10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                             to

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)	52-1568099 (I.R.S. Employer Identification No.)
399 Park Avenue, New York, New York (Address of principal executive offices)	10043 (Zip Code)
(212) 559-1000 (Registrant's telephone number, including area code)

        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. Yes ý No o

        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). Yes ý No o

        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.:

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a smaller
reporting company) Smaller reporting company o

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

        Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date:

Common stock outstanding as of September 30, 2009: 22,863,947,261

Available on the web at www.citigroup.com

CITIGROUP INC.

THIRD QUARTER OF 2009—FORM 10-Q

THE COMPANY			3
	Citigroup Segments and Regions		4
SUMMARY OF SELECTED FINANCIAL DATA			5
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	Management Summary		7
	Significant Events in the Third Quarter of 2009		9
SEGMENT, BUSINESS AND PRODUCT INCOME (LOSS) AND REVENUES			12
	Citigroup Income (Loss)		12
	Citigroup Revenues		13
CITICORP			14
Regional Consumer Banking			15
	North America Regional Consumer Banking		16
	EMEA Regional Consumer Banking		18
	Latin America Regional Consumer Banking		19
	Asia Regional Consumer Banking		20
Institutional Clients Group (ICG)			21
	Securities and Banking		22
	Transaction Services		24
CITI HOLDINGS			25
	Brokerage and Asset Management		26
	Local Consumer Lending		27
	Special Asset Pool		29
CORPORATE/OTHER			32
GOVERNMENT PROGRAMS			33
MANAGING GLOBAL RISK			36
LOAN AND CREDIT DETAILS			36
	Loans Outstanding		36
	Details of Credit Loss Experience		40
	Non-Accrual Assets		41
	Consumer Loan Details		43
		Consumer Loan Modification Programs	44
		U.S. Consumer Mortgage Lending	45
		N.A. Cards	50
		U.S. Installment and Other Revolving Loans	53
	Corporate Loan Details		54
U.S. Subprime-Related Direct Exposure in Citi Holdings—Special Asset Pool			57
Exposure to Commercial Real Estate			58
Direct Exposure to Monolines			59
Highly Leveraged Financing Transactions			60
DERIVATIVES			60
Market Risk Management Process			64
Operational Risk Management Process			66
Country and Cross-Border Risk			67
INTEREST REVENUE/EXPENSE AND YIELDS			68
	Average Balances and Interest Rates—Assets		69
	Average Balances and Interest Rates—Liabilities and Equity, and Net Interest Revenue		70
	Analysis of Changes in Interest Revenue		73
	Analysis of Changes in Interest Expense and Net Interest Revenue		74
CAPITAL RESOURCES AND LIQUIDITY			76
	Capital Resources		76
	Common Equity		78
	Funding and Liquidity		81
	Off-Balance Sheet Arrangements		84
CONTRACTUAL OBLIGATIONS			85
FAIR VALUATION			85
CONTROLS AND PROCEDURES			85
FORWARD-LOOKING STATEMENTS			85
TABLE OF CONTENTS FOR FINANCIAL STATEMENTS AND NOTES			86
CONSOLIDATED FINANCIAL STATEMENTS			87
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			93
OTHER INFORMATION			195
	Item 1. Legal Proceedings		195
	Item 1A. Risk Factors		198
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		199
	Item 4. Submission of Matters to a Vote of Security Holders		200
	Item 6. Exhibits		201
	Signatures		202
	Exhibit Index		203

2

THE COMPANY

        Citigroup Inc. (Citigroup and, together with its subsidiaries, the Company, Citi or Citigroup) is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup has approximately 200 million customer accounts and does business in more than 140 countries. Citigroup was incorporated in 1988 under the laws of the State of Delaware.

        The Company is a bank holding company within the meaning of the U.S. Bank Holding Company Act of 1956 registered with, and subject to examination by, the Board of Governors of the Federal Reserve System (FRB). Citibank, N.A. is a U.S. national bank subject to supervision and examination by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). Some of the Company's other subsidiaries are also subject to supervision and examination by their respective federal and state authorities or, in the case of overseas subsidiaries, the regulators of the respective jurisdictions.

        This Quarterly Report on Form 10-Q should be read in conjunction with Citigroup's Annual Report on Form 10-K for the year ended December 31, 2008 (2008 Annual Report on Form 10-K), Citigroup's updated 2008 historical financial statements and notes filed on Form 8-K with the Securities and Exchange Commission (SEC) on October 13, 2009 and Citigroup's Quarterly Reports on Form 10-Q for the quarters ended June 30, 2009 and March 31, 2009. Additional financial, statistical, and business-related information for the third quarter of 2009, as well as business and segment trends, are included in a Financial Supplement that was furnished as Exhibit 99.2 to the Company's Form 8-K, filed with the SEC on October 15, 2009.

        The principal executive offices of the Company are located at 399 Park Avenue, New York, New York 10043, telephone number 212 559 1000. 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 the Company's other filings with the SEC, are available free of charge through the Company's web site by clicking on the "Investors" page and selecting "All SEC Filings." The SEC web site contains reports, proxy and information statements, and other information regarding the Company at www.sec.gov.

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        Citigroup is managed along the following segment and product lines:

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

(1)

Asia includes Japan, Latin America includes Mexico, and North America includes U.S., Canada and Puerto Rico.

4

CITIGROUP INC. AND SUBSIDIARIES

SUMMARY OF SELECTED FINANCIAL DATA—Page 1

											Nine Months Ended September 30,
		Third Quarter
In millions of dollars, except per share amounts								% Change									% Change
		2009			2008						2009			2008
Net interest revenue		$	11,998		$	13,404			(10	)%	$	37,753		$	40,478			(7	)%
Non-interest revenue			8,392			2,854			NM			37,127			5,475			NM
Revenues, net of interest expense		$	20,390		$	16,258			25	%	$	74,880		$	45,953			63	%
Operating expenses			11,824			14,007			(16	)		35,508			44,598			(20	)
Provisions for credit losses and for benefits and claims			9,095			9,067			—			32,078			22,019			46
Income (Loss) from Continuing Operations before Income Taxes		$	(529	)	$	(6,816	)		92		$	7,294		$	(20,664	)		NM
Income taxes (benefits)			(1,122	)		(3,295	)		66			620			(9,628	)		NM
Income (Loss) from Continuing Operations		$	593		$	(3,521	)		NM		$	6,674		$	(11,036	)		NM
Income (Loss) from Discontinued Operations, net of taxes			(418	)		613			NM			(677	)		578			NM
Net Income (Loss) before attribution of Noncontrolling Interests		$	175		$	(2,908	)		NM		$	5,997		$	(10,458	)		NM
Net Income (Loss) attributable to Noncontrolling Interests			74			(93	)		NM			24			(37	)		NM
Citigroup's Net Income (Loss)		$	101		$	(2,815	)		NM		$	5,973		$	(10,421	)		NM
Less:
	Preferred dividends—Basic	$	(272	)	$	(389	)		30	%	$	(2,988	)	$	(833	)		NM
	Impact of the conversion price reset related to the $12.5 billion convertible preferred stock private issuance—Basic(1)		—			—			—			(1,285	)		—			NM
	Preferred stock Series H discount accretion—Basic		(16	)		—			NM			(123	)		—			NM
	Impact of the Public and Private Preferred stock exchange offer		(3,055	)		—			NM			(3,055	)		—			NM
Income (loss) available to common stockholders			(3,242	)		(3,204	)		(1	)		(1,478	)		(11,254	)		87
	Allocation of dividends to common stock and participating securities, net of forfeitures		—			(1,738	)		NM			(63	)		(5,151	)		99
Undistributed earnings (loss) for basic EPS		$	(3,242	)	$	(4,942	)		34	%	$	(1,541	)	$	(16,405	)		91	%
Convertible Preferred Stock Dividends			—			270			NM			540			606			(11	)
Undistributed earnings (loss) for diluted EPS		$	(3,242	)	$	(4,672	)		31	%	$	(1,001	)	$	(15,799	)		94	%
Earnings per share
	Basic(2)
	Income (loss) from continuing operations	$	(0.23	)	$	(0.72	)		68	%	$	(0.10	)	$	(2.28	)		96	%
	Net income (loss)		(0.27	)		(0.61	)		56			(0.19	)		(2.17	)		91
	Diluted(2)
	Income (loss) from continuing operations	$	(0.23	)	$	(0.72	)		68	%	$	(0.10	)	$	(2.28	)		96	%
	Net income (loss)		(0.27	)		(0.61	)		56			(0.19	)		(2.17	)		91

[Continued on the following page, including notes to table.]

5

SUMMARY OF SELECTED FINANCIAL DATA—Page 2

										Nine Months Ended September 2009,
	Third Quarter
							% Change									% Change
In millions of dollars	2009			2008						2009			2008
At September 30:
Total assets	$	1,888,599		$	2,050,131			(8	)%
Total deposits		832,603			780,343			7
Long-term debt		379,557			393,097			(3	)
Mandatorily redeemable securities of subsidiary Trusts (included in Long-term debt)		34,531			23,836			45
Common stockholders' equity		140,530			98,638			42
Total stockholders' equity		140,842			126,062			12
Direct staff (in thousands)		276			352			(22	)
Ratios:
Return on common stockholders' equity(3)		(12.2	)%		(12.2	)%					(2.3	)%		(13.8	)%
Tier 1 Common(4)		9.12	%		3.72	%
Tier 1 Capital		12.76	%		8.19	%
Total Capital		16.58	%		11.68	%
Leverage(5)		6.87	%		4.70	%
Common stockholders' equity to assets		7.4	%		4.8	%
Ratio of earnings to fixed charges and preferred stock dividends		0.96			NM						1.16			NM

(1)

For the nine months ended September 30, 2009, Income available to common stockholders includes a reduction of $1.285 billion related to a conversion price reset pursuant to Citigroup's prior agreement with the purchasers of $12.5 billion convertible preferred stock issued in a private offering in January 2008. The conversion price was reset from $31.62 per share to $26.35 per share. There was no impact to net income, total stockholders' equity or capital ratios due to the reset. However, the reset resulted in a reclassification from Retained earnings to Additional paid-in capital of $1.285 billion and a reduction in Income available to common stockholders of $1.285 billion. The 2009 third quarter Income available to common stockholders includes a reduction of $3.055 billion related to the preferred stock exchanged for common stock and trust preferred securities as part of the exchange offers.

(2)

The Company adopted Accounting Standards Codification (ASC) 260-10-45 to 65, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" on January 1, 2009. All prior periods have been restated to conform to the current presentation. The Diluted EPS calculation for the third quarter and nine months of 2009 and 2008 utilize Basic shares and Income available to common stockholders (Basic) due to the negative Income available to common stockholders. Using actual Diluted shares and Income available to common stockholders (Diluted) would result in anti-dilution.

(3)

The return on average common stockholders' equity is calculated using income (loss) available to common stockholders.

(4)

As defined by the banking regulators, the Tier 1 Common ratio represents Tier 1 Capital less perpetual preferred stock, qualifying noncontrolling interests in subsidiaries and qualifying mandatorily redeemable securities of subsidiary trusts divided by risk-weighted assets. Tier 1 Common ratio is a non-GAAP measure. See "Capital Resources and Liquidity" below for additional information on this measure.

(5)

The Leverage ratio represents Tier 1 Capital divided by each period's quarterly adjusted average total assets.

NM    Not meaningful

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

        Within this Form 10-Q, please refer to the indices on pages 2 and 86 for page references to the Management's Discussion and Analysis section and Notes to Consolidated Financial Statements, respectively.

6

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

THIRD QUARTER OF 2009 MANAGEMENT SUMMARY

        Citigroup reported net income of $101 million, and a loss of ($0.27) per diluted share, for the third quarter of 2009. The ($0.27) loss per share reflected a $3.1 billion charge to retained earnings related to the closing of the exchange offers, the remaining preferred stock dividends required to be paid prior to the closing of the exchange offers and the remaining quarterly accretion of the Series H preferred stock discount.

Revenues of $20.4 billion increased 25% from year-ago levels due primarily to positive revenue marks and gains in Citi Holdings relative to the prior-year period, and a $1.4 billion gain from the extinguishment of debt associated with the closing of the exchange offers. The increase was partially offset by credit valuation adjustments (CVA) of $1.7 billion in Securities and Banking, the absence of Smith Barney revenues of $2.0 billion in the third quarter of 2009 and foreign currency translation.

Net interest revenue declined 10% from the 2008 third quarter, primarily reflecting the Company's smaller balance sheet. Net interest margin in the third quarter of 2009 was 2.95%, down 20 basis points from the third quarter of 2008, reflecting a decrease in asset yields related to the decrease in the Federal funds rate, largely offset by significantly lower funding costs. Non-interest revenue increased $5.5 billion from a year ago, primarily reflecting the absence of significant losses in the Citi Holdings Special Asset Pool portfolio.

        Operating expenses decreased 16% from the year-ago quarter and were down 1% from the second quarter of 2009 primarily due to divestitures, including Smith Barney, the re-sizing of the Citi Holdings businesses, the re-engineering of Citicorp processes, expense control, and the impact of foreign currency translation. Headcount of 276,000 was down 76,000 from September 30, 2008 and down 3,000 from June 30, 2009.

        The Company's total allowance for loan losses totaled $36.4 billion at September 30, 2009, a coverage ratio of 5.85% of total loans up from 5.6% at June 30, 2009, even though corporate loans declined by $13 billion during the quarter and consumer loans decreased by $6 billion. During the third quarter of 2009, the Company recorded a net build of $802 million to its credit reserves. The build for the quarter was $3.1 billion lower than the second quarter of 2009, consisting of a net build of $893 million for consumer loans and a net release of $91 million for corporate loans.

        Consumer non-accrual loans totaled $17.9 billion at September 30, 2009, compared to $15.8 billion at June 30, 2009 and $10.8 billion at September 30, 2008, primarily related to the recognition of SFAS 114 charge-offs in the quarter. The consumer loan delinquency rate was 4.70% at September 30, 2009, compared to 4.24% at June 30, 2009 and 2.66% a year ago. Delinquencies continue to rise for the first mortgage portfolio in the U.S. due primarily 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 "Loan and Credit Details—Consumer Loan Modification Programs" and "—U.S. Consumer Mortgage Lending" below).

        Corporate non-accrual loans were $14.8 billion at September 30, 2009, compared to $12.4 billion at June 30, 2009 and $2.7 billion a year ago. The increase from the prior quarter is mainly due to the Company'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. The increase from prior-year levels is also attributable to the transfer of non-accrual loans from the held-for-sale portfolio (which are carried at lower-of-cost-or-fair value and excluded from non-accrual loans) to the held-for-investment portfolio during the fourth quarter of 2008. The total allowance for loan loss reserve balance for funded corporate loans remained stable at $8 billion at the end of the quarter, or 4.4% of corporate loans, up from 4.1% in the second quarter of 2009.

        The Company's effective tax rate on continuing operations in the third quarter of 2009 was 212% versus 48% in the prior-year period. The tax provision reflected a higher proportion of income earned and indefinitely reinvested in countries with relatively lower tax rates as well as a higher proportion of income from tax advantaged sources. The current quarter also includes a tax benefit of $103 million in continuing operations relating to a release of tax reserves on interchange fees, which was supported by a favorable Tax Court decision in a case litigated by another financial institution.

        Total deposits were $833 billion at September 30, 2009, up 3% from June 30, 2009 and up 7% from year-ago levels. At September 30, 2009, the Company had increased its structural liquidity (equity, long-term debt and deposits) as a percentage of assets from 66% at December 31, 2008 to 72% at September 30, 2009. Over the past six months, Citigroup and its subsidiaries have issued $20 billion of non-guaranteed debt outside of the FDIC's TLGP.

        Citigroup has continued its deleveraging, reducing total assets from $2,050 billion a year ago to $1,889 billion at September 30, 2009. Asset reductions in Citi Holdings made up approximately 98% of the decline, reflecting the Company's continued strategy of reducing its assets and exposures in this business segment, which are down by almost one-third since the peak levels of early 2008.

        Primarily as a result of the exchange offers, Citigroup increased its Tier 1 Common by $63 billion from the second quarter of 2009 to $90 billion. In addition, the Company's Tangible Common Equity (TCE) increased by $62 billion from the second quarter of 2009 to $102 billion at September 30, 2009. (TCE and Tier 1 Common are non-GAAP financial

7

measures. See "Capital Resources and Liquidity" for additional information on these measures.)

        The closing of the exchange offers also resulted in a reconstitution of the Company's equity base. Common Equity increased 98% from December 31, 2008 to $140.5 billion. Citigroup's total stockholders' equity decreased by $11.5 billion during the third quarter of 2009 to $140.8 billion, primarily reflecting the impact of the exchange offers, partially offset by a $4.0 billion improvement in Accumulated Other Comprehensive Income. Citigroup's total equity capital base and trust preferred securities were $175.4 billion at September 30, 2009. The Tier 1 Capital ratio and Tier 1 Common ratio were 12.76% and 9.12%, respectively, at September 30, 2009.

