortized	cost	and,	therefore,	current	earnings	would	be	impacted	only	by	the interest	rate	shifts	and	other	factors	that	cause	the	change	in	the	swap's	value	and the	underlying	yield	of	the	debt.	This	type	of	hedge	is	undertaken	when	hedging requirements	cannot	be	achieved	or	management	decides	not	to	apply	ASC	815 hedge	accounting.	Another	alternative	for	the	Company	would	be	to	elect	to carry	the	debt	at	fair	value	under	the	fair	value	option.	Once	the	irrevocable election	is	made	upon	issuance	of	the	debt,	the	full	change	in	fair	value	of	the debt	would	be	reported	in	earnings.	The	related	interest	rate	swap,	with	changes in	fair	value,	would	also	be	reflected	in	earnings,	and	provides	a	natural	offset	to the	debt's	fair	value	change.	To	the	extent	the	two	offsets	would	not	be	exactly equal,	the	difference	would	be	reflected	in	current	earnings.	This	type	of economic	hedge	is	undertaken	when	the	Company	prefers	to	follow	this	simpler method	that	achieves	generally	similar	financial	statement	results	to	an	ASC	815 fair	value	hedge.

					Key	aspects	of	achieving	ASC	815	hedge	accounting	are	documentation	of hedging	strategy	and	hedge	effectiveness	at	the	hedge	inception	and substantiating	hedge	effectiveness	on	an	ongoing	basis.	A	derivative	must	be highly	effective	in	accomplishing	the	hedge	objective	of	offsetting	either changes	in	the	fair	value	or	cash	flows	of	the	hedged	item	for	the	risk	being hedged.	Any	ineffectiveness	in	the	hedge	relationship	is	recognized	in	current earnings.	The	assessment	of	effectiveness	excludes	changes	in	the	value	of	the hedged	item	that	are	unrelated	to	the	risks	being	hedged.	Similarly,	the assessment	of	effectiveness	may	exclude	changes	in	the	fair	value	of	a	derivative related	to	time	value	that,	if	excluded,	are	recognized	in	current	earnings.

# Fair Value Hedges

# Hedging	of	benchmark	interest	rate	risk

Citigroup	hedges	exposure	to	changes	in	the	fair	value	of	outstanding	fixed-rate issued	debt	and	borrowings.	The	fixed	cash	flows	from	those	financing transactions	are	converted	to	benchmark	variable-rate	cash	flows	by	entering	into receive-fixed,	pay-variable	interest	rate	swaps.	These	fair	value	hedge relationships	use	dollar-offset	ratio	analysis	to	determine	whether	the	hedging relationships	are	highly	effective	at	inception	and	on	an	ongoing	basis.

					Citigroup	also	hedges	exposure	to	changes	in	the	fair	value	of	fixed-rate assets,	including	available-for-sale	debt	securities	and	loans.	The	hedging instruments	used	are	receive-variable,	pay-fixed	interest	rate	swaps.	Most	of these	fair	value	hedging	relationships	use	dollar-offset	ratio	analysis	to determine	whether	the	hedging	relationships	are	highly	effective	at	inception	and on	an	ongoing	basis,	while	certain	others	use	regression	analysis.

# Hedging	of	foreign	exchange	risk

Citigroup	hedges	the	change	in	fair	value	attributable	to	foreign-exchange	rate movements	in	available-for-sale	securities	that	are	denominated	in	currencies other	than	the	functional	currency	of	the	entity	holding	the	securities,	which	may be	within	or	outside	the	U.S.	The	hedging	instrument	employed	is	a	forward foreign-exchange	contract.	In	this	type	of	hedge,	the	change	in	fair	value	of	the hedged	available-for-sale	security	attributable	to	the	portion	of	foreign	exchange risk	hedged	is	reported	in	earnings	and	not	Accumulated	other	comprehensive income—a	process	that	serves	to	offset	substantially	the	change	in	fair	value	of the	forward	contract	that	is	also	reflected	in	earnings.	Citigroup	considers	the premium	associated	with	forward	contracts	(differential	between	spot	and contractual	forward	rates)	as	the	cost	of	hedging;	this	is	excluded	from	the assessment	of	hedge	effectiveness	and	reflected	directly	in	earnings.	Dollar- offset	method	is	used	to	assess	hedge	effectiveness.	Since	that	assessment	is based	on	changes	in	fair	value	attributable	to	changes	in	spot	rates	on	both	the available-for-sale	securities	and	the	forward	contracts	for	the	portion	of	the relationship	hedged,	the	amount	of	hedge	ineffectiveness	is	not	significant.

The	following	table	summarizes	certain	information	related	to	the	Company's	fair	value	hedges	for	the	year	ended	December	31,	2009:

|  | Gains/(losses) on fair value |
| :--- | :--- |
| In millions of dollars for the year ended December 31, 2009 | hedges |
| Gain (loss) on fair value designated and qualifying hedges |  |
| Interest rate contracts | $(4,642) |
| Foreign exchange contracts | 1,202 |
| Total gain (loss) on fair value designated and qualifying hedges | $(3,440) |
| Gain (loss) on the hedged item in designated and qualifying fair value hedges |  |
| Interest rate hedges | $4,549 |
| Foreign exchange hedges | (846) |
| Total gain (loss) on the hedged item in designated and qualifying fair value hedges | $3,703 |
| Hedge ineffectiveness recognized in earnings on designated and qualifying fair value hedges |  |
| Interest rate hedges | $140 |
| Foreign exchange hedges | 137 |
| Total hedge ineffectiveness recognized in earnings on designated and qualifying fair value hedges | $277 |
| Net gain (loss) excluded from assessment of the effectiveness of fair value hedges |  |
| Interest rate contracts | $(233) |
| Foreign exchange contracts | 219 |
| Total net gain/(loss) excluded from assessment of the effectiveness of fair value hedges | $(14) |

(1)						Amounts are included in Other Revenue on the Consolidated Statement of Income. The accrued interest income on fair value hedges is recorded in Net Interest Revenue and is excluded from this table.

# Cash Flow Hedges

Citigroup	hedges	variable	cash	flows	resulting	from	floating-rate	liabilities	and roll-over	(re-issuance)	of	short-term	liabilities.	Variable	cash	flows	from	those liabilities	are	converted	to	fixed-rate	cash	flows	by	entering	into	receive-variable, pay-fixed	interest-rate	swaps	and	receive-variable,	pay-fixed	forward-starting interest-rate	swaps.	These	cash-flow	hedging	relationships	use	either	regression analysis	or	dollar-offset	ratio	analysis	to	assess	whether	the	hedging relationships	are	highly	effective	at	inception	and	on	an	ongoing	basis.	Since efforts	are	made	to	match	the	terms	of	the	derivatives	to	those	of	the	hedged forecasted	cash	flows	as	closely	as	possible,	the	amount	of	hedge	ineffectiveness is	not	significant.

Citigroup	locks	in	the	functional	currency	equivalent	of	cash	flows	of	various balance	sheet	liability	exposures,	including	short-term	borrowings	and	long-term debt	(and	the	forecasted	issuances	or	rollover	of	such	items)	that	are denominated	in	a	currency	other	than	the	functional	currency	of	the	issuing entity.	Depending	on	the	risk-management	objectives,	these	types	of	hedges	are designated	as	either	cash-flow	hedges	of	only	foreign	exchange	risk	or	cash-flow hedges	of	both	foreign-exchange	and	interest	rate	risk,	and	the	hedging instruments	used	are	foreign-exchange	forward	contracts,	cross-currency	swaps and	foreign-currency	options.	For	some	hedges,	Citigroup	matches	all	terms	of the	hedged	item	and	the	hedging	derivative	at	inception	and	on	an	ongoing	basis to	eliminate	hedge	ineffectiveness.	Citigroup	does	not	exclude	any	terms	from consideration	when	applying	the	matched	terms	method.	To	the	extent	all	terms are	not	perfectly	matched,	any	ineffectiveness	is	measured	using	the "hypothetical	derivative	method"	from	FASB	Derivative	Implementation	Group Issue	G7	(now	ASC	815-30-35-12	through	35-32).	Efforts	are	made	to	match	up the	terms	of	the	hypothetical	and	actual	derivatives	used	as	closely	as	possible. As	a	result,	the	amount	of	hedge	ineffectiveness	is	not	significant	even	when	the terms	do	not	match	perfectly.

# Hedging	total	return

Citigroup	generally	manages	the	risk	associated	with	highly	leveraged	financing it	has	entered	into	by	seeking	to	sell	a	majority	of	its	exposures	to	the	market prior	to	or	shortly	after	funding.	The	portion	of	the	highly	leveraged	financing that	is	retained	by	Citigroup	is	hedged	with	a	total	return	swap.

					The	hedge	ineffectiveness	on	the	cash	flow	hedges	recognized	in	earnings totals	$16	million	for	the	12	months	ended	December	31,	2009.

# 					The	pretax	change	in	Accumulated	other	comprehensive	income	(loss)	from

cash	flow	hedges	for	year	ended	December	31,	2009	is	presented	below:

| Interest rate contracts | $488 |
| :--- | :--- |
| Foreign exchange contracts | 689 |
| Total effective portion of cash flow |  |
| hedges included in AOCI | $ 1,177 |
| Effective portion of cash flow |  |
| hedges reclassified from AOCI to |  |
| earnings |  |
| Interest rate contracts | $(1,687) |
| Foreign exchange contracts | (308) |

#        hedges reclassified from AOCI to

(1)						Included primarily in Other revenue and Net interest revenue on the Consolidated Income Statement.

					For	cash	flow	hedges,	any	changes	in	the	fair	value	of	the	end-user	derivative remaining	in	Accumulated	other	comprehensive	income	(loss)	on	the

Consolidated	Balance	Sheet	will	be	included	in	earnings	of	future	periods	to offset	the	variability	of	the	hedged	cash	flows	when	such	cash	flows	affect earnings.	The	net	loss	associated	with	cash	flow	hedges	expected	to	be

reclassified	from	Accumulated	other	comprehensive	income	within	12	months	of December	31,	2009	is	approximately	$2.1	billion.	The	maximum	length	of	time over	which	forecasted	cash	flows	are	hedged	is	10	years.

					The	impact	of	cash	flow	hedges	on	AOCI	is	also	shown	in	Note	22	to	the Consolidated	Financial	Statements.

# Net Investment Hedges

Consistent	with	ASC	830-20,	Foreign	Currency	Matters	—	Foreign	Currency Transactions	(formerly	SFAS	52,	Foreign	Currency	Translation),	ASC	815 allows	hedging	of	the	foreign-currency	risk	of	a	net	investment	in	a	foreign operation.	Citigroup	uses	foreign-currency	forwards,	options	and	swaps	and foreign-currency-denominated	debt	instruments	to	manage	the	foreign-exchange risk	associated	with	Citigroup's	equity	investments	in	several	non-U.S.	dollar functional	currency	foreign	subsidiaries.	Citigroup	records	the	change	in	the carrying	amount	of	these	investments	in	the	Cumulative	translation	adjustment account	within	Accumulated	other	comprehensive	income	(loss).	Simultaneously,

the	effective	portion	of	the	hedge	of	this	exposure	is	also	recorded	in	the

Cumulative	translation	adjustment	account	and	the	ineffective	portion,	if	any,	is immediately	recorded	in	earnings.

					For	derivatives	used	in	net	investment	hedges,	Citigroup	follows	the forward-rate	method	from	FASB	Derivative	Implementation	Group	Issue	H8 (now	ASC	815-35-35-16	through	35-26),	"Foreign	Currency	Hedges:	Measuring the	Amount	of	Ineffectiveness	in	a	Net	Investment	Hedge."	According	to	that method,	all	changes	in	fair	value,	including	changes

related	to	the	forward-rate	component	of	the	foreign-currency	forward	contracts and	the	time-value	of	foreign-currency	options,	are	recorded	in	the	foreign- currency	Cumulative	translation	adjustment	account.	For	foreign-currency denominated	debt	instruments	that	are	designated	as	hedges	of	net	investments, the	translation	gain	or	loss	that	is	recorded	in	the	foreign-currency	translation adjustment	account	is	based	on	the	spot	exchange	rate	between	the	functional currency	of	the	respective	subsidiary	and	the	U.S.	dollar,	which	is	the	functional currency	of	Citigroup.	To	the	extent	the	notional	amount	of	the	hedging instrument	exactly	matches	the	hedged	net	investment	and	the	underlying exchange	rate	of	the	derivative	hedging	instrument	relates	to	the	exchange	rate between	the	functional	currency	of	the	net	investment	and	Citigroup's	functional currency	(or,	in	the	case	of	a	non-derivative	debt	instrument,	such	instrument	is denominated	in	the	functional	currency	of	the	net	investment),	no	ineffectiveness is	recorded	in	earnings.

					The	pretax	loss	recorded	in	foreign-currency	translation	adjustment	within Accumulated	other	comprehensive	income	(loss),	related	to	the	effective	portion of	the	net	investment	hedges,	is	$4,560	million	during	the	year	ended	December 31,	2009.

A	credit	derivative	is	a	bilateral	contract	between	a	buyer	and	a	seller	under which	the	seller	agrees	to	provide	protection	to	the	buyer	against	the	credit	risk of	a	particular	entity	("reference	entity"	or	"reference	credit").	Credit	derivatives generally	require	that	the	seller	of	credit	protection	make	payments	to	the	buyer upon	the	occurrence	of	predefined	credit	events	(commonly	referred	to	as "settlement	triggers").	These	settlement	triggers	are	defined	by	the	form	of	the derivative	and	the	reference	credit	and	are	generally	limited	to	the	market standard	of	failure	to	pay	on	indebtedness	and	bankruptcy	of	the	reference	credit and,	in	a	more	limited	range	of	transactions,	debt	restructuring.	Credit	derivative transactions	referring	to	emerging	market	reference	credits	will	also	typically include	additional	settlement	triggers	to	cover	the	acceleration	of	indebtedness and	the	risk	of	repudiation	or	a	payment	moratorium.	In	certain	transactions, protection	may	be	provided	on	a	portfolio	of	referenced	credits	or	asset-backed securities.	The	seller	of	such	protection	may	not	be	required	to	make	payment until	a	specified	amount	of	losses	has	occurred	with	respect	to	the	portfolio and/or	may	only	be	required	to	pay	for	losses	up	to	a	specified	amount. 					The	Company	makes	markets	in	and	trades	a	range	of	credit	derivatives,	both on	behalf	of	clients	as	well	as	for	its	own	account.	Through	these	contracts,	the Company	either	purchases	or	writes	protection	on	either	a	single	name	or	a portfolio	of	reference	credits.	The	Company	uses	credit	derivatives	to	help mitigate	credit	risk	in	its	corporate	and	consumer	loan	portfolio	and	other	cash positions,	to	take	proprietary	trading	positions,	and	to	facilitate	client transactions.

					The	range	of	credit	derivatives	sold	includes	credit	default	swaps,	total	return swaps	and	credit	options.

					A	credit	default	swap	is	a	contract	in	which,	for	a	fee,	a	protection	seller agrees	to	reimburse	a	protection	buyer	for	any	losses	that	occur	due	to	a	credit event	on	a	reference	entity.	If	there	is	no	credit	default	event	or	settlement trigger,	as	defined	by	the	specific	derivative	contract,	then	the	protection seller	makes	no	payments	to	the	protection	buyer	and	receives	only	the contractually	specified	fee.	However,	if	a	credit	event	occurs	as	defined	in	the specific	derivative	contract	sold,	the	protection	seller	will	be	required	to	make	a payment	to	the	protection	buyer.

					A	total	return	swap	transfers	the	total	economic	performance	of	a	reference asset,	which	includes	all	associated	cash	flows,	as	well	as	capital	appreciation	or depreciation.	The	protection	buyer	receives	a	floating	rate	of	interest	and	any depreciation	on	the	reference	asset	from	the	protection	seller	and,	in	return,	the protection	seller	receives	the	cash	flows	associated	with	the	reference	asset	plus any	appreciation.	Thus,	according	to	the	total	return	swap	agreement, the	protection	seller	will	be	obligated	to	make	a	payment	anytime	the	floating interest	rate	payment	and	any	depreciation	of	the	reference	asset	exceed	the	cash flows	associated	with	the	underlying	asset.	A	total	return	swap	may	terminate upon	a	default	of	the	reference	asset	subject	to	the	provisions	of	the	related	total return	swap	agreement	between	the	protection	seller	and	the	protection	buyer. 					A	credit	option	is	a	credit	derivative	that	allows	investors	to	trade	or	hedge changes	in	the	credit	quality	of	the	reference	asset.	For	example,	in	a	credit spread	option,	the	option	writer	assumes	the	obligation	to	purchase	or	sell	the reference	asset	at	a	specified	"strike"	spread	level.	The	option	purchaser	buys	the right	to	sell	the	reference	asset	to,	or	purchase	it	from,	the	option	writer	at	the strike	spread	level.	The	payments	on	credit	spread	options	depend	either	on	a particular	credit	spread	or	the	price	of	the	underlying	credit-sensitive	asset.	The options	usually	terminate	if	the	underlying	assets	default.

					A	credit-linked	note	is	a	form	of	credit	derivative	structured	as	a	debt security	with	an	embedded	credit	default	swap.	The	purchaser	of	the	note	writes credit	protection	to	the	issuer,	and	receives	a	return	which	will	be	negatively affected	by	credit	events	on	the	underlying	reference	credit.	If	the	reference entity	defaults,	the	purchaser	of	the	credit-linked	note	may	assume	the	long position	in	the	debt	security	and	any	future	cash	flows	from	it,	but	will	lose	the amount	paid	to	the	issuer	of	the	credit-linked	note.	Thus	the	maximum	amount	of the	exposure	is	the	carrying	amount	of	the	credit-linked	note.	As	of	December 31,	2009	and	December	31,	2008,	the	amount	of	credit-linked	notes	held	by	the Company	in	trading	inventory	was	immaterial.

					The	following	tables	summarize	the	key	characteristics	of	the	Company's credit	derivative	portfolio	as	protection	seller	as	of	December	31,	2009	and December	31,	2008:

(1)						In addition, fair value amounts receivable under credit derivatives sold were $24,234 million.

(1)						In addition, fair value amounts receivable under credit derivatives sold were $5,890 million.

					Citigroup	evaluates	the	payment/performance	risk	of	the	credit	derivatives	to which	it	stands	as	a	protection	seller	based	on	the	credit	rating	which	has	been assigned	to	the	underlying	referenced	credit.	Where	external	ratings	by nationally	recognized	statistical	rating	organizations	(such	as	Moody's	and	S&P) are	used,	investment	grade	ratings	are	considered	to	be	Baa/BBB

or	above,	while	anything	below	is	considered	non-investment	grade.	The Citigroup	internal	ratings	are	in	line	with	the	related	external	credit	rating system.	On	certain	underlying	referenced	credit,	mainly	related	to	over-the- counter	credit	derivatives,	ratings	are	not	available,	and	these	are	included	in	the not-rated	category.	Credit	derivatives	written	on	an	underlying	non-investment grade	referenced	credit	represent	greater	payment	risk	to	the	Company.	The	non- investment	grade	category	in	the	table	above	primarily	includes	credit derivatives	where	the	underlying	referenced	entity	has	been	downgraded subsequent	to	the	inception	of	the	derivative.

					The	maximum	potential	amount	of	future	payments	under	credit	derivative contracts	presented	in	the	table	above	is	based	on	the	notional	value	of	the derivatives.	The	Company	believes	that	the	maximum	potential	amount	of	future payments	for	credit	protection	sold	is	not	representative	of	the	actual	loss exposure	based	on	historical	experience.	This	amount	has	not	been	reduced	by the	Company's	rights	to	the	underlying	assets	and	the	related	cash	flows.	In accordance	with	most	credit	derivative	contracts,	should	a	credit	event	(or settlement	trigger)	occur,	the	Company	is	usually	liable	for	the	difference between	the	protection	sold	and	the	recourse	it	holds	in	the	value	of	the underlying	assets.	Thus,	if	the	reference	entity	defaults,	Citi	will	generally	have a	right	to	collect	on	the	underlying	reference	credit	and	any	related	cash	flows, while	being	liable	for	the	full	notional	amount	of	credit	protection	sold	to	the buyer.	Furthermore,	this	maximum	potential	amount	of	future	payments	for credit	protection	sold	has	not	been	reduced	for	any	cash	collateral	paid	to	a	given counterparty,	as	such	payments	would	be	calculated	after	netting	all	derivative exposures,	including	any	credit	derivatives	with	that	counterparty	in	accordance with	a	related	master	netting	agreement.	Due	to	such	netting	processes, determining	the	amount	of	collateral	that	corresponds	to	credit	derivative exposures	only	is	not	possible.	The	Company	actively	monitors	open	credit	risk exposures,	and	manages	this	exposure	by	using	a	variety	of	strategies	including purchased	credit	derivatives,	cash	collateral	or	direct	holdings	of	the	referenced assets.	This	risk	mitigation	activity	is	not	captured	in	the	table	above.

# Credit-Risk-Related Contingent Features in Derivatives

Certain	derivative	instruments	contain	provisions	that	require	the	Company	to either	post	additional	collateral	or	immediately	settle	any	outstanding	liability balances	upon	the	occurrence	of	a	specified	credit-risk-related	event.	These events,	which	are	defined	by	the	existing	derivative	contracts,	are	primarily downgrades	in	the	credit	ratings	of	the	Company	and	its	affiliates.	The	fair	value of	all	derivative	instruments	with	credit-risk-related	contingent	features	that	are in	a	liability	position	at	December	31,	2009	is	$17	billion.	The	Company	has posted	$11	billion	as	collateral	for	this	exposure	in	the	normal	course	of	business as	of	December	31,	2009.	Each	downgrade	would	trigger	additional	collateral requirements	for	the	Company	and	its	affiliates.	In	the	event	that	each	legal entity	was	downgraded	a	single	notch	as	of	December	31,	2009,	the	Company would	be	required	to	post	additional	collateral	of	$2.6	billion.

# 25. CONCENTRATIONS OF CREDIT RISK

Concentrations	of	credit	risk	exist	when	changes	in	economic,	industry	or geographic	factors	similarly	affect	groups	of	counterparties	whose	aggregate credit	exposure	is	material	in	relation	to	Citigroup's	total	credit	exposure. Although	Citigroup's	portfolio	of	financial	instruments	is	broadly	diversified along	industry,	product,	and	geographic	lines,	material	transactions	are completed	with	other	financial	institutions,	particularly	in	the	securities	trading, derivatives,	and	foreign	exchange	businesses.

					In	connection	with	the	Company's	efforts	to	maintain	a	diversified	portfolio, the	Company	limits	its	exposure	to	any	one	geographic	region,	country	or individual	creditor	and	monitors	this	exposure	on	a	continuous	basis.	At December	31,	2009,	Citigroup's	most	significant	concentration	of	credit	risk	was with	the	U.S.	government	and	its	agencies.	The	Company's	exposure,	which primarily	results	from	trading	assets	and	investments	issued	by	the	U.S. government	and	its	agencies,	amounted	to	$126.6	billion	and	$93.7	billion	at December	31,	2009	and	2008,	respectively.	The	Mexican	and	Japanese governments	and	their	agencies	are	the	next	largest	exposures,	which	are	rated investment	grade	by	both	Moody's	and	S&P.	The	Company's	exposure	to Mexico	amounted	to	$41.4	billion	and	$35.0	billion	at	December	31,	2009	and 2008,	respectively,	and	is	composed	of	investment	securities,	loans	and	trading assets.	The	Company's	exposure	to	Japan	amounted	to	$31.8	billion	and	$29.1 billion	at	December	31,	2009	and	2008,	respectively,	and	is	composed	of investment	securities,	loans	and	trading	assets.

# 26. FAIR VALUE MEASUREMENT

Effective	January	1,	2007,	the	Company	adopted	SFAS	157	(now	ASC	820-10), which	defines	fair	value,	establishes	a	consistent	framework	for	measuring	fair value	and	expands	disclosure	requirements	about	fair	value	measurements. Among	other	things,	the	standard	requires	the	Company	to	maximize	the	use	of observable	inputs	and	minimize	the	use	of	unobservable	inputs	when	measuring fair	value.	In	addition,	it	precludes	the	use	of	block	discounts	when	measuring the	fair	value	of	instruments	traded	in	an	active	market;	such	discounts	were previously	applied	to	large	holdings	of	publicly	traded	equity	securities.	It	also requires	recognition	of	trade-date	gains	related	to	certain	derivative	transactions whose	fair	value	has	been	determined	using	unobservable	market	inputs.	This guidance	supersedes	the	guidance	in	Emerging	Issues	Task	Force	Issue	No.	02- 3,	"Issues	Involved	in	Accounting	for	Derivative	Contracts	Held	for	Trading Purposes	and	Contracts	Involved	in	Energy	Trading	and	Risk	Management Activities"	(EITF	Issue	02-3),	which	prohibited	the	recognition	of	trade-date gains	for	such	derivative	transactions	when	determining	the	fair	value	of instruments	not	traded	in	an	active	market.

					As	a	result	of	the	adoption	of	the	standard,	the	Company	made	amendments to	the	techniques	used	in	measuring	the	fair	value	of	derivative	and	other positions.	These	amendments	change	the	way	that	the	probability	of	default	of	a counterparty	is	factored	into	the	valuation	of	derivative	positions,	include	for	the first	time	the	impact	of	Citigroup's	own	credit	risk	on	derivatives	and	other liabilities	measured	at	fair	value,	and	also	eliminate	the	portfolio	servicing adjustment	that	is	no	longer	necessary.

# Fair Value Hierarchy

ASC	820-10	also	specifies	a	hierarchy	of	valuation	techniques	based	on	whether the	inputs	to	those	valuation	techniques	are	observable	or	unobservable. Observable	inputs	reflect	market	data	obtained	from	independent	sources,	while unobservable	inputs	reflect	the	Company's	market	assumptions.	These	two	types of	inputs	have	created	the	following	fair-value	hierarchy:

					This	hierarchy	requires	the	use	of	observable	market	data	when	available. The	Company	considers	relevant	and	observable	market	prices	in	its	valuations where	possible.	The	frequency	of	transactions,	the	size	of	the	bid-ask	spread	and the	amount	of	adjustment	necessary	when	comparing	similar	transactions	are	all factors	in	determining	the	liquidity	of	markets	and	the	relevance	of	observed prices	in	those	markets.

# Determination of Fair Value

For	assets	and	liabilities	carried	at	fair	value,	the	Company	measures	such	value using	the	procedures	set	out	below,	irrespective	of	whether	these	assets	and liabilities	are	carried	at	fair	value	as	a	result	of	an	election	or	whether	they	were previously	carried	at	fair	value.

					When	available,	the	Company	generally	uses	quoted	market	prices	to determine	fair	value	and	classifies	such	items	as	Level	1.	In	some	cases	where	a market	price	is	available,	the	Company	will	make	use	of	acceptable	practical expedients	(such	as	matrix	pricing)	to	calculate	fair	value,	in	which	case	the items	are	classified	as	Level	2.

					If	quoted	market	prices	are	not	available,	fair	value	is	based	upon	internally developed	valuation	techniques	that	use,	where	possible,	current	market-based or	independently	sourced	market	parameters,	such	as	interest	rates,	currency rates,	option	volatilities,	etc.	Items	valued	using	such	internally	generated valuation	techniques	are	classified	according	to	the	lowest	level	input	or	value driver	that	is	significant	to	the	valuation.	Thus,	an	item	may	be	classified	in Level	3	even	though	there	may	be	some	significant	inputs	that	are	readily observable.

					Where	available,	the	Company	may	also	make	use	of	quoted	prices	for recent	trading	activity	in	positions	with	the	same	or	similar	characteristics	to	that being	valued.	The	frequency	and	size	of	transactions	and	the	amount	of	the	bid- ask	spread	are	among	the	factors	considered	in	determining	the	liquidity	of markets	and	the	relevance	of	observed	prices	from	those	markets.	If	relevant	and observable	prices	are	available,	those	valuations	would	be	classified	as	Level	2. If	prices	are	not	available,	other	valuation	techniques	would	be	used	and	the	item would	be	classified	as	Level	3.

					Fair	value	estimates	from	internal	valuation	techniques	are	verified,	where possible,	to	prices	obtained	from	independent	vendors	or	brokers.	Vendors	and brokers'	valuations	may	be	based	on	a	variety	of	inputs	ranging	from	observed prices	to	proprietary	valuation	models.

					The	following	section	describes	the	valuation	methodologies	used	by	the Company	to	measure	various	financial	instruments	at	fair	value,	including	an indication	of	the	level	in	the	fair	value	hierarchy	in	which	each	instrument	is generally	classified.	Where	appropriate,	the	description	includes	details	of	the valuation	models,	the	key	inputs	to	those	models	as	well	as	any	significant assumptions.

# Securities	purchased	under	agreements	to	resell	and	securities	sold	under agreements	to	repurchase

No	quoted	prices	exist	for	such	instruments	and	so	fair	value	is	determined	using a	discounted	cash-flow	technique.	Cash	flows	are	estimated	based	on	the	terms of	the	contract,	taking	into	account	any	embedded	derivative	or	other	features. Expected	cash	flows	are	discounted	using	market	rates	appropriate	to	the maturity	of	the	instrument	as	well	as	the	nature	and	amount	of	collateral	taken	or received.	Generally,	such	instruments	are	classified	within	Level	2	of	the	fair value	hierarchy	as	the	inputs	used	in	the	fair	valuation	are	readily	observable.

# Trading	account	assets	and	liabilities—trading	securities	and	trading	loans

When	available,	the	Company	uses	quoted	market	prices	to	determine	the	fair value	of	trading	securities;	such	items	are	classified	as	Level	1	of	the	fair	value hierarchy.	Examples	include	some	government	securities	and	exchange-traded equity	securities.

					For	bonds	and	secondary	market	loans	traded	over	the	counter,	the	Company generally	determines	fair	value	utilizing	internal	valuation	techniques.	Fair	value estimates	from	internal	valuation	techniques	are	verified,	where	possible,	to prices	obtained	from	independent	vendors.	Vendors	compile	prices	from	various sources	and	may	apply	matrix	pricing	for	similar	bonds	or	loans	where	no	price is	observable.	If	available,	the	Company	may	also	use	quoted	prices	for	recent trading	activity	of	assets	with	similar	characteristics	to	the	bond	or	loan	being valued.	Trading	securities	and	loans	priced	using	such	methods	are	generally classified	as	Level	2.	However,	when	less	liquidity	exists	for	a	security	or	loan,	a quoted	price	is	stale	or	prices	from	independent	sources	vary,	a	loan	or	security is	generally	classified	as	Level	3.

					Where	the	Company's	principal	market	for	a	portfolio	of	loans	is	the securitization	market,	the	Company	uses	the	securitization	price	to	determine	the fair	value	of	the	portfolio.	The	securitization	price	is	determined	from	the assumed	proceeds	of	a	hypothetical	securitization	in	the	current	market,	adjusted for	transformation	costs	(i.e.,	direct	costs	other	than	transaction	costs)	and securitization	uncertainties	such	as	market	conditions	and	liquidity.	As	a	result of	the	severe	reduction	in	the	level	of	activity	in	certain	securitization	markets since	the	second	half	of	2007,	observable	securitization	prices	for	certain	directly comparable	portfolios	of	loans	have	not	been	readily	available.	Therefore,	such portfolios	of	loans	are	generally	classified	as	Level	3	of	the	fair	value	hierarchy. However,	for	other	loan	securitization	markets,	such	as	those	related	to conforming	prime	fixed-rate	and	conforming	adjustable-rate	mortgage	loans, pricing	verification	of	the	hypothetical	securitizations	has	been	possible,	since these	markets	have	remained	active.	Accordingly,	these	loan	portfolios	are classified	as	Level	2	in	the	fair	value	hierarchy.

# Trading	account	assets	and	liabilities—derivatives

Exchange-traded	derivatives	are	generally	fair	valued	using	quoted	market	(i.e., exchange)	prices	and	so	are	classified	as	Level	1	of	the	fair	value	hierarchy. 					The	majority	of	derivatives	entered	into	by	the	Company	are	executed	over the	counter	and	so	are	valued	using	internal	valuation	techniques	as	no	quoted market	prices	exist	for	such	instruments.	The	valuation	techniques	and	inputs depend	on	the	type	of	derivative	and	the	nature	of	the	underlying	instrument. The	principal	techniques	used	to	value	these	instruments	are	discounted	cash flows,	Black-Scholes	and	Monte	Carlo	simulation.	The	fair	values	of	derivative contracts	reflect	cash	the	Company	has	paid	or	received	(for	example,	option premiums	paid	and	received).

					The	key	inputs	depend	upon	the	type	of	derivative	and	the	nature	of	the underlying	instrument	and	include	interest	rate	yield	curves,	foreign-exchange rates,	the	spot	price	of	the	underlying	volatility	and	correlation.	The	item	is placed	in	either	Level	2	or	Level	3	depending	on	the	observability	of	the significant	inputs	to	the	model.	Correlation	and	items	with	longer	tenors	are generally	less	observable.

# Subprime-related	direct	exposures	in	CDOs

The	Company	accounts	for	its	CDO	super-senior	subprime	direct	exposures	and the	underlying	securities	on	a	fair-value	basis	with	all	changes	in	fair	value recorded	in	earnings.	Citigroup's	CDO	super-senior	subprime	direct	exposures are	not	subject	to	valuation	based	on	observable	transactions.	Accordingly,	the fair	value	of	these	exposures	is	based	on	management's	best	estimates	based	on facts	and	circumstances	as	of	the	date	of	these	Consolidated	Financial Statements.

