CONTINGENCIES

The following information supplements and amends, as applicable, the disclosures in Note 28 to the Consolidated Financial Statements of Citigroup's 2013 Annual Report on Form 10-K and Note 25 to the Consolidated Financial Statements of Citigroup’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2014 and June 30, 2014. For purposes of this Note, Citigroup, its affiliates and subsidiaries, and current and former officers, directors and employees, are sometimes collectively referred to as Citigroup and Related Parties.

In accordance with ASC 450, Citigroup establishes accruals for contingencies, including the litigation and regulatory matters disclosed herein, when Citigroup believes it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of loss ultimately incurred in relation to those matters may be substantially higher or lower than the amounts accrued for those matters.

If Citigroup has not accrued for a matter because the matter does not meet the criteria for accrual (as set forth above), or Citigroup believes an exposure to loss exists in excess of the amount accrued for a particular matter, in each case assuming a material loss is reasonably possible, Citigroup discloses the matter. In addition, for such matters, Citigroup discloses an estimate of the aggregate reasonably possible loss or range of loss in excess of the amounts accrued for those matters as to which an estimate can be made. At September 30, 2014, Citigroup's estimate was materially unchanged from its estimate of approximately $5 billion at December 31, 2013, as more fully described in Note 28 to the Consolidated Financial Statements in the 2013 Annual Report on Form 10-K.

As available information changes, the matters for which Citigroup is able to estimate will change, and the estimates themselves will change. In addition, while many estimates presented in financial statements and other financial disclosure involve significant judgment and may be subject to significant uncertainty, estimates of the range of reasonably possible loss arising from litigation and regulatory proceedings are subject to particular uncertainties. For example, at the time of making an estimate, Citigroup may have only preliminary, incomplete or inaccurate information about the facts underlying the claim; its assumptions about the future rulings of the court or other tribunal on significant issues, or the behavior and incentives of adverse parties or regulators, may prove to be wrong; and the outcomes it is attempting to predict are often not amenable to the use of statistical or other quantitative analytical tools. In addition, from time to time an outcome may occur that Citigroup had not accounted for in its estimates because it had deemed such an outcome to be remote. For all these reasons, the amount of loss in excess of accruals ultimately incurred for the matters as to which an estimate has been made could be substantially higher or lower than the range of loss included in the estimate.

Subject to the foregoing, it is the opinion of Citigroup's management, based on current knowledge and after taking into account its current legal accruals, that the eventual outcome of all matters described in this Note would not be likely to have a material adverse effect on the consolidated financial condition of Citigroup. 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 Citigroup’s consolidated results of operations or cash flows in particular quarterly or annual periods.

For further information on ASC 450 and Citigroup's accounting and disclosure framework for contingencies, including for litigation and regulatory matters disclosed herein, see Note 28 to the Consolidated Financial Statements of Citigroup’s 2013 Annual Report on Form 10-K.

Commodities Financing Contracts

A trial in the Commercial Court in London is scheduled to commence on December 1, 2014.

Credit Crisis-Related Litigation and Other Matters

Mortgage-Related Litigation and Other Matters

Regulatory Actions: As previously disclosed, on June 4, 2014, the United States Court of Appeals for the Second Circuit issued an opinion and order reversing the district court’s order in UNITED STATES SECURITIES & EXCHANGE COMMISSION v. CITIGROUP GLOBAL MARKETS INC. refusing to approve Citigroup’s proposed settlement with the SEC. The action was remanded to the district court for further proceedings consistent with the Second Circuit’s decision. On August 5, 2014, the district court approved the settlement. Additional information relating to this action is publicly available in court filings under the docket numbers 11 Civ. 7387 (S.D.N.Y.) (Rakoff, J.) and 11-5227 (2d Cir.).

Mortgage-Backed Securities and CDO Investor Actions: Certain of the actions brought by purchasers of MBS sponsored, underwritten, or sold by Citigroup have been resolved through settlement and dismissed with prejudice. Additional information relating to these actions is publicly available in court filings under the docket numbers 12 Civ. 1841 (D. Minn.) (Montgomery, J.) and 14 Civ. 252 (C.D. Cal.) (Pfaelzer, J.).

On September 16, 2014, the Commonwealth of Virginia filed a complaint intervening in VIRGINIA EX REL. INTEGRA REC LLC. v. BARCLAYS CAPITAL INC., ET AL., asserting claims for fraud and a violation of the Virginia Fraud Against Taxpayers Act in relation to CGMI’s alleged sale of RMBS to the Virginia Retirement System. Additional information relating to this action is publicly available in court filings under the docket number CL 14-399 (Vir. Cir. Ct.) (Hughes, J.).