8

SIGNIFICANT EVENTS IN THE THIRD QUARTER OF 2009

        Certain significant events have occurred during the fiscal year to date, including events subsequent to September 30, 2009, that had, or could have, an effect on Citigroup's current and future financial condition, results of operations, liquidity and capital resources. These events are summarized below and discussed throughout this MD&A.

EXCHANGE OFFERS

Private Exchange Offers

        On July 23, 2009, Citigroup closed its exchange offers with the private holders of $12.5 billion aggregate liquidation value of preferred stock. The U.S. Treasury (UST) matched these exchange offers by exchanging $12.5 billion aggregate liquidation value of its preferred stock, for a total closing of $25 billion. Following the approval, on September 2, 2009, by Citi shareholders of an increase in Citi's authorized common stock, on September 10, 2009, the private holders and the UST received an aggregate of approximately 7,692 million shares of Citigroup common stock.

Public Exchange Offers

        On July 29, 2009, Citigroup closed its exchange offers with the holders of approximately $20.4 billion in aggregate liquidation value of publicly-held preferred stock and trust preferred securities, representing 99% of the total liquidation value of securities Citigroup was offering to exchange. Upon closing of the public exchange offers, Citi issued approximately 5.8 billion shares of common stock to the public exchange offer participants.

        In addition, on July 30, 2009, the UST matched the public exchange offers by exchanging an additional $12.5 billion aggregate liquidation value of its preferred stock. Following the increase in Citigroup's authorized common stock, on September 10, 2009, the UST received an additional approximately 3.8 billion shares of Citigroup common stock.

        In total, approximately $58 billion in aggregate liquidation value of preferred stock and trust preferred securities were exchanged for common stock upon completion of all stages of the exchange offers. As a result of the exchange offers, the UST owned approximately 33.6% of Citigroup's outstanding common stock, not including the exercise of the warrants issued to the UST as part of TARP and pursuant to the loss-sharing agreement. See "Government Programs" below.

Trust Preferred Securities

        On July 30, 2009, all remaining preferred stock of Citigroup held by the UST and the FDIC that was not exchanged into Citigroup common stock in connection with the exchange offers, in an aggregate liquidation amount of approximately $27.1 billion, was exchanged into newly issued 8% trust preferred securities.

Accounting Impact

        The accounting for the exchange offers resulted in the de-recognition of preferred stock and the recognition of the common stock issued at fair value in the Common stock and Additional paid-in capital accounts in equity. The difference between the carrying amount of preferred stock and the fair value of the common stock was recorded in Retained earnings (impacting net income available to common shareholders and EPS) or Additional paid-in capital accounts in equity, depending on whether the preferred stock was originally non-convertible or convertible.

        For the U.S. Government (USG) preferred stock that was converted to 8% trust preferred securities, the newly issued trust preferred securities were initially recorded at fair value as Long-term debt. The difference between the carrying amount of the preferred stock and the fair value of the trust preferred securities was recorded in Retained earnings after adjusting for the appropriate deferred tax liability (impacting net income available to common shareholders and EPS). For trust preferred securities exchanged for common stock, the carrying amount recorded as long-term debt was de-recognized and the common stock issued was recorded at fair value in the Common Stock and the Additional Paid-in Capital accounts in equity. The difference between the carrying amount of the trust preferred securities and the fair value of the common stock was recorded in Other revenue in the third quarter of 2009.

9

        The following table presents the impact of the completion of all stages of the exchange offers to Citigroup's common shares outstanding and to its balance sheet:

(in millions of dollars, except incremental number of Citigroup common shares)								Impact on
Security	Notional Amounts		Converted Into	Incremental Number of Citigroup Common Shares		Date of Settlement		Other Assets(3)			Long- Term Debt			Preferred Stock			Common Stock		Additional Paid In Capital		Income Statement(2)		Retained Earnings(1)
				(in millions)
Convertible Preferred Stock held by Private Investors	$	12,500	Common Stock		3,846		7/23/2009	$	—			—		$	(12,500	)	$	38	$	21,801	$	—	$	(9,340	)
Convertible Preferred Stock held by Public Investors		3,146	Common Stock		823		7/29/2009		—			—			(3,146	)		8		5,128		—		(1,990	)
Non-Convertible Preferred Stock held by Public Investors		11,465	Common Stock		3,351		7/29/2009		—			—			(11,465	)		33		9,116		—		2,316
Trust Preferred Securities held by Public Investors		5,773	Common Stock		1,660		7/29/2009		(602	)		(5,972	)		—			17		4,515		851		851
USG TARP Preferred Stock matching the Preferred Stock held by Private Investors		12,500	Common Stock		3,846		7/23/2009		—			—			(11,924	)		38		10,615		—		1,270
USG TARP Preferred Stock matching the Preferred Stock and Trust Preferred Securities held by Public Investors		12,500	Common Stock		3,846		7/30/2009		—			—			(11,926	)		39		10,615		—		1,272
USG TARP Preferred Stock		20,000	TruPS		—		7/30/2009		(2,883	)		12,004			(19,514	)		—		—		—		4,627
Non-Convertible Preferred Stock held by U.S. Treasury and FDIC related to covered asset guarantee (loss-sharing agreement)		7,059	TruPS		—		7/30/2009		(503	)		4,237			(3,530	)		—		—		—		(1,210	)
Total					17,372			$	(3,988	)	$	10,269		$	(74,005	)	$	173	$	61,790	$	851	$	(2,204	)

Note: Table may not foot due to roundings.

Summary of Impact of Exchange Offers

        During the third quarter of 2009, TCE increased by $60 billion as a result of the exchange of approximately $74 billion carrying amount of preferred shares and $6 billion carrying value of trust preferred securities for 17,372 million shares of common stock and approximately $27.1 billion liquidation amount of trust preferred securities (recorded as Long-term debt at its fair value of $16.2 billion). This resulted in an increase to common stock and APIC of $62 billion and a reduction in Retained earnings of approximately $2 billion, for a total increase in TCE of approximately $60 billion. The additional $64 billion of Tier 1 Common includes the impact of the above plus a reduction in the disallowed Deferred tax asset (which increases Tier 1 Common) that arises from the accounting for the transactions. TCE and Tier 1 Common are non-GAAP financial measures. See "Capital Resources and Liquidity" below for additional information on these measures.

(1)

The Retained earnings impact primarily reflects:

a)

Difference between the carrying value of the preferred stock exchanged versus the fair value of the common stock and trust preferred securities issued.

b)

Value of inducement offer to the convertible preferred stock holders (calculated as the incremental shares received in excess of the original terms multiplied by stock price on the commitment date); and

c)

After-tax gain from extinguishment of debt associated with the trust preferred securities held by public investors.

(2)

After-tax gain reflected in third quarter 2009 earnings of approximately $0.9 billion from the extinguishment of debt associated with the trust preferred securities held by public investors.

(3)

Primarily represents the impact on deferred taxes of the various exchange transactions, which will benefit Tier 1 Common and Tier 1 Capital.

        Earnings per share in the third quarter of 2009 was impacted by (1) the increase in shares outstanding as a result of the issuance of common shares and interim securities and the timing thereof, (2) the net impact to Retained earnings and income statement resulting from the exchange offers and (3) dividends on USG preferred shares accrued up to the date of their conversion to interim securities and trust preferred securities.

10

DEFERRED TAX ASSET

        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.

        As of September 30, 2009, Citigroup had recognized a net deferred tax asset of approximately $38 billion, down $4 billion from approximately $42 billion at June 30, 2009 and down $6.5 billion from approximately $44.5 billion at December 31, 2008. Approximately $13 billion of the net deferred tax asset is included in Tier 1 and Tier 1 Common regulatory capital. The principal items reducing the deferred tax asset during 2009 were a decrease of approximately $3.9 billion relating to the exchange offers and $2.8 billion due to an increase in Other Comprehensive Income.

        Although realization is not assured, the Company believes that the realization of the recognized net deferred tax asset at September 30, 2009 is more likely than not based upon expectations of future taxable income in the jurisdictions in which it operates and available tax planning strategies.

        Approximately $17 billion of Citigroup's DTA is represented by U.S. federal, state and local tax return carry-forwards subject to expiration substantially beginning in 2017 and continuing through 2028. The remaining $21 billion DTA is largely due to timing differences between the recognition of income for GAAP and tax, representing net deductions that have not yet been taken on a tax return and are not currently subject to expiration. The most significant source of these timing differences is the loan loss reserve build, which accounts for approximately $14 billion of the net DTA. In general, Citigroup would need to generate approximately $85 billion of taxable income during the respective carry-forward periods to fully realize its U.S. federal, state and local DTA.

        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 did not result in an ownership change under the Code. On June 9, 2009, the board of directors of Citigroup adopted a tax benefits preservation plan (the "Plan"). The purpose of the Plan is to minimize the likelihood of an ownership change occurring for Section 382 purposes and thus protect Citigroup's ability to utilize certain of its deferred tax assets, such as net operating loss and tax credit carry forwards, to offset future income. Despite adoption of the Plan, future stock issuance or transactions in our stock that may not be in our control, including sales by the USG, may cause Citi to experience an ownership change and thus limit the Company's ability to utilize its deferred tax asset and reduce its TCE and stockholders' equity.

DIVESTITURES

Sale of Nikko Cordial Securities

        On October 1, 2009, Citigroup completed the sale of its domestic Japanese domestic securities business, conducted principally through Nikko Cordial Securities Inc. (NCS) to Sumitomo Mitsui Banking Corporation in a transaction with a total cash value of approximately $8.7 billion (¥776 billion). The transaction will be recorded in the fourth quarter of 2009. After considering the impact of foreign exchange hedges of the proceeds of the transaction (most of which has been recorded in the second and third quarters of 2009), the sale will result in an immaterial after-tax gain to Citigroup.

        Beginning in the second quarter of 2009, the results of NCS and its related companies are reflected as Discontinued Operations in the Company's Consolidated Financial Statements. At September 30, 2009, assets of $23.6 billion and liabilities of $16.0 billion are reflected on the Consolidated Balance Sheet as "Assets/ Liabilities of discontinued operations held for sale", respectively, including $3.8 billion of identifiable goodwill and intangibles.

SUBSEQUENT EVENTS

        As required by SFAS 165, Subsequent Events, the Company has evaluated subsequent events through November 6, 2009, which is the date its Consolidated Financial Statements were issued.

ACCOUNTING CHANGES AND FUTURE APPLICATION OF ACCOUNTING STANDARDS

        See Note 1 to the Consolidated Financial Statements for a discussion of "Accounting Changes" and "Future Application of Accounting Standards."

11

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)

			Third Quarter									Nine Months
									% Change									% Change
In millions of dollars			2009			2008						2009			2008
Income from Continuing Operations
CITICORP
Regional Consumer Banking
	North America		$	163		$	(44	)		NM		$	345		$	470			(27	)%
	EMEA			(23	)		31			NM			(166	)		87			NM
	Latin America			29			102			(72	)%		268			867			(69	)
	Asia			446			357			25			969			1,344			(28	)
		Total	$	615		$	446			38		$	1,416		$	2,768			(49	)%
Securities and Banking
	North America		$	(77	)	$	1,340			NM		$	2,493		$	3,368			(26	)%
	EMEA			548			102			NM			3,466			674			NM
	Latin America			216			227			(5	)%		1,137			853			33
	Asia			68			569			(88	)		1,720			1,502			15
		Total	$	755		$	2,238			(66	)%	$	8,816		$	6,397			38	%
Transaction Services
	North America		$	152		$	94			62	%	$	471		$	243			94	%
	EMEA			308			348			(11	)		984			925			6
	Latin America			148			159			(7	)		458			451			2
	Asia			331			317			4			904			899			1
		Total	$	939		$	918			2	%	$	2,817		$	2,518			12	%
	Institutional Clients Group		$	1,694		$	3,156			(46	)%	$	11,633		$	8,915			30	%
Total Citicorp			$	2,309		$	3,602			(36	)%	$	13,049		$	11,683			12	%
CITI HOLDINGS
Brokerage and Asset Management			$	139		$	(57	)		NM		$	7,011		$	96			NM
Local Consumer Lending				(2,099	)		(2,285	)		8	%		(7,711	)		(3,366	)		NM
Special Asset Pool				142			(4,594	)		NM			(5,095	)		(18,041	)		72	%
Total Citi Holdings			$	(1,818	)	$	(6,936	)		74	%	$	(5,795	)	$	(21,311	)		73	%
Corporate/Other			$	102		$	(187	)		NM		$	(580	)	$	(1,408	)		59
Income (Loss) from Continuing Operations			$	593		$	(3,521	)		NM		$	6,674		$	(11,036	)		NM
Discontinued Operations			$	(418	)	$	613					$	(677	)	$	578
Net Income (Loss) attributable to Noncontrolling Interests				74		$	(93	)					24		$	(37	)
Citigroup's Net Income (Loss)			$	101		$	(2,815	)		NM		$	5,973		$	(10,421	)		NM

NM    Not meaningful

12

Citigroup Revenues

			Third Quarter								Nine Months
								% Change									% Change
In millions of dollars			2009		2008						2009			2008
CITICORP
Regional Consumer Banking
	North America		$	1,754	$	1,472			19	%	$	5,604		$	5,917			(5	)%
	EMEA			415		498			(17	)		1,169			1,467			(20	)
	Latin America			1,826		2,300			(21	)		5,436			6,906			(21	)
	Asia			1,680		1,839			(9	)		4,842			5,674			(15	)
		Total	$	5,675	$	6,109			(7	)%	$	17,051		$	19,964			(15	)%
Securities and Banking
	North America		$	1,312	$	4,018			(67	)%	$	8,454		$	11,117			(24	)%
	EMEA			2,198		1,395			58			8,974			5,098			76
	Latin America			703		469			50			2,547			1,872			36
	Asia			680		1,463			(54	)		4,214			4,382			(4	)
		Total	$	4,893	$	7,345			(33	)%	$	24,189		$	22,469			8	%
Transaction Services
	North America		$	643	$	540			19	%	$	1,888		$	1,557			21	%
	EMEA			845		953			(11	)		2,549			2,784			(8	)
	Latin America			337		378			(11	)		1,020			1,092			(7	)
	Asia			632		695			(9	)		1,857			2,029			(8	)
		Total	$	2,457	$	2,566			(4	)	$	7,314		$	7,462			(2	)%
	Institutional Clients Group		$	7,350	$	9,911			(26	)%	$	31,503		$	29,931			5	%
Total Citicorp			$	13,025	$	16,020			(19	)%	$	48,554		$	49,895			(3	)%
CITI HOLDINGS
Brokerage and Asset Management			$	670	$	2,094			(68	)%	$	14,710		$	6,951			NM
Local Consumer Lending				4,647		5,432			(14	)		15,030			19,156			(22	)%
Special Asset Pool				1,377		(6,822	)		NM			(3,844	)		(27,842	)		86
Total Citi Holdings			$	6,694	$	704			NM		$	25,896		$	(1,735	)		NM
Corporate/Other			$	671	$	(466	)		NM		$	430		$	(2,207	)		NM
Total Net Revenues			$	20,390	$	16,258			25	%	$	74,880		$	45,953			63	%

NM    Not meaningful

13

CITICORP

			Third Quarter								Nine Months
								% Change								% Change
In millions of dollars			2009		2008						2009		2008
	Net interest revenue		$	8,435	$	8,316			1	%	$	25,067	$	24,980			—
	Non-interest revenue			4,590		7,704			(40	)		23,487		24,915			(6	)%
Total Revenues, net of interest expense			$	13,025	$	16,020			(19	)%	$	48,554	$	49,895			(3	)%
Provision for credit losses and for benefits and claims
	Net credit losses		$	1,718	$	1,317			30	%	$	4,515	$	3,535			28	%
	Credit reserve build (release)			465		799			(42	)		2,570		1,846			39
	Provision for loan losses		$	2,183	$	2,116			3		$	7,085	$	5,381			32	%
	Provision for benefits & claims			14		—			—			41		3			NM
	Provision for unfunded lending commitments			—		(80	)		100			115		(155	)		NM
		Total provision for credit losses and for benefits and claims	$	2,197	$	2,036			8	%	$	7,241	$	5,229			38	%
Total operating expenses			$	8,181	$	8,948			(9	)	$	23,227	$	28,174			(18	)%
Income from continuing operations before taxes			$	2,647	$	5,036			(47	)%	$	18,086	$	16,492			10	%
Provision for income taxes				338		1,434			(76	)		5,037		4,809			5
Income from continuing operations			$	2,309	$	3,602			(36	)%	$	13,049	$	11,683			12	%
Net income (loss) attributable to noncontrolling interests				25		16			56			25		50			(50	)
Citicorp's net income			$	2,284	$	3,586			(36	)%	$	13,024	$	11,633			12	%
Balance Sheet Data (in billions)
Total EOP assets			$	1,014	$	1,158			(12	)%
Average assets			$	1,032	$	1,175			(12	)%	$	1,024	$	1,287			(20	)%
Total EOP deposits			$	728	$	683			7	%