					Citigroup's	CDO	super-senior	subprime	direct	exposures	are	Level	3	assets. The	valuation	of	the	high-grade	and	mezzanine	ABS	CDO	positions	uses	trader prices	based	on	the	underlying	assets	of	each	high-grade	and	mezzanine	ABS CDO.	Unlike	the	ABCP	positions,	the	high-grade	and	mezzanine	positions	are now	largely	hedged	through	the	ABX	and	bond	short	positions,	which	are	trader priced.	This	results	in	closer	symmetry	in	the	way	these	long	and	short	positions are	valued	by	the	Company.	Citigroup	intends	to	use	trader	marks	to	value	this portion	of	the	portfolio	going	forward	so	long	as	it	remains	largely	hedged. 					The	fair	values	of	ABCP	positions	are	based	on	significant	unobservable inputs.	Fair	value	of	these	exposures	are	based	on	estimates	of	future	cash	flows from	the	mortgage	loans	underlying	the	assets	of	the	ABS	CDOs.	To	determine the	performance	of	the	underlying	mortgage	loan	portfolios,	the	Company estimates	the	prepayments,	defaults	and	loss	severities	based	on	a	number	of macroeconomic	factors,	including	housing	price	changes,	unemployment	rates, interest	rates	and	borrower	and	loan	attributes,	such	as	age,	credit	scores, documentation	status,	loan-to-value	(LTV)	ratios	and	debt-to-income	(DTI) ratios.	The	model	is	calibrated	using	available	mortgage	loan	information including	historical	loan	performance.	In	addition,	the	methodology	estimates the	impact	of	geographic	concentration	of	mortgages	and	the	impact	of	reported fraud	in	the	origination	of	subprime	mortgages.	An	appropriate	discount	rate	is then	applied	to	the	cash	flows	generated	for	each	ABCP	tranche,	in	order	to estimate	its	fair	value	under	current	market	conditions.

					When	necessary,	the	valuation	methodology	used	by	Citigroup	is	refined	and the	inputs	used	for	the	purposes	of	estimation	are	modified,	in	part,	to	reflect ongoing	market	developments.	More	specifically,	the	inputs	of	home	price appreciation	(HPA)	assumptions	and	delinquency	data	were	updated	along	with discount	rates	that	are	based	upon	a	weighted	average	combination	of	implied spreads	from	single	name	ABS	bond	prices	and	ABX	indices,	as	well	as	CLO spreads	under	current	market	conditions.

					The	housing-price	changes	were	estimated	using	a	forward-looking projection,	which	incorporated	the	Loan	Performance	Index.	In	addition,	the Company's	mortgage	default	model	also	uses	recent	mortgage	performance	data, a	period	of	sharp	home	price	declines	and	high	levels	of	mortgage	foreclosures. 					The	valuation	as	of	December	31,	2009	assumes	that	U.S.	housing	prices	are unchanged	in	2010,	increase	1.1%	in	2011,	increase	1.4%	in	2012,	and	increase 3%	from	2013	onwards.

					In	addition,	the	discount	rates	were	based	on	a	weighted	average combination	of	the	implied	spreads	from	single	name	ABS	bond	prices,	ABX indices	and	CLO	spreads,	depending	on	vintage	and	asset	types.	To	determine the	discount	margin,	the	Company	applies	the	mortgage	default	model	to	the bonds	underlying	the	ABX	indices	and	other	referenced	cash	bonds	and	solves for	the	discount	margin	that	produces	the	current	market	prices	of	those instruments.

					The	primary	drivers	that	currently	impact	the	model	valuations	are	the discount	rates	used	to	calculate	the	present	value	of	projected	cash	flows	and projected	mortgage	loan	performance.

					For	most	of	the	lending	and	structuring	direct	subprime	exposures (excluding	super	seniors),	fair	value	is	determined	utilizing	observable transactions	where	available,	other	market	data	for	similar	assets	in	markets	that are	not	active	and	other	internal	valuation	techniques.

The	investments	category	includes	available-for-sale	debt	and	marketable	equity securities,	whose	fair	value	is	determined	using	the	same	procedures	described for	trading	securities	above	or,	in	some	cases,	using	vendor	prices	as	the	primary source.

					Also	included	in	investments	are	nonpublic	investments	in	private	equity	and real	estate	entities	held	by	the	S&B	business.	Determining	the	fair	value	of nonpublic	securities	involves	a	significant	degree	of	management	resources	and judgment	as	no	quoted	prices	exist	and	such	securities	are	generally	very	thinly traded.	In	addition,	there	may	be	transfer	restrictions	on	private	equity	securities. The	Company	uses	an	established	process	for	determining	the	fair	value	of	such securities,	using	commonly	accepted	valuation	techniques,	including	the	use	of earnings	multiples	based	on	comparable	public	securities,	industry-specific	non- earnings-based	multiples	and	discounted	cash	flow	models.	In	determining	the fair	value	of	nonpublic	securities,	the	Company	also	considers	events	such	as	a proposed	sale	of	the	investee	company,	initial	public	offerings,	equity	issuances, or	other	observable	transactions.

					Private	equity	securities	are	generally	classified	as	Level	3	of	the	fair	value hierarchy.

# Short-term	borrowings	and	long-term	debt

Where	fair	value	accounting	has	been	elected,	the	fair	value	of	non-structured liabilities	is	determined	by	discounting	expected	cash	flows	using	the	appropriate discount	rate	for	the	applicable	maturity.	Such	instruments	are	generally classified	as	Level	2	of	the	fair	value	hierarchy	as	all	inputs	are	readily observable.

					The	Company	determines	the	fair	value	of	structured	liabilities	(where performance	is	linked	to	structured	interest	rates,	inflation	or	currency	risks)	and hybrid	financial	instruments	(performance	linked	to	risks	other	than	interest rates,	inflation	or	currency	risks)	using	the	appropriate	derivative	valuation methodology	(described	above)	given	the	nature	of	the	embedded	risk	profile. Such	instruments	are	classified	as	Level	2	or	Level	3	depending	on	the observability	of	significant	inputs	to	the	model.

# Market	valuation	adjustments

Liquidity	adjustments	are	applied	to	items	in	Level	2	and	Level	3	of	the	fair value	hierarchy	to	ensure	that	the	fair	value	reflects	the	price	at	which	the	entire position	could	be	liquidated.	The	liquidity	reserve	is	based	on	the	bid-offer spread	for	an	instrument,	adjusted	to	take	into	account	the	size	of	the	position. 					Counterparty	credit-risk	adjustments	are	applied	to	derivatives,	such	as	over- the-counter	derivatives,	where	the	base	valuation	uses	market	parameters	based on	the	LIBOR	interest	rate	curves.	Not	all	counterparties	have	the	same	credit risk	as	that	implied	by	the	relevant	LIBOR	curve,	so	it	is	necessary	to	consider the	market	view	of	the	credit	risk	of	a	counterparty	in	order	to	estimate	the	fair value	of	such	an	item.

					Bilateral	or	"own"	credit-risk	adjustments	are	applied	to	reflect	the Company's	own	credit	risk	when	valuing	derivatives	and	liabilities	measured	at fair	value.	Counterparty	and	own	credit	adjustments	consider	the	expected	future cash	flows	between	Citi	and	its	counterparties	under	the	terms	of	the	instrument and	the	effect	of	credit	risk	on	the	valuation	of	those	cash	flows,	rather	than	a point-in-time	assessment	of	the	current	recognized	net	asset	or	liability. Furthermore,	the	credit-risk	adjustments	take	into	account	the	effect	of	credit-risk mitigants,	such	as	pledged	collateral	and	any	legal	right	of	offset	(to	the	extent such	offset	exists)	with	a	counterparty	through	arrangements	such	as	netting agreements.

# Auction	rate	securities

Auction	rate	securities	(ARS)	are	long-term	municipal	bonds,	corporate	bonds, securitizations	and	preferred	stocks	with	interest	rates	or	dividend	yields	that	are reset	through	periodic	auctions.	The	coupon	paid	in	the	current	period	is	based on	the	rate	determined	by	the	prior	auction.	In	the	event	of	an	auction	failure, ARS	holders	receive	a	"fail	rate"	coupon,	which	is	specified	by	the	original	issue documentation	of	each	ARS.

					Where	insufficient	orders	to	purchase	all	of	the	ARS	issue	to	be	sold	in	an auction	were	received,	the	primary	dealer	or	auction	agent	would	traditionally have	purchased	any	residual	unsold	inventory	(without	a	contractual	obligation to	do	so).	This	residual	inventory	would	then	be	repaid	through	subsequent auctions,	typically	in	a	short	timeframe.	Due	to	this	auction	mechanism	and generally	liquid	market,	ARS	have	historically	traded	and	were	valued	as	short- term	instruments.

					Citigroup	acted	in	the	capacity	of	primary	dealer	for	approximately	$72 billion	of	ARS	and	continued	to	purchase	residual	unsold	inventory	in	support	of the	auction	mechanism	until	mid-February	2008.	After	this	date,	liquidity	in	the ARS	market	deteriorated	significantly,	auctions	failed	due	to	a	lack	of	bids	from third-party	investors,	and	Citigroup	ceased	to	purchase	unsold	inventory. Following	a	number	of	ARS	refinancings,	at	December	31,	2009,	Citigroup continued	to	act	in	the	capacity	of	primary	dealer	for	approximately	$28.2	billion of	outstanding	ARS.

					The	Company	classifies	its	ARS	as	held-to-maturity,	available-for-sale	and trading	securities.

					Prior	to	the	Company's	first	auction's	failing	in	the	first	quarter	of	2008, Citigroup	valued	ARS	based	on	observation	of	auction	market	prices,	because the	auctions	had	a	short	maturity	period	(7,	28	and	35	days).	This	generally resulted	in	valuations	at	par.	Once	the	auctions	failed,	ARS	could	no	longer	be valued	using	observation	of	auction	market	prices.	Accordingly,	the	fair	value	of ARS	is	currently	estimated	using	internally	developed	discounted	cash	flow valuation	techniques	specific	to	the	nature	of	the	assets	underlying	each	ARS. 					For	ARS	with	U.S.	municipal	securities	as	underlying	assets,	future	cash flows	are	estimated	based	on	the	terms	of	the	securities	underlying	each individual	ARS	and	discounted	at	an	estimated	discount	rate	in	order	to	estimate the	current	fair	value.	The	key	assumptions	that	impact	the	ARS	valuations	are estimated	prepayments	and	refinancings,	estimated	fail	rate	coupons	(i.e.,	the rate	paid	in	the	event	of	auction	failure,	which	varies	according	to	the	current credit	rating	of	the	issuer)	and	the	discount	rate	used	to	calculate	the	present value	of	projected	cash	flows.	The	discount	rate	used	for	each	ARS	is	based	on rates	observed	for	straight	issuances	of	other	municipal	securities.	In	order	to arrive	at	the	appropriate	discount	rate,	these	observed	rates	were	adjusted	upward to	factor	in	the	specifics	of	the	ARS	structure	being	valued,	such	as	callability, and	the	illiquidity	in	the	ARS	market.

					For	ARS	with	student	loans	as	underlying	assets,	future	cash	flows	are estimated	based	on	the	terms	of	the	loans	underlying	each	individual	ARS, discounted	at	an	appropriate	rate	in	order	to	estimate	the	current	fair	value.	The key	assumptions	that	impact	the	ARS	valuations	are	the	expected	weighted average	life	of	the	structure,	estimated	fail	rate	coupons,	the	amount	of	leverage in	each	structure	and	the	discount	rate	used	to	calculate	the	present	value	of projected	cash	flows.	The	discount	rate	used	for	each	ARS	is	based	on	rates observed	for	basic	securitizations	with	similar	maturities	to	the	loans	underlying each	ARS	being	valued.	In	order	to	arrive	at	the	appropriate	discount	rate,	these observed	rates	were	adjusted	upward	to	factor	in	the	specifics	of	the	ARS structure	being	valued,	such	as	callability,	and	the	illiquidity	in	the	ARS	market. 					During	the	first	quarter	of	2008,	ARS	for	which	the	auctions	failed	and where	no	secondary	market	has	developed	were	moved	to	Level	3,	as	the	assets were	subject	to	valuation	using	significant	unobservable	inputs.	The	majority	of ARS	continue	to	be	classified	as	Level	3.

# Alt-A	mortgage	securities

The	Company	classifies	its	Alt-A	mortgage	securities	as	held-to-maturity, available-for-sale,	and	trading	investments.	The	securities	classified	as	trading and	available-for-sale	are	recorded	at	fair	value	with	changes	in	fair	value reported	in	current	earnings	and	AOCI,	respectively.	For	these	purposes,	Alt-A mortgage	securities	are	non-agency	residential	mortgage-backed	securities (RMBS)	where	(1)	the	underlying	collateral	has	weighted	average	FICO	scores between	680	and	720	or	(2)	for	instances	where	FICO	scores	are	greater	than 720,	RMBS	have	30%	or	less	of	the	underlying	collateral	composed	of	full documentation	loans.

					Similar	to	the	valuation	methodologies	used	for	other	trading	securities	and trading	loans,	the	Company	generally	determines	the	fair	value	of	Alt-A mortgage	securities	utilizing	internal	valuation	techniques.	Fair-value	estimates from	internal	valuation	techniques	are	verified,	where	possible,	to	prices obtained	from	independent	vendors.	Vendors	compile	prices	from	various sources.	Where	available,	the	Company	may	also	make	use	of	quoted	prices	for recent	trading	activity	in	securities	with	the	same	or	similar	characteristics	to	that being	valued.

					The	internal	valuation	techniques	used	for	Alt-A	mortgage	securities,	as	with other	mortgage	exposures,	consider	estimated	housing	price	changes, unemployment	rates,	interest	rates	and	borrower	attributes.	They	also	consider prepayment	rates	as	well	as	other	market	indicators.

					Alt-A	mortgage	securities	that	are	valued	using	these	methods	are	generally classified	as	Level	2.	However,	Alt-A	mortgage	securities	backed	by	Alt-A mortgages	of	lower	quality	or	more	recent	vintages	are	mostly	classified	as Level	3	due	to	the	reduced	liquidity	that	exists	for	such	positions,	which	reduces the	reliability	of	prices	available	from	independent	sources.

# Commercial	real	estate	exposure

Citigroup	reports	a	number	of	different	exposures	linked	to	commercial	real estate	at	fair	value	with	changes	in	fair	value	reported	in	earnings,	including securities,	loans	and	investments	in	entities	that	hold	commercial	real	estate loans	or	commercial	real	estate	directly.	The	Company	also	reports	securities backed	by	commercial	real	estate	as	Available-for-sale	investments,	which	are carried	at	fair	value	with	changes	in	fair-value	reported	in	AOCI.

					Similar	to	the	valuation	methodologies	used	for	other	trading	securities	and trading	loans,	the	Company	generally	determines	the	fair	value	of	securities	and loans	linked	to	commercial	real	estate	utilizing	internal	valuation	techniques. Fair-value	estimates	from	internal	valuation	techniques	are	verified,	where possible,	to	prices	obtained	from	independent	vendors.	Vendors	compile	prices from	various	sources.	Where	available,	the	Company	may	also	make	use	of quoted	prices	for	recent	trading	activity	in	securities	or	loans	with	the	same	or similar	characteristics	to	that	being	valued.	Securities	and	loans	linked	to commercial	real	estate	valued	using	these	methodologies	are	generally	classified as	Level	3	as	a	result	of	the	reduced	liquidity	currently	in	the	market	for	such exposures.

					The	fair	value	of	investments	in	entities	that	hold	commercial	real	estate loans	or	commercial	real	estate	directly	is	determined	using	a	similar methodology	to	that	used	for	other	non-public	investments	in	real	estate	held	by the	S&B	business.	The	Company	uses	an	established	process	for	determining	the fair	value	of	such	securities,	using	commonly	accepted	valuation	techniques, including	the	use	of	earnings	multiples	based	on	comparable	public	securities, industry-specific	non-earnings-based	multiples	and	discounted	cash	flow models.	In	determining	the	fair	value	of	such	investments,	the	Company	also considers	events,	such	as	a	proposed	sale	of	the	investee	company,	initial	public offerings,	equity	issuances,	or	other	observable	transactions.	Such	investments are	generally	classified	as	Level	3	of	the	fair-value	hierarchy.

# Highly	leveraged	financing	commitments

The	Company	reports	highly	leveraged	loans	with	a	carrying	value	of	$36 million	and	face	amount	of	$468	million	at	December	31,	2009	as	held-for-sale, which	are	measured	on	a	LOCOM	basis.	The	fair	value	of	such	exposures	is determined,	where	possible,	using	quoted	secondary-market	prices	and	classified as	Level	2	of	the	fair	value	hierarchy	if	there	is	a	sufficient	level	of	activity	in	the market	and	quotes	or	traded	prices	are	available	with	suitable	frequency.

					However,	due	to	the	dislocation	of	the	credit	markets	and	the	reduced	market interest	in	higher	risk/higher	yield	instruments	since	the	latter	half	of	2007, liquidity	in	the	market	for	highly	leveraged	financings	has	been	limited. Therefore,	a	majority	of	such	exposures	are	classified	as	Level	3	as	quoted secondary	market	prices	do	not	generally	exist.	The	fair	value	for	such	exposures is	determined	using	quoted	prices	for	a	similar	asset	or	assets,	adjusted	for	the specific	attributes	of	the	loan	being	valued.

# Items Measured at Fair Value on a Recurring Basis

The	following	tables	present	for	each	of	the	fair	value	hierarchy	levels	the Company's	assets	and	liabilities	that	are	measured	at	fair	value	on	a	recurring basis	at	December	31,	2009	and	2008.	The	Company	often	hedges	positions	that have	been	classified	in	the	Level	3	category	with	financial

instruments	that	have	been	classified	as	Level	1	or	Level	2.	In	addition,	the Company	also	hedges	items	classified	in	the	Level	3	category	with	instruments classified	in	Level	3	of	the	fair	value	hierarchy.	The	effects	of	these	hedges	are presented	gross	in	the	following	table.

|  |  |  |  | Gross |  | Net |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars at December 31, 2009 | Level 1 | Level 2 | Level 3 | inventory | Netting(1) | balance |
| Assets |  |  |  |  |  |  |
| Federal funds sold and securities borrowed or purchased under |  |  |  |  |  |  |
| agreements to resell | $ — | $138,550 | $ — | $138,550 | $(50,713) | $87,837 |
| Trading securities |  |  |  |  |  |  |
| Trading mortgage-backed securities |  |  |  |  |  |  |
| U.S. government-sponsored agency guaranteed | $ — | $19,666 | $972 | $20,638 | $ — | $20,638 |
| Prime | — | 772 | 384 | 1,156 | — | 1,156 |
| Alt-A | — | 842 | 387 | 1,229 | — | 1,229 |
| Subprime | — | 736 | 8,998 | 9,734 | — | 9,734 |
| Non-U.S. residential | — | 1,796 | 572 | 2,368 | — | 2,368 |
| Commercial | — | 1,004 | 2,451 | 3,455 | — | 3,455 |
| Total trading mortgage-backed securities | $ — | $24,816 | $13,764 | $38,580 | $ — | $38,580 |
| U.S. Treasury and federal agencies securities |  |  |  |  |  |  |
| U.S. Treasury | $27,943 | $995 | $ — | $28,938 | $ — | $28,938 |
| Agency obligations | — | 2,041 | — | 2,041 | — | 2,041 |
| Total U.S. Treasury and federal agencies securities | $27,943 | $3,036 | $ — | $30,979 | $ — | $30,979 |
| Other trading securities |  |  |  |  |  |  |
| State and municipal | $ — | $6,925 | $222 | $7,147 | $ — | $7,147 |
| Foreign government | 59,229 | 13,081 | 459 | 72,769 | — | 72,769 |
| Corporate | — | 43,365 | 8,620 | 51,985 | — | 51,985 |
| Equity securities | 33,754 | 11,827 | 640 | 46,221 | — | 46,221 |
| Other debt securities | — | 19,976 | 16,237 | 36,213 | — | 36,213 |
| Total trading securities | $120,926 | $123,026 | $39,942 | $283,894 | $ — | $283,894 |
| Derivatives | $4,002 | $671,532 | $27,685 | $703,219 | $(644,340) | $58,879 |
| Investments |  |  |  |  |  |  |
| Mortgage-backed securities |  |  |  |  |  |  |
| U.S. government-sponsored agency guaranteed | $89 | $20,823 | $2 | $20,914 | $ — | $20,914 |
| Prime | — | 5,742 | 736 | 6,478 | — | 6,478 |
| Alt-A | — | 572 | 55 | 627 | — | 627 |
| Subprime | — | — | 1 | 1 | — | 1 |
| Non-U.S. residential | — | 255 | — | 255 | — | 255 |
| Commercial | — | 47 | 746 | 793 | — | 793 |
| Total investment mortgage-backed securities | $89 | $27,439 | $1,540 | $29,068 | $ — | $29,068 |
| U.S. Treasury and federal agency securities |  |  |  |  |  |  |
| U.S. Treasury | $5,943 | $20,619 | $ — | $26,562 | $ — | $26,562 |
| Agency obligations | — | 27,531 | 21 | 27,552 | — | 27,552 |
| Total U.S. Treasury and federal agency | $5,943 | $48,150 | $21 | $54,114 | $ — | $54,114 |
| State and municipal | $ — | $15,393 | $217 | $15,610 | $ — | $15,610 |
| Foreign government | 60,484 | 41,765 | 270 | 102,519 | — | 102,519 |
| Corporate | — | 19,056 | 1,257 | 20,313 | — | 20,313 |
| Equity securities | 3,056 | 237 | 2,513 | 5,806 | — | 5,806 |
| Other debt securities | — | 3,337 | 8,832 | 12,169 | — | 12,169 |
| Non-marketable equity securities | — | 77 | 6,753 | 6,830 | — | 6,830 |
| Total investments | $69,572 | $155,454 | $21,403 | $246,429 | $ — | $246,429 |
| Loans (2) | $ — | $1,226 | $213 | $1,439 | $ — | $1,439 |
| Mortgage servicing rights | — | — | 6,530 | 6,530 | — | 6,530 |
| Other financial assets measured on a recurring basis | — | 15,787 | 1,101 | 16,888 | (4,224) | 12,664 |
| Total assets | $194,500 | $1,105,575 | $96,874 | $1,396,949 | $(699,277) | $697,672 |
|  | 13.9% | 79.2% | 6.9% | 100.0% |  |  |

|  |  |  |  | Gross |  | Net |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars at December 31, 2009 | Level 1 | Level 2 | Level 3 | inventory | Netting(1) | balance |
| Liabilities |  |  |  |  |  |  |
| Interest-bearing deposits | $ — | $1,517 | $28 | $1,545 | $ — | $1,545 |
| Federal funds purchased and securities loaned or sold under |  |  |  |  |  |  |
| agreements to repurchase | — | 152,687 | 2,056 | 154,743 | (50,713) | 104,030 |
| Trading account liabilities |  |  |  |  |  |  |
| Securities sold, not yet purchased | 52,399 | 20,233 | 774 | 73,406 | — | 73,406 |
| Derivatives | 4,980 | 669,384 | 24,577 | 698,941 | (634,835) | 64,106 |
| Short-term borrowings | — | 408 | 231 | 639 | — | 639 |
| Long-term debt | — | 16,288 | 9,654 | 25,942 | — | 25,942 |
| Other financial liabilities measured on a recurring basis | — | 15,753 | 13 | 15,766 | (4,224) | 11,542 |
| Total liabilities | $57,379 | $876,270 | $37,333 | $ 970,982 | $(689,772) | $281,210 |
|  | 5.9% | 90.2% | 3.8% | 100.0% |  |  |

(1)						Represents netting of: (i) the amounts due under securities purchased under agreements to resell and the amounts owed under securities sold under agreements to repurchase, and (ii) derivative exposures covered by a qualifying master netting agreement, cash collateral, and the market value adjustment.

(2) There is no allowance for loan losses recorded for loans reported at fair value.

|  |  |  |  | Gross |  | Net |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars at December 31, 2008 | Level 1 | Level 2 | Level 3 | inventory | Netting(1) | balance |
| Assets |  |  |  |  |  |  |
| Federal funds sold and securities borrowed or purchased under |  |  |  |  |  |  |
| agreements to resell | $ — | $96,524 | $ — | $96,524 | $(26,219) | $70,305 |
| Trading account assets |  |  |  |  |  |  |
| Trading securities and loans | 90,530 | 121,043 | 50,773 | 262,346 | — | 262,346 |
| Derivatives | 9,675 | 1,102,252 | 60,725 | 1,172,652 | (1,057,363) | 115,289 |
| Investments | 44,342 | 111,836 | 28,273 | 184,451 | — | 184,451 |
| Loans (2) | — | 2,572 | 160 | 2,732 | — | 2,732 |
| Mortgage servicing rights | — | — | 5,657 | 5,657 | — | 5,657 |
| Other financial assets measured on a recurring basis | — | 25,540 | 359 | 25,899 | (4,527) | 21,372 |
| Total assets | $144,547 | $1,459,767 | $145,947 | $1,750,261 | $(1,088,109) | $662,152 |
|  | 8.3% | 83.4% | 8.3% | 100.0% |  |  |
| Liabilities |  |  |  |  |  |  |
| Interest-bearing deposits | $ — | $2,552 | $54 | $2,606 | $ — | $2,606 |
| Federal funds purchased and securities loaned or sold under |  |  |  |  |  |  |
| agreements to repurchase | — | 153,918 | 11,167 | 165,085 | (26,219) | 138,866 |
| Trading account liabilities |  |  |  |  |  |  |
| Securities sold, not yet purchased | 36,848 | 13,192 | 653 | 50,693 | — | 50,693 |
| Derivatives | 10,038 | 1,094,435 | 57,139 | 1,161,612 | (1,046,505) | 115,107 |
| Short-term borrowings | — | 16,278 | 1,329 | 17,607 | — | 17,607 |
| Long-term debt | — | 16,065 | 11,198 | 27,263 | — | 27,263 |
| Other financial liabilities measured on a recurring basis | — | 18,093 | 1 | 18,094 | (4,527) | 13,567 |
| Total liabilities | $46,886 | $1,314,533 | $81,541 | $1,442,960 | $(1,077,251) | $365,709 |
|  | 3.2% | 91.1% | 5.7% | 100.0% |  |  |

# Changes in Level 3 Fair Value Category

The	following	tables	present	the	changes	in	the	Level	3	fair	value	category	for the	years	ended	December	31,	2009	and	2008.	The	Company	classifies	financial instruments	in	Level	3	of	the	fair	value	hierarchy	when	there	is	reliance	on	at least	one	significant	unobservable	input	to	the	valuation	model.	In	addition	to these	unobservable	inputs,	the	valuation	models	for	Level	3	financial instruments	typically	also	rely	on	a	number	of	inputs	that	are	readily	observable either	directly	or	indirectly.	Thus,	the	gains	and	losses	presented	below	include changes	in	the	fair	value	related	to	both	observable	and	unobservable	inputs.

					The	Company	often	hedges	positions	with	offsetting	positions	that	are classified	in	a	different	level.	For	example,	the	gains	and	losses	for	assets	and liabilities	in	the	Level	3	category	presented	in	the	tables	below	do	not	reflect	the effect	of	offsetting	losses	and	gains	on	hedging	instruments	that	have	been classified	by	the	Company	in	the	Level	1	and	Level	2	categories.	In	addition,	the Company	hedges	items	classified	in	the	Level	3	category	with	instruments	also classified	in	Level	3	of	the	fair	value	hierarchy.	The	effects	of	these	hedges	are presented	gross	in	the	following	tables.

|  |  | Net realized/unrealized | Net realized/unrealized |  | Transfers | Purchases, |  | Unrealized |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | gains (losses) included in | gains (losses) included in |  | in and/or | issuances |  | gains |
|  | December 31, | Principal |  |  | out of | and | December 31, | (losses) |
| In millions of dollars | 2008 | transactions | Other | (1)(2) | Level 3 | settlements | 2009 | still held |
| Assets |  |  |  |  |  |  |  |  |
| Trading securities |  |  |  |  |  |  |  |  |
| Trading mortgage-backed securities |  |  |  |  |  |  |  |  |
| U.S. government-sponsored agency guaranteed | $1,325 | $243 | $ — |  | $35 | $(631) | $972 | $317 |
| Prime | 147 | (295) | — |  | 498 | 34 | 384 | (179) |
| Alt-A | 1,153 | (78) | — |  | (374) | (314) | 387 | 73 |
| Subprime | 13,844 | 233 | — |  | (997) | (4,082) | 8,998 | 472 |
| Non-U.S. residential | 858 | (23) | — |  | (617) | 354 | 572 | 125 |
| Commercial | 2,949 | (256) | — |  | 362 | (604) | 2,451 | (762) |
| Total trading mortgage-backed securities | $20,276 | $(176) | $ — |  | $(1,093) | $(5,243) | $13,764 | $46 |
| U.S. Treasury and federal agencies securities |  |  |  |  |  |  |  |  |
| U.S. Treasury | $— | $— | $ — |  | $— | $— | $— | $— |
| Agency obligations | 59 | (108) | — |  | (54) | 103 | — | — |
| Total U.S. Treasury and federal |  |  |  |  |  |  |  |  |
| agencies securities | $59 | $(108) | $ — |  | $(54) | $103 | $— | $— |
| State and municipal | $233 | $(67) | $ — |  | $219 | $(163) | $222 | $4 |
| Foreign government | 1,261 | 112 | — |  | (396) | (518) | 459 | 3 |
| Corporate | 13,027 | (184) | — |  | (1,492) | (2,731) | 8,620 | (449) |
| Equity securities | 1,387 | 260 | — |  | (1,147) | 140 | 640 | (22) |
| Other debt securities | 14,530 | 1,637 | — |  | (2,520) | 2,590 | 16,237 | 53 |
| Total trading securities | $50,773 | $1,474 | $— |  | $(6,483) | $(5,822) | $39,942 | $(365) |
| Derivatives, net (4) | $3,586 | $(4,878) | $ — |  | $80 | $4,320 | $3,108 | $(4,854) |
| Investments |  |  |  |  |  |  |  |  |
| Mortgage-backed securities |  |  |  |  |  |  |  |  |
| U.S. government-sponsored agency guaranteed | $— | $— | $1 |  | $77 | $(76) | $2 | $— |
| Prime | 1,163 | — | 201 |  | 61 | (689) | 736 | 417 |
| Alt-A | 111 | — | 42 |  | (61) | (37) | 55 | — |
| Subprime | 25 | — | (7) |  | (19) | 2 | 1 | — |
| Commercial | 964 | — | 87 |  | (461) | 156 | 746 | 8 |
| Total investment mortgage-backed |  |  |  |  |  |  |  |  |
| debt securities | $2,263 | $— | $324 |  | $(403) | $(644) | $1,540 | $425 |
| U.S. Treasury and federal agencies securities |  |  |  |  |  |  |  |  |
| Agency obligations | $— | $— | $ — |  | $26 | $(5) | $21 | $— |
| Total U.S. Treasury and federal |  |  |  |  |  |  |  |  |
| agencies securities | $— | $— | $ — |  | $26 | $(5) | $21 | $— |
| State and municipal | $222 | $— | $2 |  | $(13) | $6 | $217 | $— |
| Foreign government | 571 | — | (6) |  | (302) | 7 | 270 | (3) |
| Corporate | 1,019 | — | 13 |  | 762 | (537) | 1,257 | 16 |
| Equity securities | 3,807 | — | (453) |  | (146) | (695) | 2,513 | 41 |
| Other debt securities | 11,324 | — | 279 |  | (1,292) | (1,479) | 8,832 | (81) |
| Non-marketable equity securities | 9,067 | — | (538) |  | (137) | (1,639) | 6,753 | 69 |
| Total investments | $28,273 | $— | $(379) |  | $(1,505) | $(4,986) | $21,403 | $467 |

|  |  | Net realized/unrealized | Net realized/unrealized |  | Transfers | Purchases, |  | Unrealized |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | gains (losses) included in | gains (losses) included in |  | in and/or | issuances |  | gains |
|  | December 31, | Principal |  |  | out of | and | December 31, | (losses) |
| In millions of dollars | 2008 | transactions | Other | \t(1)\t(2) | Level 3 | settlements | 2009 | still held\t(3) |
| Loans | $160 | $— | $51 |  | $7 | $(5) | $213 | $9 |
| Mortgage servicing rights | 5,657 | — | 1,543 |  | — | (670) | 6,530 | 1,582 |
| Other financial assets measured on a |  |  |  |  |  |  |  |  |
| recurring basis | 359 | — | 305 |  | 761 | (324) | 1,101 | 215 |
| Liabilities |  |  |  |  |  |  |  |  |
| Interest-bearing deposits | $54 | $— | $2 |  | $(6) | $(18) | $28 | $(14) |
| Federal funds purchased and securities |  |  |  |  |  |  |  |  |
| loaned or sold under agreements |  |  |  |  |  |  |  |  |
| to repurchase | 11,167 | 359 | — |  | (8,601) | (151) | 2,056 | 250 |
| Trading account liabilities |  |  |  |  |  |  |  |  |
| Securities sold, not yet purchased | 653 | (11) | — |  | (180) | 290 | 774 | (52) |
| Short-term borrowings | 1,329 | (48) | — |  | (775) | (371) | 231 | (76) |
| Long-term debt | 11,198 | (290) | — |  | (504) | (1,330) | 9,654 | 124 |
| Other financial liabilities measured on a |  |  |  |  |  |  |  |  |
| recurring basis | 1 | — | (75) |  | — | (63) | 13 | — |
|  |  | Net realized/unrealized | Net realized/unrealized |  | Transfers | Purchases, |  | Unrealized |
|  |  | gains (losses) included in | gains (losses) included in |  | in and/or | issuances |  | gains |
|  | December 31, | Principal |  |  | out of | and | December 31, | (losses) |
| In millions of dollars |  |  | Other | \t(1)\t(2) |  |  |  | still held\t(3) |

|  | 2007 | transactions |  | Level 3 | settlements | 2008 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Assets |  |  |  |  |  |  |  |
| Securities purchased under agreements |  |  |  |  |  |  |  |
| to resell | $16 | $— | $ — | $— | $(16) | $— | $— |
| Trading account assets |  |  |  |  |  |  |  |
| Trading securities and loans | 75,573 | (28,052) | — | 7,418 | (4,166) | 50,773 | (19,572) |
| Derivatives, net (4) | (2,470) | 7,804 | — | (2,188) | 440 | 3,586 | 9,622 |
| Investments | 17,060 | — | (4,917) | 5,787 | 10,343 | 28,273 | (801) |
| Loans | 9 | — | (15) | — | 166 | 160 | (19) |
| Mortgage servicing rights | 8,380 | — | (1,870) | — | (853) | 5,657 | (1,870) |
| Other financial assets measured on a |  |  |  |  |  |  |  |
| recurring basis | 1,171 | — | 86 | 422 | (1,320) | 359 | 86 |
| Liabilities |  |  |  |  |  |  |  |
| Interest-bearing deposits | $56 | $(5) | $— | $13 | $(20) | $54 | $(3) |
| Securities sold under agreements |  |  |  |  |  |  |  |
| to repurchase | 6,158 | (273) | — | 6,158 | (1,422) | 11,167 | (136) |
| Trading account liabilities |  |  |  |  |  |  |  |
| Securities sold, not yet purchased | 473 | 153 | — | 1,036 | (703) | 653 | 328 |
| Short-term borrowings | 5,016 | 106 | — | (1,798) | (1,783) | 1,329 | (63) |
| Long-term debt | 8,953 | 2,228 | — | 38,792 | (34,319) | 11,198 | 1,115 |
| Other financial liabilities measured on a |  |  |  |  |  |  |  |
| recurring basis | 1 | — | (61) | — | (61) | 1 | — |

(1)  Changes in fair value for available-for-sale investments (debt securities) are recorded in Accumulated other comprehensive income, while gains and losses from sales are recorded in Realized gains (losses) from sales of investments on the Consolidated Statement of Income.