As of September 30, 2014, the aggregate original purchase amount of the purchases at issue in the pending MBS and CDO investor suits is approximately $6.2 billion, and the aggregate original purchase amount of the purchases covered by tolling agreements with MBS and CDO investors threatening litigation is approximately $1.4 billion.

Mortgage-Backed Security Repurchase Claims: The deadline for trustees to accept or reject Citigroup's April 7, 2014 offer of settlement to resolve representation and warranty repurchase claims related to certain legacy securitizations was further extended to December 5, 2014.

Counterparty and Investor Actions

On October 6, 2014, the United States Supreme Court denied Abu Dhabi Investment Authority’s petition for a writ of certiorari seeking review of the Second Circuit’s affirmance of the district court’s confirmation of the arbitration award. Additional information relating to this action is publicly available in court filings under the docket numbers 12 Civ. 283 (S.D.N.Y.) (Daniels, J.), 13-1068-cv (2d Cir.) and 13-1500 (U.S.).

KIKOs

As of September 30, 2014, there were 103 civil lawsuits filed by small- and medium-sized export businesses against Citibank Korea Inc. (CKI). To date, 101 decisions have been rendered at the district court level, and CKI has prevailed in 81 of those decisions. In the other 20 decisions, plaintiffs were awarded only a portion of the damages sought. The damage awards total in the aggregate approximately $37.4 million. CKI is appealing the 20 adverse decisions. A significant number of plaintiffs that had decisions rendered against them are also filing appeals, including plaintiffs that were awarded less than all of the damages they sought.

Of the 101 cases decided at the district court level, 66 have been appealed to the high court, including the 20 in which an adverse decision was rendered against CKI in the district court. Of the 64 appeals decided or settled at the high court level, CKI prevailed in 47 cases, and in the other 17 cases plaintiffs were awarded partial damages. As a result, the aggregate damages awarded against CKI decreased by approximately $10.2 million. CKI is appealing nine of the adverse decisions to the Korean Supreme Court and many plaintiffs have filed appeals to the Supreme Court as well.

As of September 30, 2014, the Supreme Court has rendered 33 judgments relating to CKI. CKI prevailed in 30 cases. The Supreme Court confirmed lower court judgments in which plaintiffs were awarded partial damages in three cases. As a result, the aggregate damages awarded against CKI decreased by approximately $0.3 million.

After taking into account all decisions rendered through September 30, 2014 at the district court, high court, or Supreme Court levels, the damages awarded against CKI currently total in the aggregate approximately $26.9 million.

Terra Firma Litigation

A trial of the claims asserted by Terra Firma against Citigroup in the High Court of Justice, Queen’s Bench Division, Commercial Court in London is scheduled to begin on November 7, 2016. Additional information relating to this action is publicly available in court filings under the caption Terra Firma Investments (GP) 2 Ltd. & Ors v. Citigroup Global Markets Ltd. & Ors (Claim No 3MA40121).

Tribune Company Bankruptcy

Motions to dismiss are pending in the Litigation Trustee’s action against former Tribune officers, directors and shareholders, and in the separate action in which CGMI has been named as a defendant in connection with its role as advisor to Tribune. Additionally, cross-appeals to the Second Circuit are pending with respect to the district court’s September 23, 2013 order dismissing the constructive fraudulent transfer claims asserted by creditors of Tribune. Additional information relating to these actions is publicly available in court filings under the docket numbers 11 MD 2296 (S.D.N.Y.) (Sullivan, J.), 12 2296 (S.D.N.Y.) (Sullivan, J.), and 13-3992(L) (2d Cir.).

Credit Default Swaps Matters

On September 4, 2014, the United States District Court for the Southern District of New York granted in part and denied in part defendants’ motion to dismiss the second consolidated amended complaint, dismissing plaintiffs’ claim for violation of Section 2 of the Sherman Act and certain claims for damages, but permitting the case to proceed as to plaintiffs’ claims for violation of Section 1 of the Sherman Act and unjust enrichment. Additional information relating to this action is publicly available in court filings under the docket number 13 MD 2476 (S.D.N.Y.) (Cote, J.).

Foreign Exchange Matters

Regulatory Actions: Government and regulatory agencies in the U.S., including the Antitrust Division and the Criminal Division of the Department of Justice and the Commodity Futures Trading Commission, as well as agencies in other jurisdictions, including the U.K. Financial Conduct Authority and the Swiss Competition Commission, are conducting investigations or making inquiries regarding Citigroup’s foreign exchange business. Citigroup is fully cooperating with these and related investigations and inquiries.