NM    Not meaningful

14

REGIONAL CONSUMER BANKING

				Third Quarter									Nine Months
										% Change									% Change
In millions of dollars				2009			2008						2009			2008
Net interest revenue				$	3,992		$	4,224			(5	)%	$	11,508		$	12,429			(7	)%
Non-interest revenue					1,683			1,885			(11	)		5,543			7,535			(26	)
Total Revenues, net of interest expense				$	5,675		$	6,109			(7	)%	$	17,051		$	19,964			(15	)%
Total operating expenses				$	3,547		$	4,029			(12	)%	$	10,344		$	12,005			(14	)%
		Net credit losses		$	1,426		$	1,096			30	%	$	3,978		$	2,940			35	%
		Credit reserve build (release)			319			514			(38	)		1,575			1,346			17
		Provision for benefits & claims			14			—			—			41			3			NM
Provision for loan losses and for benefits and claims				$	1,759		$	1,610			9	%	$	5,594		$	4,289			30	%
Income from continuing operations before taxes					369		$	470			(21	)		1,113		$	3,670			(70	)%
Income taxes (benefits)					(246	)		24			NM			(303	)		902			NM
Income from continuing operations				$	615		$	446			38	%	$	1,416		$	2,768			(49	)%
Net income (loss) attributable to noncontrolling interests					2			5			(60	)		2			10			(80	)
Net income				$	613		$	441			39	%	$	1,414		$	2,758			(49	)%
Average assets (in billions of dollars)				$	201		$	222			(9	)%		191		$	225			(15	)%
Return on assets					1.21	%		0.79	%					0.99	%		1.64	%
Average deposits (in billions of dollars)					275			266			3	%
Net credit losses as a % of average loans					4.70	%		3.35	%
Revenue by business
	Retail Banking			$	3,315		$	3,531			(6	)%	$	9,463		$	10,559			(10	)%
	Citi-Branded Cards				2,360			2,578			(8	)		7,588			9,405			(19	)
			Total revenues	$	5,675		$	6,109			(7	)%	$	17,051		$	19,964			(15	)%
Income (loss) from continuing operations by business
	Retail Banking			$	609		$	563			8	%	$	1,480		$	1,826			(19	)%
	Citi-Branded Cards				6			(117	)		NM			(64	)		942			NM
			Total	$	615		$	446			38	%	$	1,416		$	2,768			(49	)%

NM    Not meaningful

15

NORTH AMERICA REGIONAL CONSUMER BANKING

			Third Quarter									Nine Months
									% Change								% Change
In millions of dollars			2009			2008						2009			2008
Net interest revenue			$	1,224		$	978			25	%	$	3,394		$	2,673		27	%
Non-interest revenue				530			494			7			2,210			3,244		(32	)
Total Revenues, net of interest expense			$	1,754		$	1,472			19	%	$	5,604		$	5,917		(5	)%
Total operating expenses			$	1,331		$	1,444			(8	)%	$	4,023		$	4,507		(11	)%
	Net credit losses		$	280		$	144			94	%	$	843		$	425		98	%
	Credit reserve build (release)			30			(9	)		NM			402			286		41
	Provision for benefits and claims			14			—			—			41			2		NM
Provisions for loan losses and for benefits and claims			$	324		$	135			NM		$	1,286		$	713		80	%
Income (loss) from continuing operations before taxes			$	99		$	(107	)		NM		$	295		$	697		(58	)%
Income taxes (benefits)				(64	)		(63	)		(2	)%		(50	)		227		NM
Income (loss) from continuing operations			$	163		$	(44	)		NM		$	345		$	470		(27	)%
Net income (loss) attributable to noncontrolling interests				—			—			—			—			—		—
Net income (loss)			$	163		$	(44	)		NM		$	345		$	470		(27	)%
Average deposits (in billions of dollars)			$	139		$	121			15	%
Net credit losses as a % of average loans				5.94	%		3.51	%
Revenue by business
	Retail banking		$	1,070		$	1,004			7	%	$	2,907		$	2,806		4	%
	Citi-branded cards			684			468			46			2,697			3,111		(13	)
		Total	$	1,754		$	1,472			19	%	$	5,604		$	5,917		(5	)%
Income (loss) from continuing operations by business
	Retail banking		$	150		$	143			5	%	$	319		$	205		56	%
	Citi-branded cards			13			(187	)		NM			26			265		(90	)
		Total	$	163		$	(44	)		NM		$	345		$	470		(27	)%

NM    Not meaningful

3Q09 vs. 3Q08

        Overall, most key revenue drivers in North America regional consumer banking were stable or higher in the third quarter of 2009 as compared to the second quarter of 2009. The key focus in Citi's North America consumer businesses will likely remain on engagement with customers to raise deposits and to offer loans. However, recovery is expected to be driven by improvement in credit in the key North American businesses. For a further discussion, see "Loan and Credit Details—Consumer Loan Modification Programs" and "—U.S. Consumer Mortgage Lending" below.

Revenues, net of interest expense, increased 19%, primarily reflecting higher net interest margin in cards, higher volumes in retail banking, and better securitization revenue, offset by higher credit losses in the securitization trusts. Net interest revenue was up 25% driven by higher net interest margin in cards as a result of higher interest revenue from pricing actions and lower funding costs, and by the impact of higher deposit and loan volumes in retail banking. Average deposits were 15% higher than the prior year, driven by growth in both consumer and commercial deposits. Non-interest revenue increased 7% primarily driven by better securitization revenue, partially offset by higher credit losses flowing through the securitization trusts.

Operating expenses declined 8%, primarily reflecting the benefits from re-engineering efforts and lower marketing costs.

Provisions for loan losses and for benefits and claims increased $189 million primarily due to rising net credit losses in both cards and retail banking. Continued weakening of leading credit indicators and trends in the macro-economic environment, including rising unemployment and higher bankruptcy filings, drove higher credit costs. The cards net credit loss ratio increased 339 basis points to 7.06%, while the retail banking net credit loss ratio increased 120 basis points to 4.23%.

        The increase in Net Income also reflected a tax benefit resulting from the federal tax reserve release in the third quarter of 2009.

3Q09 YTD vs. 3Q08 YTD

Revenues, net of interest expense, declined 5%, primarily reflecting higher credit losses in the securitization trusts, offset by higher net interest margin in cards and higher volumes in retail banking. Net interest revenue was up 27% driven by the impact of pricing actions and lower funding costs in cards, and by higher deposit volumes in retail banking, with average deposits up 10% from the prior-year period. Non-interest revenue declined 32% driven by higher credit losses flowing through the securitization trusts partially offset by better

16

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 period.

Operating expenses declined 11%, reflecting the benefits from re-engineering efforts, lower marketing costs, and the absence of $126 million of repositioning charges recorded in the prior-year period, offset by the absence of a prior-year $159 million Visa litigation reserve release.

Provisions for loan losses and for benefits and claims increased $573 million or 80% primarily due to rising net credit losses in both cards and retail banking. Continued weakening of leading credit indicators and trends in the macro-economic environment, including rising unemployment and higher bankruptcy filings, drove higher credit costs. The cards net credit loss ratio increased 332 basis points to 6.74%, while the retail banking net credit loss ratio increased 70 basis points to 4.12%.

17

EMEA REGIONAL CONSUMER BANKING

			Third Quarter									Nine Months
									% Change									% Change
In millions of dollars			2009			2008						2009			2008
Net interest revenue			$	262		$	350			(25	)%	$	729		$	984			(26	)%
Non-interest revenue				153			148			3			440			483			(9	)
Total Revenues, net of interest expense			$	415		$	498			(17	)%	$	1,169		$	1,467			(20	)%
Total operating expenses			$	270		$	372			(27	)%	$	808		$	1,142			(29	)%
	Net credit losses		$	139		$	55			NM		$	349		$	150			NM
	Credit reserve build (release)			67			33			NM			297			64			NM
Provisions for loan losses and for benefits and claims			$	206		$	88			NM		$	646		$	214			NM
Income (loss) from continuing operations before taxes			$	(61	)	$	38			NM		$	(285	)	$	111			NM
Income taxes (benefits)				(38	)		7			NM			(119	)		24			NM
Income (loss) from continuing operations			$	(23	)	$	31			NM		$	(166	)	$	87			NM
Net income (loss) attributable to noncontrolling interests				2			5			(60	)%		2			11			(82	)%
Net income (loss)			$	(25	)	$	26			NM		$	(168	)	$	76			NM
Average assets (in billions of dollars)			$	11		$	14			(21	)%	$	11		$	14			(21	)%
Return on assets				(0.90	)%		0.74	%					(2.04	)%		0.73	%
Average deposits (in billions of dollars)				10			11			(9	)%
Net credit losses as a % of average loans				6.34	%		2.10	%
Revenue by business
	Retail banking		$	237		$	310			(24	)%	$	676		$	931			(27	)%
	Citi-branded cards			178			188			(5	)		493			536			(8	)
		Total	$	415		$	498			(17	)%	$	1,169		$	1,467			(20	)%
Income (loss) from continuing operations by business
	Retail banking		$	(23	)	$	(2	)		NM		$	(140	)	$	(4	)		NM
	Citi-branded cards			—			33			(100	)%		(26	)		91			NM
		Total	$	(23	)	$	31			NM		$	(166	)	$	87			NM

NM    Not meaningful

3Q09 vs. 3Q08

Revenues, net of interest expense, declined 17%. More than half of the revenue decline was attributable to changes in foreign currency translation (generally referred to throughout this report as "FX translation"). Other drivers included lower wealth management and lending revenues due to lower volumes and spread compression. Investment sales and assets under management declined by 29% and 25%, respectively. Net interest revenue was 25% lower than the prior-year period with average loans for retail banking down 22% as a result of a lower risk profile, branch closures and the impact of FX translation.

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

Provisions for loan losses and for benefits and claims increased $118 million to $206 million in the third quarter of 2009. While delinquencies improved during the third quarter of 2009 as compared to the second quarter of 2009, net credit losses continued to increase from $55 million to $139 million, and the loan loss reserve build increased from $33 million to $67 million. Higher credit costs reflected continued credit deterioration, particularly in the UAE, Turkey, Poland and Russia.

3Q09 YTD vs. 3Q08 YTD

Revenues, net of interest expense, declined 20%. Over half of the revenue decline was attributable to the impact of FX translation. Other drivers included lower wealth management and lending revenues due to lower volumes and spread compression. Investment sales and assets under management declined by 42% and 25%, respectively. Net interest revenue was 26% lower than the prior-year period with average loans for retail banking down 20% and average deposits down 22%. Non-interest revenue decreased by 9%, primarily due to the impact of FX translation.

Operating expenses declined 29%, reflecting expense control actions, lower marketing spend and the impact of FX translation. Cost savings were achieved by branch closures, headcount reductions and re-engineering efforts.

Provisions for loan losses and for benefits and claims increased $432 million to $646 million. Net credit losses increased from $150 million to $349 million, while the loan loss reserve build increased from $64 million to $297 million. Higher credit costs reflected continued credit deterioration across the region.

18

LATIN AMERICA REGIONAL CONSUMER BANKING

			Third Quarter									Nine Months
									% Change									% Change
In millions of dollars			2009			2008						2009			2008
Net interest revenue			$	1,339		$	1,669			(20	)%	$	3,940		$	5,046			(22	)%
Non-interest revenue				487			631			(23	)		1,496			1,860			(20	)
Total Revenues, net of interest expense			$	1,826		$	2,300			(21	)%	$	5,436		$	6,906			(21	)%
Total operating expenses			$	1,077		$	1,292			(17	)%	$	3,027		$	3,475			(13	)%
	Net credit losses		$	656		$	640			3	%	$	1,809		$	1,661			9	%
	Credit reserve build (release)			141			301			(53	)		461			695			(34	)
	Provision for benefits and claims			—			—			—			—			1			(100	)
Provisions for loan losses and for benefits and claims			$	797		$	941			(15	)%	$	2,270		$	2,357			(4	)%
Income from continuing operations before taxes			$	(48	)	$	67			NM		$	139		$	1,074			(87	)%
Income taxes (benefits)				(77	)		(35	)		NM			(129	)		207			NM
Income from continuing operations			$	29		$	102			(72	)%	$	268		$	867			(69	)%
Net income (loss) attributable to noncontrolling interests				—			—			—			—			—			—
Net income			$	29		$	102			(72	)%	$	268		$	867			(69	)%
Average assets (in billions of dollars)				61		$	81			(25	)%		59		$	78			(24	)%
Return on assets				0.19	%		0.50	%					0.61	%		1.48	%
Average deposits (in billions of dollars)				36			42			(14	)%
Net credit losses as a % of average loans				9.04			7.79
Revenue by business
	Retail banking		$	969		$	1,067			(9	)%	$	2,843		$	3,180			(11	)%
	Citi-branded cards			857			1,233			(30	)		2,593			3,726			(30	)
		Total	$	1,826		$	2,300			(21	)%	$	5,436		$	6,906			(21	)%
Income (loss) from continuing operations by business
	Retail banking		$	106		$	112			(5	)%	$	436		$	573			(24	)%
	Citi-branded cards			(77	)		(10	)		NM			(168	)		294			NM
		Total	$	29		$	102			(72	)%	$	268		$	867			(69	)%

NM    Not meaningful

3Q09 vs. 3Q08

Revenues, net of interest expense, declined 21%, mainly due to the impact of FX translation, lower cards receivables and spread compression, partially offset by higher business volumes in retail banking. Net interest revenue was 20% lower than the prior year caused by the decrease in cards receivables as well as lower spreads resulting from a lower risk profile, partially offset by higher business volumes in retail banking. Average deposits were down 14%, due primarily to the impact of FX translation. Non-interest revenue declined 23%, primarily due to the impact of FX translation.

Operating expenses declined 17%, reflecting the benefits from re-engineering efforts and the impact of FX translation.

Provisions for loan losses and for benefits and claims decreased $144 million mainly due to lower loan loss reserve build of $160 million. While delinquencies decreased during the third quarter 2009 as compared to the second quarter 2009, cards net credit loss rates increased from 16.2% to 18.1%. Rising losses were apparent in Brazil and Mexico; however, the business continues to focus on repositioning and de-risking the portfolio, particularly in the Mexico cards business.

3Q09 YTD vs. 3Q08 YTD

Revenues, net of interest expense, declined 21% driven by the impact of FX translation, lower volumes and spread compression in the cards business. Net interest revenue was 22% lower than the prior year with average credit cards loans down 22%, and net interest margin decreasing as well due to the cards spread compression impact. Non-interest revenue declined 20%, primarily due to the decline in cards fees as well as the impact of FX translation.

Operating expenses declined 13%, reflecting the benefits from re-engineering efforts and the impact of FX translation. The prior-year period also included a $257 million expense benefit related to a legal vehicle restructuring in Mexico.

Provisions for loan losses and for benefits and claims decreased $87 million or 4%. Cards net credit loss rates increased from 11.6% to 16.7%. Credit deterioration was apparent in Brazil and Mexico where the business has focused its repositioning and derisking efforts.

19

ASIA REGIONAL CONSUMER BANKING

			Third Quarter									Nine Months
									% Change									% Change
In millions of dollars			2009			2008						2009			2008
Net interest revenue			$	1,167		$	1,227			(5	)%	$	3,445		$	3,726			(8	)%
Non-interest revenue				513			612			(16	)		1,397			1,948			(28	)
Total Revenues, net of interest expense			$	1,680		$	1,839			(9	)%	$	4,842		$	5,674			(15	)%
Total operating expenses			$	869		$	921			(6	)%	$	2,486		$	2,881			(14	)%
	Net credit losses		$	351		$	257			37			977		$	704			39	%
	Credit reserve build (release)			81			189			(57	)%		415			301			38
Provisions for loan losses and for benefits and claims			$	432		$	446			(3	)%	$	1,392		$	1,005			39	%
Income from continuing operations before taxes			$	379		$	472			(20	)%	$	964		$	1,788			(46	)%
Income taxes (benefits)				(67	)		115			NM			(5	)		444			NM
Income from continuing operations			$	446		$	357			25	%	$	969		$	1,344			(28	)%
Net income (loss) attributable to noncontrolling interests				—			—			—			—			(1	)		100
Net income			$	446		$	357			25	%	$	969		$	1,345			(28	)%
Average assets (in billions of dollars)			$	92		$	95			(3	)%	$	87		$	96			(9	)
Return on assets				1.92	%		1.49	%					1.49	%		1.87	%
Average deposits (in billions of dollars)				91			93			(2	)
Net credit losses as a % of average loans				2.17			1.44
Revenue by business
	Retail banking		$	1,039		$	1,150			(10	)%	$	3,037		$	3,642			(17	)%
	Citi-branded cards			641			689			(7	)		1,805			2,032			(11	)
		Total	$	1,680		$	1,839			(9	)%	$	4,842		$	5,674			(15	)%
Income (loss) from continuing operations by business
	Retail banking		$	376		$	310			21	%	$	865		$	1,052			(18	)%
	Citi-branded cards			70			47			49			104			292			(64	)
		Total	$	446		$	357			25	%	$	969		$	1,344			(28	)%

NM    Not meaningful

3Q09 vs. 3Q08

Revenues, net of interest expense, declined 9% driven by the absence of Visa assets sales gains in the 2008 third quarter, lower investment product revenues, lower loan volumes and the impact of FX translation. Net interest revenue was 5% lower than the prior-year period. Average loans and deposits were down 9% and 1%, respectively, in each case primarily due to the impact of FX translation. Non-interest revenue declined 16%, primarily due to the decline in investment revenues, lower Cards Purchase sales, the absence of Visa share sales gains and the impact of FX translation.