(2) Unrealized gains (losses) on MSRs are recorded in Commissions and fees on the Consolidated Statement of Income.

(3) Represents the amount of total gains or losses for the period, included in earnings (and Accumulated other comprehensive income for changes in fair value for available-for-sale investments), attributable to the change in fair value relating to assets and liabilities classified as Level 3 that are still held at December 31, 2009 and 2008.

(4) Total Level 3 derivative exposures have been netted in these tables for presentation purposes only.

					The	following	is	a	discussion	of	the	changes	to	the	Level	3	balances	for	each of	the	roll-forward	tables	presented	above.

The	significant	changes	from	December	31,	2008	to	December	31,	2009	in Level	3	assets	and	liabilities	are	due	to:

A	net	decrease	in	trading	securities	of	$10.8	billion	that	was	driven by:

–		Net	transfers	of	$6.5	billion,	due	mainly	to	the	transfer	of	debt	securities from	Level	3	to	Level	2	due	to	increased	liquidity	and	pricing transparency;	and

–		Net	settlements	of	$5.8	billion,	due	primarily	to	the	liquidations	of subprime	securities	of	$4.1	billion.

The	change	in	net	trading	derivatives	driven	by: –		A	net	loss	of	$4.9	billion	relating	to	complex	derivative	contracts,	such as	those	linked	to	credit,	equity	and	commodity	exposures.	These	losses include	both	realized	and	unrealized	losses	during	2009	and	are	partially offset	by	gains	recognized	in	instruments	that	have	been	classified	in Levels	1	and	2;	and

–		Net	increase	in	derivative	assets	of	$4.3	billion,	which	includes	cash settlements	of	derivative	contracts	in	an	unrealized	loss	position,	notably those	linked	to	subprime	exposures.

The	decrease	in	Level	3	Investments	of	$6.9	billion	primarily	resulted from:

–		A	reduction	of	$5.0	billion,	due	mainly	to	paydowns	on	debt	securities and	sales	of	private	equity	investments;

–		The	net	transfer	of	investment	securities	from	Level	3	to	Level	2	of	$1.5 billion,	due	to	increased	availability	of	observable	pricing	inputs;	and –		Net	losses	recognized	of	$0.4	billion	due	mainly	to	losses	on	non- marketable	equity	securities	including	write-downs	on	private	equity investments.

The	decrease	in	securities	sold	under	agreements	to	repurchase	of	$9.1 billion	is	driven	by	a	$8.6	billion	net	transfers	from	Level	3	to	Level	2 as	effective	maturity	dates	on	structured	repos	have	shortened. The	decrease	in	long-term	debt	of	$1.5	billion	is	driven	mainly	by $1.3	billion	of	net	terminations	of	structured	notes.

A	net	decrease	in	trading	securities	and	loans	of	$24.8	billion	that	was driven	by:

–		Net	realized	and	unrealized	losses	of	$28.1	billion	recorded	in	Principal transactions,	which	was	composed	mostly	of	write-downs	recognized on	various	trading	securities	including	ABCP	of	$9	billion;

–		Net	transfers	in	of	$7.4	billion,	which	consisted	of	approximately	$26 billion	of	net	transfers	in	from	Level	2	as	the	availability	of	observable pricing	inputs	continued	to	decline	due	to	the	current	credit	crisis,	offset by	transfers	out	of	Level	3	of	approximately	$19	billion	primarily related	to	Level	3	trading	inventory	being	reclassified	to	held-to- maturity	investments	during	the	fourth	quarter	of	2008;	and –		Net	settlements	of	trading	securities	of	$4.2	billion.

The	shift	in	the	net	unrealized	gains/(losses)	from	trading	derivatives driven	by:

–		A	net	gain	of	$7.8	billion	relating	to	complex	derivative	contracts,	such as	those	linked	to	credit,	equity	and	commodity	exposures.	These	gains include	both	realized	and	unrealized	gains	and	are	partially	offset	by losses	recognized	in	instruments	that	have	been	classified	in	Levels	1 and	2;	and

The	increase	in	Investments	of	$11.2	billion	primarily	resulted	from: –		The	addition	of	$10.3	billion	from	net	purchases,	issuances	and settlements,	which	included	$8.7	billion	in	senior	debt	securities retained	by	the	Company	from	its	sale	of	a	corporate	loan	portfolio	that included	highly	leveraged	loans	during	the	second	quarter	of	2008,	plus $3	billion	of	ARS	securities	purchased	from	GWM	clients,	in accordance	with	the	Auction	Rate	Securities	settlement	agreement; –		The	net	transfer	in	of	investment	securities	from	Level	2	of	$5.8	billion, as	the	availability	of	observable	pricing	inputs	continued	to	decline	due to	the	current	credit	crisis;	and

–		Net	losses	recognized	of	$4.9	billion	which	was	recorded	in Accumulated	other	comprehensive	income	(loss)	primarily	related	to Alt-A	MBS	classified	as	available-for-sale	investments.

The	decrease	in	Mortgage	Servicing	Rights	of	$2.7	billion	was primarily	attributed	to	mark-to-market	losses	recognized	in	the portfolio	due	to	decreases	in	the	mortgage	interest	rates	and	increases in	refinancing.

The	increase	in	Securities	sold	under	agreements	to	repurchase	of	$5 billion	is	driven	by	a	$6.2	billion	increase	from	net	transfers	in	as	the continued	credit	crisis	impacted	the	availability	of	observable	inputs for	the	underlying	securities	related	to	this	liability.	This	was	offset	by a	reduction	from	net	settlements	of	$1.4	billion.

The	decrease	in	short-term	borrowings	of	$3.7	billion	is	due	to	net transfers	out	of	$1.8	billion	as	valuation	methodology	inputs considered	to	be	unobservable	were	determined	not	to	be	significant to	the	overall	valuation.	In	addition,	net	payments	of	$1.8	billion	were made	during	the	year.

The	increase	in	long-term	debt	of	$2.2	billion	is	driven	by: –		The	net	transfers	in	of	$38.8	billion,	substantially	all	of	which	related	to the	transfer	of	consolidated	SIV	debt	in	the	first	quarter	of	2008,	as	the availability	of	observable	inputs	continued	to	decline	due	to	the	current crisis;	offset	by

–		$2.2	billion	in	gains	recognized	as	credit	spreads	widened	during	the year;	and

–		$34.3	billion	decrease	from	net	settlements/payments.	Included	in	these settlements	were	$21	billion	of	payments	made	on	maturing	SIV	debt and	the	replacement	of	$17	billion	of	non-recourse,	consolidated	SIV debt	classified	as	Level	3	with	Citigroup	debt	classified	as	Level	2.	This replacement	occurred	in	connection	with	the	purchase	of	the	SIV	assets by	the	Company	in	November	2008.

# Items Measured at Fair Value on a Nonrecurring Basis

Certain	assets	and	liabilities	are	measured	at	fair	value	on	a	nonrecurring	basis and	therefore	are	not	included	in	the	tables	above.

					These	include	assets	measured	at	cost	that	have	been	written	down	to	fair value	during	the	periods	as	a	result	of	an	impairment.	In	addition,	these	assets include	loans	held-for-sale	that	are	measured	at	LOCOM	that	were	recognized	at fair	value	below	cost	at	the	end	of	the	period.

					The	fair	value	of	loans	measured	on	a	LOCOM	basis	is	determined	where possible	using	quoted	secondary-market	prices.	Such	loans	are	generally classified	as	Level	2	of	the	fair-value	hierarchy	given	the	level	of	activity	in	the market	and	the	frequency	of	available	quotes.	If	no	such	quoted	price	exists,	the fair	value	of	a	loan	is	determined	using	quoted	prices	for	a	similar	asset	or	assets, adjusted	for	the	specific	attributes	of	that	loan.

					The	following	table	presents	all	loans	held-for-sale	that	are	carried	at LOCOM	as	of	December	31,	2009	and	2008	(in	billions):

# 	Aggregate

| December 31, 2009 | $2.5 | $1.6 | $0.3 | $1.3 |
| :--- | :--- | :--- | :--- | :--- |
| December 31, 2008 | 3.1 | 2.1 | 0.8 | 1.3 |

# 27. FAIR VALUE ELECTIONS

The	Company	may	elect	to	report	most	financial	instruments	and	certain	other items	at	fair	value	on	an	instrument-by-instrument	basis	with	changes	in	fair value	reported	in	earnings.	After	the	initial	adoption,	the	election	is	made	upon the	acquisition	of	an	eligible	financial	asset,	financial	liability	or	firm commitment	or	when	certain	specified	reconsideration	events	occur.	The	fair- value	election	may	not	be	revoked	once	an	election	is	made.

					Additionally,	the	transition	provisions	of	ASC	825-10	(SFAS	159)	permit	a one-time	election	for	existing	positions	at	the	adoption	date	with	a	cumulative- effect	adjustment	included	in	opening	retained	earnings	and	future	changes	in fair	value	reported	in	earnings.

					The	Company	also	has	elected	to	adopt	the	fair	value	accounting	provisions for	certain	assets	and	liabilities	prospectively.	Hybrid	financial	instruments,	such as	structured	notes	containing	embedded	derivatives	that	otherwise	would require	bifurcation,	as	well	as	certain	interest-only	instruments,	may	be accounted	for	at	fair	value	if	the	Company	makes	an	irrevocable	election	to	do	so on	an	instrument-by-instrument	basis.	The	changes	in	fair	value	are	recorded	in current	earnings.	Additional	discussion	regarding	the	applicable	areas	in	which fair	value	elections	were	made	is	presented	in	Note	26	to	the	Consolidated Financial	Statements.

					All	servicing	rights	must	now	be	recognized	initially	at	fair	value.	At	its initial	adoption,	the	standard	permitted	a	one-time	irrevocable	election	to	re- measure	each	class	of	servicing	rights	at	fair	value,	with	the	changes	in	fair	value recorded	in	current	earnings.	The	classes	of	servicing	rights	are	identified	based on	the	availability	of	market	inputs	used	in	determining	their	fair	values	and	the methods	for	managing	their	risks.	The	Company	has	elected	fair-value accounting	for	its	mortgage	and	student	loan	classes	of	servicing	rights.	The impact	of	adopting	this	standard	was	not	material.	See	Note	23	to	the Consolidated	Financial	Statements	for	further	discussions	regarding	the accounting	and	reporting	of	mortgage	servicing	rights.

The	following	table	presents,	as	of	December	31,	2009	and	2008,	the	fair	value	of	those	positions	selected	for	fair-value	accounting,	as	well	as	the	changes	in	fair	value for	the	years	ended	December	31,	2009	and	2008:

|  |  |  | Changes in | Changes in |
| :--- | :--- | :--- | :--- | :--- |
|  |  |  | fair value | fair value |
|  | Fair value at | Fair value at | gains | gains |
|  | December 31, | December 31, | (losses) | (losses) |
| In millions of dollars | 2009 | 2008 | 2009 | 2008(1) |
| Assets |  |  |  |  |
| Federal funds sold and securities borrowed or purchased under agreements to resell |  |  |  |  |
| Selected portfolios of securities purchased under agreements to resell, securities borrowed (2) | $87,837 | $70,305 | $(864) | $2,438 |
| Trading account assets |  |  |  |  |
| Legg Mason convertible preferred equity securities originally classified as available-for-sale | $— | $— | $— | $(13) |
| Selected letters of credit hedged by credit default swaps or participation notes | 30 | — | 64 | — |
| Certain credit products | 14,338 | 16,254 | 5,916 | (6,272) |
| Certain hybrid financial instruments | — | 33 | — | 3 |
| Retained interests from asset securitizations | 2,357 | 3,026 | 2,024 | (1,890) |
| Total trading account assets | $16,725 | $19,313 | $8,004 | $(8,172) |
| Investments |  |  |  |  |
| Certain investments in private equity and real estate ventures | $321 | $469 | $(67) | $(254) |
| Other | 253 | 295 | (70) | (35) |
| Total investments | $574 | $764 | $(137) | $(289) |
| Loans |  |  |  |  |
| Certain credit products | $945 | $2,315 | $35 | $(60) |
| Certain mortgage loans | 34 | 36 | 3 | (34) |
| Certain hybrid financial instruments | 460 | 381 | 27 | 19 |
| Total loans | $1,439 | $2,732 | $65 | $(75) |
| Other assets |  |  |  |  |
| Mortgage servicing rights | $6,530 | $5,657 | $1,543 | $(1,870) |
| Certain mortgage loans | 3,338 | 4,273 | 35 | 78 |
| Certain equity method investments | 598 | 936 | 211 | (362) |
| Total other assets | $10,466 | $10,866 | $1,789 | $(2,154) |
| Total | $117,041 | $103,980 | $8,857 | $(8,252) |
| Liabilities |  |  |  |  |
| Interest-bearing deposits |  |  |  |  |
| Certain structured liabilities | $167 | $320 | $— | $— |
| Certain hybrid financial instruments | 1,378 | 2,286 | (701) | 640 |
| Total interest-bearing deposits | $1,545 | $2,606 | $(701) | $640 |
| Federal funds purchased and securities loaned or sold under agreements to repurchase |  |  |  |  |
| Selected portfolios of securities sold under agreements to repurchase, securities loaned (2) | $104,030 | $138,866 | $155 | $(319) |
| Trading account liabilities |  |  |  |  |
| Selected letters of credit hedged by credit default swaps or participation notes | $— | $72 | $37 | $(81) |
| Certain hybrid financial instruments | 5,325 | 4,679 | (2,360) | 4,663 |
| Total trading account liabilities | $5,325 | $4,751 | $(2,323) | $4,582 |
| Short-term borrowings |  |  |  |  |
| Certain non-collateralized short-term borrowings | $140 | $2,303 | $(19) | $(9) |
| Certain hybrid financial instruments | 499 | 2,112 | (100) | 277 |
| Certain structured liabilities | — | 3 | — | 1 |
| Certain non-structured liabilities | — | 13,189 | (33) | 250 |
| Total short-term borrowings | $639 | $17,607 | $(152) | $519 |
| Long-term debt |  |  |  |  |
| Certain structured liabilities | $3,666 | $3,083 | $(268) | $160 |
| Certain non-structured liabilities | 8,008 | 7,189 | (303) | 3,802 |
| Certain hybrid financial instruments | 14,268 | 16,991 | (2,612) | 3,730 |
| Total long-term debt | $25,942 | $27,263 | $(3,183) | $7,692 |
| Total | $137,481 | $191,093 | $(6,204) | $13,114 |

(1)  Reclassified to conform to current period's presentation.

(2) Reflects netting of the amounts due from securities purchased under agreements to resell and the amounts owed under securities sold under agreements to repurchase.

# Own Credit Valuation Adjustment

The	fair	value	of	debt	liabilities	for	which	the	fair	value	option	was	elected	(other than	non-recourse	and	similar	liabilities)	was	impacted	by	the	narrowing	of	the Company's	credit	spreads.	The	estimated	change	in	the	fair	value	of	these	debt liabilities	due	to	such	changes	in	the	Company's	own	credit	risk	(or	instrument- specific	credit	risk)	was	a	loss	of	$4.226	billion	and	a	gain	of	$4.558	billion	for the	years	ended	December	31,	2009	and	2008,	respectively.	Changes	in	fair value	resulting	from	changes	in	instrument-specific	credit	risk	were	estimated	by incorporating	the	Company's	current	observable	credit	spreads	into	the	relevant valuation	technique	used	to	value	each	liability	as	described	above.

					During	the	fourth	quarter	of	2008,	the	Company	changed	the	source	of	its credit	spreads	from	those	observed	in	the	credit	default	swap	market	to	those observed	in	the	bond	market.	Had	this	modification	been	in	place	since	the beginning	of	2008,	the	change	in	the	Company's	own	credit	spread	would	have resulted	in	a	gain	of	$2.49	billion	and	a	gain	of	$2.02	billion	for	the	three and	twelve	months	ended	December	31,	2008,	respectively.	See	also	Note	1	to the	Consolidated	Financial	Statements	for	a	discussion	of	the	Company's correction	of	an	error	in	the	calculation	of	CVA	for	prior	periods.

# The Fair Value Option for Financial Assets and Financial Liabilities

# Selected	portfolios	of	securities	purchased	under	agreements	to	resell, securities	borrowed,	securities	sold	under	agreements	to	repurchase,	securities loaned	and	certain	non-collateralized	short-term	borrowings

The	Company	elected	the	fair	value	option	retrospectively	for	our	United	States and	United	Kingdom	portfolios	of	fixed-income	securities	purchased	under agreements	to	resell	and	fixed-income	securities	sold	under	agreements	to repurchase	(and	certain	non-collateralized	short-term	borrowings).	The	fair	value option	was	also	elected	prospectively	in	the	second	quarter	of	2007	for	certain portfolios	of	fixed-income	securities	lending	and	borrowing	transactions	based	in Japan.	In	each	case,	the	election	was	made	because	the	related	interest-rate	risk	is managed	on	a	portfolio	basis,	primarily	with	derivative	instruments	that	are accounted	for	at	fair	value	through	earnings.	Previously,	these	positions	were accounted	for	on	an	accrual	basis.

					Changes	in	fair	value	for	transactions	in	these	portfolios	are	recorded	in Principal	transactions.	The	related	interest	revenue	and	interest	expense	are measured	based	on	the	contractual	rates	specified	in	the	transactions	and	are reported	as	interest	revenue	and	expense	in	the	Consolidated	Statement	of Income.

# Legg	Mason	convertible	preferred	equity	securities

The	Legg	Mason	convertible	preferred	equity	securities	(Legg	shares)	were acquired	in	connection	with	the	sale	of	Citigroup's	Asset	Management	business in	December	2005.	Prior	to	the	election	of	fair	value	option	accounting,	the shares	were	classified	as	available-for-sale	securities	with	the	unrealized	loss	of $232	million	as	of	December	31,	2006	included	in	Accumulated	other comprehensive	income	(loss).	This	unrealized	loss	was	recorded	upon	election	of a	fair	value	as	a	reduction	of	January	1,	2007	Retained	earnings	as	part	of	the cumulative-effect	adjustment.

					During	the	first	quarter	of	2008,	the	Company	sold	the	remaining	8.4	million Legg	shares	at	a	pretax	loss	of	$10.3	million	($6.7	million	after-tax).

# Selected	letters	of	credit	and	revolving	loans	hedged	by	credit	default	swaps	or participation	notes

The	Company	has	elected	the	fair	value	option	for	certain	letters	of	credit	that are	hedged	with	derivative	instruments	or	participation	notes.	Upon	electing	the fair	value	option,	the	related	portions	of	the	allowance	for	loan	losses	and	the allowance	for	unfunded	lending	commitments	were	reversed.	Citigroup	elected the	fair	value	option	for	these	transactions	because	the	risk	is	managed	on	a	fair value	basis	and	mitigates	accounting	mismatches.

					The	notional	amount	of	these	unfunded	letters	of	credit	was	$1.8	billion	as	of December	31,	2009	and	$1.4	billion	as	of	December	31,	2008.	The	amount funded	was	insignificant	with	no	amounts	90	days	or	more	past	due	or	on	a	non- accrual	status	at	December	31,	2009	and	2008.

					These	items	have	been	classified	in	Trading	account	assets	or	Trading account	liabilities	on	the	Consolidated	Balance	Sheet.	Changes	in	fair	value	of these	items	are	classified	in	Principal	transactions	in	the	Company's Consolidated	Statement	of	Income.

# Certain	credit	products

Citigroup	has	elected	the	fair	value	option	for	certain	originated	and	purchased loans,	including	certain	unfunded	loan	products,	such	as	guarantees	and	letters	of credit,	executed	by	Citigroup's	trading	businesses.	None	of	these	credit	products is	a	highly	leveraged	financing	commitment.	Significant	groups	of	transactions include	loans	and	unfunded	loan	products	that	are	expected	to	be	either	sold	or securitized	in	the	near	term,	or	transactions	where	the	economic	risks	are	hedged with	derivative	instruments	such	as	purchased	credit	default	swaps	or	total	return swaps	where	the	Company	pays	the	total	return	on	the	underlying	loans	to	a	third party.	Citigroup	has	elected	the	fair	value	option	to	mitigate	accounting mismatches	in	cases	where	hedge	accounting	is	complex	and	to	achieve operational	simplifications.	Fair	value	was	not	elected	for	most	lending transactions	across	the	Company,	including	where	those	management	objectives would	not	be	met.

The	following	table	provides	information	about	certain	credit	products	carried	at	fair	value:

|  | December 31, 2009 | December 31, 2009 | December 31, 2008	(1) | December 31, 2008	(1) |
| :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | Trading assets\t\t\t\t\t\t\tLoans\t\t\t\t\t\t\tTrading assets\t\t\t\t\t\t\t Loans | Trading assets\t\t\t\t\t\t\tLoans\t\t\t\t\t\t\tTrading assets\t\t\t\t\t\t\t Loans | Trading assets\t\t\t\t\t\t\tLoans\t\t\t\t\t\t\tTrading assets\t\t\t\t\t\t\t Loans | Trading assets\t\t\t\t\t\t\tLoans\t\t\t\t\t\t\tTrading assets\t\t\t\t\t\t\t Loans |
| Carrying amount reported on the Consolidated Balance Sheet | $14,338 | $945 | $16,254 | $2,315 |
| Aggregate unpaid principal balance in excess of fair value | 390 | (44) | 6,501 | 3 |
| Balance of non-accrual loans or loans more than 90 days past due | 312 | — | 77 | — |
| Aggregate unpaid principal balance in excess of fair value for non-accrual |  |  |  |  |
| loans or loans more than 90 days past due | 267 | — | 190 | — |

					In	addition	to	the	amounts	reported	above,	$200	million	and	$72	million	of unfunded	loan	commitments	related	to	certain	credit	products	selected	for	fair value	accounting	were	outstanding	as	of	December	31,	2009	and	2008, respectively.

					Changes	in	fair	value	of	funded	and	unfunded	credit	products	are	classified	in Principal	transactions	in	the	Company's	Consolidated	Statement	of	Income. Related	interest	revenue	is	measured	based	on	the	contractual	interest	rates	and reported	as	Interest	revenue	on	trading	account	assets	or	loans	depending	on their	balance	sheet	classifications.	The	changes	in	fair	value	for	the	years	ended December	31,	2009	and	2008	due	to	instrument-specific	credit	risk	totaled	to a	gain	of	$5.9	billion	and	a	loss	of	$6.0	billion,	respectively.

# Certain	hybrid	financial	instruments

The	Company	has	elected	to	apply	fair	value	accounting	for	certain	hybrid financial	assets	and	liabilities	whose	performance	is	linked	to	risks	other	than interest	rate,	foreign	exchange	or	inflation	(e.g.,	equity,	credit	or	commodity risks).	In	addition,	the	Company	has	elected	fair	value	accounting	for	residual interests	retained	from	securitizing	certain	financial	assets.

					The	Company	has	elected	fair	value	accounting	for	these	instruments because	these	exposures	are	considered	to	be	trading-related	positions	and, therefore,	are	managed	on	a	fair	value	basis.	In	addition,	the	accounting	for	these instruments	is	simplified	under	a	fair	value	approach	as	it	eliminates	the complicated	operational	requirements	of	bifurcating	the	embedded	derivatives from	the	host	contracts	and	accounting	for	each	separately.	The	hybrid	financial instruments	are	classified	as	Trading	account	assets,	Loans,	Deposits,	Trading account	liabilities	(for	prepaid	derivatives),	Short-term	borrowings	or	Long-term debt	on	the	Company's	Consolidated	Balance	Sheet	according	to	their	legal form,	while	residual	interests	in	certain	securitizations	are	classified	as	Trading account	assets.

					For	hybrid	financial	instruments	for	which	fair	value	accounting	has	been elected	and	that	are	classified	as	Long-term	debt,	the	aggregate	unpaid	principal exceeded	the	aggregate	fair	value	by	$3.4	billion	and	$4.1	billion	as	of	December 31,	2009	and	2008,	respectively.	The	difference	for	those	instruments	classified as	Loans	is	immaterial.

					Changes	in	fair	value	for	hybrid	financial	instruments,	which	in	most	cases includes	a	component	for	accrued	interest,	are	recorded	in	Principal	transactions in	the	Company's	Consolidated	Statement	of	Income.	Interest	accruals	for certain	hybrid	instruments	classified	as	trading	assets	are	recorded	separately from	the	change	in	fair	value	as	Interest	revenue	in	the	Company's	Consolidated Statement	of	Income.

# Certain	investments	in	private	equity	and	real	estate	ventures	and	certain equity	method	investments

Citigroup	invests	in	private	equity	and	real	estate	ventures	for	the	purpose	of earning	investment	returns	and	for	capital	appreciation.	The	Company	has elected	the	fair	value	option	for	certain	of	these	ventures,	because	such investments	are	considered	similar	to	many	private	equity	or	hedge	fund activities	in	our	investment	companies,	which	are	reported	at	fair	value.	The	fair value	option	brings	consistency	in	the	accounting	and	evaluation	of	certain	of these	investments.	All	investments	(debt	and	equity)	in	such	private	equity	and real	estate	entities	are	accounted	for	at	fair	value.	These	investments	are classified	as	Investments	on	Citigroup's	Consolidated	Balance	Sheet. 					Citigroup	also	holds	various	non-strategic	investments	in	leveraged	buyout funds	and	other	hedge	funds	that	previously	were	required	to	be	accounted	for under	the	equity	method.	The	Company	elected	fair	value	accounting	to	reduce operational	and	accounting	complexity.	Since	the	funds	account	for	all	of	their underlying	assets	at	fair	value,	the	impact	of	applying	the	equity	method	to Citigroup's	investment	in	these	funds	was	equivalent	to	fair	value	accounting. Thus,	this	fair	value	election	had	no	impact	on	opening	Retained	earnings.	These investments	are	classified	as	Other	assets	on	Citigroup's	Consolidated	Balance Sheet.

					Changes	in	the	fair	values	of	these	investments	are	classified	in	Other revenue	in	the	Company's	Consolidated	Statement	of	Income.

# Certain	mortgage	loans

Citigroup	has	elected	the	fair	value	option	for	certain	purchased	and	originated prime	fixed-rate	and	conforming	adjustable-rate	first	mortgage	loans	held-for- sale.	These	loans	are	intended	for	sale	or	securitization	and	are	hedged	with derivative	instruments.	The	Company	has	elected	the	fair	value	option	to mitigate	accounting	mismatches	in	cases	where	hedge

accounting	is	complex	and	to	achieve	operational	simplifications.	The	fair	value option	was	not	elected	for	loans	held-for-investment,	as	those	loans	are	not hedged	with	derivative	instruments.

The	following	table	provides	information	about	certain	mortgage	loans	carried	at fair	value:

					The	changes	in	fair	values	of	these	mortgage	loans	are	reported	in	Other revenue	in	the	Company's	Consolidated	Statement	of	Income.	The	changes	in fair	value	during	the	years	ended	December	31,	2009	and	2008	due	to instrument-specific	credit	risk	resulted	in	a	$10	million	loss	and	$32	million	loss, respectively.	Related	interest	income	continues	to	be	measured	based	on	the contractual	interest	rates	and	reported	as	such	in	the	Consolidated	Statement	of Income.

The	Company	accounts	for	mortgage	servicing	rights	(MSRs)	at	fair	value.	Fair value	for	MSRs	is	determined	using	an	option-adjusted	spread	valuation approach.	This	approach	consists	of	projecting	servicing	cash	flows	under multiple	interest-rate	scenarios	and	discounting	these	cash	flows	using	risk- adjusted	rates.	The	model	assumptions	used	in	the	valuation	of	MSRs	include mortgage	prepayment	speeds	and	discount	rates.	The	fair	value	of	MSRs	is primarily	affected	by	changes	in	prepayments	that	result	from	shifts	in	mortgage interest	rates.	In	managing	this	risk,	the	Company	hedges	a	significant	portion	of the	values	of	its	MSRs	through	the	use	of	interest-rate	derivative	contracts, forward-purchase	commitments	of	mortgage-backed	securities,	and	purchased securities	classified	as	trading.	See	Note	23	to	the	Consolidated	Financial Statements	for	further	discussions	regarding	the	accounting	and	reporting	of MSRs.

					These	MSRs,	which	totaled	$6.5	billion	and	$5.7	billion	as	of	December	31, 2009	and	2008,	respectively,	are	classified	as	Mortgage	servicing	rights	on Citigroup's	Consolidated	Balance	Sheet.	Changes	in	fair	value	of	MSRs	are recorded	in	Commissions	and	fees	in	the	Company's	Consolidated	Statement	of Income.

# Certain	structured	liabilities

The	Company	has	elected	the	fair	value	option	for	certain	structured	liabilities whose	performance	is	linked	to	structured	interest	rates,	inflation	or	currency risks	("structured	liabilities").	The	Company	elected	the	fair	value	option, because	these	exposures	are	considered	to	be	trading-related	positions	and, therefore,	are	managed	on	a	fair	value	basis.	These	positions	will	continue	to	be classified	as

debt,	deposits	or	derivatives	(Trading	account	liabilities)	on	the	Company's Consolidated	Balance	Sheet	according	to	their	legal	form.

					For	those	structured	liabilities	classified	as	Long-term	debt	for	which	the	fair value	option	has	been	elected,	the	aggregate	unpaid	principal	balance	exceeded the	aggregate	fair	value	by	$125	million	and	$671	million	as	of	December	31, 2009	and	2008,	respectively.

					The	change	in	fair	value	for	these	structured	liabilities	is	reported	in Principal	transactions	in	the	Company's	Consolidated	Statement	of	Income. 					Related	interest	expense	is	measured	based	on	the	contractual	interest	rates and	reported	as	such	in	the	Consolidated	Income	Statement.

# Certain	non-structured	liabilities

The	Company	has	elected	the	fair	value	option	for	certain	non-structured liabilities	with	fixed	and	floating	interest	rates	("non-structured	liabilities").	The Company	has	elected	the	fair	value	option	where	the	interest-rate	risk	of	such liabilities	is	economically	hedged	with	derivative	contracts	or	the	proceeds	are used	to	purchase	financial	assets	that	will	also	be	accounted	for	at	fair	value through	earnings.	The	election	has	been	made	to	mitigate	accounting	mismatches and	to	achieve	operational	simplifications.	These	positions	are	reported	in	Short- term	borrowings	and	Long-term	debt	on	the	Company's	Consolidated	Balance Sheet.

					For	those	non-structured	liabilities	classified	as	Short-term	borrowings	for which	the	fair	value	option	has	been	elected,	the	aggregate	unpaid	principal balance	exceeded	the	aggregate	fair	value	of	such	instruments	by	$220	million	as of	December	31,	2008.