Interbank Offered Rates-Related Litigation and Other Matters

Antitrust and Other Litigation: On August 29, 2014, plaintiffs in GELBOIM, ET AL. v. BANK OF AMERICA CORP., ET AL. filed their opening brief in the United States Supreme Court. Respondents’ brief was filed on October 15, 2014, and oral argument is scheduled for December 9, 2014. Additional information concerning this action is publicly available in court filings under the docket numbers 13-3565 (2d Cir.), 13-3636 (2d Cir.), and 13-1174 (U.S.).

On September 11, 2014, the United States District Court for the Southern District of New York granted the Department of Justice’s motion to stay discovery in SULLIVAN v. BARCLAYS PLC, ET AL. for eight months, until May 12, 2015. Additional information concerning this action is publicly available in court filings under the docket number 1:13-cv-2811 (S.D.N.Y.) (Castel, J.).

ISDAFIX-Related Litigation and Other Matters

Regulatory Actions: Government agencies in the U.S., including the Department of Justice and the Commodity Futures Trading Commission, are conducting investigations or making inquiries concerning submissions for the global benchmark for fixed interest rate swaps (ISDAFIX) and trading in products that reference ISDAFIX. Citigroup is fully cooperating with these and related investigations and inquiries.

Antitrust and Other Litigation. On September 4, 2014, Alaska Electrical Pension Fund filed a putative class action complaint in the United States District Court for the Southern District of New York against Citigroup and other U.S. dollar (USD) ISDAFIX panel banks. On September 30, 2014, the County of Beaver (Pennsylvania) filed a similar putative class action complaint in the United States District Court for the Southern District of New York. Plaintiffs in both actions assert federal antitrust claims, as well as claims under the Commodity Exchange Act and for unjust enrichment. On October 14, 2014, the Court signed an order consolidating these two actions for all purposes. Additional information concerning these actions is publicly available in court filings under the docket numbers 1:14-cv-7126 (S.D.N.Y.) (Furman, J.) and 1:14-cv-7907 (S.D.N.Y.) (Furman, J.).

Following the initial consolidation order, substantially similar putative class action complaints were filed by Magnolia Regional Health Center (on October 17, 2014 in the Southern District of New York), the County of Montgomery, Pennsylvania (on October 17, 2014 in the District of New Jersey) and the Genesee County Employees' Retirement System (on October 20, 2014 in the Southern District of New York). Additional information concerning these actions is publicly available in court filings under the docket numbers 1:14-cv-8342 (S.D.N.Y.) (Furman, J.), 2:14-cv-06427 (D.N.J.) (Linares, J.) and 1:14-cv-8365 (S.D.N.Y.) (Furman, J.).

Oceanografia Fraud and Related Matters

The Mexican National Banking and Securities Commission (CNBV) has finalized its review of the facts and circumstances of the fraud discovered in a Petróleos Mexicanos (Pemex) supplier program involving Oceanografía SA de CV (OSA). As a result of its review, the CNBV issued a corrective action order that must be implemented by Banamex and imposed a fine of approximately $2.2 million. Citigroup continues to cooperate fully with regulators and authorities in connection with investigations and inquiries related to the OSA fraud.

Derivative Actions and Related Proceedings: On September 30, 2014, the Chancery Court Master issued a final report recommending that the court enter an order granting in part and denying in part plaintiff’s request for inspection. On October 7, 2014, Citigroup filed a notice of exception to the final report. Additional information concerning this action is publicly available in court filings under the docket number C.A. No. 9587-ML (Del. Ch.) (LeGrow, M.).

Parmalat Litigation and Related Matters

Following the October 20, 2008 verdict in New Jersey awarding $431 million in damages on Citigroup’s counterclaim, Citigroup has taken steps to enforce that judgment in the Italian Courts. On August 29, 2014, the Court of Appeal of Bologna affirmed the decision in the full amount of $431 million, to be paid in Parmalat shares. The judgment is subject to appeal by Parmalat.

Regulatory Review of Consumer “Add-On” Products

Citigroup has settled industry-wide suits filed by certain state attorneys general under state consumer protection statutes that alleged deceptive marketing practices in connection with the sale of payment protection products and demanding restitution and statutory damages for in-state customers.

Settlement Payments

Payments required in settlement agreements described above have been made or are covered by existing litigation accruals.

[End of Consolidated Financial Statements and Notes to Consolidated Financial Statements]