Operating expenses declined 6%, reflecting the benefits from re-engineering efforts and the impact of FX translation.

Provisions for loan losses and for benefits and claims decreased 3%, mainly due to impact of lower credit reserve build, offset by an increase in net credit losses and the impact of FX translation. Rising credit losses were particularly apparent in the portfolios in India and Korea. Compared to the second quarter of 2009, delinquencies improved and net credit losses flattened as this region showed possible early signs of economic recovery and increased levels of customer activity.

3Q09 YTD vs. 3Q08 YTD

Revenues, net of interest expense, declined 15% driven by absence of Visa assets sales gains, a 34% decline in investment sales, lower loan and deposit volumes, and the impact of FX translation. Net interest revenue was 8% lower than the prior-year period reflecting lower Average loans and deposits. Non-interest revenue declined 28%, primarily due to the absence of Visa asset sales gains and the decline in investment sales.

Operating expenses declined 14%, reflecting the benefits from re-engineering efforts and the impact of FX translation.

Provisions for loan losses and for benefits and claims increased 39% mainly due to higher net credit losses in India and Korea and a higher credit reserve build.

20

INSTITUTIONAL CLIENTS GROUP (ICG)

			Third Quarter									Nine Months
									% Change									% Change
In millions of dollars			2009			2008						2009			2008
Commissions and Fees			$	565		$	754			(25	)%	$	1,500		$	2,269			(34	)%
Administration and Other Fiduciary Fees				1,258			1,397			(10	)		3,717			4,148			(10	)
Investment banking				1,063			740			44			3,245			3,005			8
Principal transactions				(535	)		3,116			NM			7,699			8,065			(5	)
Other				556			(188	)		NM			1,783			(107	)		NM
	Total non-interest revenue		$	2,907		$	5,819			(50	)%	$	17,944		$	17,380			3	%
	Net interest revenue (including dividends)			4,443			4,092			9			13,559			12,551			8
Total revenues, net of interest expenses			$	7,350		$	9,911			(26	)%	$	31,503		$	29,931			5	%
Total operating expenses				4,634			4,919			(6	)		12,883			16,169			(20	)
	Net credit losses			292			221			32			537			595			(10	)
	Provisions for unfunded lending commitments			—			(80	)		100			115			(155	)		NM
	Credit reserve build (release)			146			285			(49	)		995			500			99
Provision for credit losses			$	438		$	426			3	%	$	1,647		$	940			75	%
Income from continuing operations before taxes			$	2,278		$	4,566			(50	)%	$	16,973		$	12,822			32	%
Income taxes (benefits)				584			1,410			(59	)		5,340			3,907			37
Income from continuing operations			$	1,694		$	3,156			(46	)%	$	11,633		$	8,915			30	%
Net income (loss) attributable to noncontrolling interests				23			11			NM			23			40			(43	)
Net income			$	1,671		$	3,145			(47	)%	$	11,610		$	8,875			31	%
Average assets (in billions of dollars)			$	831		$	953			(13	)%	$	833		$	1,062			(22	)%
Return on assets				0.80	%		1.31	%					1.86	%		1.12	%
Revenue by region:
	North America		$	1,955		$	4,558			(57	)%	$	10,342		$	12,674			(18	)%
	EMEA			3,043			2,348			30			11,523			7,882			46
	Latin America			1,040			847			23			3,567			2,964			20
	Asia			1,312			2,158			(39	)		6,071			6,411			(5	)
		Total	$	7,350		$	9,911			(26	)%	$	31,503		$	29,931			5	%
Income (loss) from continuing operations by region:
	North America		$	75		$	1,434			(95	)%	$	2,964		$	3,611			(18	)%
	EMEA			856			450			90			4,450			1,599			NM
	Latin America			364			386			(6	)		1,595			1,304			22
	Asia			399			886			(55	)		2,624			2,401			9
		Total	$	1,694		$	3,156			(46	)%	$	11,633		$	8,915			30	%
Average loans by region (in billions):
	North America		$	43		$	52			(17	)%
	EMEA			42			49			(14	)
	Latin America			21			24			(13	)
	Asia			27			36			(25	)
		Total	$	133		$	161			(17	)%

NM    Not meaningful

21

SECURITIES AND BANKING

		Third Quarter									Nine Months
								% Change									% Change
In millions of dollars		2009			2008						2009			2008
Net interest revenue		$	3,050		$	2,670			14	%	$	9,305		$	8,520			9	%
Non-interest revenue			1,843			4,675			(61	)		14,884			13,949			7
Revenues, net of interest expense		$	4,893		$	7,345			(33	)%	$	24,189		$	22,469			8	%
Operating expenses			3,493			3,667			(5	)		9,580			12,322			(22	)
	Net credit losses		294			223			32			539			593			(9	)
	Provision for unfunded lending commitments		—			(74	)		100			115			(149	)		NM
	Credit reserve build (release)		151			288			(48	)		994			494			NM
Provision for credit losses		$	445		$	437			2	%	$	1,648		$	938			76	%
Income before taxes and noncontrolling interest		$	955		$	3,241			(71	)%	$	12,961		$	9,209			41	%
Income taxes			200			1,003			(80	)		4,145			2,812			47
Income from continuing operations			755			2,238			(66	)		8,816			6,397			38
Net income attributable to noncontrolling interests			18			2			NM			19			14			36
Net income		$	737		$	2,236			(67	)%	$	8,797		$	6,383			38	%
Average assets (in billions of dollars)		$	771		$	883			(13	)%	$	774		$	990			(22	)%
Return on assets			0.38	%		1.01	%					1.52	%		0.86	%
Revenues by region:
	North America	$	1,312		$	4,018			(67	)%	$	8,454		$	11,117			(24	)%
	EMEA		2,198			1,395			58			8,974			5,098			76
	Latin America		703			469			50			2,547			1,872			36
	Asia		680			1,463			(54	)		4,214			4,382			(4	)
Total revenues		$	4,893		$	7,345			(33	)%	$	24,189		$	22,469			8	%
Net income (loss) from continuing operations by region:
	North America	$	(77	)	$	1,340			NM		$	2,493		$	3,368			(26	)%
	EMEA		548			102			NM			3,466			674			NM
	Latin America		216			227			(5	)%		1,137			853			33
	Asia		68			569			(88	)		1,720			1,502			15
Total net income from continuing operations		$	755		$	2,238			(66	)%	$	8,816		$	6,397			38	%
Securities and Banking
	Revenue details:
	Net Investment Banking	$	1,163		$	618			88	%	$	3,305		$	2,783			19	%
	Lending		(699	)		1,262			NM			(1,956	)		2,026			NM
	Equity markets		446			550			(19	)		3,151			3,237			(3	)
	Fixed income markets		3,945			4,756			(17	)		19,739			13,927			42
	Private bank		520			563			(8	)		1,496			1,789			(16	)
	Other Securities and Banking		(482	)		(404	)		(19	)		(1,546	)		(1,293	)		(20	)
Total Securities and Banking Revenues		$	4,893		$	7,345			(33	)%	$	24,189		$	22,469			8	%

NM    Not meaningful

3Q09 vs. 3Q08

Revenues, net of interest expense, decreased 33% or $2.5 billion to $4.9 billion mainly from revenue marks of negative $1.4 billion, set forth in greater detail below, and a decrease in lending revenues of $2.0 billion to negative $699 million (mainly from losses on credit derivative positions). Fixed income markets revenues declined $811 million to $3.9 billion due to negative credit value adjustments of $760 million (mainly due to narrowing in Citigroup spreads, partially offset by the narrowing of counterparty spreads), compared to positive credit value adjustments of $2.6 billion in the third quarter of 2008, partially offset by stronger performances across most fixed income categories as market conditions improved. Equity markets revenues declined $104 million or 19% primarily driven by negative credit value adjustments of $878 million, offset by stronger results in proprietary trading and derivatives. Investment banking revenues increased $545 million, led by stronger high yield and investment grade debt issuances in debt underwriting, and stronger volumes in equity underwriting, with a decline in advisory revenues resulting from lower global M&A activity.

Operating expenses decreased 5% or $174 million to $3.5 billion, mainly driven by lower severance and the benefit of FX translation, offset partially by an increase in compensation costs.

Provisions for credit losses increased by 2% or $8 million to $445 million, mainly from higher net credit losses and a release of provisions for unfunded lending commitments in the prior-year period, offset partially by lower credit reserve builds.

3Q09 YTD vs. 3Q08 YTD

Revenues, net of interest expense, increased 8% or $1.7 billion, mainly due to an increase in fixed income markets of $5.8 billion to $19.7 billion reflecting strong trading results, particularly in the first and second quarters of 2009, offset partially by a decrease in lending revenues of $4.0 billion to

22

negative $2.0 billion (mainly from losses on credit default swap hedges).

Operating expenses decreased 22% or $2.7 billion driven by lower compensation due to headcount reductions and benefits from re-engineering and expense management.

Provisions for credit losses increased 76% or $710 million to $1.6 billion mainly from increased credit reserve builds on funded loans and higher provisions for unfunded lending commitments.

Third Quarter Revenue Impacting Citicorp—Securities and Banking

        While not as significant as in prior quarters, certain items continued to impact Securities and Banking revenues during the third quarter of 2009. These items are set forth in the table below.

	Pretax Revenue (in millions)
	Third Quarter 2009			Third Quarter 2008
Private Equity and equity investments	$	79		$	(50	)
Alt-A Mortgages(1)(2)		142			(221	)
Commercial Real Estate (CRE) positions(1)(3)		20			130
CVA on Citi debt liabilities under fair value option		(955	)		1,526
CVA on derivatives positions, excluding monoline insurers		(722	)		1,178
Total significant revenue items	$	(1,436	)	$	2,563

(1)

Net of hedges.

(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 "Loan and Credit Details—U.S. Consumer Mortgage Lending."

(3)

Securities and Banking'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 "Exposure to Commercial Real Estate" below for a further discussion.

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

        The Company is required to use its own credit spreads in determining the current value of 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 $955 million of losses recorded by Securities and Banking on its fair value option liabilities (excluding derivative liabilities) during the third quarter of 2009 was principally due to the narrowing (improving) of the Company's credit spreads.

Credit Valuation Adjustment on Derivative Positions, excluding Monoline insurers

        The approximately $722 million of pretax losses recorded by Securities and Banking on its derivative positions during the third quarter of 2009 was due to the narrowing of the Company's credit default swap spreads on its derivative liabilities. These losses were partially offset by gains due to the narrowing of the credit spreads of the Company's counterparties on its derivative assets. See "Derivatives—Fair Valuation Adjustments for Derivatives" below for a further discussion.

23

TRANSACTION SERVICES

		Third Quarter									Nine Months
								% Change									% Change
In millions of dollars		2009			2008						2009			2008
Net interest revenue		$	1,393		$	1,422			(2	)%	$	4,254		$	4,031			6	%
Non-interest revenue			1,064			1,144			(7	)		3,060			3,431			(11	)
Revenues, net of interest expense		$	2,457		$	2,566			(4	)%	$	7,314		$	7,462			(2	)%
Operating expenses			1,141			1,252			(9	)		3,303			3,847			(14	)
Provision for credit losses and for benefits and claims			(7	)		(11	)		36			(1	)		2			NM
Income before taxes and noncontrolling interest		$	1,323		$	1,325			—		$	4,012		$	3,613			11	%
Income taxes			384			407			(6	)%		1,195			1,095			9
Income from continuing operations			939			918			2			2,817			2,518			12
Net income (loss) attributable to noncontrolling interests			5			9			(44	)		4			26			(85	)
Net income		$	934		$	909			3	%	$	2,813		$	2,492			13	%
Average assets (in billions of dollars)		$	60		$	70			(14	)%	$	59		$	72			(18	)%
Return on assets			6.18	%		5.17	%					6.37	%		4.62	%
Revenues by region:
	North America	$	643		$	540			19	%	$	1,888		$	1,557			21	%
	EMEA		845			953			(11	)		2,549			2,784			(8	)
	Latin America		337			378			(11	)		1,020			1,092			(7	)
	Asia		632			695			(9	)		1,857			2,029			(8	)
Total revenues		$	2,457		$	2,566			—		$	7,314		$	7,462			(2	)%
Net income (loss) from continuing operations by region:
	North America	$	152		$	94			62	%	$	471		$	243			94	%
	EMEA		308			348			(11	)		984			925			6
	Latin America		148			159			(7	)		458			451			2
	Asia		331			317			4			904			899			1
Total net income from continuing operations		$	939		$	918			2	%	$	2,817		$	2,518			12	%
Key Indicators (in billions of dollars)
Average deposits and other customer liability balances		$	314		$	273			15	%
EOP assets under custody (in trillions of dollars)		$	11.8		$	11.9			(1	)

NM    Not meaningful

3Q09 vs. 3Q08

Revenues, net of interest expense, were $2.5 billion, down $109 million or 4% from strong prior-year performance due to spread compression (as global rates declined) and lower volumes as well as negative foreign exchange impact. This was partly offset by strong growth in liability balances and higher trade fees.

Operating expenses declined 9% or $111 million to $1.1 billion, driven by headcount reductions, re-engineering efforts, expense management initiatives and a benefit from FX translation.

3Q09 YTD vs. 3Q08 YTD

Revenues, net of interest expense, of $7.3 billion decreased slightly from the prior period driven primarily by the impact of lower fee revenues and negative foreign exchange. Average liability balances grew 6% driven by strong growth in North America as a result of successful implementation of deposit growth strategy.

Operating expenses declined 14%, driven by headcount reduction and re-engineering benefits.

24

CITI HOLDINGS

		Third Quarter									Nine Months
								% Change									% Change
In millions of dollars		2009			2008						2009			2008
	Net interest revenue	$	4,024		$	5,766			(30	)%	$	13,902		$	17,292			(20	)%
	Non-interest revenue		2,670			(5,062	)		NM			11,994			(19,027	)		NM
Total Revenues, net of interest expense		$	6,694		$	704			NM		$	25,896		$	(1,735	)		NM
Provision for credit losses and for benefits and claims
	Net credit losses	$	6,250		$	3,603			73	%	$	19,090		$	9,332			NM
	Credit reserve build (release)		338			3,224			(90	)		4,743			6,790			(30	)%
	Provision for loan losses	$	6,588		$	6,827			(4	)%	$	23,833		$	16,122			48	%
	Provision for benefits & claims		310			273			14			923			805			15
	Provision for unfunded lending commitments		—			(70	)		100			80			(138	)		NM
	Total provision for credit losses and for benefits and claims	$	6,898		$	7,030			(2	)%	$	24,836		$	16,789			48	%
Total operating expenses		$	3,202		$	5,136			(38	)%	$	11,417		$	16,406			(30	)%
Income (loss) from continuing operations before taxes		$	(3,406	)	$	(11,462	)		70	%	$	(10,357	)	$	(34,930	)		70	%
Provision (benefits) for income taxes			(1,588	)		(4,526	)		65			(4,562	)		(13,619	)		67
Income (loss) from continuing operations		$	(1,818	)	$	(6,936	)		74	%	$	(5,795	)	$	(21,311	)		73	%
Net income (loss) attributable to noncontrolling interests			49			(109	)		NM			(1	)		(87	)		99
Citi Holding's net income (loss)		$	(1,867	)	$	(6,827	)		73	%	$	(5,794	)	$	(21,224	)		73	%
Balance Sheet Data (in billions)
Total EOP assets		$	617		$	775			(20	)%
Total EOP deposits			90			83			8

NM    Not meaningful

25

BROKERAGE AND ASSET MANAGEMENT

		Third Quarter									Nine Months
								% Change								% Change
In millions of dollars		2009			2008						2009		2008
Net interest revenue		$	(56	)	$	318			NM		$	460	$	727			(37	)%
Non-interest revenue			726			1,776			(59	)%		14,250		6,224			NM
Total Revenues, net of interest expense		$	670		$	2,094			(68	)%	$	14,710	$	6,951			NM
Total operating expenses		$	358		$	2,085			(83	)%	$	3,000	$	6,537			(54	)%
	Net credit losses		—		$	1			(100	)%	$	3	$	11			(73	)%
	Credit reserve build (release)	$	(11	)		(3	)		NM			35		7			NM
	Provision for benefits and claims		38			58			(34	)		113		155			(27	)
Provisions for loan losses and for benefits and claims		$	27		$	56			(52	)%	$	151	$	173			(13	)%
Income from continuing operations before taxes		$	285		$	(47	)		NM		$	11,559	$	241			NM
Income taxes			146			10			NM			4,548		145			NM
Income (loss) from continuing operations		$	139		$	(57	)		NM		$	7,011	$	96			NM
Net income (loss) attributable to noncontrolling interests			16			(98	)		NM			5		(60	)		NM
Net income		$	123		$	41			NM		$	7,006	$	156			NM
EOP assets (in billions of dollars)		$	59		$	62			(5	)%
EOP deposits (in billions of dollars)			60		$	53			13

NM    Not meaningful

3Q09 vs. 3Q08

Revenues, net of interest expense, decreased 68% primarily driven by the decrease in the Company's share of Smith Barney revenue resulting from the joint venture transaction. Revenues in the prior-year period included a $347 million pre-tax gain on sale of CitiStreet and charges related to settlement of auction rate securities (ARS) of $306 million pre-tax. 2009 third quarter revenue includes a $320 million pre-tax gain on the sale of the Managed Futures business to the Morgan Stanley Smith Barney joint venture.