					For	non-structured	liabilities	classified	as	Long-term	debt	for	which	the	fair value	option	has	been	elected,	the	aggregate	unpaid	principal	balance	exceeded the	aggregate	fair	value	by	$1,542	million	and	$856	million	as	of	December	31, 2009	and	2008,	respectively.	The	change	in	fair	value	for	these	non-structured liabilities	is	reported	in	Principal	transactions	in	the	Company's	Consolidated Statement	of	Income.

					Related	interest	expense	continues	to	be	measured	based	on	the	contractual interest	rates	and	reported	as	such	in	the	Consolidated	Income	Statement.

# 28. FAIR VALUE OF FINANCIAL INSTRUMENTS

# Estimated Fair Value of Financial Instruments

The	table	below	presents	the	carrying	value	and	fair	value	of	Citigroup's financial	instruments.	The	disclosure	excludes	leases,	affiliate	investments, pension	and	benefit	obligations	and	insurance	policy	claim	reserves.	In	addition, contract-holder	fund	amounts	exclude	certain	insurance	contracts.	Also	as required,	the	disclosure	excludes	the	effect	of	taxes,	any	premium	or	discount that	could	result	from	offering	for	sale	at	one	time	the	entire	holdings	of	a particular	instrument,	excess	fair	value	associated	with	deposits	with	no	fixed maturity	and	other	expenses	that	would	be	incurred	in	a	market	transaction.	In addition,	the	table	excludes	the	values	of	non-financial	assets	and	liabilities,	as well	as	a	wide	range	of	franchise,	relationship	and	intangible	values	(but includes	mortgage	servicing	rights),	which	are	integral	to	a	full	assessment	of Citigroup's	financial	position	and	the	value	of	its	net	assets.

					The	fair	value	represents	management's	best	estimates	based	on	a	range	of methodologies	and	assumptions.	The	carrying	value	of	short-term	financial instruments	not	accounted	for	at	fair	value,	as	well	as	receivables	and	payables arising	in	the	ordinary	course	of	business,	approximates	fair	value	because	of	the relatively	short	period	of	time	between	their	origination	and	expected	realization. Quoted	market	prices	are	used	when	available	for	investments	and	for	both trading	and	end-user	derivatives,	as	well	as	for	liabilities,	such	as	long-term debt,	with	quoted	prices.	For	performing	loans	not	accounted	for	at	fair	value, contractual	cash	flows	are	discounted	at	quoted	secondary	market	rates	or estimated	market	rates	if	available.	Otherwise,	sales	of	comparable	loan portfolios	or	current	market	origination	rates	for	loans	with	similar	terms	and risk	characteristics	are	used.	For	loans	with	doubt	as	to	collectability,	expected cash	flows	are	discounted	using	an	appropriate	rate	considering	the	time	of collection	and	the	premium	for	the	uncertainty	of	the	cash	flows.	This	method	of estimating	fair	value	does	not	incorporate	the	exit-price	concept	of	fair	value prescribed	by	ASC	820-10	(SFAS	No.	157).	The	value	of	collateral	is	also considered.	For	liabilities	such	as	long-term	debt	not	accounted	for	at	fair	value and	without	quoted	market	prices,	market	borrowing	rates	of	interest	are	used	to discount	contractual	cash	flows.

|  |  | 2009 |  | 2008 |
| :--- | :--- | :--- | :--- | :--- |
|  | Carrying | Estimated | Carrying | Estimated |
| In billions of dollars at year end | value | fair value | value | fair value |
| Assets |  |  |  |  |
| Investments | $306.1 | $307.6 | $256.0 | $251.9 |
| Federal funds sold and |  |  |  |  |
| securities borrowed or |  |  |  |  |
| purchased under |  |  |  |  |
| agreements to resell | 222.0 | 222.0 | 184.1 | 184.1 |
| Trading account assets | 342.8 | 342.8 | 377.6 | 377.6 |
| Loans (1) | 552.5 | 542.8 | 660.9 | 642.7 |
| Other financial assets (2) | 290.9 | 290.9 | 316.6 | 316.6 |

|  |  | 2009 |  | 2008 |
| :--- | :--- | :--- | :--- | :--- |
|  | Carrying | Estimated | Carrying | Estimated |
| In billions of dollars at year end | value | fair value | value | fair value |
| Liabilities |  |  |  |  |
| Deposits | $835.9 | $834.5 | $774.2 | $772.9 |
| Federal funds purchased and |  |  |  |  |
| securities loaned or sold |  |  |  |  |
| under agreements to |  |  |  |  |
| repurchase | 154.3 | 154.3 | 205.3 | 205.3 |
| Trading account liabilities | 137.5 | 137.5 | 165.8 | 165.8 |
| Long-term debt | 364.0 | 354.8 | 359.6 | 317.1 |
| Other financial liabilities (3) | 175.8 | 175.8 | 255.6 | 255.6 |

(1)  The carrying value of loans is net of the Allowance for loan losses of $36.0 billion for 2009 and $29.6 billion for 2008. In addition, the carrying values exclude $2.9 billion and $3.7 billion of lease finance receivables in 2009 and 2008, respectively.

(2) Includes cash and due from banks, deposits with banks, brokerage receivables, reinsurance recoverable, mortgage servicing rights, separate and variable accounts and other financial instruments included in Other assets on the Consolidated Balance Sheet, for all of which the carrying value is a reasonable estimate of fair value.

(3) Includes brokerage payables, separate and variable accounts, short-term borrowings and other financial instruments included in Other liabilities on the Consolidated Balance Sheet, for all of which the carrying value is a reasonable estimate of fair value.

					Fair	values	vary	from	period	to	period	based	on	changes	in	a	wide	range	of factors,	including	interest	rates,	credit	quality,	and	market	perceptions	of	value and	as	existing	assets	and	liabilities	run	off	and	new	transactions	are	entered into.

					The	estimated	fair	values	of	loans	reflect	changes	in	credit	status	since	the loans	were	made,	changes	in	interest	rates	in	the	case	of	fixed-rate	loans,	and premium	values	at	origination	of	certain	loans.	The	carrying	values	(reduced	by the	Allowance	for	loan	losses)	exceeded	the	estimated	fair	values	of	Citigroup's loans,	in	aggregate,	by	$9.7	billion	and	by	$18.2	billion	in	2009	and	2008, respectively.	At	December	31,	2009,	the	carrying	values,	net	of	allowances, exceeded	the	estimated	values	by	$8.2	billion	and	$1.5	billion	for	consumer loans	and	corporate	loans,	respectively.

					The	estimated	fair	values	of	the	Company's	corporate	unfunded	lending commitments	at	December	31,	2009	and	2008	were	liabilities	of	$3.3	billion	and $7.1	billion,	respectively.	The	Company	does	not	estimate	the	fair	values	of consumer	unfunded	lending	commitments,	which	are	generally	cancellable	by providing	notice	to	the	borrower.

# 29. PLEDGED ASSETS, COLLATERAL, COMMITMENTS AND GUARANTEES

# Pledged Assets

At	December	31,	2009	and	2008,	the	approximate	fair	values	of	securities	sold under	agreements	to	repurchase	and	other	assets	pledged,	excluding	the	impact of	allowable	netting,	were	as	follows:

| In millions of dollars | 2009 | 2008 |
| :--- | :--- | :--- |
| For securities sold under agreements to repurchase | $237,707 | $237,055 |
| As collateral for securities borrowed for approximately |  |  |
| equivalent value | 44,095 | 81,740 |
| As collateral on bank loans | 188,160 | 144,982 |
| To clearing organizations or segregated under |  |  |
| securities laws and regulations | 21,385 | 41,312 |
| For securities loaned | 36,767 | 51,158 |
| Other | 30,000 | 52,576 |
| Total | $558,114 | $608,823 |

					In	addition,	included	in	cash	and	due	from	banks	at	December	31,	2009	and 2008	are	$11.2	billion	and	$11.7	billion,	respectively,	of	cash	segregated	under federal	and	other	brokerage	regulations	or	deposited	with	clearing	organizations. 					At	December	31,	2009	and	2008,	the	Company	had	$1.9	billion	and	$3.1 billion,	respectively,	of	outstanding	letters	of	credit	from	third-party	banks	to satisfy	various	collateral	and	margin	requirements.

# Collateral

At	December	31,	2009	and	2008,	the	approximate	market	value	of	collateral received	by	the	Company	that	may	be	sold	or	repledged	by	the	Company, excluding	amounts	netted	was	$346.2	billion	and	$340.2	billion,	respectively. This	collateral	was	received	in	connection	with	resale	agreements,	securities borrowings	and	loans,	derivative	transactions	and	margined	broker	loans. 					At	December	31,	2009	and	2008,	a	substantial	portion	of	the	collateral received	by	the	Company	had	been	sold	or	repledged	in	connection	with repurchase	agreements,	securities	sold,	not	yet	purchased,	securities	borrowings and	loans,	pledges	to	clearing	organizations,	segregation	requirements	under securities	laws	and	regulations,	derivative	transactions	and	bank	loans.

					In	addition,	at	December	31,	2009	and	2008,	the	Company	had	pledged	$253 billion	and	$236	billion,	respectively,	of	collateral	that	may	not	be	sold	or repledged	by	the	secured	parties.

# Lease Commitments

Rental	expense	(principally	for	offices	and	computer	equipment)	was	$2.0 billion,	$2.7	billion	and	$2.3	billion	for	the	years	ended	December	31,	2009, 2008	and	2007,	respectively.

					Future	minimum	annual	rentals	under	noncancelable	leases,	net	of	sublease income,	are	as	follows:

| In millions of dollars |  |
| :--- | :--- |
| 2010 | $1,247 |
| 2011 | 1,110 |
| 2012 | 1,007 |
| 2013 | 900 |
| 2014 | 851 |
| Thereafter | 2,770 |
| Total | $7,885 |

# Guarantees

The	Company	provides	a	variety	of	guarantees	and	indemnifications	to	Citigroup customers	to	enhance	their	credit	standing	and	enable	them	to	complete	a	wide variety	of	business	transactions.	For	certain	contracts	meeting	the	definition	of	a guarantee,	the	guarantor	must	recognize,	at	inception,	a	liability	for	the	fair	value of	the	obligation	undertaken	in	issuing	the	guarantee.

					In	addition,	the	guarantor	must	disclose	the	maximum	potential	amount	of future	payments	the	guarantor	could	be	required	to	make	under	the	guarantee,	if there	were	a	total	default	by	the	guaranteed	parties.	The	determination	of	the maximum	potential	future	payments	is	based	on	the	notional	amount	of	the guarantees	without	consideration	of	possible	recoveries	under	recourse provisions	or	from	collateral	held	or	pledged.	Such	amounts	bear	no	relationship to	the	anticipated	losses,	if	any,	on	these	guarantees.

The	following	tables	present	information	about	the	Company's	guarantees	at	December	31,	2009	and	December	31,	2008:

| In billions of dollars at December 31, | Expire within | Expire after | Total amount | Carrying value |
| :--- | :--- | :--- | :--- | :--- |
| except carrying value in millions | 1 year | 1 year | outstanding | (in millions) |
| 2009 |  |  |  |  |
| Financial standby letters of credit | $41.4 | $48.0 | $89.4 | $438.8 |
| Performance guarantees | 9.4 | 4.5 | 13.9 | 32.4 |
| Derivative instruments considered to be guarantees | 4.1 | 3.6 | 7.7 | 569.2 |
| Loans sold with recourse | — | 0.3 | 0.3 | 76.6 |
| Securities lending indemnifications (1) | 64.5 | — | 64.5 | — |
| Credit card merchant processing (1) | 59.7 | — | 59.7 | — |
| Custody indemnifications and other | — | 33.5 | 33.5 | 121.4 |
| Total | $179.1 | $89.9 | $269.0 | $1,238.4 |

(1)  The carrying values of guarantees of collections of contractual cash flows, securities lending indemnifications and credit card merchant processing are not material, as the Company has determined that the amount and probability of potential liabilities arising from these guarantees are not significant.

# Maximum potential amount of future payments

| In billions of dollars at December 31, | Expire within | Expire after | Total amount | Carrying value |
| :--- | :--- | :--- | :--- | :--- |
| except carrying value in millions | 1 year | 1 year | outstanding | (in millions) |
| 2008 |  |  |  |  |
| Financial standby letters of credit | $31.6 | $62.6 | $94.2 | $289.0 |
| Performance guarantees | 9.4 | 6.9 | 16.3 | 23.6 |
| Derivative instruments considered to be guarantees (2) | 7.6 | 7.2 | 14.8 | 1,308.4 |
| Guarantees of collection of contractual cash flows (1) | — | 0.3 | 0.3 | — |
| Loans sold with recourse | — | 0.3 | 0.3 | 56.4 |
| Securities lending indemnifications (1) | 47.6 | — | 47.6 | — |
| Credit card merchant processing (1) | 56.7 | — | 56.7 | — |
| Custody indemnifications and other | — | 21.6 | 21.6 | 149.2 |
| Total | $152.9 | $98.9 | $251.8 | $1,826.6 |

# Financial	standby	letters	of	credit

Citigroup	issues	standby	letters	of	credit	which	substitute	its	own	credit	for	that of	the	borrower.	If	a	letter	of	credit	is	drawn	down,	the	borrower	is	obligated	to repay	Citigroup.	Standby	letters	of	credit	protect	a	third	party	from	defaults	on contractual	obligations.	Financial	standby	letters	of	credit	include	guarantees	of payment	of	insurance	premiums	and	reinsurance	risks	that	support	industrial revenue	bond	underwriting	and	settlement	of	payment	obligations	to	clearing houses,	and	also	support	options	and	purchases	of	securities	or	are	in	lieu	of escrow	deposit	accounts.	Financial	standbys	also	backstop	loans,	credit	facilities, promissory	notes	and	trade	acceptances.

# Performance	guarantees

Performance	guarantees	and	letters	of	credit	are	issued	to	guarantee	a	customer's tender	bid	on	a	construction	or	systems-installation	project	or	to	guarantee completion	of	such	projects	in	accordance	with	contract	terms.	They	are	also issued	to	support	a	customer's	obligation	to	supply	specified	products, commodities,	or	maintenance	or	warranty	services	to	a	third	party.

# Derivative	instruments	considered	to	be	guarantees

Derivatives	are	financial	instruments	whose	cash	flows	are	based	on	a	notional amount	or	an	underlying	instrument,	where	there	is	little	or	no	initial	investment, and	whose	terms	require	or	permit	net	settlement.	Derivatives	may	be	used	for	a variety	of	reasons,	including	risk	management,	or	to	enhance	returns.	Financial institutions	often	act	as	intermediaries	for	their	clients,	helping	clients	reduce their	risks.	However,	derivatives	may	also	be	used	to	take	a	risk	position. 					The	derivative	instruments	considered	to	be	guarantees,	which	are	presented in	the	tables	above,	include	only	those	instruments	that	require	Citi	to	make payments	to	the	counterparty	based	on	changes	in	an	underlying	that	is	related	to an	asset,	a	liability,	or	an	equity	security	held	by	the	guaranteed	party.	More specifically,	derivative	instruments	considered	to	be	guarantees	include	certain over-the-counter	written	put	options	where	the	counterparty	is	not	a	bank,	hedge fund	or	broker-dealer	(such	counterparties	are	considered	to	be	dealers	in	these markets,	and	may	therefore	not	hold	the

underlying	instruments).	However,	credit	derivatives	sold	by	the	Company	are excluded	from	this	presentation,	as	they	are	disclosed	separately	within	this	note below.	In	addition,	non-credit	derivative	contracts	that	are	cash	settled	and	for which	the	Company	is	unable	to	assert	that	it	is	probable	the	counterparty	held the	underlying	instrument	at	the	inception	of	the	contract	also	are	excluded	from the	disclosure	above.

					In	instances	where	the	Company's	maximum	potential	future	payment	is unlimited,	the	notional	amount	of	the	contract	is	disclosed.

# Guarantees	of	collection	of	contractual	cash	flows

Guarantees	of	collection	of	contractual	cash	flows	protect	investors	in	credit	card receivables	securitization	trusts	from	loss	of	interest	relating	to	insufficient collections	on	the	underlying	receivables	in	the	trusts.	The	notional	amount	of these	guarantees	as	of	December	31,	2008	was	$300	million.	No	such	guarantees were	outstanding	as	of	December	31,	2009.

# Loans	sold	with	recourse

Loans	sold	with	recourse	represent	the	Company's	obligations	to	reimburse	the buyers	for	loan	losses	under	certain	circumstances.	Recourse	refers	to	the	clause in	a	sales	agreement	under	which	a	lender	will	fully	reimburse	the	buyer/investor for	any	losses	resulting	from	the	purchased	loans.	This	may	be	accomplished	by the	seller's	taking	back	any	loans	that	become	delinquent.

# Securities	lending	indemnifications

Owners	of	securities	frequently	lend	those	securities	for	a	fee	to	other	parties who	may	sell	them	short	or	deliver	them	to	another	party	to	satisfy	some	other obligation.	Banks	may	administer	such	securities	lending	programs	for	their clients.	Securities	lending	indemnifications	are	issued	by	the	bank	to	guarantee that	a	securities	lending	customer	will	be	made	whole	in	the	event	that	the security	borrower	does	not	return	the	security	subject	to	the	lending	agreement and	collateral	held	is	insufficient	to	cover	the	market	value	of	the	security.

# Credit	card	merchant	processing

Credit	card	merchant	processing	guarantees	represent	the	Company's	indirect obligations	in	connection	with	the	processing	of	private	label	and	bankcard transactions	on	behalf	of	merchants.

					Citigroup's	primary	credit	card	business	is	the	issuance	of	credit	cards	to individuals.	In	addition,	the	Company	provides	transaction	processing	services	to various	merchants	with	respect	to	bankcard	and	private-label	cards.	In	the	event of	a	billing	dispute	with	respect	to	a	bankcard	transaction	between	a	merchant and	a	cardholder	that	is	ultimately	resolved	in	the	cardholder's	favor,	the	third party	holds	the	primary	contingent	liability	to	credit	or	refund	the	amount	to	the cardholder	and	charge	back	the	transaction	to	the	merchant.	If	the	third	party	is unable	to	collect	this	amount	from	the	merchant,	it	bears	the	loss	for	the	amount of	the	credit	or	refund	paid	to	the	cardholder.

					The	Company	continues	to	have	the	primary	contingent	liability	with	respect to	its	portfolio	of	private-label	merchants.	The	risk	of	loss	is	mitigated	as	the cash	flows	between	the	third	party	or	the	Company	and	the	merchant	are	settled on	a	net	basis	and	the	third	party	or	the	Company	has	the	right	to	offset	any payments	with	cash	flows	otherwise	due	to	the	merchant.	To	further	mitigate	this risk,	the	third	party	or	the	Company	may	require	a	merchant	to	make	an	escrow deposit,	delay	settlement,	or	include	event	triggers	to	provide	the	third	party	or the	Company	with	more	financial	and	operational	control	in	the	event	of	the financial	deterioration	of	the	merchant,	or	require	various	credit	enhancements (including	letters	of	credit	and	bank	guarantees).	In	the	unlikely	event	that	a private-label	merchant	is	unable	to	deliver	products,	services	or	a	refund	to	its private-label	cardholders,	Citigroup	is	contingently	liable	to	credit	or	refund cardholders.	In	addition,	although	a	third	party	holds	the	primary	contingent liability	with	respect	to	the	processing	of	bankcard	transactions,	in	the	event	that the	third	party	does	not	have	sufficient	collateral	from	the	merchant	or	sufficient financial	resources	of	its	own	to	provide	the	credit	or	refunds	to	the	cardholders, Citigroup	would	be	liable	to	credit	or	refund	the	cardholders.

					The	Company's	maximum	potential	contingent	liability	related	to	both bankcard	and	private-label	merchant	processing	services	is	estimated	to	be	the total	volume	of	credit	card	transactions	that	meet	the	requirements	to	be	valid chargeback	transactions	at	any	given	time.	At	December	31,	2009	and	December 31,	2008,	this	maximum	potential	exposure	was	estimated	to	be	$60	billion	and $57	billion,	respectively.

					However,	the	Company	believes	that	the	maximum	exposure	is	not representative	of	the	actual	potential	loss	exposure	based	on	the	Company's historical	experience	and	its	position	as	a	secondary	guarantor	(in	the	case	of bankcards).	In	most	cases,	this	contingent	liability	is	unlikely	to	arise,

as	most	products	and	services	are	delivered	when	purchased,	and	amounts	are refunded	when	items	are	returned	to	merchants.	The	Company	assesses	the probability	and	amount	of	its	contingent	liability	related	to	merchant	processing based	on	the	financial	strength	of	the	primary	guarantor	(in	the	case	of bankcards)	and	the	extent	and	nature	of	unresolved	chargebacks	and	its	historical loss	experience.	At	December	31,	2009	and	December	31,	2008,	the	estimated losses	incurred	and	the	carrying	amounts	of	the	Company's	contingent obligations	related	to	merchant	processing	activities	were	immaterial.

# Custody	indemnifications

Custody	indemnifications	are	issued	to	guarantee	that	custody	clients	will	be made	whole	in	the	event	that	a	third-party	subcustodian	or	depository	institution fails	to	safeguard	clients'	assets.

# Other

As	of	December	31,	2008,	Citigroup	carried	a	reserve	of	$149	million	related	to certain	of	Visa	USA's	litigation	matters.	As	of	December	31,	2009,	the	carrying value	of	the	reserve	was	$121	million	and	was	included	in	Other	liabilities	on	the Consolidated	Balance	Sheet.

# Other	guarantees	and	indemnifications

The	Company,	through	its	credit	card	business,	provides	various	cardholder protection	programs	on	several	of	its	card	products,	including	programs	that provide	insurance	coverage	for	rental	cars,	coverage	for	certain	losses	associated with	purchased	products,	price	protection	for	certain	purchases	and	protection	for lost	luggage.	These	guarantees	are	not	included	in	the	table,	since	the	total outstanding	amount	of	the	guarantees	and	the	Company's	maximum	exposure	to loss	cannot	be	quantified.	The	protection	is	limited	to	certain	types	of	purchases and	certain	types	of	losses	and	it	is	not	possible	to	quantify	the	purchases	that would	qualify	for	these	benefits	at	any	given	time.	The	Company	assesses	the probability	and	amount	of	its	potential	liability	related	to	these	programs	based on	the	extent	and	nature	of	its	historical	loss	experience.	At	December	31,	2009 and	2008,	the	actual	and	estimated	losses	incurred	and	the	carrying	value	of	the Company's	obligations	related	to	these	programs	were	immaterial. 					In	the	normal	course	of	business,	the	Company	provides	standard representations	and	warranties	to	counterparties	in	contracts	in	connection	with numerous	transactions	and	also	provides	indemnifications	that	protect	the counterparties	to	the	contracts	in	the	event	that	additional	taxes	are	owed	due either	to	a	change	in	the	tax	law	or	an	adverse	interpretation	of	the	tax	law. Counterparties	to	these	transactions	provide	the	Company	with	comparable indemnifications.	While	such	representations,	warranties

and	tax	indemnifications	are	essential	components	of	many	contractual relationships,	they	do	not	represent	the	underlying	business	purpose	for	the transactions.	The	indemnification	clauses	are	often	standard	contractual	terms related	to	the	Company's	own	performance	under	the	terms	of	a	contract	and	are entered	into	in	the	normal	course	of	business	based	on	an	assessment	that	the	risk of	loss	is	remote.	Often	these	clauses	are	intended	to	ensure	that	terms	of	a contract	are	met	at	inception	(for	example,	that	loans	transferred	to	a counterparty	in	a	sales	transaction	did	in	fact	meet	the	conditions	specified	in	the contract	at	the	transfer	date).	No	compensation	is	received	for	these	standard representations	and	warranties,	and	it	is	not	possible	to	determine	their	fair	value because	they	rarely,	if	ever,	result	in	a	payment.	In	many	cases,	there	are	no stated	or	notional	amounts	included	in	the	indemnification	clauses	and	the contingencies	potentially	triggering	the	obligation	to	indemnify	have	not occurred	and	are	not	expected	to	occur.	These	indemnifications	are	not	included in	the	table	above.

					In	addition,	the	Company	is	a	member	of	or	shareholder	in	hundreds	of value-transfer	networks	(VTNs)	(payment	clearing	and	settlement	systems	as well	as	securities	exchanges)	around	the	world.	As	a	condition	of	membership, many	of	these	VTNs	require	that	members	stand	ready	to	backstop	the	net	effect on	the	VTNs	of	a	member's	default	on	its	obligations.	The	Company's	potential obligations	as	a	shareholder	or	member	of	VTN	associations	are	excluded	from the	scope	of	FIN	45,	since	the	shareholders	and	members	represent	subordinated classes	of	investors	in	the	VTNs.	Accordingly,	the	Company's	participation	in VTNs	is	not	reported	in	the	table	and	there	are	no	amounts	reflected	on	the Consolidated	Balance	Sheet	as	of	December	31,	2009	or	December	31,	2008	for potential	obligations	that	could	arise	from	the	Company's	involvement	with VTN	associations.

					In	the	sale	of	an	insurance	subsidiary,	the	Company	provided	an indemnification	to	an	insurance	company	for	policyholder	claims	and	other liabilities	relating	to	a	book	of	long-term	care	(LTC)	business	(for	the	entire	term of	the	LTC	policies)	that	is	fully	reinsured	by	another	insurance	company.	The reinsurer	has	funded	two	trusts	with	securities	whose	fair	value	(approximately $3.3	billion	at	December	31,	2009)	is	designed	to	cover	the	insurance	company's statutory	liabilities	for	the	LTC	policies.	The	assets	in	these	trusts	are	evaluated and	adjusted	periodically	to	ensure	that	the	fair	value	of	the	assets	continues	to cover	the	estimated	statutory	liabilities	related	to	the	LTC	policies,	as	those statutory	liabilities	change	over	time.	If	the	reinsurer	fails	to	perform	under	the reinsurance	agreement	for	any	reason,	including	insolvency,	and	the	assets	in	the two	trusts	are	insufficient	or	unavailable	to	the	ceding	insurance	company,	then Citigroup	must	indemnify	the	ceding	insurance	company	for	any	losses	actually incurred	in	connection	with	the	LTC	policies.	Since	both	events	would	have	to occur	before	Citi	would	become	responsible	for	any	payment	to	the	ceding insurance	company	pursuant	to	its	indemnification	obligation	and	the

likelihood	of	such	events	occurring	is	currently	not	probable,	there	is	no	liability reflected	in	the	Consolidated	Balance	Sheet	as	of	December	31,	2009	related	to this	indemnification.

					At	December	31,	2009	and	December	31,	2008,	the	total	carrying	amounts of	the	liabilities	related	to	the	guarantees	and	indemnifications	included	in	the table	amounted	to	approximately	$1.2	billion	and	$1.8	billion,	respectively.	The carrying	value	of	derivative	instruments	is	included	in	either	Trading	liabilities or	Other	liabilities,	depending	upon	whether	the	derivative	was	entered	into	for trading	or	non-trading	purposes.	The	carrying	value	of	financial	and performance	guarantees	is	included	in	Other	liabilities.	For	loans	sold	with recourse,	the	carrying	value	of	the	liability	is	included	in	Other	liabilities.	In addition,	at	December	31,	2009	and	December	31,	2008,	Other	liabilities	on	the Consolidated	Balance	Sheet	include	an	allowance	for	credit	losses	of	$1,157 million	and	$887	million	relating	to	letters	of	credit	and	unfunded	lending commitments,	respectively.

Cash	collateral	available	to	the	Company	to	reimburse	losses	realized	under these	guarantees	and	indemnifications	amounted	to	$31	billion	and	$33	billion	at December	31,	2009	and	December	31,	2008,	respectively.	Securities	and	other marketable	assets	held	as	collateral	amounted	to	$43	billion	and	$27	billion, respectively,	the	majority	of	which	collateral	is	held	to	reimburse	losses	realized under	securities	lending	indemnifications.	Additionally,	letters	of	credit	in	favor of	the	Company	held	as	collateral	amounted	to	$1.4	billion	and	$0.5	billion	at December	31,	2009	and	December	31,	2008,	respectively.	Other	property	may also	be	available	to	the	Company	to	cover	losses	under	certain	guarantees	and indemnifications;	however,	the	value	of	such	property	has	not	been	determined.

# Performance	risk

Citigroup	evaluates	the	performance	risk	of	its	guarantees	based	on	the	assigned referenced	counterparty	internal	or	external	ratings.	Where	external	ratings	are used,	investment-grade	ratings	are	considered	to	be	Baa/BBB	and	above,	while anything	below	is	considered	non-investment	grade.	The	Citigroup	internal ratings	are	in	line	with	the	related	external	rating	system.	On	certain	underlying referenced	credits	or	entities,	ratings	are	not	available.	Such	referenced	credits are	included	in	the	not	rated	category.	The	maximum	potential	amount	of	the future	payments	related	to	guarantees	and	credit	derivatives	sold	is	determined	to be	the	notional	amount	of	these	contracts,	which	is	the	par	amount	of	the	assets guaranteed.

					Presented	in	the	tables	below	are	the	maximum	potential	amounts	of	future payments	classified	based	upon	internal	and	external	credit	ratings	as	of December	31,	2009	and	2008.	As	previously	mentioned,	the	determination	of	the maximum	potential	future	payments	is	based	on	the	notional	amount

of	the	guarantees	without	consideration	of	possible	recoveries	under	recourse provisions	or	from	collateral	held	or	pledged.	Such	amounts	bear	no	relationship to	the	anticipated	losses,	if	any,	on	these	guarantees.

|  | Investment | Non-investment | Not |  |
| :--- | :--- | :--- | :--- | :--- |
| In billions of dollars as of December 31, 2009 | grade | grade | rated | Total |
| Financial standby letters of credit | $49.2 | $13.5 | $26.7 | $89.4 |
| Performance guarantees | 6.5 | 3.7 | 3.7 | 13.9 |
| Derivative instruments deemed to be guarantees | — | — | 7.7 | 7.7 |
| Loans sold with recourse | — | — | 0.3 | 0.3 |
| Securities lending indemnifications | — | — | 64.5 | 64.5 |
| Credit card merchant processing | — | — | 59.7 | 59.7 |
| Custody indemnifications and other | 27.7 | 5.8 | — | 33.5 |
| Total | $83.4 | $23.0 | $162.6 | $269.0 |

|  | Investment | Non-investment | Not |  |
| :--- | :--- | :--- | :--- | :--- |
| In billions of dollars as of December 31, 2008 | grade | grade | rated | Total |
| Financial standby letters of credit | $49.2 | $28.6 | $16.4 | $94.2 |
| Performance guarantees | 5.7 | 5.0 | 5.6 | 16.3 |
| Derivative instruments deemed to be guarantees | — | — | 14.8 | 14.8 |
| Guarantees of collection of contractual cash flows | — | — | 0.3 | 0.3 |
| Loans sold with recourse | — | — | 0.3 | 0.3 |
| Securities lending indemnifications | — | — | 47.6 | 47.6 |
| Credit card merchant processing | — | — | 56.7 | 56.7 |
| Custody indemnifications and other | 18.5 | 3.1 | — | 21.6 |
| Total | $73.4 | $36.7 | $141.7 | $251.8 |

# Credit Commitments and Lines of Credit

The	table	below	summarizes	Citigroup's	credit	commitments	as	of	December	31,	2009	and	December	31,	2008:

| In millions of dollars | U.S. | U.S. | 2009 | 2008 |
| :--- | :--- | :--- | :--- | :--- |
| Commercial and similar letters of credit | $1,321 | $5,890 | $7,211 | $8,215 |
| One- to four-family residential mortgages | 788 | 282 | 1,070 | 937 |
| Revolving open-end loans secured by one- to four-family residential properties | 20,914 | 3,002 | 23,916 | 25,212 |
| Commercial real estate, construction and land development | 1,185 | 519 | 1,704 | 2,702 |
| Credit card lines | 649,625 | 135,870 | 785,495 | 1,002,437 |
| Commercial and other consumer loan commitments | 167,510 | 89,832 | 257,342 | 309,997 |
| Total | $841,343 | $235,395 | $1,076,738 | $ 1,349,500 |

	The	majority	of	unused	commitments	are	contingent	upon	customers' maintaining	specific	credit	standards.	Commercial	commitments	generally	have floating	interest	rates	and	fixed	expiration	dates	and	may	require	payment	of fees.	Such	fees	(net	of	certain	direct	costs)	are	deferred	and,	upon	exercise	of	the commitment,	amortized	over	the	life	of	the	loan	or,	if	exercise	is	deemed	remote, amortized	over	the	commitment	period.

# Commercial	and	similar	letters	of	credit

A	commercial	letter	of	credit	is	an	instrument	by	which	Citigroup	substitutes	its credit	for	that	of	a	customer	to	enable	the	customer	to	finance	the	purchase	of goods	or	to	incur	other	commitments.	Citigroup	issues	a	letter	on	behalf	of	its client	to	a	supplier	and	agrees	to	pay	the	supplier	upon	presentation	of documentary	evidence	that	the	supplier	has	performed	in	accordance	with	the terms	of	the	letter	of	credit.	When	a	letter	of	credit	is	drawn,	the	customer	is	then required	to	reimburse	Citigroup.

# One-	to	four-family	residential	mortgages

A	one-	to	four-family	residential	mortgage	commitment	is	a	written	confirmation from	Citigroup	to	a	seller	of	a	property	that	the	bank	will	advance	the	specified sums	enabling	the	buyer	to	complete	the	purchase.