Operating expenses decreased 83% from the prior-year period, mainly driven by the absence of Smith Barney expenses and the absence of restructuring expenses in retail alternative investments.

Provisions for loan losses and for benefits and claims decreased by 52% mainly reflecting lower provisions for benefits and claims.

End of Period Assets include approximately $24 billion of assets of discontinued operations held for sale.

3Q09 YTD vs. 3Q08 YTD

Revenues, net of interest expense, increased $7.8 billion due to an $11.1 billion pre-tax gain on sale ($6.7 billion after-tax) on the Morgan Stanley Smith Barney joint venture transaction, which closed on June 1, 2009. Excluding the gain, revenues declined $3.3 billion driven by the absence of Smith Barney revenues as well as the impact of market conditions on Smith Barney transactional and fee-based revenue compared to the prior year.

Operating expenses decreased $3.5 billion primarily driven by the absence of Smith Barney expenses, lower variable compensation and re-engineering efforts, particularly in retail alternative investments.

Provisions for loan losses and for benefits and claims declined 13% mainly reflecting lower provisions for benefits and claims.

26

LOCAL CONSUMER LENDING

		Third Quarter									Nine Months
								% Change									% Change
In millions of dollars		2009			2008						2009			2008
Net interest revenue		$	3,453		$	4,612			(25	)%	$	10,730		$	14,015			(23	)%
Non-interest revenue			1,194			820			46			4,300			5,141			(16	)
Total Revenues, net of interest expense		$	4,647		$	5,432			(14	)%	$	15,030		$	19,156			(22	)%
Total operating expenses		$	2,611		$	2,847			(8	)%	$	7,746		$	9,094			(15	)%
	Net credit losses	$	4,929		$	3,487			41	%	$	14,617		$	9,116			60	%
	Credit reserve build (release)		604			2,702			(78	)		5,003			5,858			(15	)
	Provision for benefits and claims		272			215			27			810			650			25
Provisions for loan losses and for benefits and claims		$	5,805		$	6,404			(9	)%	$	20,430		$	15,624			31	%
Loss from continuing operations before taxes		$	(3,769	)	$	(3,819	)		1	%	$	(13,146	)	$	(5,562	)		NM
Income taxes (benefits)			(1,670	)		(1,534	)		(9	)		(5,435	)		(2,196	)		NM
Loss from continuing operations		$	(2,099	)	$	(2,285	)		8	%	$	(7,711	)	$	(3,366	)		NM
Net income attributable to noncontrolling interests			13			1			NM			23			13			77	%
Net loss		$	(2,112	)	$	(2,286	)		8	%	$	(7,734	)	$	(3,379	)		NM
Average assets (in billions of dollars)		$	384		$	456			(16	)%	$	397		$	471			(16	)%
Net credit losses as a % of average loans			6.11	%		3.83	%

NM    Not meaningful

3Q09 vs. 3Q08

Revenues, net of interest expense, decreased 14% due to lower net interest margin, partially offset by increased Cards securitization revenues of $0.7 billion. Net interest revenue was 25% lower than the prior year due to lower balances and the impact of delinquencies and loan modifications in Real Estate, North America Consumer Finance, and Cards. Net interest revenue as a percent of average loans decreased 98 basis points from the prior-year quarter in North America (ex Cards) and decreased 99 basis points in International, due principally to volume decreases. Average loans decreased 12%, with North America (ex Cards) down 10%, North America Cards down 19%, and International down 19%. Non-interest revenue increased 46% reflecting the increased revenue from Cards securitization.

Operating expenses declined 8% primarily due to lower volumes and reductions from expense re-engineering actions, partially offset by higher real estate owned (OREO) and collection costs.

Provisions for loan losses and for benefits and claims decreased 9% from the prior period reflecting lower reserve builds of $2.1 billion, partially offset by increased net credit losses of $1.4 billion, primarily in Real Estate and EMEA. The credit reserve build for the quarter included $350 million related to the UK Cards portfolio which was transferred to held-for-sale. The net credit loss ratio increased 228 basis points from the prior-year quarter with North America (ex Cards) up 184 basis points to 4.78%, International up 375 basis points to 9.77%, and North America Cards up 575 basis points to 14.58%.

3Q09 YTD vs. 3Q08 YTD

Revenues, net of interest expense, decreased 22% due to a decline in net interest revenue, higher net credit losses flowing through the securitization trusts in North America and a higher FDIC assessment. Net interest revenue was 23% lower than the prior year driven by lower balances (due to run-off and credit tightening) and spread compression due largely to higher non-accrual loans, the higher FDIC assessment and the impact of loan modifications. Non-interest revenue declined 16% primarily due to higher credit costs flowing through the securitization trusts in North America and lower securitization gains. Year-to-date non-interest revenue for 2009 also included a $1.1 billion pretax gain on the sale of the Company's remaining stake in Redecard as compared to a prior-year period pre-tax gain on sale of Redecard of $663 million.

Operating expenses decreased 15% primarily due to re-engineering actions, lower volumes and marketing expenses and the absence of prior-year repositioning charges. The declines in expenses were partially offset by higher OREO and collections costs.

Provisions for loan losses and for benefits and claims increased 31% reflecting higher net credit losses of $5.5 billion, partially offset by decreased reserve builds of $855 million.

27

        The following table provides additional information, as of September 30, 2009, regarding the Local Consumer Lending loan details. For additional information on loans within Local Consumer Lending, see "Loan and Credit Details—Consumer Loan Details" below.

Composition of Loans within Local Consumer Lending		Carrying Value of Assets				September 30, 2009
in billions of dollars		September 30, 2009		June 30, 2009		% of Assets under U.S. Government Loss- Sharing Agreement(1)			Net credit loss ratio			90+ Days Past Due %
North America
	First mortgages	$	123.3	$	126.9		66	%		3.46	%		10.12	%
	Second mortgages		56.9		59.4		87			7.70			3.01
	Student		26.5		26.6		—			0.39			3.25
	Cards (Retail Partners)		21.7		22.8		4			14.58			4.08
	Personal and Other		19.3		20.1		10			10.17			3.32
	Auto		15.0		16.2		72			6.61			1.83
	Commercial Real Estate		10.8		11.1		88			2.42			2.38
Total North America		$	273.5	$	283.1		56	%.		5.61	%		6.26	%
International
	EMEA	$	26.1	$	28.6		—			7.69	%		4.52	%
	Asia		10.9		11.4		—			14.71			2.40
	Latin America		0.3		0.3		—			19.14			1.74
Total International		$	37.3	$	40.3		—			9.77	%		3.88	%
Total		$	310.8	$	323.4		49	%		6.11	%		5.97	%

(1)

See "Government Programs—U.S. Government Loss-Sharing Agreement" below for a description of the agreement.

Note: Totals may not sum due to rounding.

28

SPECIAL ASSET POOL

		Third Quarter									Nine Months
In millions of dollars		2009			2008			% Change			2009			2008			% Change
Net interest revenue		$	627		$	836			(25	)%	$	2,712		$	2,550			6	%
Non-interest revenue			750			(7,658	)		NM			(6,556	)		(30,392	)		78
Total Revenues, net of interest expense		$	1,377		$	(6,822	)		NM		$	(3,844	)	$	(27,842	)		86	%
Total operating expenses		$	233		$	204			14	%	$	671		$	775			(13	)%
	Net credit losses	$	1,321		$	115			NM		$	4,470		$	205			NM
	Provision for unfunded lending commitments		—			(70	)		100	%		80			(138	)		NM
	Credit reserve builds (release)		(255	)		525			NM			(295	)		925			NM
Provisions for credit losses and for benefits and claims		$	1,066		$	570			87	%	$	4,255		$	992			NM
Income (Loss) from continuing operations before taxes		$	78		$	(7,596	)		NM		$	(8,770	)	$	(29,609	)		70	%
Income taxes (benefits)			(64	)		(3,002	)		98	%		(3,675	)		(11,568	)		68
Income (Loss) from continuing operations		$	142		$	(4,594	)		NM		$	(5,095	)	$	(18,041	)		72	%
Net income (loss) attributable to noncontrolling interests			20			(12	)		NM			29			(40	)		28
Net Income (loss)		$	122		$	(4,582	)		NM		$	(5,066	)	$	(18,001	)		72	%
EOP assets (in billions of dollars)		$	182		$	261			(31	)%

NM

Not meaningful

3Q09 vs. 3Q08

Revenues, net of interest expense, increased $8.2 billion primarily due to favorable net revenue marks relative to the prior-year quarter, which are described in more detail below. Revenue in the current quarter included positive marks of $2.0 billion on subprime-related direct exposures and non-credit accretion of $502 million, partially offset by write-downs on CRE of $586 million and $506 million of other write-downs and losses.

Operating expenses increased 14% driven by the USG loss-sharing agreement (see "Government Programs—U.S. Government Loss-Sharing Agreement" below), partially offset by lower compensation expenses.

Provisions for credit losses and for benefits and claims increased $496 million primarily driven by $1.2 billion in increased net credit losses, partially offset by a lower provision of $780 million.

3Q09 YTD vs. 3Q08 YTD

Revenues, net of interest expense, increased $24.0 billion primarily due to favorable net revenue marks relative to the prior year. Revenue year-to-date included a $1.2 billion positive CVA on derivative positions, excluding monoline insurers, and positive marks of $284 million on subprime-related direct exposures, offset by negative revenue of $1.1 billion on Alt-A mortgages. Revenue year-to-date was also negatively impacted by $3.4 billion related to CVA on fair value option liabilities and monolines, CRE, and negative marks for private equity positions.

Operating expenses decreased 13% mainly driven by lower volumes and lower transaction expenses.

Provisions for credit losses and for benefits and claims increased $3.3 billion primarily driven by the $4.3 billion increase in write-offs over the prior period. Significant write-offs included exposures in Lyondell Basell. The net $295 million net credit reserve release in the current period was driven by a $2.1 billion release for specific counterparties (including Lyondell Basell), partially offset by builds for specific counterparties.

Assets declined 30% versus the prior year primarily driven by amortization/prepayments, sales, and marks/charge-offs.

29

        The following table provides details of the composition of the Special Asset Pool assets as of September 30, 2009.

Assets within Special Asset Pool

		Carrying Value of Assets						September 30, 2009
in billions of dollars		September 30, 2009			June 30, 2009			% of Assets under U.S. Government Loss-Sharing Program(1)			Face Value		Carrying value as % of Face Value
Securities in AFS/HTM(2)
	Corporates	$	14.8		$	17.1			4	%	$	15.1		98	%
	Prime and Non-U.S. MBS		16.0			16.2			33			20.2		80
	Auction Rate Securities		8.0			8.3			15			10.8		74
	Alt-A mortgages		9.0			9.5			99			17.5		52
	Government Agencies		0.7			6.2			—			0.8		97
	Other Securities(3)		6.3			7.4			35			8.7		73
Total Securities in AFS/HTM		$	54.8		$	64.7			33	%	$	72.9		75	%
Loan, leases & LC in HFI/HFS(4)
	Corporates	$	26.4		$	28.2			33	%	$	28.4		93	%
	Commercial Real Estate (CRE)		15.3			15.8			65			16.7		92
	Other		3.7			4.7			—			4.3		85
	Loan Loss Reserves		(4.0	)		(4.1	)		NM			NM		NM
Total Loan, leases & LC in HFI/HFS		$	41.4		$	44.6			NM			NM		NM
Mark to Market
	Subprime securities(5)	$	8.0		$	8.0			—		$	20.9		38	%
	Other Securities(6)		6.9			8.4			8	%		29.5		24
	Derivatives		9.4			10.8			—			NM		NM
	Loans, Leases and Letters of Credit		7.3			7.8			28			11.5		63
	Repurchase agreements		6.9			7.3			—			NM		NM
Total Mark to Market		$	38.5		$	42.1			9	%		NM		NM
Highly Lev. Fin. Commitments		$	3.5		$	4.6			5	%	$	6.1		57	%
Equities (excludes ARS in AFS)			12.9			13.8			—			NM		NM
SIVs			16.2			16.2			36			21.0		77
Monolines			1.3			1.7			—			NM		NM
Consumer and Other(7)			13.3			13.2			NM			NM		NM
Total		$	181.9		$	201.0

(1)

See "Government Programs—U.S. Government Loss-Sharing Agreement" below.

(2)

AFS accounts for approximately one-third of the total.

(3)

Includes CRE ($2.2 billion), Municipals ($1.5 billion) and ABS ($1.6 billion).

(4)

HFS accounts for approximately $1.1 billion of the total.

(5)

These $8.0 billion of assets are reflected in the exposures set forth under "U.S. Subprime-Related Direct Exposure in Citi Holdings—Special Asset Pool" below.

(6)

Includes $3.2 billion of Corporates and $0.7 billion of CRE.

(7)

Includes $4.8 billion of Small Business Banking & Finance loans.

30

Items Impacting Special Asset Pool Revenues

        The table below provides additional information regarding the favorable net revenue marks affecting the Special Asset Pool during the third quarter of 2009.

	Pretax Revenue (in millions)
	Third Quarter 2009			Third Quarter 2008
Sub-prime related direct exposures(1)(2)	$	1,967		$	(394	)
Private Equity and equity investments		(20	)		(430	)
Alt-A Mortgages(1)(3)		(196	)		(932	)
Highly leveraged loans and financing commitments(4)		(24	)		(792	)
Commercial Real Estate (CRE) positions(1)(5)		(594	)		(649	)
Structured Investment Vehicles' (SIVs) Assets		(40	)		(2,004	)
Auction Rate Securities (ARS) proprietary positions		—			(166	)
CVA related to exposure to monoline insurers		(61	)		(920	)
CVA on Citi debt liabilities under fair value option		(64	)		—
CVA on derivatives positions, excluding monoline insurers		43			(64	)
Subtotal	$	1,011		$	(6,351	)
Accretion on reclassified assets		502			—
Total significant revenue items	$	1,513		$	(6,351	)

(1)

Net of hedges.

(2)

See "U.S. Subprime-Related Direct Exposures in Citi Holdings—Special Asset Pool" below for a further discussion of the related risk exposures and the associated marks recorded.

(3)

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 "Loan and Credit Details—U.S. Consumer Mortgage Lending".

(4)

Net of underwriting fees. See "Highly Leveraged Financing Transactions" below for a further discussion.

(5)

The aggregate $594 million is comprised primarily of $497 million, net of hedges, on exposures recorded at fair value and $104 million of losses on equity method investments. Citi Holdings' CRE exposure is split into three categories of assets: held at fair value; held to maturity/held for investment; and equity. See "Exposure to Commercial Real Estate" below for a further discussion.

Credit Valuation Adjustment 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 "Direct Exposure to Monolines" below for a further discussion.

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

        The Company 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 $64 million of losses recorded by Citi Holdings on its fair value option liabilities (excluding derivative liabilities) during the third quarter of 2009 was principally due to the narrowing (improving) of the Company's credit spreads.

Credit Valuation Adjustment on Derivative Positions, excluding Monoline insurers

        The approximately $43 million net gain on Citi Holdings' derivative positions during the third quarter of 2009 was due to the narrowing of the Company's counterparties on its derivative assets. See "Derivatives—Fair Valuation Adjustments for Derivatives" below for a further discussion.

Accretion on Reclassified Assets

        In the fourth quarter of 2008, Citi Holdings reclassified $33.3 billion of debt securities 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. During the third quarter of 2009, Citi Holdings recognized approximately $502 million of interest revenue from this accretion.

31

CORPORATE/OTHER

	Third Quarter						Nine Months
In millions of dollars	2009			2008			2009			2008
Net interest revenue	$	(461	)	$	(678	)	$	(1,216	)	$	(1,794	)
Non-interest revenue		1,132			212			1,646			(413	)
Total Revenues, net of interest expense	$	671		$	(466	)	$	430		$	(2,207	)
Total operating expenses		441			(77	)		864			18
Provisions for loan losses and for benefits and claims		—			1			1			1
Income (Loss) from continuing operations before taxes	$	230			(390	)	$	(435	)	$	(2,226	)
Income taxes (benefits)		128			(203	)		145			(818	)
Income (Loss) from continuing operations	$	102		$	(187	)	$	(580	)	$	(1,408	)
Income (loss) from discontinued operations, net of taxes		(418	)		613			(677	)		578
Net Income (loss) before attribution of noncontrolling interests	$	(316	)	$	426		$	(1,257	)	$	(830	)
Net Income (loss) attributable to noncontrolling interests		—			—			—			—
Net Income (loss)	$	(316	)	$	426		$	(1,257	)	$	(830	)

3Q09 vs. 3Q08

Revenues, net of interest expense, increased primarily due to the pretax gain related to the preferred exchange, partly offset by the interest cost of the trust preferred securities.

Operating Expenses increased primarily due to intersegment eliminations and the absence of prior-year reserve releases.

3Q09 YTD vs. 3Q08 YTD

Revenues, net of interest expense, increased primarily due to the pretax gain related to the preferred exchange, intersegment eliminations, and the impact of changes in U.S. dollar rates, partly offset by the interest cost of the trust preferred securities.

Operating Expenses increased primarily due to intersegment eliminations and the absence of prior-year reserve releases.

32

GOVERNMENT PROGRAMS

Common Stock Warrants Issued to UST under TARP

        In connection with its participation in TARP in October and December 2008, Citi issued two warrants exercisable for common stock to the UST. These warrants remain outstanding following the completion of the exchange offers.

        The warrant issued to the UST in October 2008 has a term of 10 years, an exercise price of $17.85 per share and is exercisable for approximately 210.1 million shares of common stock. The value ascribed to the warrant, or $1.3 billion out of the $25 billion in cash proceeds, on a relative fair value basis, was recorded in Citigroup's stockholders' equity and resulted in an increase in Additional paid-in capital.

        The warrant issued to the UST in December 2008 also has a term of 10 years, an exercise price of $10.61 per share and is exercisable for approximately 188.5 million shares of common stock. The value ascribed to the warrant, or $0.5 billion out of the $20 billion in cash proceeds, on a relative fair value basis, was recorded in Citigroup's stockholders' equity and resulted in an increase in Additional paid-in capital.

        The fair value for the warrants was calculated using the Black-Scholes option pricing model. The valuation was based on the Citigroup stock price, stock volatility, dividend yield, and the risk free rate on the measurement date for both the issuances.

        See "U.S. Government Loss-Sharing Agreement" below for a description of the third common stock warrant issued, outstanding and held by the UST.

Implementation and Management of TARP Programs

        Citigroup has established a Special TARP Committee composed of senior executives to approve, monitor and track how the USG's TARP funds invested in Citi, or $45 billion, are utilized. Citi is required to adhere to the following objectives as a condition of the USG's capital investments:

•

Expand the flow of credit to U.S. consumers and businesses on competitive terms to promote the sustained growth and vitality of the U.S. economy.

•

Work diligently, under existing programs, to modify the terms of residential mortgages as appropriate to strengthen the health of the U.S. housing market.

        The Committee has established specific guidelines, which are consistent with the objectives and spirit of TARP. Pursuant to these guidelines, Citi will use TARP capital only for those purposes expressly approved by the Committee.

        Committee approval is the final stage in a four-step review process to evaluate proposals from Citi businesses for the use of TARP capital, considering the risk, the potential financial impact and returns.

        On August 11, 2009, Citi published its most recent quarterly report summarizing its TARP spending initiatives for the second quarter of 2009 (the report is available at www.citigroup.com). The report states that the Committee had authorized $50.8 billion in initiatives backed by TARP capital which has subsequently been increased to $53.8 billion. As of September 30, 2009, the Company has deployed approximately $18.3 billion of funds under the approved initiatives.

FDIC's Temporary Liquidity Guarantee Program

        Under the terms of the FDIC's Temporary Liquidity Guarantee Program (TLGP), the FDIC guaranteed, until the earlier of either its maturity or June 30, 2012 (for qualifying debt issued before April 1, 2009) or December 31, 2012 (for qualifying debt issued on or after April 1, 2009 through October 31, 2009), certain qualifying senior unsecured debt issued by certain Citigroup entities between October 31, 2008 and October 31, 2009 in amounts up to 125% of the qualifying debt for each qualifying entity. The FDIC charged Citigroup a fee ranging from 50 to 150 basis points in accordance with a prescribed fee schedule for any qualifying debt issued with the FDIC guarantee. The TLGP was terminated on October 31, 2009 and Citigroup and its affiliates have elected not to participate in any FDIC-approved extension of the program.

        As of September 30, 2009, Citigroup and its affiliates had issued a total of $54.6 billion of long-term debt that is covered under the FDIC guarantee, with $6.35 billion maturing in 2010, $18.75 billion maturing in 2011 and $29.5 billion maturing in 2012.

        In addition, as of September 30, 2009, Citigroup, through its subsidiaries, had $4.37 billion in outstanding commercial paper and interbank deposits backed by the FDIC. The FDIC also charged a fee ranging from 50 to 150 basis points in connection with the issuance of those instruments. As approved by the FDIC, effective October 1, 2009 through the termination of the TLGP program on October 31, 2009, Citigroup issued commercial paper of various tenors without the FDIC guarantee.

        See "Capital Resources and Liquidity" below for further information on Citi's funding and liquidity programs.

U.S. Government Loss-Sharing Agreement

Background

        On January 15, 2009, Citigroup entered into an agreement with the UST, the FDIC and the Federal Reserve Bank of New York (collectively referred to in this section as the USG) on losses arising on a $301 billion portfolio of Citigroup assets (valued as of November 21, 2008, other than as set forth in note 1 to the table below). Primarily as a result of the receipt of principal repayment and charge-offs to date, the total asset pool has declined by approximately $50 billion on a GAAP basis to approximately $250.4 billion as of September 30, 2009.

        As consideration for the loss-sharing agreement, Citigroup issued approximately $7.1 billion in preferred stock to the UST and the FDIC, as well as a warrant exercisable for common stock to the UST. As part of the exchange offers, the preferred stock was exchanged for newly issued 8% trust preferred securities. See "Significant Events in the Third Quarter of 2009—Exchange Offers" above. The warrant issued to the UST as consideration for the loss-sharing agreement has a term of 10 years, an exercise price of $10.61 per share and is exercisable for approximately 66.5 million shares of common stock. The fair value of the warrant of $88

33

million was recorded as a credit to Additional paid-in capital at the time of issuance.

Terms of Agreement

        The loss-sharing agreement extends for 10 years for residential assets and five years for non-residential assets. Under the agreement, a "loss" on a portfolio asset is generally defined to include a charge-off or a realized loss upon collection, through a permitted disposition or exchange, or upon a foreclosure or short-sale loss, but not merely through a change in Citigroup's fair value accounting for the asset or the creation or increase of a related loss reserve. Once a loss is recognized under the agreement, the aggregate amount of qualifying losses across the portfolio in a particular period is netted against the aggregate recoveries and gains across the portfolio, all on a pretax basis.

        The resulting net loss amount on the portfolio is the basis of the loss-sharing agreement between Citigroup and the USG. Citigroup will bear the first $39.5 billion of such net losses, which amount was determined using (i) an agreed-upon $29 billion of first losses, (ii) Citigroup's then-existing reserve with respect to the portfolio of approximately $9.5 billion, and (iii) an additional $1.0 billion as an agreed-upon amount in exchange for excluding the effects of certain hedge positions from the portfolio. Net losses, if any, on the portfolio after Citigroup's losses exceed the $39.5 billion first-loss amount will be borne 90% by the USG and 10% by Citigroup in the following manner:

•

first, until the UST has paid $5 billion in aggregate, 90% by the UST and 10% by Citigroup;

•

second, until the FDIC has paid $10 billion in aggregate, 90% by the FDIC and 10% by Citigroup; and

•

third, 90% by the Federal Reserve Bank of New York and 10% by Citigroup.

        Approximately $2.8 billion of GAAP losses on the asset pool were recorded in the third quarter of 2009, bringing the GAAP losses on the portfolio to date to approximately $8.1 billion (i.e., for the period of November 21, 2008 through September 30, 2009). These losses count towards Citigroup's $39.5 billion first-loss position.

        The Federal Reserve Bank of New York will implement its loss-sharing obligations under the agreement, if any, by making a loan in an amount equal to the then aggregate value of the remaining covered asset pool (after reductions for charge-offs, pay-downs and realized losses) as determined in accordance with the agreement. Following the loan, as losses are incurred on the remaining covered asset pool, Citigroup will be required to immediately repay 10% of such losses to the Federal Reserve Bank of New York. The loan is non-recourse to Citigroup, other than with respect to the repayment obligation in the preceding sentence and interest on the loan. The loan is recourse only to the remaining covered asset pool, which is the sole collateral to secure the loan. The loan will bear interest at the overnight index swap rate plus 300 basis points.

        The covered asset pool includes U.S.-based exposures and transactions that were originated prior to March 14, 2008. Pursuant to the terms of the agreement, the USG had a 120-day period, beginning April 15, 2009, to review the asset pool to confirm asset eligibility. The USG has completed its review and, in October 2009, substantially agreed with Citigroup on the final asset pool's composition. The USG's final approval of the pool is expected in November 2009. After final approval of the pool, the USG has the right to review and confirm Citigroup's first-loss position ($39.5 billion) and the consideration paid by Citigroup for the loss coverage, each based on expected losses and reserves associated with the final pool (using a methodology and assumptions consistent with those used to set the $39.5 billion first-loss position). The USG is expected to complete this review in the fourth quarter of 2009.

        The agreement includes guidelines for governance and asset management with respect to the covered asset pool, including reporting requirements and notice and approval rights of the USG at certain thresholds. If covered losses exceed $19 billion, the USG may increase the required reporting or alter the thresholds for notice and approval. If covered losses exceed $27 billion, the USG has the right to replace Citi as the asset manager for the covered asset pool, among other things.

Accounting and Regulatory Capital Treatment

        Citigroup accounts for the loss-sharing agreement as an indemnification agreement pursuant to the guidance in ASC 805-20-30-18, Business Combinations. Citigroup recorded an asset of $3.617 billion (equal to the fair value of the consideration issued to the USG) in Other assets on the Consolidated Balance Sheet. The asset will be amortized as an Other operating expense in the Consolidated Statement of Income on a straight-line basis over the coverage periods of 10 years and five years, respectively, based on the relative initial principal amounts of each group. During the quarter and nine months ended September 30, 2009, Citigroup recorded $122 million and $412 million, respectively, as an Other operating expense.

        Under indemnification accounting, recoveries (gains), if any, will be recognized in the Consolidated Statement of Income in the same future periods that cumulative losses recorded under U.S. GAAP on the covered assets exceed the $39.5 billion first-loss amount. The Company will recognize and measure an indemnification asset on the same basis that it recognizes losses on the covered assets in the Consolidated Statement of Income. For example, for a covered loan classified as held-for-investment and reported in the balance sheet at amortized cost, the Company would recognize and measure an indemnification asset due from the USG at the same time related loan loss reserves are recorded for that loan equal to 90% of the amount of the loan loss reserve, subject to the first-loss limitation.

        Further, under indemnification accounting, recoveries (gains) may be recorded at times when such amounts are not contractually receivable from the USG based on the definition of covered losses in the loss-sharing agreement. Such amounts may or may not thereafter become contractually receivable, depending upon whether or not they become covered "losses" (see above for definition of covered "loss"). Indemnification accounting matches the amount and timing of the recording of recoveries with the amount and timing of the recognition of losses based on the U.S. GAAP accounting for the covered assets, as opposed to the amount and timing of recognition as defined in the loss-sharing agreement. The indemnification asset amount recorded will be adjusted, as appropriate, to take into consideration additional revenue and expense amounts related to the covered assets specifically defined as

34

recoverable or non-recoverable in the loss-sharing program.

        The covered assets are risk-weighted at 20% for purposes of calculating the Tier 1 Capital ratio at September 30, 2009.

Asset Values as of September 30, 2009

        The following table summarizes the assets that were part of the covered asset pool agreed to between Citigroup and the USG as of January 15, 2009, with their values as of November 21, 2008 (except as set forth in note 1 to the table below), and the balances as of September 30, 2009, reflecting changes in the balances of assets that remained qualified, plus approximately $10 billion of replacement assets that Citi substituted for non-qualifying assets between January 15, 2009 and April 15, 2009. The $250.4 billion of covered assets at September 30, 2009 are recorded in Citi Holdings within Local Consumer Lending ($171.9 billion) and Special Asset Pool ($78.5 billion). As discussed above, the asset pool, as revised, remains subject to the USG's final approval, which is expected in November 2009.

Assets

In billions of dollars		September 30, 2009		November 21, 2008(1)
Loans:
	First mortgages	$	81.0	$	98.0
	Second mortgages		49.6		55.4
	Retail auto loans		10.8		16.2
	Other consumer loans		17.6		19.7
Total consumer loans		$	159.0	$	189.3
	CRE loans	$	10.8	$	12.0
	Highly leveraged finance loans		0.2		2.0
	Other corporate loans		10.5		14.0
Total corporate loans		$	21.5	$	28.0
Securities:
	Alt-A	$	9.1	$	11.4
	SIVs		5.8		6.1
	CRE		1.5		1.4
	Other		8.2		11.2
Total securities		$	24.6	$	30.1
Unfunded lending commitments (ULC)
	Second mortgages	$	18.3	$	22.4
	Other consumer loans		2.4		3.6
	Highly leveraged finance		0.0		0.1
	CRE		3.8		5.5
	Other commitments		20.8		22.0
Total ULC		$	45.3	$	53.6
Total covered assets		$	250.4	$	301.0

(1)

As a result of the initial confirmation process (conducted between November 21, 2008 and January 15, 2009), the covered asset pool includes approximately $99 billion of assets considered "replacement" assets (assets that were added to the pool to replace assets that were in the pool as of November 21, 2008 but were later determined not to qualify). Loss-sharing on qualifying losses incurred on these replacement assets was effective beginning January 15, 2009, instead of November 21, 2008.

35

MANAGING GLOBAL RISK

        Citigroup's risk management framework balances strong corporate oversight with well-defined independent risk management functions for each business and region, as well as cross-business product expertise. The Citigroup risk management framework is described in Citigroup's 2008 Annual Report on Form 10-K.

LOAN AND CREDIT DETAILS

Loans Outstanding

In millions of dollars		September 30, 2009			June 30, 2009			December 31, 2008
Consumer loans
In U.S. offices:
	Mortgage and real estate(1)	$	191,748		$	197,358		$	219,482
	Installment, revolving credit, and other		63,668			67,661			71,360
	Cards		36,039			33,750			44,418
	Lease financing		15			16			31
		$	291,470		$	298,785		$	335,291
In offices outside the U.S.:
	Mortgage and real estate(1)	$	47,568		$	45,986		$	44,382
	Installment, revolving credit, and other		48,027			48,467			44,189
	Cards		41,443			42,262			42,586
	Commercial and industrial		11,835			10,947			13,897
	Lease financing		345			339			304
		$	149,218		$	148,001		$	145,358
Total consumer loans		$	440,688		$	446,786		$	480,649
Unearned income			803			866			738
Consumer loans, net of unearned income		$	441,491		$	447,652		$	481,387
Corporate loans
In U.S. offices:
	Commercial and industrial	$	23,345		$	30,567		$	33,450
	Loans to financial institutions		7,666			8,181			10,200
	Mortgage and real estate(1)		23,221			23,862			16,643
	Installment, revolving credit, and other		14,081			15,414			15,047
	Lease financing		1,275			1,284			1,476
		$	69,588		$	79,308		$	76,816
In offices outside the U.S.:
	Commercial and industrial	$	73,564		$	78,512		$	85,492
	Installment, revolving credit, and other		10,949			11,638			23,158
	Mortgage and real estate(1)		12,023			11,887			11,375
	Loans to financial institutions		16,906			15,856			18,413
	Lease financing		1,462			1,560			1,850
	Governments and official institutions		826			713			385
		$	115,730		$	120,166		$	140,673
Total corporate loans		$	185,318		$	199,474		$	217,489
Unearned income			(4,598	)		(5,436	)		(4,660	)
Corporate loans, net of unearned income		$	180,720		$	194,038		$	212,829
Total loans—net of unearned income		$	622,211		$	641,690		$	694,216
Allowance for loan losses—on drawn exposures			(36,416	)		(35,940	)		(29,616	)
Total loans—net of unearned income and allowance for credit losses		$	585,795		$	605,750		$	664,600
Allowance for loan losses as a percentage of total loans—net of unearned income			5.85	%		5.60	%		4.27	%
Allowance for consumer loan losses as a percentage of total consumer loans—net of unearned income			6.44	%		6.25	%		4.61	%
Allowance for corporate loan losses as a percentage of total corporate loans—net of unearned income			4.42			4.11			3.48

(1)

Loans secured primarily by real estate.

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Loan Accounting Policies

        The following are the Company's accounting policies for Loans, Allowance for Loan Losses and related lending activities.

Loans

        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 17 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 Changes 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 nonconforming 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 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. 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 cards 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 than180 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.