# Revolving	open-end	loans	secured	by	one-	to	four-family	residential	properties

Revolving	open-end	loans	secured	by	one-	to	four-family	residential	properties are	essentially	home	equity	lines	of	credit.	A	home	equity	line	of	credit	is	a	loan secured	by	a	primary	residence	or	second	home	to	the	extent	of	the	excess	of	fair market	value	over	the	debt	outstanding	for	the	first	mortgage.

# Commercial	real	estate,	construction	and	land	development

Commercial	real	estate,	construction	and	land	development	include	unused portions	of	commitments	to	extend	credit	for	the	purpose	of	financing commercial	and	multifamily	residential	properties	as	well	as	land	development projects.	Both	secured-by-real-estate	and	unsecured	commitments	are	included in	this	line,	as	well	as	undistributed	loan	proceeds,	where	there	is	an	obligation to	advance	for	construction	progress	payments.	However,	this	line	only	includes those	extensions	of	credit	that,	once	funded,	will	be	classified	as	Total	loans,	net on	the	Consolidated	Balance	Sheet.

# Credit	card	lines

Citigroup	provides	credit	to	customers	by	issuing	credit	cards.	The	credit	card lines	are	unconditionally	cancellable	by	the	issuer.

# Commercial	and	other	consumer	loan	commitments

Commercial	and	other	consumer	loan	commitments	include	overdraft	and liquidity	facilities,	as	well	as	commercial	commitments	to	make	or	purchase loans,	to	purchase	third-party	receivables,	to	provide	note	issuance	or	revolving underwriting	facilities	and	to	invest	in	the	form	of	equity.	Amounts	include	$126 billion	and	$170	billion	with	an	original	maturity	of	less	than	one	year	at December	31,	2009	and	December	31,	2008,	respectively.	In	addition,	included in	this	line	item	are	highly	leveraged	financing	commitments,	which	are agreements	that	provide	funding	to	a	borrower	with	higher	levels	of	debt (measured	by	the	ratio	of	debt	capital	to	equity	capital	of	the	borrower)	than	is generally	considered	normal	for	other	companies.	This	type	of	financing	is commonly	employed	in	corporate	acquisitions,	management	buy-outs	and similar	transactions.

# 30. CONTINGENCIES

As	described	in	"Legal	Proceedings,"	Citigroup	and	its	affiliates	and	subsidiaries and	current	and	former	officers,	directors	and	employees	have	been	named,	and routinely	are	named	in	the	ordinary	course	of	business,	as	defendants	in,	or	as parties	to,	various	legal	actions	and	proceedings.		In	accordance	with	ASC	450 (formerly	SFAS	5),	Citigroup	establishes	reserves	for	litigation	and	regulatory matters	when	those	matters	present	loss	contingencies	that	both	are	probable	and can	be	reasonably	estimated.		In	view	of	the	inherent	unpredictability	of litigation	and	regulatory	matters,	particularly	where	the	damages	sought	are substantial	or	indeterminate,	the	investigations	or	proceedings	are	in	the	early stages,	or	the	matters	involve	novel	legal	theories	or	a	large	number	of	parties, Citigroup	cannot	state	with	certainty	the	timing	or	ultimate	resolution	of litigations	and	regulatory	matters,	and	the	actual	costs	of	resolving	litigations and	regulatory	matters	may	be	substantially	higher	or	lower	than	the	amounts reserved	for	those	matters.

					Subject	to	the	foregoing,	it	is	the	opinion	of	Citigroup's	management,	based on	current	knowledge	and	after	taking	into	account	available	insurance	coverage and	its	current	legal	reserves,	that	the	eventual	outcome	of	such	matters, including	the	matters	described	in	"Legal	Proceedings,"	would	not	be	likely	to have	a	material	adverse	effect	on	the	consolidated	financial	condition	of	Citi. Nonetheless,	given	the	substantial	or	indeterminate	amounts	sought	in	certain	of these	matters,	and	the	inherent	unpredictability	of	such	matters,	an	adverse outcome	in	certain	of	these	matters	could,	from	time	to	time,	have	a	material adverse	effect	on	Citi's	consolidated	results	of	operations	or	cash	flows	in particular	quarterly	or	annual	periods.

# 31. CITIBANK, N.A. STOCKHOLDER'S EQUITY

# Statement of Changes in Stockholder's Equity

| In millions of dollars, except shares | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
| Common stock ($20 par value) |  |  |  |
| Balance, beginning of year—shares: 37,534,553 in 2009, 2008 and 2007 | $751 | $751 | $751 |
| Balance, end of year—shares: |  |  |  |
| 37,534,553 in 2009, 2008 and 2007 | $751 | $751 | $751 |
| Surplus |  |  |  |
| Balance, beginning of year | $74,767 | $ 69,135 | $43,753 |
| Capital contribution from parent company | 32,992 | 6,177 | 25,267 |
| Employee benefit plans | 163 | 183 | 85 |
| Other (1) | 1 | (728) | 30 |
| Balance, end of year | $107,923 | $ 74,767 | $69,135 |
| Retained earnings |  |  |  |
| Balance, beginning of year | $21,735 | $ 31,915 | $30,358 |
| Adjustment to opening balance, net of taxes (2)(3) | 402 | — | (96) |
| Adjusted balance, beginning of period | $22,137 | $ 31,915 | $30,262 |
| Net income (loss) | (2,794) | (6,215) | 2,304 |
| Dividends paid | (3) | (41) | (651) |
| Other (1) | 117 | (3,924) | — |
| Balance, end of year | $19,457 | $ 21,735 | $31,915 |
| Accumulated other comprehensive income (loss) |  |  |  |
| Balance, beginning of year | $ (15,895) | $(2,495) | $(1,709) |
| Adjustment to opening balance, net of taxes (2)(4) | (402) | — | (1) |
| Adjusted balance, beginning of period | $ (16,297) | $(2,495) | $(1,710) |
| Net change in unrealized gains (losses) on investment securities available-for-sale, net of taxes | 3,675 | (6,746) | (1,142) |
| Net change in foreign currency translation adjustment, net of taxes | 709 | (5,651) | 2,143 |
| Net change in cash flow hedges, net of taxes | 880 | (1,162) | (1,954) |
| Pension liability adjustment, net of taxes | (499) | 159 | 168 |
| Net change in accumulated other comprehensive income (loss) | $4,765 | $(13,400) | $(785) |
| Balance, end of year | $ (11,532) | $(15,895) | $(2,495) |
| Total Citibank stockholder's equity | $116,599 | $ 81,358 | $99,306 |
| Noncontrolling interest |  |  |  |
| Balance, beginning of period | $1,082 | $1,266 | $1,057 |
| Initial origination of a noncontrolling interest | 284 | — | 15 |
| Transactions between noncontrolling interest and the related consolidating subsidiary | (130) | — | — |
| Net income attributable to noncontrolling interest shareholders | 74 | 101 | 126 |
| Dividends paid to noncontrolling interest shareholders | (17) | (120) | (54) |
| Accumulated other comprehensive income—Net change in unrealized gains and losses on investment securities, net of tax | 5 | 3 | (10) |
| Accumulated other comprehensive income—Net change in FX translation adjustment, net of tax | 23 | (173) | 140 |
| All other | (27) | 5 | (8) |
| Net change in noncontrolling interest | $212 | $(184) | $209 |
| Balance, end of period | $1,294 | $1,082 | $1,266 |
| Total equity | $117,893 | $ 82,440 | $100,572 |
| Comprehensive income (loss) |  |  |  |
| Net income (loss) before attribution of noncontrolling interest | $(2,720) | $(6,114) | $2,430 |
| Net change in accumulated other comprehensive income (loss) | 4,793 | \t(13,570) | (655) |
| Total comprehensive income (loss) | $2,073 | $(19,684) | $1,775 |
| Comprehensive income attributable to the noncontrolling interest | 102 | (69) | 256 |
| Comprehensive income attributable to Citibank | $1,971 | $(19,615) | $1,519 |

(1)							Represents the accounting for the transfers of assets and liabilities between Citibank, N.A. and other affiliates under the common control of Citigroup.

(2) 	The adjustment to the opening balances for Retained earnings and Accumulated other comprehensive income (loss) in 2009 represents the cumulative effect of initially adopting ASC 320-10- 35-34 (FSP FAS 115-2 and FAS 124-2). See Note 1 to the Consolidated Financial Statements.

(3)  The adjustment to opening balance for Retained earnings in 2007 represents the total of the after-tax gain (loss) amounts for the adoption of the following accounting pronouncements:

(4) 	The after-tax adjustment to the opening balance of Accumulated other comprehensive income (loss) in 2007 represents the reclassification of the unrealized gains (losses) related to several miscellaneous items previously reported. The related unrealized gains and losses were reclassified to Retained earnings upon the adoption of the fair-value option. See Notes 1 and 27 to the Consolidated Financial Statements for further discussions.

# 32. SUBSEQUENT EVENTS

# LQIF Acquisition

On	January	31,	2010	Citigroup	elected	to	exercise	its	option	to	acquire approximately	8.5%	of	LQIF	for	approximately	$500	million.	The	acquisition	of the	additional	shares	is	expected	to	close	on	April	30,	2010	and	will	increase Citigroup's	ownership	in	LQIF	to	approximately	41.5%.	Citigroup	retains	an option	to	increase	its	ownership	an	additional	8.5%	of	LQIF	in	2010	for	an additional	$500	million.

# Venezuelan Bolivar Devaluation

The	Venezuelan	government	enacted	currency	restrictions	in	2003	that	have restricted	Citigroup's	ability	to	obtain	foreign	currency	in	Venezuela	at	the official	foreign	currency	rate.	Citigroup	uses	the	official	rate	to	remeasure	the foreign	currency	transactions	in	the	financial	statements	of	our	Venezuelan subsidiaries,	which	have	U.S.	dollar	functional	currencies,	into	U.S.	dollars.	At December	31,	2009,	Citigroup	had	net	monetary	assets	denominated	in	bolivars and	subject	to	the	official	rate	of	approximately	$290	million.

	On	January	8,	2010,	the	Venezuelan	government	announced	the devaluation	of	the	official	foreign	currency	exchange	rate	from	2.15	bolivars	per dollar	to	4.3	bolivars	per	dollar	and	the	creation	of	a	dual,	subsidized	exchange rate	of	2.6	bolivars	per	dollar	for	the	importation	of	certain	essential	goods.	The devaluation	in	the	rate	is	expected	to	result	in	a	pretax	loss	to	the	Company	of approximately	$170	million	in	the	first	quarter	of	2010.	Additionally,	revenue and	net	operating	profit	in	U.S.	dollar	terms	will	be	reduced	on	an	ongoing	basis. 	The	Company	has	evaluated	subsequent	events	through	February	26,	2010, which	is	the	date	its	Consolidated	Financial	Statements	were	issued.

# 33. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS SCHEDULES

These	condensed	Consolidating	Financial	Statements	schedules	are	presented	for purposes	of	additional	analysis	but	should	be	considered	in	relation	to	the Consolidated	Financial	Statements	of	Citigroup	taken	as	a	whole.

# Citigroup Parent Company

The	holding	company,	Citigroup	Inc.

# Citigroup Global Markets Holdings Inc. (CGMHI)

Citigroup	guarantees	various	debt	obligations	of	CGMHI	as	well	as	all	of	the outstanding	debt	obligations	under	CGMHI's	publicly	issued	debt.

# Citigroup Funding Inc. (CFI)

CFI	is	a	first-tier	subsidiary	of	Citigroup,	which	issues	commercial	paper, medium-term	notes	and	structured	equity-linked	and	credit-linked	notes,	all	of which	are	guaranteed	by	Citigroup.

# CitiFinancial Credit Company (CCC)

An	indirect	wholly	owned	subsidiary	of	Citigroup.	CCC	is	a	wholly	owned subsidiary	of	Associates.	Citigroup	has	issued	a	full	and	unconditional	guarantee of	the	outstanding	indebtedness	of	CCC.

# Associates First Capital Corporation (Associates)

A	wholly	owned	subsidiary	of	Citigroup.	Citigroup	has	issued	a	full	and unconditional	guarantee	of	the	outstanding	long-term	debt	securities	and commercial	paper	of	Associates.	In	addition,	Citigroup	guaranteed	various	debt obligations	of	Citigroup	Finance	Canada	Inc.	(CFCI),	a	wholly	owned	subsidiary of	Associates.	CFCI	continues	to	issue	debt	in	the	Canadian	market	supported	by a	Citigroup	guarantee.	Associates	is	the	immediate	parent	company	of	CCC.

# Other Citigroup Subsidiaries

Includes	all	other	subsidiaries	of	Citigroup,	intercompany	eliminations,	and income/loss	from	discontinued	operations.

# Consolidating Adjustments

Includes	Citigroup	parent	company	elimination	of	distributed	and	undistributed income	of	subsidiaries,	investment	in	subsidiaries	and	the	elimination	of	CCC, which	is	included	in	the	Associates	column.

# Condensed Consolidating Statements of Income

|  | Citigroup |  |  |  |  | from |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | parent |  |  |  |  | discontinued | Consolidating | Citigroup |
| In millions of dollars | company | CGMHI | CFI | CCC\t\t\t\t\tAssociates | CCC\t\t\t\t\tAssociates | operations | adjustments\t\t\t\t\tconsolidated | adjustments\t\t\t\t\tconsolidated |
| Revenues |  |  |  |  |  |  |  |  |
| Dividends from subsidiary banks and bank holding |  |  |  |  |  |  |  |  |
| companies | $1,049 | $ — | $ — | $ — | $— | $— | $(1,049) | $ — |
| Interest revenue | 299 | 7,447 | 1 | 6,150 | 7,049 | 61,839 | (6,150) | 76,635 |
| Interest revenue—intercompany | 2,387 | 2,806 | 4,132 | 69 | 421 | (9,746) | (69) | — |
| Interest expense | 9,354 | 2,585 | 1,911 | 86 | 376 | 13,495 | (86) | 27,721 |
| Interest expense—intercompany | (758) | 2,390 | 823 | 2,243 | 1,572 | (4,027) | (2,243) | — |
| Net interest revenue | $(5,910) | $5,278 | $ 1,399 | $ 3,890 | $5,522 | $42,625 | $ (3,890) | $48,914 |
| Commissions and fees | $ — | $5,945 | $ — | $51 | $128 | $11,043 | $(51) | $17,116 |
| Commissions and fees—intercompany | — | 741 | (6) | 134 | 152 | (887) | (134) | — |
| Principal transactions | 359 | (267) | (1,905) | — | 2 | 5,743 | — | 3,932 |
| Principal transactions—intercompany | (649) | 3,605 | 224 | — | (109) | (3,071) | — | — |
| Other income | (3,731) | 13,586 | 38 | 428 | 584 | (154) | (428) | 10,323 |
| Other income—intercompany | (3,663) | (21) | (47) | 2 | 44 | 3,687 | (2) | — |
| Total non-interest revenues | $(7,684) | $ 23,589 | $(1,696) | $615 | $801 | $16,361 | $(615) | $31,371 |
| Total revenues, net of interest expense | $(12,545) | $ 28,867 | $(297) | $ 4,505 | $6,323 | $58,986 | $ (5,554) | $80,285 |
| Provisions for credit losses and for benefits |  |  |  |  |  |  |  |  |
| and claims | $ — | $129 | $ — | $ 3,894 | $4,354 | $35,779 | $ (3,894) | $40,262 |
| Expenses |  |  |  |  |  |  |  |  |
| Compensation and benefits | $101 | $6,389 | $ — | $523 | $686 | $17,811 | $(523) | $24,987 |
| Compensation and benefits—intercompany | 7 | 470 | — | 141 | 141 | (618) | (141) | — |
| Other expense | 791 | 2,739 | 2 | 578 | 735 | 18,568 | (578) | 22,835 |
| Other expense—intercompany | 782 | 637 | 4 | 526 | 573 | (1,996) | (526) | — |
| Total operating expenses | $1,681 | $ 10,235 | $6 | $ 1,768 | $2,135 | $33,765 | $ (1,768) | $47,822 |
| Income (loss) before taxes and equity in |  |  |  |  |  |  |  |  |
| undistributed income of subsidiaries | $(14,226) | $ 18,503 | $(303) | $(1,157) | $(166) | $(10,558) | $108 | $(7,799) |
| Income taxes (benefits) | (7,298) | 6,852 | (146) | (473) | (131) | (6,010) | 473 | (6,733) |
| Equities in undistributed income of subsidiaries | 5,322 | — | — | — | — | — | (5,322) | — |
| Income (loss) from continuing operations | $(1,606) | $ 11,651 | $(157) | $(684) | $(35) | $(4,548) | $ (5,687) | $(1,066) |
| Income (loss) from discontinued operations, net of |  |  |  |  |  |  |  |  |
| taxes | — | — | — | — | — | (445) | — | (445) |
| Net income (loss) before attrition of |  |  |  |  |  |  |  |  |
| noncontrolling interest | $(1,606) | $ 11,651 | $(157) | $(684) | $(35) | $(4,993) | $ (5,687) | $(1,511) |
| Net income (loss) attributable to |  |  |  |  |  |  |  |  |
| noncontrolling interests | — | (18) | — | — | — | 113 | — | 95 |
| Citigroup's net income (loss) | $(1,606) | $ 11,669 | $(157) | $(684) | $(35) | $(5,106) | $ (5,687) | $(1,606) |

|  | Citigroup |  |  |  |  | from |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | parent |  |  |  |  | discontinued | Consolidating | Citigroup |
| In millions of dollars | company | CGMHI | CFI | CCC\t\t\t\t\tAssociates | CCC\t\t\t\t\tAssociates | operations | adjustments\t\t\t\t\tconsolidated | adjustments\t\t\t\t\tconsolidated |
| Revenues |  |  |  |  |  |  |  |  |
| Dividends from subsidiary banks and bank holding |  |  |  |  |  |  |  |  |
| companies | $1,788 | $ — | $ — | $ — | $— | $— | $(1,788) | $— |
| Interest revenue | 758 | 18,569 | 3 | 7,218 | 8,261 | 78,908 | (7,218) | 106,499 |
| Interest revenue—intercompany | 4,822 | 2,109 | 5,156 | 67 | 575 | (12,662) | (67) | — |
| Interest expense | 9,455 | 11,607 | 3,294 | 141 | 608 | 27,786 | (141) | 52,750 |
| Interest expense—intercompany | (306) | 5,014 | 290 | 2,435 | 2,202 | (7,200) | (2,435) | — |
| Net interest revenue | $(3,569) | $4,057 | $ 1,575 | $ 4,709 | $6,026 | $45,660 | $(4,709) | $53,749 |
| Commissions and fees | $(1) | $7,361 | $ — | $87 | $182 | $2,824 | $(87) | $10,366 |
| Commissions and fees—intercompany | — | 521 | — | 37 | 52 | (573) | (37) | — |
| Principal transactions | (159) | (22,175) | 5,261 | — | (6) | (5,522) | — | (22,601) |
| Principal transactions—intercompany | 962 | 479 | (4,070) | — | 180 | 2,449 | — | — |
| Other income | (6,253) | 2,896 | (174) | 389 | 344 | 13,272 | (389) | 10,085 |
| Other income—intercompany | 6,521 | 2,635 | 187 | 27 | 69 | (9,412) | (27) | — |
| Total non-interest revenues | $1,070 | $(8,283) | $ 1,204 | $540 | $821 | $3,038 | $(540) | $(2,150) |
| Total revenues, net of interest expense | $(711) | $(4,226) | $ 2,779 | $ 5,249 | $6,847 | $48,698 | $(7,037) | $51,599 |
| Provisions for credit losses and for benefits |  |  |  |  |  |  |  |  |
| and claims | $ — | $381 | $ — | $ 4,638 | $5,020 | $29,313 | $(4,638) | $34,714 |
| Expenses |  |  |  |  |  |  |  |  |
| Compensation and benefits | $(150) | $9,651 | $ — | $667 | $906 | $20,689 | $(667) | $31,096 |
| Compensation and benefits—intercompany | 9 | 912 | — | 188 | 189 | (1,110) | (188) | — |
| Other expense | 219 | 4,206 | 3 | 663 | 1,260 | 32,456 | (663) | 38,144 |
| Other expense—intercompany | 594 | 1,828 | 51 | 451 | 498 | (2,971) | (451) | — |
| Total operating expenses | $672 | $ 16,597 | $54 | $ 1,969 | $2,853 | $49,064 | $(1,969) | $69,240 |
| Income (loss) before taxes and equity in |  |  |  |  |  |  |  |  |
| undistributed income of subsidiaries | $(1,383) | $(21,204) | $ 2,725 | $(1,358) | $(1,026) | $(29,679) | $(430) | $(52,355) |
| Income taxes (benefits) | (2,223) | (8,463) | 953 | (526) | (310) | (10,283) | 526 | (20,326) |
| Equities in undistributed income of subsidiaries | (29,122) | — | — | — | — | — | 29,122 | — |
| Income (loss) from continuing operations | $(28,282) | $(12,741) | $ 1,772 | $(832) | $(716) | $(19,396) | $28,166 | $(32,029) |
| Income from discontinued operations, net of |  |  |  |  |  |  |  |  |
| taxes | 598 | — | — | — | — | 3,404 | — | 4,002 |
| Net income (loss) before attrition of |  |  |  |  |  |  |  |  |
| noncontrolling interest | $(27,684) | $(12,741) | $ 1,772 | $(832) | $(716) | $(15,992) | $28,166 | $(28,027) |
| Net income (loss) attributable to |  |  |  |  |  |  |  |  |
| noncontrolling interests | — | (9) | — | — | — | $(334) | — | $(343) |
| Citigroup's net income (loss) | $(27,684) | $(12,732) | $ 1,772 | $(832) | $(716) | $(15,658) | $28,166 | $(27,684) |

|  | Citigroup |  |  |  |  | from |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | parent |  |  |  |  | discontinued | Consolidating | Citigroup |
| In millions of dollars | company | CGMHI | CFI | CCC\t\t\t\t\tAssociates | CCC\t\t\t\t\tAssociates | operations | adjustments\t\t\t\t\tconsolidated | adjustments\t\t\t\t\tconsolidated |
| Revenues |  |  |  |  |  |  |  |  |
| Dividends from subsidiary banks and bank holding |  |  |  |  |  |  |  |  |
| companies | $10,632 | $ — | $ — | $ — | $— | $— | $(10,632) | $— |
| Interest revenue | 426 | 31,438 | 6 | 6,754 | 7,854 | 81,623 | (6,754) | 121,347 |
| Interest revenue—intercompany | 5,507 | 1,695 | 6,253 | 137 | 630 | (14,085) | (137) | — |
| Interest expense | 7,994 | 24,489 | 4,331 | 189 | 759 | 38,385 | (189) | 75,958 |
| Interest expense—intercompany | (80) | 5,871 | 882 | 2,274 | 2,955 | (9,628) | (2,274) | — |
| Net interest revenue | $(1,981) | $2,773 | $1,046 | $4,428 | $4,770 | $38,781 | $(4,428) | $45,389 |
| Commissions and fees | $— | $ 11,089 | $— | $95 | $186 | $8,793 | $(95) | $20,068 |
| Commissions and fees—intercompany | (3) | 184 | — | 21 | 25 | (206) | (21) | — |
| Principal transactions | 380 | (11,382) | (68) | — | 2 | (1,279) | — | (12,347) |
| Principal transactions—intercompany | 118 | 605 | (561) | — | (30) | (132) | — | — |
| Other income | (1,233) | 4,594 | 150 | 452 | 664 | 20,015 | (452) | 24,190 |
| Other income—intercompany | 1,008 | 1,488 | (117) | 26 | (30) | (2,349) | (26) | — |
| Total non-interest revenues | $270 | $6,578 | $(596) | $594 | $817 | $24,842 | $(594) | $31,911 |
| Total revenues, net of interest expense | $8,921 | $9,351 | $450 | $5,022 | $5,587 | $63,623 | $(15,654) | $77,300 |
| Provisions for credit losses and for benefits |  |  |  |  |  |  |  |  |
| and claims | $— | $40 | $ — | $2,515 | $2,786 | $15,091 | $(2,515) | $17,917 |
| Expenses |  |  |  |  |  |  |  |  |
| Compensation and benefits | $170 | $ 11,631 | $ — | $679 | $894 | $20,010 | $(679) | $32,705 |
| Compensation and benefits—intercompany | 11 | 1 | — | 161 | 162 | (174) | (161) | — |
| Other expense | 383 | 3,716 | 2 | 524 | 713 | 21,218 | (524) | 26,032 |
| Other expense—intercompany | 241 | 1,959 | 71 | 299 | 397 | (2,668) | (299) | — |
| Total operating expenses | $805 | $ 17,307 | $73 | $1,663 | $2,166 | $38,386 | $(1,663) | $58,737 |
| Income (loss) before taxes and equity in |  |  |  |  |  |  |  |  |
| undistributed income of subsidiaries | $8,116 | $(7,996) | $377 | $844 | $635 | $10,146 | $(11,476) | $646 |
| Income taxes (benefits) | (933) | (3,050) | 133 | 287 | 205 | 1,099 | (287) | (2,546) |
| Equities in undistributed income of subsidiaries | (5,432) | — | — | — | — | — | 5,432 | — |
| Income (loss) from continuing operations | $3,617 | $(4,946) | $244 | $557 | $430 | $9,047 | $(5,757) | $3,192 |
| Income from discontinued operations, net of |  |  |  |  |  |  |  |  |
| taxes | — | — | — | — | — | 708 | — | 708 |
| Net income (loss) before attrition of |  |  |  |  |  |  |  |  |
| noncontrolling interest | $3,617 | $(4,946) | $244 | $557 | $430 | $9,755 | $(5,757) | $3,900 |
| Net income (loss) attributable to |  |  |  |  |  |  |  |  |
| noncontrolling interests | — | (20) | — | — | — | 303 | — | 283 |
| Citigroup's net income (loss) | $3,617 | $(4,926) | $244 | $557 | $430 | $9,452 | $(5,757) | $3,617 |

# Condensed Consolidating Balance Sheet

|  | Citigroup |  |  |  |  | subsidiaries |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | parent |  |  |  |  | and | Consolidating | Citigroup |
| In millions of dollars | company | CGMHI | CFI | CCC\t\t\tAssociates\t\t\teliminations | CCC\t\t\tAssociates\t\t\teliminations | CCC\t\t\tAssociates\t\t\teliminations | adjustments\t\t\tconsolidated | adjustments\t\t\tconsolidated |
| Assets |  |  |  |  |  |  |  |  |
| Cash and due from banks | $ — | $1,801 | $ — | $198 | $297 | $23,374 | $(198) | $25,472 |
| Cash and due from banks—intercompany | 5 | 3,146 | 1 | 145 | 168 | (3,320) | (145) | — |
| Federal funds sold and resale agreements | — | 199,760 | — | — | — | 22,262 | — | 222,022 |
| Federal funds sold and resale agreements—intercompany | — | 20,626 | — | — | — | (20,626) | — | — |
| Trading account assets | 26 | 140,777 | 71 | — | 17 | 201,882 | — | 342,773 |
| Trading account assets—intercompany | 196 | 6,812 | 788 | — | — | (7,796) | — | — |
| Investments | 13,318 | 237 | — | 2,293 | 2,506 | 290,058 | (2,293) | 306,119 |
| Loans, net of unearned income | — | 248 | — | 42,739 | 48,821 | 542,435 | (42,739) | 591,504 |
| Loans, net of unearned income—intercompany | — | — | 129,317 | 3,387 | 7,261 | (136,578) | (3,387) | — |
| Allowance for loan losses | — | (83) | — | (3,680) | (4,056) | (31,894) | 3,680 | (36,033) |
| Total loans, net | $ — | $165 | $129,317 | $42,446 | $ 52,026 | $ 373,963 | $(42,446) | $555,471 |
| Advances to subsidiaries | 144,497 | — | — | — | — | (144,497) | — | — |
| Investments in subsidiaries | 210,895 | — | — | — | — | — | (210,895) | — |
| Other assets | 14,196 | 69,907 | 1,186 | 6,440 | 7,317 | 312,183 | (6,440) | 404,789 |
| Other assets—intercompany | 10,412 | 38,047 | 3,168 | 47 | 1,383 | (53,010) | (47) | — |
| Total assets | $ 393,545 | $481,278 | $134,531 | $51,569 | $ 63,714 | $ 994,473 | $(262,464) | $1,856,646 |
| Liabilities and equity |  |  |  |  |  |  |  |  |
| Deposits | $ — | $ — | $ — | $— | $ — | $ 835,903 | $ — | $835,903 |
| Federal funds purchased and securities loaned or sold | — | 124,522 | — | — | — | 29,759 | — | 154,281 |
| Federal funds purchased and securities loaned or sold— |  |  |  |  |  |  |  |  |
| intercompany | 185 | 18,721 | — | — | — | (18,906) | — | — |
| Trading account liabilities | — | 82,905 | 115 | — | — | 54,492 | — | 137,512 |
| Trading account liabilities—intercompany | 198 | 7,495 | 1,082 | — | — | (8,775) | — | — |
| Short-term borrowings | 1,177 | 4,593 | 10,136 | — | 379 | 52,594 | — | 68,879 |
| Short-term borrowings—intercompany | — | 69,306 | 62,336 | 3,304 | 33,818 | (165,460) | (3,304) | — |
| Long-term debt | 197,804 | 13,422 | 55,499 | 2,893 | 7,542 | 89,752 | (2,893) | 364,019 |
| Long-term debt—intercompany | 367 | 62,050 | 1,039 | 37,600 | 14,278 | (77,734) | (37,600) | — |
| Advances from subsidiaries | 30,275 | — | — | — | — | (30,275) | — | — |
| Other liabilities | 5,985 | 70,477 | 585 | 1,772 | 1,742 | 62,290 | (1,772) | 141,079 |
| Other liabilities—intercompany | 4,854 | 7,911 | 198 | 1,080 | 386 | (13,349) | (1,080) | — |
| Total liabilities | $ 240,845 | $461,402 | $130,990 | $46,649 | $ 58,145 | $ 810,291 | $(46,649) | $1,701,673 |
| Citigroup stockholders' equity | 152,700 | 19,448 | 3,541 | 4,920 | 5,569 | 182,337 | (215,815) | 152,700 |
| Noncontrolling interest | — | 428 | — | — | — | 1,845 | — | 2,273 |
| Total equity | $ 152,700 | $19,876 | $3,541 | $4,920 | $5,569 | $ 184,182 | $(215,815) | $154,973 |
| Total liabilities and equity | $ 393,545 | $481,278 | $134,531 | $51,569 | $ 63,714 | $ 994,473 | $(262,464) | $1,856,646 |

|  | Citigroup |  |  |  |  | subsidiaries |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | parent |  |  |  |  | and | Consolidating | Citigroup |
| In millions of dollars | company | CGMHI | CFI | CCC\t\t\tAssociates\t\t\teliminations | CCC\t\t\tAssociates\t\t\teliminations | CCC\t\t\tAssociates\t\t\teliminations | adjustments\t\t\tconsolidated | adjustments\t\t\tconsolidated |
| Assets |  |  |  |  |  |  |  |  |
| Cash and due from banks | $ — | $3,142 | $ — | $149 | $211 | $25,900 | $(149) | $29,253 |
| Cash and due from banks—intercompany | 13 | 1,415 | 1 | 141 | 185 | (1,614) | (141) | — |
| Federal funds sold and resale agreements | — | 167,589 | — | — | — | 16,544 | — | 184,133 |
| Federal funds sold and resale agreements—intercompany | — | 31,446 | — | — | — | (31,446) | — | — |
| Trading account assets | 20 | 155,136 | 88 | — | 15 | 222,376 | — | 377,635 |
| Trading account assets—intercompany | 818 | 11,197 | 4,439 | — | 182 | (16,636) | — | — |
| Investments | 25,611 | 382 | — | 2,059 | 2,366 | 227,661 | (2,059) | 256,020 |
| Loans, net of unearned income | — | 663 | — | 48,663 | 55,387 | 638,166 | (48,663) | 694,216 |
| Loans, net of unearned income—intercompany | — | — | 134,744 | 3,433 | 11,129 | (145,873) | (3,433) | — |
| Allowance for loan losses | — | (122) | — | (3,415) | (3,649) | (25,845) | 3,415 | (29,616) |
| Total loans, net | $ — | $541 | $134,744 | $48,681 | $62,867 | $466,448 | $(48,681) | $664,600 |
| Advances to subsidiaries | 167,043 | — | — | — | — | (167,043) | — | — |
| Investments in subsidiaries | 149,424 | — | — | — | — | — | (149,424) | — |
| Other assets | 12,148 | 74,740 | 51 | 6,156 | 6,970 | 332,920 | (6,156) | 426,829 |
| Other assets—intercompany | 14,998 | 108,952 | 3,997 | 254 | 504 | (128,451) | (254) | — |
| Total assets | $ 370,075 | $554,540 | $143,320 | $57,440 | $73,300 | $946,659 | $(206,864) | $1,938,470 |
| Liabilities and stockholders' equity |  |  |  |  |  |  |  |  |
| Deposits | $ — | $ — | $ — | $ — | $— | $774,185 | $— | $774,185 |
| Federal funds purchased and securities loaned or sold | — | 165,914 | — | — | — | 39,379 | — | 205,293 |
| Federal funds purchased and securities loaned or sold— |  |  |  |  |  |  |  |  |
| intercompany | 8,673 | 34,007 | — | — | — | (42,680) | — | — |
| Trading account liabilities | — | 70,006 | 14 | — | — | 95,780 | — | 165,800 |
| Trading account liabilities—intercompany | 732 | 12,751 | 2,660 | — | — | (16,143) | — | — |
| Short-term borrowings | 2,571 | 9,735 | 30,994 | — | 222 | 83,169 | — | 126,691 |
| Short-term borrowings—intercompany | — | 87,432 | 66,615 | 6,360 | 39,637 | (193,684) | (6,360) | — |
| Long-term debt | 192,290 | 20,623 | 37,375 | 2,214 | 8,333 | 100,972 | (2,214) | 359,593 |
| Long-term debt—intercompany | — | 60,318 | 878 | 40,722 | 17,655 | (78,851) | (40,722) | — |
| Advances from subsidiaries | 7,660 | — | — | — | — | (7,660) | — | — |
| Other liabilities | 7,347 | 75,247 | 854 | 1,907 | 1,808 | 77,630 | (1,907) | 162,886 |
| Other liabilities—intercompany | 9,172 | 10,213 | 232 | 833 | 332 | (19,949) | (833) | — |
| Total liabilities | $ 228,445 | \t$546,246 | $139,622 | $52,036 | $67,987 | $812,148 | $(52,036) | $1,794,448 |
| Citigroup stockholders' equity | $ 141,630 | $7,819 | $3,698 | \t$5,404 | $5,313 | $132,594 | $(154,828) | $141,630 |
| Noncontrolling interest | — | 475 | — | — | — | 1,917 | — | 2,392 |
| Total equity | $ 141,630 | $8,294 | $3,698 | $5,404 | $5,313 | $134,511 | $(154,828) | $144,022 |
| Total liabilities and stockholders' equity | $ 370,075 | $554,540 | $143,320 | $57,440 | $73,300 | $946,659 | $(206,864) | $1,938,470 |