        For a discussion of the impact of mortgage loan and credit card modification and forbearance programs on Citi's consumer loan businesses, see "Consumer Loan Modification Programs" below.

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.

37

        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, 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.

Corporate Loans

        In the corporate portfolios, larger-balance, non-homogeneous exposures representing significant individual credit exposures are evaluated based upon the borrower's overall financial condition, resources, the prospects for support from any financially responsible guarantors and, if appropriate, the realizable value of any collateral. Reserves are established for these loans based upon an estimate of probable losses for the individual loans deemed to be impaired. This estimate may consider the present value of the expected future cash flows discounted at the loan's contractual effective rate, the secondary market value of the loan or the fair value of collateral less disposal costs. The allowance for credit losses attributed to the remaining portfolio is established via a process that estimates the probable loss inherent in the portfolio based upon various analyses. These analyses consider historical default rates and loss severities, internal risk ratings, and geographic, industry, and other environmental factors.

        Management also considers overall portfolio indicators, including trends in internally risk-rated exposures, classified exposures, cash-basis loans, historical and forecasted write-offs, and a review of industry, geographic, and portfolio concentrations, including current developments within those segments. In addition, management considers the current business strategy and credit process, including credit limit setting and compliance, credit approvals, loan underwriting criteria, and loan workout procedures.

Consumer Loans

        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 homogenous 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. These allowances 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.

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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 and Risk Management 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.

        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 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 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.

•

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 that have delinquency-managed portfolios containing smaller homogeneous loans (primarily the non-commercial lending areas of 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.

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.

39

Details of Credit Loss Experience

In millions of dollars				3rd Qtr. 2009			2nd Qtr. 2009(1)			1st Qtr. 2009			4th Qtr 2008			3rd Qtr. 2008
Allowance for loan losses at beginning of period				$	35,940		$	31,703		$	29,616		$	24,005		$	20,777
Provision for loan losses
		Consumer		$	7,321		$	10,010		$	8,010		$	8,592		$	7,831
		Corporate			1,450			2,223			1,905			3,579			1,112
				$	8,771		$	12,233		$	9,915		$	12,171		$	8,943
Gross credit losses
Consumer
	In U.S. offices			$	4,459		$	4,694		$	4,124		$	3,610		$	3,073
	In offices outside the U.S.				2,406			2,305			1,936			1,818			1,914
Corporate
	In U.S. offices				1,101			1,216			1,176			364			156
	In offices outside the U.S.				483			558			424			756			200
				$	8,449		$	8,773		$	7,660		$	6,548		$	5,343
Credit recoveries
Consumer
	In U.S. offices			$	149		$	131		$	136		$	132		$	137
	In offices outside the U.S.				288			261			213			219			252
Corporate
	In U.S. offices				30			4			1			2			3
	In offices outside the U.S.				13			22			28			52			31
				$	480		$	418		$	378		$	405		$	423
Net credit losses
	In U.S. offices			$	5,381		$	5,775		$	5,163		$	3,840		$	3,089
	In offices outside the U.S.				2,588			2,580			2,119			2,303			1,831
Total				$	7,969		$	8,355		$	7,282		$	6,143		$	4,920
Other—net(2)(3)(4)(5)(6)				$	(326	)	$	359		$	(546	)	$	(417	)	$	(795	)
Allowance for loan losses at end of period(7)				$	36,416		$	35,940		$	31,703		$	29,616		$	24,005
Allowance for loan losses as a % of total loans					5.85	%		5.60	%		4.82	%		4.27	%		3.35	%
Allowance for unfunded lending commitments(8)				$	1,074		$	1,082		$	947		$	887		$	957
Total allowance for loan losses and unfunded lending commitments				$	37,490		$	37,022		$	32,650		$	30,503		$	24,962
Net consumer credit losses				$	6,428		$	6,607		$	5,711		$	5,077		$	4,598
As a percentage of average consumer loans					5.66	%		5.88	%		4.95	%		4.12	%		3.57	%
Net corporate credit losses				$	1,541		$	1,748		$	1,571		$	1,066		$	322
As a percentage of average corporate loans					0.82	%		0.89	%		0.79	%		0.60	%		0.15	%
Allowance for loan losses at end of period(9)
	Citicorp			$	10,286		$	10,046		$	8,520		$	7,684		$	6,651
	Citi Holdings				26,130			25,894			23,183			21,932			17,354
			Total Citigroup	$	36,416		$	35,940		$	31,703		$	29,616		$	24,005

(1)

Reclassified to conform to the current period's presentation.

(2)

The third quarter of 2009 primarily includes a reduction to the credit loss reserves of $562 million related to the transfer of the U.K. Cards portfolio to held-for-sale partially offset by increases related to FX translation.

(3)

The second quarter of 2009 primarily includes increases to the credit loss reserves primarily related to FX translation.

(4)

The first quarter of 2009 primarily includes reductions to the credit loss reserves of $213 million related to securitizations and reductions of approximately $320 million primarily related to FX translation.

(5)

The fourth quarter of 2008 primarily includes reductions to the credit loss reserves of approximately $400 million primarily related to FX translation.

(6)

The third quarter of 2008 primarily includes reductions to the credit loss reserves of $23 million related to securitizations, reductions of $244 million related to the sale of Citigroup's German Retail Banking Operation and reductions of approximately $500 million related to FX translation.

(7)

Included in the allowance for loan losses are reserves for troubled debt restructurings (TDRs) of $4,587 million, $3,810 million, $2,760 million, $2,180 million, and $1,443 million as of September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, and September 30, 2008, respectively.

(8)

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

(9)

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.

40

Non-Accrual Assets

        The table below summarizes the Company'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 the Company has determined that the payment of interest or principal is doubtful, and are therefore considered impaired. As discussed under "Accounting Policies" above, in situations where the Company 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 above under "Third Quarter of 2009 Management Summary," the Company 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. Of the total portfolio of non-accrual corporate loans as of September 30, 2009, over two-thirds are current and continue to make their contractual payments.

Non-accrual loans

In millions of dollars		3rd Qtr. 2009		2nd Qtr. 2009		1st Qtr. 2009		4th Qtr. 2008		3rd Qtr. 2008
Citicorp		$	5,131	$	5,314	$	3,829	$	3,193	$	2,408
Citi Holdings			27,553		22,932		22,282		19,104		11,135
	Total Non-accrual loans (NAL)	$	32,684	$	28,246	$	26,111	$	22,297	$	13,543
Corporate non-accrual loans(1)
North America		$	5,263	$	3,499	$	3,789	$	2,660	$	851
EMEA			7,969		7,690		6,479		6,330		1,406
Latin America			416		230		300		229		125
Asia			1,128		1,013		639		513		357
		$	14,776	$	12,432	$	11,207	$	9,732	$	2,739
	Citicorp	$	2,999	$	3,045	$	1,825	$	1,364	$	605
	Citi Holdings	$	11,777	$	9,387	$	9,382	$	8,368	$	2,134
		$	14,776	$	12,432	$	11,207	$	9,732	$	2,739
Consumer non-accrual loans(1)
North America(2)		$	14,609	$	12,154	$	11,687	$	9,617	$	7,941
EMEA			1,314		1,356		1,128		948		904
Latin America			1,342		1,520		1,338		1,290		1,343
Asia			643		784		751		710		616
		$	17,908	$	15,814	$	14,904	$	12,565	$	10,804
	Citicorp	$	2,132	$	2,269	$	2,004	$	1,829	$	1,803
	Citi Holdings		15,776		13,545		12,900		10,736		9,001
		$	17,908	$	15,814	$	14,904	$	12,565	$	10,804

(1)

Excludes purchased distressed loans as they are accreting interest. The carrying value of these loans was $1.267 billion at September 30, 2009, $1.509 billion at June 30, 2009, $1.328 billion at March 31, 2009, $1.510 billion at December 31, 2008, and $1.550 billion at September 30, 2008.

(2)

The recent increases reflect the impact of the deterioration in the U.S. consumer real estate market.

41

Non-Accrual Assets (Continued)

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

OREO		3rd Qtr. 2009		2nd Qtr. 2009		1st Qtr. 2009		4th Qtr. 2008		3rd Qtr. 2008
Citicorp		$	284	$	291	$	307	$	371	$	425
Citi Holdings			585		664		854		1,022		1,092
Corporate/Other			15		14		41		40		85
	Total OREO	$	884	$	969	$	1,202	$	1,433	$	1,602
North America		$	682	$	789	$	1,115	$	1,349	$	1,525
EMEA			105		97		65		66		61
Latin America			40		29		20		16		14
Asia			57		54		2		2		2
		$	884	$	969	$	1,202	$	1,433	$	1,602
Other repossessed assets(1)		$	76	$	72	$	78	$	78	$	81

(1)

Primarily transportation equipment, carried at lower of cost or fair value, less costs to sell.

Non-accrual assets—Total Citigroup		3rd Qtr. 2009			2nd Qtr. 2009			1st Qtr. 2009			4th Qtr. 2008			3rd Qtr. 2008
Corporate non-accrual loans		$	14,776		$	12,432		$	11,207		$	9,732		$	2,739
Consumer non-accrual loans			17,908			15,814			14,904			12,565			10,804
	Non-accrual loans (NAL)	$	32,684		$	28,246		$	26,111		$	22,297		$	13,543
OREO		$	884		$	969		$	1,202		$	1,433		$	1,602
Other repossessed assets			76			72			78			78			81
	Non-accrual assets (NAA)	$	33,644		$	29,287		$	27,391		$	23,808		$	15,226
NAL as a % of total loans			5.25	%		4.40	%		3.97	%		3.21	%		1.89	%
NAA as a % of total assets			1.78	%		1.59	%		1.50	%		1.23	%		0.74	%
Allowance for loan losses as a % of NAL(1)			111	%		127	%		121	%		133	%		177	%

(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.

Non-accrual assets—Total Citicorp		3rd Qtr. 2009			2nd Qtr. 2009			1st Qtr. 2009			4th Qtr. 2008			3rd Qtr. 2008
Non-accrual loans (NAL)		$	5,131		$	5,314		$	3,829		$	3,193		$	2,408
OREO			284			291			307			371			425
Other repossessed assets			N/A			N/A			N/A			N/A			N/A
	Non-accrual assets (NAA)	$	5,415		$	5,605		$	4,136		$	3,564		$	2,833
NAA as a % of total assets			0.53	%		0.57	%		0.43	%		0.36	%		0.24	%
Allowance for loan losses as a % of NAL			200	%		189	%		223	%		241	%		276	%
Non-accrual assets—Total Citi Holdings
Non-accrual loans (NAL)		$	27,553		$	22,932		$	22,282		$	19,104		$	11,135
OREO			585			664			854			1,022			1,092
Other repossessed assets			N/A			N/A			N/A			N/A			N/A
	Non-accrual assets (NAA)	$	28,138		$	23,596		$	23,136		$	20,126		$	12,227
NAA as a % of total assets			4.56	%		3.64	%		3.49	%		2.81	%		1.58	%
Allowance for loan losses as a % of NAL			95	%		113	%		104	%		115	%		156	%

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

42

Consumer Loan Details

Consumer Loan Delinquency Amounts, Net Credit Losses and Ratios
Table presents consumer credit information on a held basis.

			Total loans(1)		90 days or more past due(2)											Net credit losses(2)
In millions of dollars, except total and average loan amounts in billions			Sept. 2009		Sept. 2009			June 2009			Sept. 2008			Average loans(1) 3Q 2009		3Q 2009			2Q 2009			3Q 2008
Citicorp
Total			$	124.3	$	1,909		$	2,218		$	1,634		$	120.5	$	1,426		$	1,392		$	1,096
	Ratio					1.54	%		1.89	%		1.29	%				4.70	%		4.78	%		3.35	%
Retail Bank
	Total			80.0		749			831			616			77.7		379			414			317
		Ratio				0.94	%		1.10	%		0.77	%				1.93	%		2.22	%		1.51	%
	North America			7.5		93			97			54			7.4		79			86			35
		Ratio				1.24	%		1.35	%		1.10	%				4.23	%		4.85	%		3.03	%
	EMEA			5.7		62			70			35			5.7		84			74			36
		Ratio				1.09	%		1.23	%		0.48	%				5.84	%		5.34	%		1.99	%
	Latin America			17.7		324			360			323			16.9		113			140			147
		Ratio				1.83	%		2.18	%		1.89	%				2.65	%		3.43	%		3.29	%
	Asia			49.1		270			304			204			47.7		103			114			99
		Ratio				0.55	%		0.66	%		0.40	%				0.85	%		0.99	%		0.73	%
Citi-Branded Cards(3)
	Total			44.3		1,160			1,387			1,018			42.8		1,047			978			779
		Ratio				2.61	%		3.29	%		2.20	%				9.71	%		9.32	%		6.58	%
	North America(4)			12.4		241			248			118			11.3		201			219			109
		Ratio				1.94	%		2.21	%		0.94	%				7.06	%		7.51	%		3.67	%
	EMEA			3.0		85			94			35			3.0		55			47			19
		Ratio				2.83	%		3.35	%		1.12	%				7.43	%		6.70	%		2.45	%
	Latin America			11.9		519			695			603			11.9		543			472			493
		Ratio				4.36	%		5.89	%		4.31	%				18.05	%		16.22	%		13.16	%
	Asia			17.0		315			350			262			16.6		248			240			158
		Ratio				1.85	%		2.15	%		1.57	%				5.93	%		6.00	%		3.63	%
Citi Holdings—Local Consumer Lending
	Total			310.8		18,538			16,486			11,294			319.6		4,929			5,156			3,487
		Ratio				5.96	%		5.10	%		3.13	%				6.12	%		6.25	%		3.83	%
	International			37.3		1,447			1,535			1,033			39.5		973			976			737
		Ratio				3.88	%		3.81	%		2.21	%				9.77	%		9.69	%		6.02	%
	North America Retail Partners Cards(3)(4)			21.7		885			917			810			23.7		867			872			646
		Ratio				4.08	%		4.06	%		2.73	%				14.51	%		14.82	%		8.80	%
	North America (excluding Cards)			251.8		16,206			14,034			9,451			256.4		3,089			3,308			2,104
		Ratio				6.44	%		5.39	%		3.33	%				4.78	%		4.98	%		2.94	%
Total Citigroup (excluding Special Asset Pool)			$	435.1	$	20,447		$	18,704		$	12,928		$	440.1	$	6,355		$	6,548		$	4,583
		Ratio				4.70	%		4.24	%		2.66	%				5.73	%		5.87	%		3.70	%

(1)

Total loans and average loans exclude interest and fees on credit cards.

(2)

The ratios of 90 days or more past due and net credit losses are calculated based on end-of-period loans and average loans, respectively, both net of unearned income.

(3)

The 90 days or more past due balance for Citi-branded cards and retail partners cards are generally still accruing interest. As discussed under "Loan Accounting Policies" above, the Company'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)

In September 2009, the Citi-branded cards and retail partner cards businesses in North America changed their bankruptcy loss recognition practice from 10 days after receipt of notification of a cardmember's bankruptcy filing to 30 days after receipt of notification. The change was made to improve the accuracy in bankruptcy loss recognition and to closer align Citigroup's practices with industry norms. The effect of this change was not material.

43

Consumer Loan Modification Programs

        The Company has instituted a variety of 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. The Company'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, summarized below. The short and long-term programs are available to credit card, residential mortgage, personal installment, and auto borrowers both internationally and in the U.S.

        HAMP.    As of September 30, 2009, $5.7 billion of first mortgages, have been enrolled in HAMP, pending successful completion of a trial period (described below). 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 before the end of the trial period. During the trial period, the original terms of the loans remain in effect pending final modification.

        Short-Term Programs.    Citigroup has also instituted programs to assist borrowers experiencing temporary hardships. These programs include short-term (twelve months or less) interest rate reductions and deferrals of past due payments. The loan volume under these short-term programs has increased significantly during 2009. As of September 30, 2009, short-term interest rate reduction programs covered loans in the residential mortgage ($7.4 billion), personal installment ($0.9 billion), credit card ($0.9 billion) and auto ($0.5 billion) businesses. Payment deferrals primarily occur in the U.S. residential mortgage business. Appropriate loan loss reserves have been established, giving consideration to the higher risk associated with those borrowers.

        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. TDRs totaled $13.6 billion as of September 30, 2009. TDRs can be applied to credit card, residential mortgage, personal installment and auto loans. 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.

44

U.S. Consumer Mortgage Lending

Overview

        The Company's U.S. consumer mortgage portfolio consists of both first lien and second lien mortgages, managed primarily by Local Consumer Lending (LCL) within Citi Holdings. However, $0.5 billion of first lien mortgages and $1.7 billion of second lien mortgages are reported in Citicorp. As of September 30, 2009, the U.S. first lien mortgage portfolio totaled approximately $122 billion while the U.S. second lien mortgage portfolio was approximately $53 billion.