# Condensed Consolidating Statements of Cash Flows

|  | Citigroup |  |  |  |  | subsidiaries |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | parent |  |  |  |  | and | Consolidating | Citigroup |
| In millions of dollars | company | CGMHI | CFI | CCC\t\t\t\tAssociates\t\t\t\teliminations | CCC\t\t\t\tAssociates\t\t\t\teliminations | CCC\t\t\t\tAssociates\t\t\t\teliminations | adjustments\t\t\t\tconsolidated | adjustments\t\t\t\tconsolidated |
| Net cash (used in) provided by operating |  |  |  |  |  |  |  |  |
| activities of continuing operations | $(5,318) | $ 19,442 | $1,238 | $ 4,408 | $4,852 | $(75,933) | $ (4,408) | $(55,719) |
| Cash flows from investing activities |  |  |  |  |  |  |  |  |
| Change in loans | $— | $ — | $5,759 | $ 1,024 | $1,191 | $(155,601) | $ (1,024) | $(148,651) |
| Proceeds from sales and securitizations of loans | — | 176 | — | 6 | — | 241,191 | (6) | 241,367 |
| Purchases of investments | (17,056) | (13) | — | (589) | (650) | (263,396) | 589 | (281,115) |
| Proceeds from sales of investments | 7,092 | 32 | — | 520 | 598 | 77,673 | (520) | 85,395 |
| Proceeds from maturities of investments | 21,030 | — | — | 348 | 459 | 112,125 | (348) | 133,614 |
| Changes in investments and advances—intercompany | (22,371) | — | — | (165) | 3,657 | 18,714 | 165 | — |
| Business acquisitions | 384 | — | — | — | — | (384) | — | — |
| Other investing activities | — | 6,259 | — | — | — | 1,417 | — | 7,676 |
| Net cash (used in) provided by investing activities | $(10,921) | $6,454 | $5,759 | $ 1,144 | $5,255 | $31,739 | $ (1,144) | $38,286 |
| Cash flows from financing activities |  |  |  |  |  |  |  |  |
| Dividends paid | $(3,237) | $ — | $— | $ — | $— | $— | $— | $(3,237) |
| Dividends paid—intercompany | (121) | (1,000) | — | — | — | 1,121 | — | — |
| Issuance of common stock | 17,514 | — | — | — | — | — | — | 17,514 |
| Issuance of preferred stock | — | — | — | — | — | — | — | — |
| Treasury stock acquired | (3) | — | — | — | — | — | — | (3) |
| Proceeds/(repayments) from issuance of long-term |  |  |  |  |  |  |  |  |
| debt—third-party, net | (9,591) | (2,788) | 18,090 | 679 | (791) | (18,575) | (679) | (13,655) |
| Proceeds/(repayments) from issuance of long-term |  |  |  |  |  |  |  |  |
| debt—intercompany, net | — | 1,550 | — | (3,122) | (3,377) | 1,827 | 3,122 | — |
| Change in deposits | — | — | — | — | — | 61,718 | — | 61,718 |
| Net change in short-term borrowings and other |  |  |  |  |  |  |  |  |
| investment banking and brokerage borrowings— |  |  |  |  |  |  |  |  |
| third-party | (1,339) | (5,142) | (20,847) | — | (10) | (24,657) | — | (51,995) |
| Net change in short-term borrowings and other |  |  |  |  |  |  |  |  |
| advances—intercompany | 10,344 | (18,126) | (4,240) | (3,056) | (5,819) | 17,841 | 3,056 | — |
| Capital contributions from parent | — | — | — | — | — | — | — | — |
| Other financing activities | 2,664 | — | — | — | (41) | 41 | — | 2,664 |
| Net cash provided by (used in) financing activities | $16,231 | $(25,506) | $(6,997) | $(5,499) | $(10,038) | $39,316 | $5,499 | $13,006 |
| Effect of exchange rate changes on cash and |  |  |  |  |  |  |  |  |
| due from banks | $— | $ — | $— | $ — | $— | $632 | $— | $632 |
| Net cash used in discontinued operations | $— | $ — | $— | $ — | $— | $14 | $— | $14 |
| Net (decrease) increase in cash and due from banks | $(8) | $390 | $— | $53 | $69 | $(4,232) | $(53) | $(3,781) |
| Cash and due from banks at beginning of period | $13 | $4,557 | $1 | $290 | $396 | $24,286 | $(290) | $29,253 |
| Cash and due from banks at end of period from |  |  |  |  |  |  |  |  |
| continuing operations | $5 | $4,947 | $1 | $343 | $465 | $20,054 | $(343) | $25,472 |
| Supplemental disclosure of cash flow information |  |  |  |  |  |  |  |  |
| Cash paid during the year for |  |  |  |  |  |  |  |  |
| Income taxes | $412 | $(663) | $101 | $(12) | $(137) | $(2) | $12 | $(289) |
| Interest | $8,891 | $7,311 | $2,898 | $ 3,046 | $530 | $8,759 | $ (3,046) | $28,389 |
| Non-cash investing activities |  |  |  |  |  |  |  |  |
| Transfers to repossessed assets | $— | $ — | $— | $ 1,642 | $1,704 | $1,176 | $ (1,642) | $2,880 |

|  | Citigroup |  |  |  |  | subsidiaries |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | parent |  |  |  |  | and | Consolidating | Citigroup |
| In millions of dollars | company | CGMHI | CFI | CCC\t\t\tAssociates\t\t\teliminations | CCC\t\t\tAssociates\t\t\teliminations | CCC\t\t\tAssociates\t\t\teliminations | adjustments\t\t\tconsolidated | adjustments\t\t\tconsolidated |
| Net cash provided by (used in) operating |  |  |  |  |  |  |  |  |
| activities of continuing operations | $5,600 | $(21,162) | $(1,028) | $ 4,591 | $4,677 | $108,433 | $(4,591) | $96,520 |
| Cash flows from investing activities |  |  |  |  |  |  |  |  |
| Change in loans | $ — | $91 | $(26,363) | $(3,177) | $(1,118) | $ (243,131) | $3,177 | $ (270,521) |
| Proceeds from sales and securitizations of loans | — | 98 | — | — | — | 313,710 | — | 313,808 |
| Purchases of investments | (188,901) | (47) | — | (1,065) | (1,338) | (154,050) | 1,065 | (344,336) |
| Proceeds from sales of investments | 38,020 | — | — | 309 | 649 | 54,997 | (309) | 93,666 |
| Proceeds from maturities of investments | 137,005 | — | 3 | 670 | 774 | 71,530 | (670) | 209,312 |
| Changes in investments and advances—intercompany | (83,055) | — | — | (1,062) | 1,496 | 81,559 | 1,062 | — |
| Business acquisitions | — | (181) | — | — | — | 181 | — | — |
| Other investing activities | — | (17,142) | — | — | — | (62,398) | — | (79,540) |
| Net cash (used in) provided by investing activities | $(96,931) | $(17,181) | $(26,360) | $(4,325) | $463 | $62,398 | $4,325 | $(77,611) |
| Cash flows from financing activities |  |  |  |  |  |  |  |  |
| Dividends paid | $(7,526) | $ — | $ — | $ — | $— | $— | $— | $(7,526) |
| Dividends paid—intercompany | (239) | (92) | — | — | — | 331 | — | — |
| Issuance of common stock | 6,864 | — | — | — | — | — | — | 6,864 |
| Issuance of preferred stock | 70,626 | — | — | — | — | — | — | 70,626 |
| Treasury stock acquired | (7) | — | — | — | — | — | — | (7) |
| Proceeds/(repayments) from issuance of long-term |  |  |  |  |  |  |  |  |
| debt—third-party, net | 15,086 | (9,543) | 2,496 | (960) | (5,345) | (45,181) | 960 | (42,487) |
| Proceeds/(repayments) from issuance of long-term |  |  |  |  |  |  |  |  |
| debt—intercompany, net | — | 26,264 | — | (956) | (2,183) | (24,081) | 956 | — |
| Change in deposits | — | — | — | — | — | (37,811) | — | (37,811) |
| Net change in short-term borrowings and other |  |  |  |  |  |  |  |  |
| investment banking and brokerage borrowings— |  |  |  |  |  |  |  |  |
| third-party | (3,197) | (6,997) | (10,100) | — | (112) | 6,610 | — | (13,796) |
| Net change in short-term borrowings and other |  |  |  |  |  |  |  |  |
| advances—intercompany | 10,118 | 27,971 | 34,991 | 1,619 | 2,456 | (75,536) | (1,619) | — |
| Capital contributions from parent | — | — | — | — | — | — | — | — |
| Other financing activities | (400) | — | — | — | — | — | — | (400) |
| Net cash provided by (used in) financing activities | $91,325 | $ 37,603 | $ 27,387 | $(297) | $(5,184) | $ (175,668) | $297 | $(24,537) |
| Effect of exchange rate changes on cash and |  |  |  |  |  |  |  |  |
| due from banks | $ — | $ — | $ — | $ — | $— | $(2,948) | $— | $(2,948) |
| Net cash used in discontinued operations | — | — | — | — | — | (377) | — | (377) |
| Net decrease in cash and due from banks | $(6) | $(740) | $(1) | $(31) | $(44) | $(8,162) | $31 | $(8,953) |
| Cash and due from banks at beginning of period | $19 | $5,297 | $2 | $321 | $440 | $32,448 | $(321) | $38,206 |
| Cash and due from banks at end of period from |  |  |  |  |  |  |  |  |
| continuing operations | 13 | 4,557 | 1 | 290 | 396 | 24,286 | (290) | 29,253 |
| Supplemental disclosure of cash flow information |  |  |  |  |  |  |  |  |
| Cash paid during the year for |  |  |  |  |  |  |  |  |
| Income taxes | $440 | $(2,742) | $350 | $228 | $287 | $4,835 | $(228) | $3,170 |
| Interest | 9,341 | 16,990 | 3,761 | 2,677 | 502 | 25,084 | (2,677) | 55,678 |
| Non-cash investing activities |  |  |  |  |  |  |  |  |
| Transfers to repossessed assets | $ — | $ — | $ — | $ 1,571 | $1,621 | $1,818 | $ (1,571) | $3,439 |

|  | Citigroup |  |  |  |  | subsidiaries |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | parent |  |  |  |  | and | Consolidating | Citigroup |
| In millions of dollars | company | CGMHI | CFI | CCC\t\t\t\t\tAssociates\t\t\t\t\teliminations | CCC\t\t\t\t\tAssociates\t\t\t\t\teliminations | CCC\t\t\t\t\tAssociates\t\t\t\t\teliminations | adjustments\t\t\t\t\tconsolidated | adjustments\t\t\t\t\tconsolidated |
| Net cash (used in) provided by operating |  |  |  |  |  |  |  |  |
| activities of continuing operations | $(7,572) | $(26,696) | $(269) | $ 3,973 | $3,386 | $(40,400) | $(3,973) | $(71,551) |
| Cash flows from investing activities |  |  |  |  |  |  |  |  |
| Change in loans | $ — | $174 | $(23,943) | $(7,601) | $ (8,389) | $(329,776) | $7,601 | $ (361,934) |
| Proceeds from sales and securitizations of loans | — | — | — | — | — | 273,464 | — | 273,464 |
| Purchases of investments | (25,567) | (302) | — | (690) | (1,662) | (246,895) | 690 | (274,426) |
| Proceeds from sales of investments | 15,475 | — | — | 276 | 755 | 195,523 | (276) | 211,753 |
| Proceeds from maturities of investments | 8,221 | — | — | 430 | 961 | 112,164 | (430) | 121,346 |
| Changes in investments and advances—intercompany | (31,692) | — | — | 4,130 | (1,391) | 33,083 | (4,130) | — |
| Business acquisitions | — | — | — | — | — | (15,614) | — | (15,614) |
| Other investing activities | — | (986) | — | — | — | (15,980) | — | (16,966) |
| Net cash (used in) provided by investing activities | $(33,563) | $(1,114) | $(23,943) | $(3,455) | $ (9,726) | $5,969 | $3,455 | $(62,377) |
| Cash flows from financing activities |  |  |  |  |  |  |  |  |
| Dividends paid | $(10,778) | $ — | $ — | $ — | $— | $— | $— | $(10,778) |
| Dividends paid—intercompany | — | (1,903) | — | (4,900) | (1,500) | 3,403 | 4,900 | — |
| Issuance of common stock | 1,060 | — | — | — | — | — | — | 1,060 |
| Redemption or retirement of preferred stock | (1,000) | — | — | — | — | — | — | (1,000) |
| Treasury stock acquired | (663) | — | — | — | — | — | — | (663) |
| Proceeds/(repayments) from issuance of long-term |  |  |  |  |  |  |  |  |
| debt—third-party, net | 47,271 | 940 | 16,656 | 270 | 457 | (12,345) | (270) | 52,979 |
| Proceeds/(repayments) from issuance of long-term |  |  |  |  |  |  |  |  |
| debt—intercompany, net | (399) | 14,097 | — | 9,243 | (4,511) | (9,187) | (9,243) | — |
| Change in deposits | — | — | — | — | — | 93,422 | — | 93,422 |
| Net change in short-term borrowings and other |  |  |  |  |  |  |  |  |
| investment banking and brokerage borrowings— |  |  |  |  |  |  |  |  |
| third-party | 5,603 | 2,630 | 7,593 | (1,200) | (886) | (4,515) | 1,200 | 10,425 |
| Net change in short-term borrowings and other |  |  |  |  |  |  |  |  |
| advances—intercompany | 990 | 12,922 | (410) | (3,998) | 12,717 | (26,219) | 3,998 | — |
| Capital contributions from parent | — | — | 375 | — | — | (375) | — | — |
| Other financing activities | (951) | — | — | — | — | — | — | (951) |
| Net cash provided by (used in) financing activities | $41,133 | $ 28,686 | $ 24,214 | $(585) | $6,277 | $44,184 | $585 | $144,494 |
| Effect of exchange rate changes on cash and |  |  |  |  |  |  |  |  |
| due from banks | $ — | $ — | $ — | $ — | $— | $1,005 | $— | $1,005 |
| Net cash provided by discontinued operations | $ — | $ — | $ — | $ — | $— | $121 | $— | $121 |
| Net (decrease) increase in cash and due from |  |  |  |  |  |  |  |  |
| banks | $(2) | $876 | $2 | $(67) | $(63) | $10,879 | $67 | $11,692 |
| Cash and due from banks at beginning of period | 21 | 4,421 | — | 388 | 503 | 21,569 | (388) | 26,514 |
| Cash and due from banks at end of period from |  |  |  |  |  |  |  |  |
| continuing operations | $19 | $5,297 | $2 | $321 | $440 | $32,448 | $(321) | $38,206 |
| Supplemental disclosure of cash flow information |  |  |  |  |  |  |  |  |
| Cash paid during the year for |  |  |  |  |  |  |  |  |
| Income taxes | $(1,225) | $230 | $18 | $387 | $54 | $6,846 | $(387) | $5,923 |
| Interest | 5,121 | \t 30,388 | 6,711 | 2,315 | 432 | 30,080 | (2,315) | 72,732 |
| Non-cash investing activities |  |  |  |  |  |  |  |  |
| Transfers to repossessed assets | $ — | $ — | $ — | $ 1,083 | $1,226 | $1,061 | $ (1,083) | $2,287 |

# 34. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

| In millions of dollars, except per share amounts | Fourth | Third					Second | Third					Second | First | Fourth | Third | Second | First |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Revenues, net of interest expense | $5,405 | $20,390 | $29,969 | $24,521 | $5,646 | $16,258 | $17,538 | $12,157 |
| Operating expenses | 12,314 | 11,824 | 11,999 | 11,685 | 24,642 | 14,007 | 15,214 | 15,377 |
| Provisions for credit losses and for benefits and claims | 8,184 | 9,095 | 12,676 | 10,307 | 12,695 | 9,067 | 7,100 | 5,852 |
| Income (loss) from continuing operations before income taxes | $(15,093) | $(529) | $5,294 | $2,529 | $(31,691) | $ (6,816) | $ (4,776) | $ (9,072) |
| Income taxes | (7,353) | (1,122) | 907 | 835 | (10,698) | (3,295) | (2,447) | (3,886) |
| Income (loss) from continuing operations | $(7,740) | $593 | $4,387 | $1,694 | $(20,993) | $ (3,521) | $ (2,329) | $ (5,186) |
| Income from discontinued operations, net of taxes | 232 | (418) | (142) | (117) | 3,424 | 613 | (94) | 59 |
| Net income (loss) before attribution of |  |  |  |  |  |  |  |  |
| noncontrolling interests | $(7,508) | $175 | $4,245 | $1,577 | $(17,569) | $ (2,908) | $ (2,423) | $ (5,127) |
| Net income (loss) attributable to noncontrolling interests | 71 | 74 | (34) | (16) | (306) | (93) | 72 | (16) |
| Citigroup's net income (loss) | $(7,579) | $101 | $4,279 | $1,593 | $(17,263) | $ (2,815) | $ (2,495) | $ (5,111) |
| Earnings per share (2) (3) |  |  |  |  |  |  |  |  |
| Basic |  |  |  |  |  |  |  |  |
| Income from continuing operations | (0.34) | (0.23) | 0.51 | (0.16) | $(4.04) | $(0.73) | $(0.53) | $(1.05) |
| Net income | (0.33) | (0.27) | 0.49 | (0.18) | (3.40) | (0.61) | (0.55) | (1.03) |
| Diluted |  |  |  |  |  |  |  |  |
| Income from continuing operations | (0.34) | (0.23) | 0.51 | (0.16) | (4.04) | (0.73) | (0.53) | (1.05) |
| Net income | (0.33) | (0.27) | 0.49 | (0.18) | $(3.40) | $(0.61) | $(0.55) | $(1.03) |
| Common stock price per share |  |  |  |  |  |  |  |  |
| High | 5.00 | 5.23 | 4.02 | 7.46 | $23.00 | $21.12 | $26.81 | $29.69 |
| Low | 3.20 | 2.59 | 2.68 | 1.02 | 3.77 | 14.03 | 16.76 | 18.62 |
| Close | 3.31 | 4.84 | 2.97 | 2.53 | 6.71 | 20.51 | 16.76 | 21.42 |
| Dividends per share of common stock | — | — | — | 0.01 | $0.16 | $0.32 | $0.32 | $0.32 |

This Note to the Consolidated Financial Statements is unaudited due to the Company's individual quarterly results not being subject to an audit.

respectively. See also Note 1 to the Consolidated Financial Statements. The impact of this CVA error was determined not to be material to the Company's results of operations and financial position for any previously reported period. Consequently, in the accompanying selected quarterly financial data, the cumulative effect through September 30, 2009 is recorded in the fourth quarter of 2009.

(2) Due to averaging of shares, quarterly earnings per share may not add up to the totals reported for the full year.

(3) Diluted shares are equal to basic shares for all four quarters of 2008 and the first, third and fourth quarter of 2009 due to the net loss available to common shareholders. Adding additional shares to the denominator would result in anti-dilution.

# [End	of	Consolidated	Financial	Statements	and	Notes	to	Consolidated	Financial	Statements]

# FINANCIAL DATA SUPPLEMENT (Unaudited)

# RATIOS

| Citigroup's net income to average assets | (0.08)% | (1.28)% | 0.17% |
| :--- | :--- | :--- | :--- |
| Return on common stockholders' equity (1) | (9.4) | (28.8) | 2.9 |
| Return on total stockholders' equity\n(2) | (1.1) | (20.9) | 3.0 |
| Total average equity to average assets | 7.64 | 6.12 | 5.66 |
| Dividends payout ratio (3) | NM | NM | 300.0 |

(1)						Based on net income less preferred stock dividends as a percentage of average common stockholders' equity.

(2) Based on net income as a percentage of average total stockholders' equity.

# AVERAGE DEPOSIT LIABILITIES IN OFFICES OUTSIDE THE U.S. (1)

|  |  | 2009 |  | 2008 |  | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Average | Average | Average | Average | Average | Average |
| In millions of dollars at year end | balance | interest rate | balance | interest rate | balance | interest rate |
| Banks | $58,046 | 1.11% | $60,315 | 3.25% | $68,538 | 4.72% |
| Other demand deposits | 187,478 | 0.66 | 212,781 | 1.85 | 208,634 | 2.57 |
| Other time and savings deposits (2) | \t237,653 | 1.85 | 243,305 | 3.53 | 256,946 | 4.54 |
| Total | $483,177 | 1.30% | $516,401 | 2.81% | $534,118 | 3.79% |

(1)						Interest rates and amounts include the effects of risk management activities and also reflect the impact of the local interest rates prevailing in certain countries. See Note 24 to the Consolidated Financial Statements.

(2) Primarily consists of certificates of deposit and other time deposits in denominations of $100,000 or more.

# MATURITY PROFILE OF TIME DEPOSITS

| In millions of dollars | Under 3 | Over 3 to 6 | Over 6 to 12							Over 12 | Over 6 to 12							Over 12 |
| :--- | :--- | :--- | :--- | :--- |
| at December 31, 2009 | months | months | months | months |
| Certificates of deposit | $13,439 | $5,609 | $5,252 | \t$4,752 |
| Other time deposits | $1,845 | $106 | $204 | $1,181 |

# SHORT-TERM AND OTHER BORROWINGS (1)

|  | agreements to repurchase	(2) | agreements to repurchase	(2) | agreements to repurchase	(2) |  | Commercial paper | Commercial paper |  | Other funds borrowed	(2) | Other funds borrowed	(2) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In millions of dollars | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 |
| Amounts outstanding at year end | $154,281 | $205,293 | $304,243 | $10,223 | $29,125 | $37,343 | $58,656 | $97,566 | $109,145 |
| Average outstanding during the year\n(3) | 205,633 | 281,478 | 385,199 | 24,667 | 31,888 | 44,274 | 76,529 | 82,587 | 93,302 |
| Maximum month-end outstanding | 252,154 | 354,685 | 441,844 | 36,884 | 41,212 | 57,303 | 99,814 | 121,834 | 145,783 |
| Weighted-average interest rate |  |  |  |  |  |  |  |  |  |
| During the year (3) (4) | 1.67% | 4.00% | 5.97% | 0.99% | 3.10% | 5.29% | 1.54% | 1.70% | 2.79% |
| At year end (5) | 0.85% | 2.22% | 4.52% | 0.34% | 1.67% | 4.92% | 0.66% | 2.40% | 3.62% |

(1)						Original maturities of less than one year.

(2) Rates reflect prevailing local interest rates including inflationary effects and monetary correction in certain countries.

(3) Excludes discontinued operations.

(4) Interest rates include the effects of risk management activities. See Notes 20 and 24 to the Consolidated Financial Statements.

(5) Based on contractual rates at year end.

# SUPERVISION AND REGULATION

# Proposed Legislation

In	addition	to	the	regulations	and	requirements	discussed	below,	legislation	is from	time	to	time	introduced	in	Congress	that	may	change	banking	statutes	and the	operating	environment	of	Citigroup	and	its	subsidiaries	in	substantial	and unpredictable	ways.	This	has	been	particularly	true	as	a	result	of	the	financial crisis	beginning	in	late	2007.	See	"Risk	Factors,"	above.	Citigroup	cannot determine	whether	any	such	proposed	legislation	will	be	enacted	and,	if	enacted, the	ultimate	effect	that	any	such	potential	legislation	or	implementing regulations	would	have	upon	the	financial	condition	or	results	of	operations	of Citigroup	or	its	subsidiaries.

# Bank Holding Company/Financial Holding Company

Citigroup's	ownership	of	Citibank,	N.A.	(Citibank)	and	other	banks	makes Citigroup	a	"bank	holding	company"	within	the	meaning	of	the	U.S.	Bank Holding	Company	Act	of	1956.

					Bank	holding	companies	are	generally	limited	to	the	business	of	banking, managing	or	controlling	banks,	and	other	closely	related	activities.	Citigroup	is qualified	as	a	"financial	holding	company,"	which	permits	Citi	to	engage	in	a broader	range	of	financial	activities	in	the	U.S.	and	abroad.	These	activities include	underwriting	and	dealing	in	securities,	insurance	underwriting	and brokerage,	and	making	investments	in	non-financial	companies	for	a	limited period	of	time,	as	long	as	Citi	does	not	manage	the	non-financial	company's	day- to-day	activities,	and	its	banking	subsidiaries	engage	only	in	permitted	cross- marketing	with	the	non-financial	company.	If	Citigroup	ceases	to	qualify	as	a financial	holding	company,	it	could	be	barred	from	new	financial	activities	or acquisitions,	and	have	to	discontinue	the	broader	range	of	activities	permitted	to financial	holding	companies.

# Regulators

As	a	bank	holding	company,	Citigroup	is	regulated	and	supervised	by	the	Board of	Governors	of	the	Federal	Reserve	System	(FRB).	Nationally	chartered subsidiary	banks,	such	as	Citibank,	are	regulated	and	supervised	by	the	Office	of the	Comptroller	of	the	Currency	(OCC);	federal	savings	associations	by	the Office	of	Thrift	Supervision;	and	state-chartered	depository	institutions	by	state banking	departments	and	the	Federal	Deposit	Insurance	Corporation	(FDIC). The	FDIC	has	back-up	enforcement	authority	for	banking	subsidiaries	whose deposits	it	insures.	Overseas	branches	of	Citibank	are	regulated	and	supervised by	the	FRB	and	OCC	and	overseas	subsidiary	banks	by	the	FRB.	Such	overseas branches	and	subsidiary	banks	are	also	regulated	and	supervised	by	regulatory authorities	in	the	host	countries.

# Internal Growth and Acquisitions

Unless	otherwise	required	by	the	FRB,	financial	holding	companies	generally can	engage,	directly	or	indirectly	in	the	U.S.	and	abroad,	in	financial	activities, either	de	novo	or	by	acquisition,	by	providing	after-the-fact	notice	to	the	FRB. However,	all	bank	holding	companies,	including	Citigroup,	must	obtain	the	prior approval	of	the	FRB	before	acquiring	more	than	5%	of	any	class	of	voting	stock of	a	U.S.	depository	institution	or	bank	holding	company.

					Subject	to	certain	restrictions	and	the	prior	approval	of	the	appropriate federal	banking	regulatory	agency,	Citi	can	acquire	U.S.	depository	institutions, including	out-of-state	banks.	In	addition,	intrastate	bank	mergers	are	permitted and	banks	in	states	that	do	not	prohibit	out-of-state	mergers	may	merge.	A national	or	state	bank	can	establish	a	new	branch	in	another	state	if	permitted	by the	other	state,	and	a	federal	savings	association	can	generally	open	new branches	in	any	state.

					The	FRB	must	approve	certain	additional	capital	contributions	to	an	existing non-U.S.	investment	and	certain	acquisitions	by	Citigroup	of	an	interest	in	a	non- U.S.	company,	including	in	a	foreign	bank,	as	well	as	the	establishment	by Citibank	of	foreign	branches	in	certain	circumstances.

# Dividends

Citi's	bank	holding	companies	and	banking	subsidiaries	are	limited	in	their ability	to	pay	dividends.	See	Note	21	to	the	Consolidated	Financial	Statements. In	addition	to	specific	limitations	on	the	dividends	that	subsidiary	banks	can	pay to	their	holding	companies,	federal	regulators	could	prohibit	a	dividend	that would	be	an	unsafe	or	unsound	banking	practice.	Further,	pursuant	to	the	various agreements	Citigroup	entered	into	with	the	U.S.	government	during	late	2008	and 2009,	Citigroup	is	prohibited	from	paying	a	dividend	of	more	than	$0.01	per share	per	quarter	generally	so	long	as	the	U.S.	Treasury	or	FDIC	continue	to	hold any	common	stock	or	trust	preferred	securities	of	Citigroup	issued	pursuant	to Citi's	exchange	offers.

					It	is	FRB	policy	that	bank	holding	companies	should	generally	pay dividends	on	common	stock	only	out	of	income	available	over	the	past	year,	and only	if	prospective	earnings	retention	is	consistent	with	the	organization's expected	future	needs	and	financial	condition.	In	December	2009,	the	FRB advised	bank	holding	companies	to	consult	with	FRB	staff	before	increasing dividends	or	taking	other	actions	that	could	diminish	the	bank	holding company's	capital	base.	Moreover,	bank	holding	companies	should	not	maintain dividend	levels	that	undermine	the	company's	ability	to	be	a	source	of	strength to	its	banking	subsidiaries.

# Transactions with Non-Bank Subsidiaries

A	banking	subsidiary's	transactions	with	a	holding	company	or	non-bank subsidiary	generally	are	limited	to	10%	of	the	banking	subsidiary's	capital	stock and	surplus,	with	an	aggregate	limit	of	20%	of	the	banking	subsidiary's	capital stock	and	surplus	for	all	such	transactions.	Such	transactions	must	be	on	arm's- length	terms,	and	certain	credit	transactions	must	be	fully	secured	by	approved forms	of	collateral.

# Liquidation

Citigroup's	right	to	participate	in	the	distribution	of	assets	of	a	subsidiary	upon the	subsidiary's	liquidation	will	be	subordinate	to	the	claims	of	the	subsidiary's creditors.	If	the	subsidiary	is	an	insured	depository	institution,	Citi's	claim	as	a stockholder	or	creditor	will	be	subordinated	to	the	claims	of	depositors	and	other general	or	subordinated	creditors.

					In	the	liquidation	of	a	U.S.-insured	depository	institution,	deposits	in	U.S. offices	and	certain	claims	for	administrative	expenses	and	employee compensation	will	have	priority	over	other	general	unsecured	claims,	including deposits	in	offices	outside	the	U.S.,	non-deposit	claims	in	all	offices,	and	claims of	a	parent	such	as	Citigroup.	The	FDIC,	which	succeeds	to	the	position	of insured	depositors,	would	be	a	priority	creditor.

					An	FDIC-insured	financial	institution	that	is	affiliated	with	a	failed	FDIC- insured	institution	may	have	to	indemnify	the	FDIC	for	losses	resulting	from	the insolvency	of	the	failed	institution,	even	if	this	causes	the	indemnifying institution	also	to	become	insolvent.	Obligations	of	a	subsidiary	depository institution	to	a	parent	company	are	subordinate	to	the	subsidiary's	indemnity liability	and	the	claims	of	its	depositors.

# Other Bank and Bank Holding Company Regulation

Citigroup	and	its	banking	subsidiaries	are	subject	to	other	regulatory	limitations, including	requirements	for	banks	to	maintain	reserves	against	deposits; requirements	as	to	risk-based	capital	and	leverage	(see	"Capital	Resources	and Liquidity"	above	and	Note	20	to	the	Consolidated	Financial	Statements); restrictions	on	the	types	and	amounts	of	loans	that	may	be	made	and	the	interest that	may	be	charged;	and	limitations	on	investments	that	can	be	made	and services	that	can	be	offered.

					The	FRB	may	also	expect	Citigroup	to	commit	resources	to	its	subsidiary banks	in	certain	circumstances.	However,	the	FRB	may	not	compel	a	bank holding	company	to	remove	capital	from	its	regulated	securities	and	insurance subsidiaries	for	this	purpose.

					A	U.S.	bank	is	not	required	to	repay	a	deposit	at	a	branch	outside	the	U.S.	if the	branch	cannot	repay	the	deposit	due	to	an	act	of	war,	civil	strife,	or	action taken	by	the	government	in	the	host	country.

# Privacy and Data Security

Under	U.S.	federal	law,	Citigroup	must	disclose	its	privacy	policy	to	consumers, permit	consumers	to	"opt	out"	of	having	non-public	customer	information disclosed	to	third	parties,	and	allow	customers	to	opt	out	of	receiving	marketing solicitations	based	on	information	about	the	customer	received	from	another subsidiary.	States	may	adopt	more	extensive	privacy	protections.

					Citigroup	is	similarly	required	to	have	an	information	security	program	to safeguard	the	confidentiality	and	security	of	customer	information	and	to	ensure its	proper	disposal	and	to	notify	customers	of	unauthorized	disclosure,	consistent with	applicable	law	or	regulation.

# Non-U.S. Regulation

A	substantial	portion	of	Citigroup's	revenues	is	derived	from	its	operations outside	the	U.S.,	which	are	subject	to	the	local	laws	and	regulations	of	the	host country.	Those	requirements	affect	how	the	local	activities	are	organized	and	the manner	in	which	they	are	conducted.	Citi's	foreign	activities	are	thus	subject	to both	U.S.	and	foreign	legal	and	regulatory	requirements	and	supervision, including	U.S.	laws	prohibiting	companies	from	doing	business	in	certain countries.

# Securities Regulation

Certain	of	Citigroup's	subsidiaries	are	subject	to	various	securities	and commodities	regulations	and	capital	adequacy	requirements	promulgated	by	the regulatory	and	exchange	authorities	of	the	jurisdictions	in	which	they	operate. 					Subsidiaries'	registrations	include	as	broker-dealers	and	as	investment advisers	with	the	SEC	and	as	futures	commission	merchants	and	as	commodity pool	operators	with	the	Commodity	Futures	Trading	Commission	(CFTC). Citigroup's	primary	U.S.	broker-dealer	subsidiary,	Citigroup	Global	Markets Inc.	(CGMI),	is	registered	as	a	broker-dealer	in	all	50	states,	the	District	of Columbia,	Puerto	Rico,	Taiwan	and	Guam.	CGMI	is	also	a	primary	dealer	in U.S.	Treasury	securities	and	a	member	of	the	principal	United	States	futures exchanges.	CGMI	is	subject	to	extensive	regulation,	including	minimum	capital requirements,	which	are	promulgated	and	enforced	by	their	Designated Examining	Authority,	the	Financial	Industry	Regulatory	Authority	(FINRA),	the Chicago	Mercantile	Exchange	and	various	other	self-regulatory	organizations	of which	CGMI	is	a	member.	The	SEC	and	the	CFTC	also	require	certain registered	broker-dealers	(including	CGMI)	to	maintain	records	concerning certain	financial	and	securities	activities	of	affiliated	companies	that	may	be material	to	the	broker-dealer,	and	to	file	certain	financial	and	other	information regarding	such	affiliated	companies.

					Citigroup's	securities	operations	abroad	are	conducted	through	various subsidiaries	and	affiliates,	principally	Citigroup	Global	Markets	Limited	in London	and	Citigroup	Global	Markets	Japan	Inc.	in	Tokyo.	Its	securities activities	in	the	United	Kingdom,	which	include	investment	banking,	trading, and	brokerage	services,	are	subject	to	the	Financial	Services	and	Markets	Act	of 2000,	which	regulates	organizations	that	conduct	investment	businesses	in	the United	Kingdom	including	capital	and	liquidity	requirements,	and	to	the	rules	of the	Financial	Services	Authority.	Citigroup	Global	Markets	Japan	Inc.	is	a registered	securities	company	in	Japan,	and	as	such	its	activities	in	Japan	are regulated	principally	by	the	Financial	Services	Agency	of	Japan.	These	and	other subsidiaries	of	Citigroup	are	also	members	of	various	securities	and	commodities exchanges	and	are	subject	to	the	rules	and	regulations	of	those	exchanges. Citigroup's	other	offices	abroad	are	also	subject	to	the	jurisdiction	of	foreign financial	services	regulatory	authorities.

					CGMI	is	a	member	of	the	Securities	Investor	Protection	Corporation	(SIPC), which	provides	protection	for	customers	of	a	broker-dealer	against	losses	in	the event	of	the	liquidation	of	a	broker-dealer.	SIPC	protects	customers'	securities accounts	held	by	a	broker-dealer	up	to	$500,000	for	each	eligible	customer, subject	to	a	limitation	of	$100,000	for	claims	for	cash	balances.	To	supplement this	SIPC	coverage,	CGMI	has	purchased	additional	protection	for	the	benefit	of its	customers,	subject	to	an	aggregate	loss	limit	of	$600	million	and	a	per	client cash	loss	limit	of	up	to	$1.9	million.

# Capital Requirements

As	a	registered	broker-dealer,	CGMI	is	subject	to	Rule	15c3-1	of	the	SEC	(the Net	Capital	Rule).	Under	the	Net	Capital	Rule,	CGMI	is	required	to	maintain minimum	net	capital		based	on	the	greater	of	the	SEC	or	CFTC	minimum	net capital	requirement		equal	to	2%	of	aggregate	debit	items,	as	defined.		Under NYSE	regulations,	CGMI	may	be	required	to	reduce	its	business	if	its	net	capital is	less	than	4%	of	aggregate	debit	items	and	may	also	be	prohibited	from expanding	its	business	or	paying	cash	dividends	if	resulting	net	capital	would	be less	than	5%	of	aggregate	debit	items.		Furthermore,	the	Net	Capital	Rule	does not	permit	withdrawal	of	equity	or	subordinated	capital	if	the	resulting	net capital	would	be	less	than	5%	of	aggregate	debit	items.

					CGMI	was	approved	by	the	SEC	to	compute	net	capital	in	accordance	with the	provisions	of	Appendix	E	of	Rule	15c3-1.	This	methodology	allows	CGMI to	compute	market	risk	capital	charges	using	internal	value-at-risk	models. Under	Appendix	E,	CGMI	is	also	required	to	hold	tentative	net	capital	in	excess of	$1	billion	and	net	capital	in	excess	of	$500	million.	The	firm	is	also	required to	notify	the	SEC	in	the	event	that	its	tentative	net	capital	is	less	than	$5	billion. 					Compliance	with	the	Net	Capital	Rule	could	limit	those	operations	of	CGMI that	require	the	intensive	use	of	capital,	such	as	underwriting	and	trading activities	and	the	financing	of	customer	account	balances,	and		also	limits	the ability	of	broker-dealers	to	transfer	large	amounts	of	capital	to	parent	companies and	other	affiliates.

# CUSTOMERS

In	Citigroup's	judgment,	no	material	part	of	Citigroup's	business	depends	upon	a single	customer	or	group	of	customers,	the	loss	of	which	would	have	a materially	adverse	effect	on	Citi,	and	no	one	customer	or	group	of	affiliated customers	accounts	for	as	much	as	10%	of	Citigroup's	consolidated	revenues.

# COMPETITION

The	financial	services	industry,	including	each	of	Citigroup's	businesses,	is highly	competitive.	Citigroup's	competitors	include	a	variety	of	other	financial services	and	advisory	companies	such	as	banks,	thrifts,	credit	unions,	credit	card issuers,	mortgage	banking	companies,	trust	companies,	investment	banking companies,	brokerage	firms,	investment	advisory	companies,	hedge	funds, private	equity	funds,	securities	processing	companies,	mutual	fund	companies, insurance	companies,	automobile	financing	companies,	and	Internet-based financial	services	companies.

					Citigroup	competes	for	clients	with	some	of	these	competitors	globally	and with	others	on	a	regional	or	product	basis.	Increased	competition	may	create pressure	to	lower	prices	on	our	products	and	services	and	affect	market	share. Our	competitive	position	depends	on	many	factors,	including	brand	name, reputation,	the	types	of	clients,	industries	and	geographies	served,	the	quality, range,	performance,	innovation	and	pricing	of	products	and	services,	the effectiveness	of	and	access	to	distribution	channels,	technology	advances, customer	service	and	convenience,	effectiveness	of	transaction	execution, interest	rates	and	lending	limits,	regulatory	constraints,	the	talent	of	our employees	and	the	effectiveness	of	advertising	and	sales	promotion	efforts.

					In	recent	years,	Citigroup	has	experienced	intense	price	competition	in	some of	its	businesses.	For	example,	the	increased	pressure	on	trading	commissions from	growing	direct	access	to	automated,	electronic	markets	may	continue	to impact	Securities	and	Banking,	and	technological	advances	that	enable	more companies	to	provide	funds	transfers	may	diminish	the	importance	of	Regional Consumer	Banking's	role	as	a	financial	intermediary.	Citigroup	also	faces intense	competition	in	attracting	and	retaining	qualified	employees,	and	its ability	to	compete	effectively	will	depend	upon	its	ability	to	attract	new employees	and	retain	and	sufficiently	motivate	existing	employees,	while managing	compensation	and	other	costs.	See	"Risk	Factors"	above. 					An	increasingly	global	financial	services	industry	has	seen	substantial consolidation	among	companies,	particularly	during	the	recent	credit	crisis, through	mergers,	acquisitions	and	bankruptcies.	In	addition,	as	a	result	of	the recent	credit	crisis,	certain	investment	banks	and	other	entities	became	bank holding	companies	and/or	financial	holding	companies.	This	consolidation	may produce	larger,	better	capitalized	and	more	geographically	diverse	competitors able	to	offer	a	wider	array	of	products	and	services	at	more	competitive	prices around	the	world.	Additionally,	some	of	Citigroup's	competitors	may	face	fewer regulatory	constraints	resulting	in	lower	cost	structures	and	increased	operating flexibility.	In	certain	geographic	regions,	including	"emerging	markets,"	our competitors	may	have	a	stronger	local	presence,	longer	operating	histories,	and more	established	relationships	with	clients	and	regulators.

					Citigroup	also	actively	competes	for	access	to	capital	at	competitive	rates	to fund	its	operations,	including	competition	for	deposits	and	funding	in	the	short- and	long-term	debt	markets.

# PROPERTIES

Citigroup's	principal	executive	offices	are	located	at	399	Park	Avenue	in	New York	City.	Citigroup,	and	certain	of	its	subsidiaries,	is	the	largest	tenant	of	this building.	Citigroup	also	has	additional	office	space	in	601	Lexington	Avenue (formerly	known	as	Citigroup	Center—153	East	53rd	Street,	NYC)	under	a	long- term	lease.	Citibank	leases	one	building	and	owns	another	in	Long	Island	City, New	York,	and	has	a	long-term	lease	on	a	building	at	111	Wall	Street	in	New York	City,	which	are	totally	occupied	by	Citigroup	and	certain	of	its subsidiaries.

					Citigroup	Global	Markets	Holdings	Inc.	has	its	principal	offices	in	a building	it	leases	at	388	Greenwich	Street	in	New	York	City,	and	also	leases	the neighboring	building	at	390	Greenwich	Street,	both	of	which	are	fully	occupied by	Citigroup	and	certain	of	its	subsidiaries.

					Citigroup's	principal	executive	offices	in	EMEA	are	located	at	25	and	33 Canada	Square	in	London's	Canary	Wharf.	Citigroup	has	a	long-term	lease	for both	buildings,	and	is	the	sole	tenant	of	33	Canada	Square	and	the	largest	tenant of	25	Canada	Square.	Citigroup	has	offices	and	a	branch	network	throughout EMEA.

					In	Asia,	Citigroup's	principal	executive	offices	are	in	leased	premises	located at	Citibank	Tower	in	Central,	Hong	Kong.	Citigroup	has	major	or	full	ownership interests	in	country	headquarter	locations	in	Shanghai,	Seoul,	Kuala	Lumpur, Manila,	and	Mumbai.

					Banamex's	headquarters	building	is	located	in	Mexico	City	in	the	Santa	Fe area,	which	is	a	two-tower	complex	with	six	floors	each	totaling	257,000 rentable	square	feet.	The	building	is	owned	by	Banamex.	Banamex	has	office and	branch	sites	throughout	Mexico.

					Citigroup	owns	or	leases	over	82.2	million	square	feet	of	real	estate	in	101 countries,	comprised	of	12,800	properties.

					Citigroup	believes	its	properties	are	adequate	and	suitable	for	its	business	as presently	conducted	and	are	adequately	maintained.	Citigroup	continues	to evaluate	its	current	and	projected	space	requirements	and	may	determine	from time	to	time	that	certain	of	its	premises	and	facilities	are	no	longer	necessary	for its	operations.	There	is	no	assurance	that	Citigroup	will	be	able	to	dispose	of	any such	excess	premises	or	that	it	will	not	incur	charges	in	connection	with	such dispositions.	Such	disposition	costs	may	be	material	to	Citigroup's	operating results	in	a	given	period.

					Citi	has	developed	programs	to	achieve	long-term	energy	efficiency objectives	and	reduce	its	greenhouse	gas	emissions	with	respect	to	its	properties. These	activities	could	help	to	mitigate,	but	will	not	eliminate,	Citigroup's		risk	of increased	costs	from	potential	future	regulatory	requirements	that	would	impact Citi	as	a	consumer	of	energy.

					For	further	information	concerning	leases,	see	Note	29	to	the	Consolidated Financial	Statements.

# LEGAL PROCEEDINGS

In	addition	to	the	matters	described	below,	in	the	ordinary	course	of	business, Citigroup	and	its	affiliates	and	subsidiaries	and	current	and	former	officers, directors	and	employees	(for	purposes	of	this	section,	sometimes	collectively referred	to	as	Citigroup	and	Related	Parties)	routinely	are	named	as	defendants in,	or	as	parties	to,	various	legal	actions	and	proceedings.	Certain	of	these actions	and	proceedings	assert	claims	or	seek	relief	in	connection	with	alleged violations	of	consumer	protection,	securities,	banking,	antifraud,	antitrust, employment	and	other	statutory	and	common	laws.	Certain	of	these	actual	or threatened	legal	actions	and	proceedings	include	claims	for	substantial	or indeterminate	compensatory	or	punitive	damages,	or	for	injunctive	relief. 					In	the	ordinary	course	of	business,	Citigroup	and	Related	Parties	also	are subject	to	governmental	and	regulatory	examinations,	information-gathering requests,	investigations	and	proceedings	(both	formal	and	informal),	certain	of which	may	result	in	adverse	judgments,	settlements,	fines,	penalties,	injunctions or	other	relief.	Certain	affiliates	and	subsidiaries	of	Citigroup	are	banks, registered	broker-dealers	or	investment	advisers	and,	in	those	capacities,	are subject	to	regulation	by	various	U.S.,	state	and	foreign	securities	and	banking regulators.	In	connection	with	formal	and	informal	inquiries	by	these	regulators, Citigroup	and	such	affiliates	and	subsidiaries	receive	numerous	requests, subpoenas	and	orders	seeking	documents,	testimony	and	other	information	in connection	with	various	aspects	of	their	regulated	activities.

					Because	of	the	global	scope	of	Citigroup's	operations,	and	its	presence	in countries	around	the	world,	Citigroup	and	Related	Parties	are	subject	to litigation,	and	governmental	and	regulatory	examinations,	information-gathering requests,	investigations	and	proceedings	(both	formal	and	informal)	in	multiple jurisdictions	with	legal	and	regulatory	regimes	that	may	differ	substantially,	and present	substantially	different	risks,	from	those	Citigroup	and	Related	Parties	are subject	to	in	the	United	States.

					Citigroup	seeks	to	resolve	all	litigation	and	regulatory	matters	in	the	manner management	believes	is	in	the	best	interests	of	the	Company	and	contests liability,	allegations	of	wrongdoing	and,	where	applicable,	the	amount	of damages	or	scope	of	any	penalties	or	other	relief	sought	as	appropriate	in	each pending	matter.	In	view	of	the	inherent	unpredictability	of	litigation	and regulatory	matters,	particularly	where	the	damages	sought	are	substantial	or indeterminate,	the	investigations	or	proceedings	are	in	the	early	stages,	or	the matters	involve	novel	legal	theories	or	a	large	number	of	parties,	Citigroup cannot	state	with	certainty	the	timing	or	ultimate	resolution	of	litigations	and regulatory	matters	or	the	eventual	loss,	fines,	penalties	or	business	impact,	if	any, associated	with	each	pending	matter.

					In	accordance	with	ASC	450	(formerly	SFAS	5),	Citigroup	establishes reserves	for	litigation	and	regulatory	matters	when	those	matters	present	loss contingencies	that	both	are	probable	and	can	be	reasonably	estimated.	Once established,	reserves	are	adjusted	from	time	to	time,	as	appropriate,	in	light	of additional	information.	The	actual	costs	of	resolving	litigations	and	regulatory matters,	however,	may	be	substantially	higher	or	lower	than	the	amounts reserved	for	those	matters.

					Subject	to	the	foregoing,	it	is	the	opinion	of	Citigroup's	management,	based on	current	knowledge	and	after	taking	into	account	available	insurance	coverage and	its	current	legal	reserves,	that	the	eventual	outcome	of	such	matters, including	the	matters	described	below,	would	not	be	likely	to	have	a	material adverse	effect	on	the	consolidated	financial	condition	of	Citi.	Nonetheless,	given the	substantial	or	indeterminate	amounts	sought	in	certain	of	these	matters,	and the	inherent	unpredictability	of	such	matters,	an	adverse	outcome	in	certain	of these	matters	could,	from	time	to	time,	have	a	material	adverse	effect	on	Citi's consolidated	results	of	operations	or	cash	flows	in	particular	quarterly	or	annual periods.

# Credit-Crisis-Related Litigation and Other Matters

Citigroup	and	Related	Parties	have	been	named	as	defendants	in	numerous	legal actions	and	other	proceedings	asserting	claims	for	damages	and	related	relief	for losses	arising	from	the	global	financial	credit	and	subprime-mortgage	crisis	that began	in	2007.	Such	matters	include,	among	other	types	of	proceedings,	claims asserted	by:	(i)	individual	investors	and	purported	classes	of	investors	in	Citi's common	and	preferred	stock	and	debt,	alleging	violations	of	the	federal securities	laws;	(ii)	individual	investors	and	purported	classes	of	investors	in, and	issuers	of,	auction	rate	securities	alleging	violations	of	the	federal	securities and	antitrust	laws;	(iii)	shareholders	alleging	derivative	claims	related	to subprime	and	auction-rate	securities	activities;	(iv)	participants	and	purported classes	of	participants	in	Citi's	retirement	plans,	alleging	violations	of	ERISA; (v)	counterparties	to	significant	transactions	adversely	affected	by	developments in	the	credit	and	subprime	markets;	(vi)	individual	investors	and	purported classes	of	investors	in	securities	and	other	investments	underwritten,	issued	or marketed	by	Citigroup,	and	other	strategic	investments,	that	have	suffered	losses as	a	result	of	the	credit	crisis;	(vii)	municipalities,	related	entities	and	individuals asserting	public	nuisance	claims;	and	(viii)	individual	borrowers	asserting	claims related	to	their	loans.	These	matters	have	been	filed	in	state	and	federal	courts across	the	country,	as	well	as	in	arbitrations	before	FINRA	and	other	arbitration associations.

					In	addition	to	these	litigations	and	arbitrations,	beginning	in	the	fourth quarter	of	2007,	certain	of	Citigroup's	regulators	and	other	state	and	federal government	agencies	commenced	formal	and	informal	investigations	and inquiries,	and	issued	subpoenas	and	requested	information,	concerning Citigroup's	subprime	mortgage-related	conduct	and	business	activities.	Citigroup is	involved	in	discussions	with	certain	of	its	regulators	to	resolve	certain	of	these matters.

					Certain	of	these	litigation	and	regulatory	matters	assert	claims	for	substantial or	indeterminate	damages.	Some	of	these	matters	already	have	been	resolved, either	through	settlements	or	court	proceedings,	including	the	complete dismissal	of	certain	complaints	or	the	rejection	of	certain	claims	following hearings.

# Subprime	Mortgage-Related	Litigation	and	Other	Matters

Beginning	in	November	2007,	Citigroup	and	Related	Parties	have	been	named as	defendants	in	numerous	legal	actions	and	other	proceedings	brought	by Citigroup	shareholders,	investors,	counterparties	and	others	concerning Citigroup's	activities	relating	to	subprime	mortgages,	including	Citigroup's exposure	to	collateralized	debt	obligations	(CDOs),	mortgage-backed	securities (MBS),	and	structured	investment	vehicles	(SIVs),	Citigroup's	underwriting activity	for	subprime	mortgage	lenders,	and	Citigroup's	more	general involvement	in	subprime-	and	credit-related	activities.

					Securities	Actions:	Several	putative	class	actions	were	filed	in	the	Southern District	of	New	York	by	Citigroup	shareholders	alleging	violations	of	Sections 10	and	20	of	the	Securities	Exchange	Act	of	1934.	On	August	19,	2008,	these actions	were	consolidated	under	the	caption	IN	RE	CITIGROUP	SECURITIES LITIGATION,	and	lead	plaintiff	and	counsel	were	appointed.	Plaintiffs' consolidated	amended	class	action	complaint	alleges,	among	other	things,	that Citigroup's	stock	price	was	artificially	inflated	as	a	result	of	purportedly misleading	disclosures	concerning	Citigroup's	subprime	mortgage–related exposures.	A	motion	to	dismiss	the	consolidated	class	action	complaint	is pending.

					In	addition,	Citigroup	and	Related	Parties	were	named	as	defendants	in	two putative	class	actions	filed	in	New	York	state	court	but	since	removed	to	the Southern	District	of	New	York.	These	actions	allege	violations	of	Sections	11, 12,	and	15	of	the	Securities	Act	of	1933,	arising	out	of	various	offerings	of Citigroup	notes	during	2006,	2007	and	2008.	On	December	10,	2008,	these actions	were	consolidated	under	the	caption	IN	RE	CITIGROUP	INC.	BOND LITIGATION.	A	motion	to	dismiss	the	consolidated	class	action	complaint	is pending.

					ERISA	Actions:	Numerous	class	actions	were	filed	in	the	Southern	District	of New	York	asserting	claims	under	the	Employee	Retirement	Income	Security	Act (ERISA)	against	Citigroup	and	certain	Citigroup	employees	alleged	to	have served	as	ERISA	plan	fiduciaries.	On	August	31,	2009,	the	court	granted defendants'	motion	to	dismiss	the	consolidated	class	action	complaint,	captioned IN	RE	CITIGROUP	ERISA	LITIGATION.	Plaintiffs	have	appealed	the dismissal.

					Derivative	Actions	and	Related	Proceedings:	Numerous	derivative	actions have	been	filed	in	federal	and	state	courts	against	various	current	and	former officers	and	directors	of	Citigroup	alleging	mismanagement	in	connection	with subprime	mortgage–related	exposures.	Citigroup	is	named	as	a	nominal defendant	in	these	actions.	Certain	of	these	actions	have	been	dismissed	either	in their	entirety	or	in	large	part.	In	addition,	a	committee	of	Citi's	Board	of Directors	is	reviewing	certain	shareholder	demands	that	raise	subprime-related issues.

					Underwriting	Matters:	Certain	Citigroup	affiliates	and	subsidiaries	have been	named	as	defendants	for	their	activities	as	underwriters	of	securities	in actions	brought	by	investors	in	securities	of	issuers	adversely	affected	by	the credit	crisis,	including	AIG,	Fannie	Mae,	Freddie	Mac,	Ambac	and	Lehman, among	many	others.	These	matters	are	in	various	stages	of	litigation.

					Subprime	Counterparty	and	Investor	Actions:	Citigroup	and	Related	Parties have	been	named	as	defendants	in	actions	brought	in	various	state	and	federal courts,	as	well	as	in	arbitrations,	by	counterparties	and	investors	that	have suffered	losses	as	a	result	of	the	credit	crisis,	including:	Ambac	Credit	Products, LLC,	which	alleges	various	claims	including	fraud	and	breach	of	fiduciary	duty in	connection	with	Citigroup's	purchase	of	credit	protection	from	Ambac	for	a $1.95	billion	super-senior	tranche	of	a	CDO	structured	by	Citigroup	subsidiaries; investors	and	purported	classes	of	investors	in	the	Falcon	and	ASTA/MAT funds,	alleging	violations	of	federal	securities	and	state	laws	arising	out	of Citigroup's	sale	and	marketing	of	shares	in	certain	of	these	funds;	and	Abu Dhabi	Investment	Authority,	alleging	statutory	and	common	law	claims	in connection	with	its	$7.5	billion	investment	in	Citigroup.	These	matters	are	in various	procedural	stages.

# Auction	Rate	Securities-Related	Litigation	and	Other	Matters

Beginning	in	March	2008,	Citigroup	and	Related	Parties	have	been	named	as defendants	in	numerous	actions	and	proceedings	brought	by	Citigroup shareholders	and	customers	concerning	auction	rate	securities	(ARS).	In	addition to	those	matters	described	below,	these	have	included,	among	others,	numerous arbitrations	filed	by	customers	of	Citigroup	and	its	subsidiaries	seeking	damages in	connection	with	investments	in	ARS,	which	are	in	various	stages	of proceedings,	and	a	derivative	action	filed	against	certain	Citigroup	officers	and directors,	which	has	been	dismissed.	A	committee	of	Citi's	Board	of	Directors	is reviewing	a	demand	sent	to	the	Board	following	the	dismissal	of	the	derivative action.

					Securities	Actions:	Beginning	in	March	2008,	Citigroup	and	Related	Parties were	named	as	defendants	in	a	series	of	putative	class	action	lawsuits	related	to ARS.	These	actions	have	been	consolidated	into	a	single	action	pending	in	the Southern	District	of	New	York,	captioned	IN	RE	CITIGROUP	AUCTION RATE	SECURITIES	LITIGATION,	asserting	claims	for	federal	securities	and other	statutory	and	common	law	violations.	On	September	11,	2009,	the	court granted	defendants'	motion	to	dismiss	the	consolidated	amended	complaint.	On October	15,	2009,	plaintiffs	filed	a	further	amended	complaint,	which defendants	also	have	moved	to	dismiss.

					Antitrust	Actions:	Two	antitrust	actions	were	filed	in	the	Southern	District	of New	York	on	behalf	of	purported	classes	of	ARS	issuers	and	investors, respectively,	against	Citigroup,	CGMI	and	various	other	financial	institutions.	In these	actions,	plaintiffs	allege	violations	of	Section	1	of	the	Sherman	Act	arising out	of	defendants'	alleged	conspiracy	to	restrain	trade	in	the	ARS	market.	On January	26,	2010,	both	actions	were	dismissed.

# Lehman	Structured	Notes	Matters

Like	many	other	financial	institutions,	Citigroup,	through	certain	of	its	affiliates and	subsidiaries,	distributed	structured	notes	issued	and	guaranteed	by	Lehman entities	to	retail	customers	in	various	countries	outside	the	United	States, principally	in	Europe	and	Asia.	After	the	relevant	Lehman	entities	filed	for bankruptcy	protection	in	September	2008,	certain	regulators	in	Europe	and	Asia commenced	investigations	into	the	conduct	of	financial	institutions	involved	in such	distribution,	including	Citigroup	entities.	These	regulatory	investigations are	in	various	stages,	and	some	have	resulted	in	adverse	findings	against Citigroup	entities.	Some	purchasers	of	the	notes	have	filed	civil	actions	or otherwise	complained	about	the	sales	process.	Citigroup	has	generally	dealt	with such	complaints	and	claims	on	an	individual	basis	based	on	the	particular circumstances.	In	Belgium	and	in	Poland,	however,	Citigroup	has	made	a settlement	offer	to	all	eligible	purchasers	of	notes	distributed	by	Citigroup	in those	countries.	A	significant	majority	of	the	eligible	purchasers	have	accepted these	offers.	Also	in	Belgium,	a	criminal	case	is	proceeding	against	a	Citigroup subsidiary,	two	current	employees	and	one	former	employee.	Citigroup	disputes that	it	or	its	employees	have	engaged	in	any	wrongdoing	in	connection	with	the distribution	of	Lehman	notes	in	Belgium	or	elsewhere	and	is	defending	the charges.	Criminal	investigations	have	also	commenced	in	Greece	and	Poland.

# Interchange Fees Litigation

Beginning	in	2005,	several	putative	class	actions	were	filed	against	Citigroup and	certain	of	its	subsidiaries,	together	with	Visa,	MasterCard	and	other	banks and	their	affiliates,	in	various	federal	district	courts.	These	actions	were consolidated	with	other	related	cases	in	the	Eastern	District	of	New	York	and captioned	IN	RE	PAYMENT	CARD	INTERCHANGE	FEE	AND	MERCHANT DISCOUNT	ANTITRUST	LITIGATION.	The	plaintiffs	in	the	consolidated class	action	are	merchants	that	accept	Visa	and	MasterCard	branded	payment cards	as	well	as	membership	associations	that	claim	to	represent	certain	groups of	merchants.	The	pending	complaint	alleges,	among	other	things,	that defendants	(including	the	Citigroup	defendants)	have	engaged	in	conspiracies	to set	the	price	of	interchange	and	merchant	discount	fees	on	credit	and	debit	card transactions	in	violation	of	Section	1

of	the	Sherman	Act	and	a	California	statute.	The	complaint	also	alleges additional	Sherman	Act	and	California	law	violations,	including	alleged unlawful	maintenance	of	monopoly	power	and	alleged	unlawful	contracts	in restraint	of	trade	pertaining	to	various	Visa	and	MasterCard	rules	governing merchant	conduct	(including	rules	allegedly	affecting	merchants'	ability,	at	the point	of	sale,	to	surcharge	payment	card	transactions	or	steer	customers	to particular	payment	cards).	In	addition,	supplemental	complaints	filed	against defendants	in	the	class	action	allege	that	Visa's	and	MasterCard's	respective initial	public	offerings	were	anticompetitive	and	violated	Section	7	of	the Clayton	Act,	and	that	MasterCard's	initial	public	offering	constituted	a fraudulent	conveyance.

					In	addition	to	injunctive	relief,	plaintiffs	seek	joint	and	several	liability	for treble	the	amount	of	damages,	including	all	interchange	fees	paid	to	all	Visa	and MasterCard	members	with	respect	to	Visa	and	MasterCard	transactions	in	the U.S.	since	at	least	January	1,	2004.	Defendants'	motions	to	dismiss	the	pending class	action	complaint	and	the	supplemental	complaints	are	pending.	Also pending	is	plaintiffs'	motion	to	certify	nationwide	classes	consisting	of	all	U.S. merchants.	Discovery	has	closed,	with	the	exception	of	expert	discovery.

# Parmalat Litigation and Other Matters

On	July	29,	2004,	Dr.	Enrico	Bondi,	the	Extraordinary	Commissioner	appointed under	Italian	law	to	oversee	the	administration	of	various	Parmalat	companies, filed	a	complaint	in	New	Jersey	state	court	against	Citigroup	and	Related Parties	alleging	that	the	defendants	"facilitated"	a	number	of	frauds	by	Parmalat insiders.	The	complaint	asserted	10	claims,	nine	of	which	were	dismissed pretrial,	arising	out	of	four	sets	of	transactions	involving	Parmalat	companies; Citibank,	N.A.	asserted	several	counterclaims.	On	October	20,	2008,	following trial,	a	jury	rendered	a	verdict	in	Citigroup's	favor	on	plaintiff's	remaining	claim, and	in	favor	of	Citibank	on	three	counterclaims.	The	court	entered	judgment	for Citibank	in	the	amount	of	$431	million	on	the	counterclaims.	Plaintiff's	appeal from	the	court's	final	judgment	is	pending.	In	addition,	prosecutors	in	Parma	and Milan,	Italy,	are	conducting	a	criminal	investigation	of	Citigroup	and	certain current	and	former	Citigroup	employees	(along	with	numerous	other	investment banks	and	certain	of	their	current	and	former	employees,	as	well	as	former Parmalat	officers	and	accountants).	In	the	event	of	an	adverse	judgment	against the	individuals	in	question,	it	is	possible	that	the	authorities	could	seek administrative	remedies	against	Citigroup.	Additionally,	Dr.	Bondi	has	purported to	file	a	civil	complaint	against	Citigroup	in	the	context	of	the	Parma	criminal proceedings,	seeking	14	billion	Euro	in	damages.

# Adelphia Litigation

Adversary	proceedings	were	filed	in	2003	by	the	Official	Committee	of Unsecured	Creditors	and	the	Equity	Holders	Committee	on	behalf	of	Adelphia Communications	Corporation	and	affiliated	parties	against	certain	Citigroup affiliates	and	subsidiaries	as	well	as	other	lenders	and	investment	banks	asserting violations	of	the	Bank	Holding	Company	Act,	the	Bankruptcy	Code,	and common	law.	The	complaints	sought	unspecified	damages	and	recovery	of certain	purportedly	fraudulent	transfers.	Following	litigation	of	motions	to dismiss,	the	Adelphia	Recovery	Trust	(the	ART),	which	replaced	the	committees as	plaintiffs	in	the	actions,	filed	a	consolidated	amended	complaint	on	behalf	of the	Adelphia	Estate.	The	district	court	granted	in	part	and	denied	in	part	the defendants'	motions	to	dismiss	the	consolidated	complaint.	The	ART's	appeal	to the	Second	Circuit	from	that	partial	dismissal	is	pending.	Before	the	district court,	the	parties	are	briefing	summary	judgment.	Trial	of	any	claims	that survive	is	scheduled	for	September	2010.

# Bruno's Litigation

Plaintiffs,	purchasers	of	senior	subordinated	notes	issued	in	connection	with	a 1995	leveraged	recapitalization	of	Bruno's	Inc.,	filed	a	complaint	in	Alabama state	court	against	certain	Citigroup	subsidiaries	and	affiliates,	and	other defendants,	in	2004,	alleging	violations	of	state	law	arising	out	of	an underwriting	of	Bruno's	securities.	Plaintiffs	seek	"hundreds	of	millions	of dollars"	in	damages.	In	January	2010,	prior	to	trial,	the	Citigroup	defendants entered	into	a	settlement	conditioned	on	court	approval.

# Research Analyst Litigation

Beginning	in	2002,	Citigroup	and	Related	Parties	were	named	as	defendants	in	a series	of	individual	and	putative	class	action	lawsuits	relating	to	the	issuance	of research	analyst	reports	concerning	WorldCom	and	other	issuers.	One	individual WorldCom	action	remains	pending	on	appeal	in	the	Second	Circuit,	following dismissal	of	the	complaint	by	the	federal	district	court	for	the	Southern	District	of New	York.	The	Second	Circuit	certified	certain	questions	of	law	to	the	Georgia Supreme	Court,	which	has	issued	an	opinion	answering	those	questions.	The Second	Circuit	has	not	yet	decided	the	appeal.

					In	March	2004,	a	putative	research-related	customer	class	action	alleging various	state	law	claims	arising	out	of	the	issuance	of	allegedly	misleading research	analyst	reports	concerning	numerous	issuers	was	filed	against	certain Citigroup	defendants	in	Illinois	state	court.	Citigroup's	motion	to	dismiss	the complaint	is	pending.

# Cash Balance Plan Litigation

Beginning	in	June	2005,	several	putative	class	actions	were	filed	in	the	Southern District	of	New	York	by	certain	participants	in	the	Citigroup	Pension	Plan (Plan),	alleging	violations	of	ERISA	against	the	Plan	and	other	Citigroup defendants.	In	December	2006,	the	district	court	denied	defendants'	summary judgment	motion;	granted	summary	judgment	to	plaintiffs	on	certain	claims;	and ordered	the	Plan	reformed	to	comply	with	ERISA.	In	January	2008,	the	court entered	a	partial	final	judgment	on	certain	of	plaintiffs'	claims	and	stayed	the judgment	pending	appeal.	On	October	19,	2009,	the	Second	Circuit	reversed	the district	court's	order	granting	summary	judgment	for	plaintiffs	and	dismissed plaintiffs'	complaint.	On	January	12,	2010,	the	Second	Circuit	denied	rehearing.

# Allied Irish

In	2003,	Allied	Irish	Bank	(AIB)	filed	a	complaint	in	the	Southern	District	of New	York	seeking	to	hold	Citibank	and	Bank	of	America,	former	prime	brokers for	AIB's	subsidiary,	Allfirst	Bank	(Allfirst),	liable	for	losses	incurred	by Allfirst	as	a	result	of	fraudulent	and	fictitious	foreign	currency	trades	entered into	by	one	of	Allfirst's	traders.	The	Court	granted	in	part	and	denied	in	part defendants'	motions	to	dismiss,	and	the	parties	are	currently	engaged	in discovery.

# Settlement Payments

Payments	required	in	settlement	agreements	described	above	have	been	made	or are	covered	by	existing	litigation	reserves.

Additional	lawsuits	containing	claims	similar	to	those	described	above	may	be filed	in	the	future.

# UNREGISTERED SALES OF EQUITY; PURCHASES OF EQUITY SECURITIES; DIVIDENDS

# Unregistered	Sales	of	Equity	Securities

# None.

# Share	Repurchases

Under	its	long-standing	repurchase	program,	Citigroup	may	buy	back	common shares	in	the	market	or	otherwise	from	time	to	time.	This	program	is	used	for many	purposes,	including	offsetting	dilution	from	stock-based	compensation programs.

					The	following	table	summarizes	Citigroup's	share	repurchases	during	2009:

# Approximate dollar

|  |  | Average | may yet be purchased |
| :--- | :--- | :--- | :--- |
|  | Total shares | price paid | under the plan or |
| In millions, except per share amounts | purchased (1) | per share | programs |
| First quarter 2009 |  |  |  |
| Open market repurchases (1) | 0.2 | $3.03 | $6,741 |
| Employee transactions (2) | 10.7 | 3.56 | N/A |
| Total first quarter 2009 | 10.9 | $3.55 | $6,741 |
| Second quarter 2009 |  |  |  |
| Open market repurchases (1) | 0.2 | $3.27 | $6,740 |
| Employee transactions (2) | 4.4 | 3.67 | N/A |
| Total second quarter 2009 | 4.6 | $3.65 | $6,740 |
| Third quarter 2009 |  |  |  |
| Open market repurchases (1) | 0.5 | $3.21 | $6,739 |
| Employee transactions (2) | 1.3 | 3.22 | N/A |
| Total third quarter 2009 | 1.8 | $3.22 | $6,739 |
| October 2009 |  |  |  |
| Open market repurchases (1) | — | $— | $6,739 |
| Employee transactions (2) | 0.2 | 4.65 | N/A |
| November 2009 |  |  |  |
| Open market repurchases (1) | — | $— | $6,739 |
| Employee transactions (2) | 10.3 | 4.11 | N/A |
| December 2009 |  |  |  |
| Open market repurchases (1) | — | $— | $6,739 |
| Employee transactions (2) | 9.3 | 3.34 | N/A |
| Fourth quarter 2009 |  |  |  |
| Open market repurchases (1) | — | $— | $6,739 |
| Employee transactions (2) | 19.8 | 3.76 | N/A |
| Total fourth quarter 2009 | 19.8 | $3.76 | $6,739 |
| Year-to-date 2009 |  |  |  |
| Open market repurchases (1) | 0.9 | $3.20 | $6,739 |
| Employee transactions (2) | 36.2 | 3.67 | N/A |
| Total year-to-date 2009 | 37.1 | $3.66 | $6,739 |

(1)  All open market repurchases were transacted under an existing authorized share repurchase plan. Since 2000, the Board of Directors has authorized the repurchase of shares in the aggregate amount of $40 billion under Citi's existing share repurchase plan. All shares repurchased during 2009 relate to customer fails/errors.

(2) Consists of shares added to treasury stock related to activity on employee stock option program exercises, where the employee delivers existing shares to cover the option exercise, or under Citi's employee restricted or deferred stock program, where shares are withheld to satisfy tax requirements.

					For	so	long	as	the	U.S.	government	holds	any	Citigroup	common	stock	or trust	preferred	securities	acquired	pursuant	to	the	preferred	stock	exchange	offers consummated	in	2009,	Citigroup	has	agreed	not	to	acquire,	repurchase

or	redeem	any	Citigroup	equity	or	trust	preferred	securities,	other	than	pursuant to	administrating	its	employee	benefit	plans	or	other	customary	exceptions,	or with	the	consent	of	the	U.S.	government.

For	a	summary	of	the	cash	dividends	paid	on	Citi's	outstanding	common	stock during	2008	and	2009,	see	Note	34	to	the	Consolidated	Financial	Statements.		In addition,	for	so	long	as	the	U.S.	government	holds	any	Citigroup	common	stock or	trust	preferred	securities	acquired	pursuant	to	the	preferred	exchange	offers consummated	in	2009,	Citigroup	has	agreed	not	to	pay	a	quarterly	common stock	dividend	exceeding	$0.01	per	quarter,	subject	to	certain	customary exceptions.		Further,	any	dividend	on	Citi's	outstanding	common	stock	would need	to	be	made	in	compliance	with	Citi's	obligations	to	any	remaining outstanding	Citigroup	preferred	stock.

# Executive Officers

Citigroup's	executive	officers	as	of	February	26,	2010	are:

Chairman of the Global Consumer Council;

Each	executive	officer	has	held	executive	or	management	positions	with Citigroup	for	at	least	five	years,	except	that:

Mr.	Callahan	joined	Citigroup	in	2007.	Prior	to	joining	Citi,	Mr. Callahan	was	a	Managing	Director	and	Head	of	Client	Coverage Strategy	for	the	Investment	Banking	Division	at	Credit	Suisse.	From 1993	to	2006,	Mr.	Callahan	worked	at	Morgan	Stanley,	serving	in numerous	roles,	including	Global	Head	of	Marketing	and	Head	of Marketing	for	the	Institutional	Equities	Division	and	for	the Institutional	Securities	Group.

Mr.	Havens	joined	Citigroup	in	2007.	Prior	to	joining	Citigroup,	Mr. Havens	was	a	partner	of	Old	Lane,	LP,	a	multi-strategy	hedge	fund and	private	equity	fund	manager	that	was	acquired	by	Citi	in	2007. Mr.	Havens,	along	with	several	former	colleagues	from	Morgan Stanley	(including	Mr.	Leach	and	Mr.	Pandit),	founded	Old	Lane	in 2005.	Before	forming	Old	Lane,	Mr.	Havens	was	Head	of	Institutional Equity	at	Morgan	Stanley	and	a	member	of	the	firm's	Management Committee.

Mr.	Kaden	joined	Citigroup	in	September	2005.	Prior	to	joining Citigroup,	Mr.	Kaden	was	a	partner	at	Davis	Polk	&	Wardwell. Mr.	Kelly	joined	Citi	in	February	2008	from	The	Carlyle	Group,	a private	investment	firm,	where	he	was	a	Managing	Director.	Prior	to joining	Carlyle	in	July	2007,	he	was	a	Vice	Chairman	at	The	PNC Financial	Services	Group	following	PNC's	acquisition	of	Mercantile Bankshares	Corporation	in	March	2007.	He	was	Chairman,	Chief Executive	and	President	of	Mercantile	from	March	2003	through March	2007.

Mr.	Leach	joined	Citigroup	in	2008.	Prior	to	becoming	Citi's	Chief Risk	Officer	in	March	2008,	Mr.	Leach	was	a	founder	and	the	co- COO	of	Old	Lane,	which	was	acquired	by	Citi	in	2007.	Earlier,	he had	worked	for	his	entire	financial	career	at	Morgan	Stanley,	finishing as	Risk	Manager	of	the	Institutional	Securities	Business.

Mr.	McQuade	joined	Citi	in	August	2009.	Prior	to	joining	Citi,	Mr. McQuade	was	Vice	Chairman	of	Merrill	Lynch	and	President	of Merrill	Lynch	Banks	(U.S.)	from	February	2008	until	February	2009. Previously,	he	was	the	President	and	Chief	Operating	Officer	of Freddie	Mac	for	three	years.	Prior	to	joining	Freddie	Mac	in	2004,	Mr. McQuade	served	as	President	of	Bank	of	America	Corporation. Mr.	Pandit,	prior	to	being	named	CEO	on	December	11,	2007,	was Chairman	and	CEO	of	Citigroup's	Institutional	Clients	Group. Formerly	the	Chairman	and	CEO	of	Alternative	Investments,	Mr. Pandit	was	a	founding	member	and	chairman	of	the	members committee	of	Old	Lane,	LP,	which	was	acquired	by	Citigroup	in	2007. Prior	to	forming	Old	Lane,	Mr.	Pandit	held	a	number	of	senior positions	at	Morgan	Stanley	over	more	than	two	decades,	including President	and	Chief	Operating	Officer	of	Morgan	Stanley's institutional	securities	and	investment	banking	business	and	was	a member	of	the	firm's	Management	Committee.

# Comparison of Five-Year Cumulative Total Return

The	following	graph	compares	the	cumulative	total	return	on	Citigroup's common	stock	with	the	S&P	500	Index	and	the	S&P	Financial	Index	over	the five-year	period	extending	through	December	31,	2009.	The	graph	assumes

that	$100	was	invested	on	December	31,	2004	in	Citigroup's	common	stock,	the S&P	500	Index	and	the	S&P	Financial	Index	and	that	all	dividends	were reinvested.

# For the years ended

| DECEMBER 31 | CITIGROUP							S&amp;P 500 INDEX							S&amp;P FINANCIAL INDEX | CITIGROUP							S&amp;P 500 INDEX							S&amp;P FINANCIAL INDEX | CITIGROUP							S&amp;P 500 INDEX							S&amp;P FINANCIAL INDEX |
| :--- | :--- | :--- | :--- |
| 2005 | 104.38 | 104.83 | 106.30 |
| 2006 | 124.02 | 121.20 | 126.41 |
| 2007 | 70.36 | 127.85 | 103.47 |
| 2008 | 18.71 | 81.12 | 47.36 |
| 2009 | 9.26 | 102.15 | 55.27 |

# CORPORATE INFORMATION

Citigroup	has	a	Code	of	Conduct	that	maintains	its	commitment	to	the	highest standards	of	conduct.	The	Code	of	Conduct	is	supplemented	by	a	Code	of	Ethics for	Financial	Professionals	(including	finance,	accounting,	treasury,	tax	and investor	relations	professionals)	that	applies	worldwide.	The	Code	of	Ethics	for Financial	Professionals	applies	to	Citigroup's	principal	executive	officer, principal	financial	officer	and	principal	accounting	officer.	Amendments	and waivers,	if	any,	to	the	Code	of	Ethics	for	Financial	Professionals	will	be disclosed	on	Citi's	Web	site,	www.citigroup.com.

					Both	the	Code	of	Conduct	and	the	Code	of	Ethics	for	Financial	Professionals can	be	found	on	the	Citigroup	Web	site.	The	Code	of	Conduct	can	be	found	by clicking	on	"About	Citi,"	and	the	Code	of	Ethics	for	Financial	Professionals	can be	found	by	further	clicking	on	"Corporate	Governance"	and	then	"Governance Documents."	Citi's	Corporate	Governance	Guidelines	can	also	be	found	there. The	charters	for	the	Audit	Committee,	the	Risk	Management	and	Finance Committee,	the	Nomination	and	Governance	Committee,	the	Personnel	and Compensation	Committee,	and	the	Public	Affairs	Committee	of	the	Board	are also	available	by	further	clicking	on	"Board	of	Directors"	and	then	"Charters." These	materials	are	also	available	by	writing	to	Citigroup	Inc.,	Corporate Governance,	425	Park	Avenue,	2nd	Floor,	New	York,	New	York	10043.

# Stockholder Information

Citigroup	common	stock	is	listed	on	the	NYSE	under	the	ticker	symbol	"C"	and on	the	Tokyo	Stock	Exchange	and	the	Mexico	Stock	Exchange.	Citigroup preferred	stock	Series	F,	T	and	AA	are	also	listed	on	the	NYSE.

					Because	Citigroup's	common	stock	is	listed	on	the	NYSE,	the	Chief Executive	Officer	is	required	to	make	an	annual	certification	to	the	NYSE stating	that	he	was	not	aware	of	any	violation	by	Citigroup	of	the	corporate governance	listing	standards	of	the	NYSE.	The	annual	certification	to	that	effect was	made	to	the	NYSE	on	May	20,	2009.

					As	of	January	31,	2010,	Citigroup	had	approximately	192,630	common stockholders	of	record.	This	figure	does	not	represent	the	actual	number	of beneficial	owners	of	common	stock	because	shares	are	frequently	held	in	"street name"	by	securities	dealers	and	others	for	the	benefit	of	individual	owners	who may	vote	the	shares.

# Transfer Agent

Stockholder	address	changes	and	inquiries	regarding	stock	transfers,	dividend replacement,	1099-DIV	reporting,	and	lost	securities	for	common	and	preferred stocks	should	be	directed	to:

# Exchange Agent

Holders	of	Golden	State	Bancorp,	Associates	First	Capital	Corporation,	Citicorp or	Salomon	Inc.	common	stock,	Citigroup	Inc.	Preferred	Stock	Series	J,	K,	Q,	S, T	or	U,	or	Salomon	Inc.	Preferred	Stock	Series	D	or	E	should	arrange	to exchange	their	certificates	by	contacting: Computershare P.O.	Box	43078 Providence,	RI	02940-3078 Telephone	No.	781	575	4555 Toll-free	No.	888	250	3985 Facsimile	No.	201	324	3284 E-mail	address:	shareholder@computershare.com Web	address:	www.computershare.com/investor

# Signatures

Pursuant	to	the	requirements	of	Section	13	or	15	(d)	of	the	Securities	Exchange Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	its	behalf by	the	undersigned,	thereunto	duly	authorized,	on	the	26th	day	of	February, 2010.

Citigroup	Inc. (Registrant)

The	Directors	of	Citigroup	listed	below	have	signed	this	report.	The	Directors' signature	pages	are	included	in	Exhibit	99.03	to	Citigroup's	2009	Annual	Report on	Form	10-K.

C. Michael Armstrong

Alain J.P. Belda

Timothy C. Collins

John M. Deutch

Jerry A. Grundhofer

Robert L. Joss, Ph.D.

Andrew N. Liveris

Anne Mulcahy

Michael E. O'Neill

Richard D. Parsons

Lawrence R. Ricciardi

Judith Rodin

Robert L. Ryan

Anthony M. Santomero

Diana L. Taylor

William	S.	Thompson,	Jr.

/s/John	C.	Gerspach

John	C.	Gerspach Chief	Financial	Officer

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report has	been	signed	below	by	the	following	persons	on	behalf	of	the	registrant	and	in the	capacities	indicated	on	the	26th	day	of	February,	2010.

Citigroup's	Principal	Executive	Officer	and	a	Director:

/s/Vikram	S.	Pandit

Vikram	S.	Pandit Citigroup's	Principal	Financial	Officer:

/s/John	C.	Gerspach John	C.	Gerspach Citigroup's	Principal	Accounting	Officer:

/s/Jeffrey	R.	Walsh

Jeffrey	R.	Walsh

# CITIGROUP BOARD OF DIRECTORS

C. Michael Armstrong Chairman,	Board	of	Trustees Johns	Hopkins	Medicine,	Health 					Systems	and	Hospital

Alain J.P. Belda Chairman Alcoa	Inc.

Timothy C. Collins Chief	Executive	Officer	and 					Senior	Managing	Director Ripplewood	Holdings	L.L.C.

John M. Deutch Institute	Professor Massachusetts	Institute 					of	Technology

Chairman	Emeritus U.S.	Bancorp

Robert L. Joss, Ph.D. Professor	of	Finance	and 					Former	Dean Graduate	School	of	Business Stanford	University

Andrew N. Liveris Chairman	and 					Chief	Executive	Officer The	Dow	Chemical	Company

Anne Mulcahy Chairman Xerox	Corporation

Former	Chairman	and 					Chief	Executive	Officer Bank	of	Hawaii	Corporation

# Vikram Pandit

Chief	Executive	Officer Citigroup	Inc.

Richard D. Parsons Chairman Citigroup	Inc.

Lawrence R. Ricciardi Senior	Advisor IBM	Corporation; Jones	Day;	and	Lazard	Ltd

President Rockefeller	Foundation

Chief	Financial	Officer,	Retired Medtronic	Inc.

Anthony M. Santomero Former	President Federal	Reserve	Bank	of	Philadelphia

Diana L. Taylor Managing	Director Wolfensohn	Capital	Partners

Chief	Executive	Officer,	Retired Pacific	Investment 					Management	Company 					(PIMCO)

# EXHIBIT	INDEX

# Exhibit

4.05 Capital	Securities	Guarantee	Agreement,	dated	as	of	July	30,	2009,	between	the	Company,	as	Guarantor,	and	The	Bank	of	New	York	Mellon,	as	Guarantee Trustee,	incorporated	by	reference	to	Exhibit	4.03	to	the	Company's	Current	Report	on	Form	8-K	filed	July	30,	2009	(File	No.	1-9924).

4.06 Purchase	Contract	Agreement,	dated	December	22,	2009,	among	the	Company,	The	Bank	of	New	York	Mellon,	as	purchase	contract	agent,	and	The	Bank of	New	York	Mellon,	as	trustee,	incorporated	by	reference	to	Exhibit	4.2	to	the	Company's	Current	Report	on	Form	8-K	filed	December	24,	2009	(File	No. 1-9924).

10.01.1* Supplemental	ERISA	Compensation	Plan	of	Citibank,	N.A.	and	Affiliates,	as	amended	and	restated	(the	"Citibank	Supplemental	ERISA	Plan"), incorporated	by	reference	to	Exhibit	10.(G)	to	Citicorp's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31,	1997	(File	No.	1-5378).

10.01.3* Amendment	to	the	1999	Amended	Citibank	Supplemental	ERISA	Plan	(the	"2005	Amended	Citibank	Supplemental	ERISA	Plan"),	incorporated	by reference	to	Exhibit	10.04.1	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31,	2005	(File	No.	1-9924)	(the "Company's	2005	10-K").

10.01.4*+ Amendment	to	the	2005	Amended	Citibank	Supplemental	ERISA	Plan,	as	amended	January	1,	2009	(the	"2009	Amended	Citibank	Supplemental	ERISA Plan").

10.01.5*+ Nonqualified	Plan	Amendment	to	the	2009	Amended	Citibank	Supplemental	ERISA	Plan,	adopted	November	19,	2009.

10.02* Citigroup	Inc.	Amended	and	Restated	Compensation	Plan	for	Non-Employee	Directors	(as	of	September	21,	2004),	incorporated	by	reference	to	Exhibit 10.01	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	September	30,	2005	(File	No.	1-9924).

10.03.1* Form	of	Citigroup	Inc.	Non-Employee	Director	Equity	Award	Agreement	(pursuant	to	the	Amended	and	Restated	Compensation	Plan	for	Non-Employee Directors),	incorporated	by	reference	to	Exhibit	10.1	to	the	Company's	Current	Report	on	Form	8-K	filed	January	14,	2005	(File	No.	1-9924).

10.03.2* Form	of	Citigroup	Inc.	Non-Employee	Director	Equity	Award	Agreement	(effective	November	1,	2006),	incorporated	by	reference	to	Exhibit	10.05	to	the Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	September	30,	2006	(File	No.	1-9924)	(the	"Company's	September	30,	2006	10- Q").

10.04.1* Travelers	Group	Capital	Accumulation	Plan	(as	amended	through	July	23,	1997),	incorporated	by	reference	to	Exhibit	10.02	to	the	Company's	Quarterly Report	on	Form	10-Q	for	the	fiscal	quarter	ended	September	30,	1997	(File	No.	1-9924).

10.04.2* Amendment	to	the	Travelers	Group	Capital	Accumulation	Plan	(as	amended	through	July	23,	1997),	incorporated	by	reference	to	Exhibit	10.08.2	to	the Company's	1999	10-K.

10.09* Citigroup	Deferred	Cash	Award	Plan,	incorporated	by	reference	to	Exhibit	99.3	to	the	Company's	Current	Report	on	Form	8-K	filed	January	21,	2009	(File No.	1-9924).

10.10.1* Citicorp	Directors'	Deferred	Compensation	Plan,	Restated	May	1,	1988,	incorporated	by	reference	to	Exhibit	10.23	to	the	Company's	Annual	Report	on Form	10-K	for	the	fiscal	year	ended	December	31,	1998	(File	No.	1-9924).

10.11* Citigroup	1999	Stock	Incentive	Plan	(as	amended	and	restated	effective	January	1,	2009),	incorporated	by	reference	to	Exhibit	10.15	to	the	Company's 2008	10-K.

10.12* Form	of	Citigroup	Directors'	Stock	Option	Grant	Notification,	incorporated	by	reference	to	Exhibit	10.26	to	the	Company's	Annual	Report	on	Form	10-K for	the	fiscal	year	ended	December	31,	2000	(File	No.	1-9924).

10.13 Lease,	dated	as	of	September	25,	2002,	between	BP	399	Park	Avenue	LLC	(as	Landlord)	and	Citigroup	Inc.	(as	Tenant),	incorporated	by	reference	to Exhibit	10.01	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	March	31,	2003	(File	No.	1-9924).

10.14.1* Form	of	Citigroup	Equity	Award	Agreement,	incorporated	by	reference	to	Exhibit	10.02	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal quarter	ended	September	30,	2004	(File	No.	1-9924)	(the	"Company's	September	30,	2004	10-Q").

10.14.2* Form	of	Citigroup	Equity	Award	Agreement	(revised),	incorporated	by	reference	to	Exhibit	10.28.1	to	the	Company's	2005	10-K.

10.14.3* Form	of	Citigroup	Equity	Award	Agreement	(effective	November	1,	2006),	incorporated	by	reference	to	Exhibit	10.04	to	the	Company's	September	30, 2006	10-Q.

10.14.5* Form	of	Citigroup	Equity	or	Deferred	Cash	Award	Agreement	(effective	January	1,	2009),	incorporated	by	reference	to	Exhibit	10.01	to	the	Company's September	30,	2008	10-Q.

10.14.6* Form	of	Citigroup	Equity	or	Deferred	Cash	Award	Agreement	(effective	November	1,	2009),	incorporated	by	reference	to	Exhibit	10.01	to	the	Company's September	30,	2009	10-Q.

10.15.1* Form	of	Reload	Option	Grant	Notification,	incorporated	by	reference	to	Exhibit	10.03	to	the	Company's	September	30,	2004	10-Q.

10.15.2* Form	of	Citigroup	Reload	Stock	Option	Grant	Notification	(effective	November	1,	2006),	incorporated	by	reference	to	Exhibit	10.03	to	the	Company's September	30,	2006	10-Q.

10.16 				Citigroup	Management	Committee	Termination	Notice	and	Non-Solicitation	Policy,effective	October	2,	2006,	incorporated	by	reference	to	Exhibit	10.1	to the	Company's	Current	Report	on	Form	8-K	filed	October	6,	2006	(File	No.	1-9924).

10.17.1* Letter	Agreement,	dated	as	of	February	23,	2007,	between	the	Company	and	Gary	Crittenden,	incorporated	by	reference	to	Exhibit	10.01	to	the	Company's Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	March	31,	2007	(File	No.	1-9924)	(the	"2007	Letter	Agreement").

10.17.2* Amendment	to	the	2007	Letter	Agreement,	dated	as	of	December	22,	2008,	between	the	Company	and	Gary	Crittenden,	incorporated	by	reference	to	Exhibit 10.26.2	to	the	Company's	2008	10-K.

10.18.1* Form	of	Citigroup	Inc.	Management	Committee	Long-Term	Incentive	Program	Award	 Agreement	(effective	July	17,	2007),	incorporated	by	reference	to Exhibit	10.01	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	June	30,	2007	(File	No.	1-9924)	(the	"2007	LTIP	Award Agreement").

10.19* Citigroup	Inc.	Non-Employee	Directors	Compensation	Plan	(effective	as	of	January	1,	2008),	incorporated	by	reference	to	Exhibit	10.01	to	the	Company's September	30,	2007	10-Q.

10.20* 2009	 Deferred	Cash	Executive	Retention	Award	Plan	(amended	and	restated	as	of	January	1,	2009),	incorporated	by	reference	to	Exhibit	10.32	to	the Company's	2008	10-K.

10.27* Form	of	Citigroup	Performance	Stock	Award	Agreement,	incorporated	by	reference	to	Exhibit	99.1	to	the	Company's	Current	Report	on	Form	8-K	filed January	21,	2009	(File	No.	1-9924).

10.28* 				Form	of	Citigroup	Executive	Premium	Price	Option	Agreement,	incorporated	by	reference	to	Exhibit	99.2	to	the	Company's	Current	Report	on	Form	8-K filed	January	21,	2009	(File	No.	1-9924).

10.30.1* Citicorp	Deferred	Compensation	Plan,	effective	October	1995,	incorporated	by	reference	to	Exhibit	10	to	Citicorp's	Registration	Statement	on	Form	S-8 filed	February	15,	1996	(No.	333-0983).

10.30.2* Amendment	to	the	Citicorp	Deferred	Compensation	Plan,	incorporated	by	reference	to	Exhibit	10.18.2	to	the	Company's	1999	10-K.

10.30.4*+ Nonqualified	Plan	Amendment	to	the	Citicorp	Deferred	Compensation	Plan,	adopted	November	19,	2009,	incorporated	by	reference	to	Exhibit	10.01.5	to this	2009	Annual	Report	on	Form	10-K.

10.31*+ Form	of	2009	Citi	Stock	Payment	Program	Notification	for	awards	granted	on	November	30,	2009.

10.32*+ Form	of	2009	Citi	Stock	Payment	Program	Notification	for	awards	granted	on	December	30,	2009.

10.33*+ Form	of	Citi	Long-Term	Restricted	Stock	Award	Agreement	for	awards	granted	on	December	30,	2009.

10.34*+ Form	of	2009	Citi	Stock	Incentive	Program	Notification	for	awards	granted	on	December	30,	2009.

10.35*+ Letter	Agreement,	dated	June	9,	2008,	between	the	Company	and	Alberto	Verme.

10.41 Securities	Purchase	Agreement,	dated	January	15,	2009,	among	the	Company,	the	UST	and	the	FDIC,	incorporated	by	reference	to	Exhibit	10.2	to	the Company's	Current	Report	on	Form	8-K	filed	January	16,	2009	(File	No.	1-9924).

10.42 Exchange	Agreement	dated	March	18,	2009	between	the	Company	and	Government	of	Singapore	Investment	Corporation	Pte.	Ltd., incorporated	by reference	to	Exhibit	10.1	to	Amendment	No.	1	to	the	Company's	Registration	Statement	on	Form	S-4	filed	May	13,	2009	(333-158100).

10.43 					Exchange	Agreement	dated	March	18,	2009	between	the	Company	and	Capital	Research	Global	Investors	and	schedule	of	substantially	identical	exchange agreements,	incorporated	by	reference	to	Exhibit	10.2	to	Amendment	No.	1	to	the	Company's	Registration	Statement	on	Form	S-4	filed	May	13,	2009	(333- 158100).

10.44* Exchange	Agreement	dated	June	9,	2009	between	the	Company	and	the	United	States	Department	of	Treasury,	incorporated	by	reference	to	Exhibit	10.3	to Amendment	No.	3	to	the	Company's	Registration	Statement	on	Form	S-4	filed	June	10,	2009	(333-158100).

10.45* Exchange	Agreement	dated	June	9,	2009	between	the	Company	and	the	Federal	Deposit	Insurance	Corporation,	incorporated	by	reference	to	Exhibit	10.4	to Amendment	No.	3	to	the	Company's	Registration	Statement	on	Form	S-4	filed	June	10,	2009	(333-158100).

10.46 Termination	Agreement,	dated	December	23,	2009,	among	the	Company,	certain	affiliates	of	the	Company,	the	U.S.	Department	of	the	Treasury,	The Federal	Deposit	Insurance	Corporation	and	the	Federal	Reserve	Bank	of	New	York,	incorporated	by	reference	to	Exhibit	10.1	to	the	Company's	Current Report	on	Form	8-K	filed	December	24,	2009	(File	No.	1-9924).

12.01+ Calculation	of	Ratio	of	Income	to	Fixed	Charges.

12.02+ Calculation	of	Ratio	of	Income	to	Fixed	Charges	Including	Preferred	Stock	Dividends.

21.01+ Subsidiaries	of	the	Company.

23.01+ Consent	of	KPMG	LLP,	Independent	Registered	Public	Accounting	Firm.

31.01+ Certification	of	principal	executive	officer	pursuant	to	Section	302	of	the	Sarbanes-Oxley	Act	of	2002.

31.02+ Certification	of	principal	financial	officer	pursuant	to	Section	302	of	the	Sarbanes-Oxley	Act	of	2002.

32.01+ Certification	pursuant	to	18	U.S.C.	Section	1350,	as	adopted	pursuant	to	Section	906	of	the	Sarbanes-Oxley	Act	of	2002.

99.01+ Residual	Value	Obligation	Certificate.

99.02+ List	of	Securities	Registered	Pursuant	to	Section	12(b)	of	the	Securities	Exchange	Act	of	1934.

99.03+ Signatures	of	the	Company's	Board	of	Directors.

99.04+ Certification	of	principal	executive	officer	pursuant	to	Section	111(b)(4)	of	the	Emergency	Economic	Stabilization	Act	of	2008.

99.05+ Certification	of	principal	financial	officer	pursuant	to	Section	111(b)(4)	of	the	Emergency	Economic	Stabilization	Act	of	2008.

101.01+ Financial	statements	from	the	Annual	Report	on	Form	10-K	of	Citigroup	Inc.	for	the	fiscal	year	ended	December	31,	2009,	filed	on	February	26,	2010, formatted	in	XBRL:	(i)	the	Consolidated	Statement	of	Income,	(ii)	the	Consolidated	Balance	Sheet,	(iii)	the	Consolidated	Statement	of	Changes	in	Equity, (iv)	the	Consolidated	Statement	of	Cash	Flows	and	(v)	the	Notes	to	Consolidated	Financial	Statements	tagged	as	blocks	of	text.

The	total	amount	of	securities	authorized	pursuant	to	any	instrument	defining	rights	of	holders	of	long-term	debt	of	the	Company	does	not	exceed	10%	of	the	total	assets of	the	Company	and	its	consolidated	subsidiaries.	The	Company	will	furnish	copies	of	any	such	instrument	to	the	SEC	upon	request.

Copies	of	any	of	the	exhibits	referred	to	above	will	be	furnished	at	a	cost	of	$0.25	per	page	(although	no	charge	will	be	made	for	the	2009	Annual	Report	on	Form	10-K) to	security	holders	who	make	written	request	therefor	to	Citigroup	Inc.,	Corporate	Governance,	425	Park	Avenue,	2nd	Floor,	New	York,	New	York	10043.

*	Denotes	a	management	contract	or	compensatory	plan	or	arrangement	required	to	be	filed	as	an	exhibit	pursuant	to	Item	15(a)	of	Form	10-K.

+	Filed	herewith.


what percent of net interest revenue where total operating expenses in 2008?