        Data appearing throughout this report, including in the tables below, have been sourced from the Company's risk systems and, as such, may not reconcile with Citi's disclosures elsewhere generally due to differences in methodology and/or inconsistencies or variations in the manner in which information is captured. In addition, while the Company's risk management function continually reviews and refines its data capture and processing systems, certain Fair Isaac Corporation (FICO) and loan-to-value (LTV) data on the Company's mortgage portfolio is not available. The Company has noted such variations or inabilities to capture data, as applicable, below where material.

        It is generally the Company's credit risk policy not to offer option ARMs/negative amortizing mortgage products to its customers. Option ARMs/negative amortizing mortgages represent a very insignificant portion of total balances that were acquired only incidentally as part of prior portfolio and business purchases.

        A portion of loans in the Company's U.S. mortgage portfolio currently requires a payment to satisfy only the current accrued interest for the payment period or an interest-only payment. The Company's mortgage portfolio includes approximately $30 billion of first and second lien home equity lines of credit (HELOCs) with the interest-only payment feature 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 also contains approximately $35 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 will negatively amortize the loan. First mortgage loans with the interest-only 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.    Approximately 83% of the Company's first lien mortgage portfolio had FICO credit scores of at least 620 at origination. As a consequence of the difficult economic environment and the decrease in housing prices, LTV ratios and FICO scores have deteriorated since originations, as depicted in the tables below. On a refreshed basis, approximately 31% of first lien mortgages had a FICO score below 620, compared to approximately 17% at origination.

Balances: September 30, 2009—First Lien Mortgages

At Origination	FICO³660			620£FICO<660			FICO<620
LTV £ 80%		57	%		5	%		6	%
80% < LTV < 90%		3	%		2	%		4	%
LTV ³ 90%		10	%		6	%		7	%

Refreshed	FICO³660			620£FICO<660			FICO£620
LTV £ 80%		29	%		4	%		11	%
80% < LTV < 90%		8	%		1	%		4	%
LTV ³ 90%		23	%		4	%		16	%

Note: First lien mortgage table excludes loans in Canada, Puerto Rico and loans sold with recourse. 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. Tables exclude $3.1 billion from At Origination balances and $2.6 billion from Refreshed balances for which FICO or LTV data was unavailable. The 90 or more days past due (90+DPD) delinquency rate for mortgages with unavailable FICO or LTV is 13.9% At Origination and 10.2% from Refreshed vs. 10.2% for total portfolio. Excluding government-insured loans, loans subject to long-term standby commitments and PMI loans described below, the 90+DPD delinquency rate for the first lien mortgage portfolio as of September 30, 2009 is 9.0%.

        The Company's first lien mortgage portfolio includes $4.8 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 scores and generally have higher LTVs. These loans have high delinquency rates (approximately 37% 90+DPD) but, given the guarantees, the Company has experienced negligible credit losses on these loans. The first lien mortgage portfolio also includes $2.4 billion of loans with LTVs above 80%, which have insurance through private mortgage insurance (PMI) companies, and $4.2 billion of loans subject to Long-Term Standby Commitments⁽¹⁾ with Government Sponsored Enterprises (GSE), for which the Company has limited exposure to credit losses.

(1)

A Long-Term Standby Commitment (LTSC) is a structured transaction in which the Company 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.

45

        Second Mortgages—Loan Balances.    In the second lien mortgage portfolio, the majority of loans are in the higher FICO categories. However, the challenging economic conditions have created a migration towards lower FICO scores and higher LTV ratios. Approximately 61% of that portfolio had refreshed LTV ratios of 90% or more, compared to about 36% at origination. However, many of the loans in the portfolio are HELOC's, where the LTV ratio is calculated as if the line were fully drawn. As a majority of lines are only partially drawn, current LTVs on a drawn basis will be lower.

Balances: September 30, 2009—Second Lien Mortgages

At Origination	FICO³660			620£FICO<660			FICO<620
LTV £ 80%		48	%		2	%		2	%
80% < LTV < 90%		10	%		1	%		1	%
LTV ³ 90%		33	%		2	%		1	%

Refreshed	FICO³660			620£FICO<660			FICO<620
LTV £ 80%		22	%		2	%		3	%
80% < LTV < 90%		9	%		1	%		2	%
LTV ³ 90%		44	%		5	%		12	%

Note: Second lien mortgage table excludes loans in Canada and Puerto Rico. 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. Tables exclude $1.8 billion from At Origination balances and $1.6 billion from Refreshed balances for which FICO or LTV data was unavailable. As of September 30, 2009, the 90+ DPD delinquency rate for mortgages with unavailable FICO or LTV is 3.8% At Origination and 7.1% from Refreshed vs. 3.1% for total portfolio.

        The second lien mortgage portfolio includes $1.8 billion of loans subject to LTSC with one of the GSE, hence limiting the Company's exposure to credit losses.

Delinquencies and Net Credit Losses

        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 ³ 660 and LTV £ 80% at origination have a 90+DPD rate of 6.6%.

        As evidenced by the tables below, loans with FICO scores of less than 620 exhibit significantly higher delinquencies than in any other FICO band. Similarly, loans with LTVs equal to or greater than 90% have higher delinquencies than LTVs of less than 90%.

        In addition, the first mortgage delinquencies continued to rise during the third quarter. 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 Origination	FICO³660			620£FICO<660			FICO<620
LTV £ 80%		6.6	%		11.3	%		13.5	%
80%> < LTV < 90%		7.9	%		14.3	%		17.8	%
LTV ³ 90%		10.1	%		17.6	%		24.7	%

Refreshed	FICO³660			620£FICO<660			FICO<620
LTV £ 80%		0.2	%		3.4	%		17.8	%
80% £ LTV < 90%		0.5	%		5.9	%		24.7	%
LTV ³ 90%		1.7	%		13.7	%		36.3	%

Note: 90+DPD are based on balances referenced in the tables above.

Delinquencies: 90+DPD Rates—Second Lien Mortgages

At Origination	FICO³660			620£FICO<660			FICO<620
LTV £ 80%		1.5	%		4.0	%		5.1	%
80% < LTV < 90%		3.3	%		5.0	%		5.8	%
LTV ³ 90%		4.7	%		5.6	%		7.6	%

Refreshed	FICO³660			620£FICO<660			FICO<620
LTV £ 80%		0.0	%		0.9	%		8.3	%
80% < LTV < 90%		0.0	%		0.7	%		8.5	%
LTV ³ 90%		0.3	%		3.6	%		18.1	%

Note: 90+DPD are based on balances referenced in the tables above.

        The following charts detail the quarterly trends in delinquencies and net credit losses for the Company's first and second N.A. consumer mortgage portfolios.

        Both losses and delinquencies for the first mortgage portfolio have been impacted by the HAMP. As set forth in the first chart, first mortgage delinquencies continued to increase in the third quarter of 2009, exacerbated in part by the reduction in loan balances. However, the continued increase in first mortgage delinquencies during the third quarter 2009 is largely explained by the impact of HAMP. As mentioned elsewhere in this report, 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).

        Further, HAMP impacted Citi's net credit losses in the first mortgage portfolio during the third quarter of 2009 as

46

loans in the trial period are not charged off at 180 DPD as long as they have made at least one payment. Nearly half of the sequential decline in net credit losses on first mortgages during the third quarter 2009 was attributable to HAMP. The Company has increased its loan loss provisions to offset this impact.

        Based on these trends described above, the Company believes that the success rate of HAMP will be a key factor influencing net credit losses from delinquent first mortgage loans in the near future, 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, during the third quarter of 2009, second mortgage delinquencies began to moderate, as did net credit losses, as compared to the prior quarter. The Company continues to actively manage this exposure by reducing the riskiest accounts, including by tightening credit requirements through higher FICOs, lower LTVs, increased documentation and verifications.

        It should be noted that first mortgage net credit losses, as a percentage of average loans, are nearly half the level of those in the second mortgage portfolio, despite much higher delinquencies in the first mortgage portfolio. The Company believes that two major factors explain this relationship:

•

first mortgages have a senior secured position;

•

more first mortgages undergo a foreclosure process where they will continue to be counted as delinquent until the conclusion of the process.

47

Note: Includes loans for Canada, Puerto Rico and loans held for sale. Balances include deferred fees/costs.

Note: Includes loans for Canada and Puerto Rico.

Origination Channel, Geographic Distribution and Origination Vintage

        The following tables detail the Company's first and second U.S. Consumer mortgage portfolios by origination channels, geographic distribution and origination vintage.

By Origination Channel

        The Company'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 the Company underwrites the loan directly with the borrower.

•

Correspondent: loans originated and funded by a third party, where the Company 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.

48

First Lien Mortgages: September 30, 2009

CHANNEL ($ in billions)	First Lien Mortgages		Channel % Total			90+DPD %			*FICO < 620		*LTV ³ 90
Retail	$	50.5		41.5	%		4.4	%	$	14.6	$	16.4
Broker	$	21.0		17.3	%		10.5	%	$	4.2	$	10.0
Correspondent	$	50.2		41.2	%		15.9	%	$	18.6	$	26.0

*

Refreshed FICO and LTV.

Note: First lien mortgage table excludes Canada and Puerto Rico, deferred fees/costs and loans sold with recourse.

        As of September 30, 2009, approximately 41% of the first lien mortgage portfolio was originated through the correspondent channel, a reduction from approximately 43% as of the end of 2008. Given that loans originated through correspondents have exhibited higher 90+DPD delinquency rates than retail originated mortgages, the Company terminated business with a number of correspondent sellers in 2007 and 2008. During 2008, the Company severed relationships with a number of brokers, only maintaining those who have produced strong, high-quality and profitable volume.

Second Lien Mortgages: September 30, 2009

CHANNEL ($ in billions)	Second Lien Mortgages		Channel % Total			90+DPD %			*FICO < 620		*LTV ³ 90
Retail	$	27.0		50.8	%		1.6	%	$	3.9	$	12.4
Broker	$	13.2		24.9	%		4.0	%	$	2.2	$	9.9
Correspondent	$	12.9		24.3	%		5.2	%	$	3.1	$	9.5

*

Refreshed FICO and LTV.

Note: Excludes Canada and Puerto Rico.

        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, the Company no longer originates second mortgages through third-party channels, which represented approximately 54% of the portfolio as of the end of 2008.

By State

        Approximately half of the Company's U.S. consumer mortgage portfolio is located in five states: California, New York, Florida, Texas and Illinois. Those states represent 49% of first lien mortgages and 54% of second lien mortgages.

        Florida and Illinois have above average 90+DPD delinquency rates. Florida has 39% of its first mortgage lien portfolio in the FICO<620 band; and 66% of its loan portfolio has refreshed LTV³90. Illinois has 33% of its loans in the FICO<620 band; and 54% of its loan portfolio has LTV³90. Texas, despite having 44% of its portfolio with FICO<620, has a lower delinquency rate relative to the overall portfolio. Texas has only 8% of its loan portfolio with refreshed LTV³90.

First Lien Mortgages: September 30, 2009

STATES ($ in billions)	First Lien Mortgages		State % Total			90+DPD %			*FICO < 620		*LTV ³ 90
California	$	32.3		26.6	%		9.0	%	$	5.2	$	18.3
New York	$	10.0		8.2	%		6.8	%	$	2.0	$	1.7
Florida	$	7.3		6.0	%		16.8	%	$	2.8	$	4.8
Texas	$	5.3		4.3	%		8.7	%	$	2.3	$	0.4
Illinois	$	5.2		4.3	%		11.4	%	$	1.7	$	2.8
Others	$	61.7		50.7	%		10.6	%	$	23.4	$	24.3

*

Refreshed FICO and LTV.

Note: First lien mortgage table excludes Canada and Puerto Rico, deferred fees/costs and loans sold with recourse.

        In the second lien mortgage portfolio, Florida continues to experience above-average delinquencies, with approximately 81% of their loans with LTV ³ 90 compared to 60% overall for second lien mortgages.

Second Lien Mortgages: September 30, 2009

STATES ($ in billions)	Second Lien Mortgages		State % Total			90+DPD %			*FICO < 620		*LTV ³ 90
California	$	14.6		27.4	%		3.8	%	$	2.0	$	10.4
New York	$	6.9		12.9	%		1.9	%	$	0.8	$	2.2
Florida	$	3.6		6.8	%		5.2	%	$	0.8	$	2.9
Illinois	$	2.1		3.9	%		3.0	%	$	0.4	$	1.5
Texas	$	1.5		2.8	%		1.2	%	$	0.2	$	0.2
Others	$	24.5		46.1	%		2.8	%	$	5.0	$	14.5

*

Refreshed FICO and LTV.

Note: Excludes Canada and Puerto Rico.

49

By Vintage

        For the Company'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, 64% of the portfolio is of 2006 and 2007 vintages, which again have higher delinquencies compared to the overall portfolio rate.

First Lien Mortgages: September 30, 2009

VINTAGES ($ in billions)	First Lien Mortgages		Vintage % Total			90+DPD %			*FICO < 620		*LTV ³ 90
2009	$	4.1		3.3	%		0.3	%	$	0.6	$	0.9
2008	$	15.1		12.4	%		5.2	%	$	3.3	$	5.5
2007	$	30.0		24.6	%		15.8	%	$	11.5	$	18.7
2006	$	22.2		18.2	%		13.7	%	$	7.6	$	13.3
2005	$	20.8		17.1	%		7.5	%	$	5.0	$	9.6
£ 2004	$	29.5		24.3	%		7.7	%	$	9.5	$	4.5

*

Refreshed FICO and LTV.

Note: First lien mortgage table excludes Canada and Puerto Rico, deferred fees/costs and loans sold with recourse.

Second Lien Mortgages: September 30, 2009

VINTAGES ($ in billions)	Second Lien Mortgages		Vintage % Total			90+DPD %			*FICO < 620		*LTV ³ 90
2009	$	0.5		0.9	%		0.6	%	$	0.0	$	0.0
2008	$	4.4		8.3	%		0.9	%	$	0.5	$	1.5
2007	$	16.0		30.0	%		3.5	%	$	3.0	$	10.4
2006	$	17.8		33.6	%		3.8	%	$	3.4	$	12.9
2005	$	10.1		18.9	%		2.7	%	$	1.5	$	6.2
£ 2004	$	4.4		8.3	%		1.7	%	$	0.7	$	0.9

*

Refreshed FICO and LTV.

Note: Excludes Canada and Puerto Rico.

N.A. Cards

        The Company's N.A. cards portfolio consists of its Citi-branded and retail partner cards portfolios located in Citicorp and Citi Holdings—Local Consumer Lending, respectively. As of September 30, 2009, the U.S. Citi-branded portfolio totaled approximately $84 billion while the U.S. retail partner cards portfolio was approximately $57 billion, both reported on a managed basis.

        In the Company'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 set forth in the table below, on a refreshed basis approximately 73% of the Citi-branded portfolio had FICO credit scores of at least 660 as of September 30, 2009, while 62% of the retail partner cards portfolio had scores of at least 660.

Balances: September 30, 2009

Refreshed	Citi Branded			Retail Partners
FICO ³ 660		73	%		62	%
620£FICO<660		11	%		13	%
FICO<620		16	%		25	%

Note: Based on balances of $138 billion. Balances include interest and fees. Excludes Canada, Puerto Rico, Installment and Classified portfolios. Excludes balances where FICO was unavailable ($0.9 billion for Citi-branded, $2.2 billion for retail partner cards). 90+DPD delinquency rate for balances where FICO was unavailable is 9.83% for Citi-branded and 9.38% for retail partner cards vs. overall rate of 2.63% for Citi-branded and 4.49% for retail partner cards.

        In each of the two portfolios, Citi has been actively eliminating riskier accounts and sales to mitigate losses. First, the Company has removed high risk customers from the portfolio by either reducing available lines of credit or closing accounts. End-of-period open accounts are down 16% in branded cards and 13% in retail partner cards versus prior year levels. Second, the Company has improved the tools used to identify and manage exposure in each of the portfolios by targeting unique customer attributes. Loss mitigation programs that entail a reduction in customers' monthly payments obligation constitutes less than 5% of the overall managed portfolio as of September 30, 2009. These programs along with other loss mitigation activities have stabilized reported delinquencies and net credit losses and importantly, early indicators of re-default rates related to these programs are within expected norms.

50

        The table below provides delinquency statistics for loans 90+DPD for both the Citi-branded and retail partner cards portfolios as of September 30, 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 with FICO scores less than 620, which constitute 16% of the Citi-branded portfolio, have a 90+DPD rate of 15.2%; in the retail partner cards portfolio, loans with FICO scores less than 620 constitute 25% of the portfolio and have a 90+DPD rate of 16.8%.

90+DPD Delinquency Rate: September 30, 2009

Refreshed	Citi Branded 90+DPD%			Retail Partners 90+DPD%
FICO ³ 660		0.1	%		0.2	%
620£FICO<660		0.3	%		0.6	%
FICO<620		15.2	%		16.8	%

Note: Based on balances of $138 billion. Balances include interest and fees. Excludes Canada, Puerto Rico, Installment and Classified portfolios. Loans 90 days or more past due 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 the Company to the credit bureaus.

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

•

The Citi-branded cards delinquencies have improved quarter over quarter. Further breakout of the FICO below 620 segment indicates that delinquencies in this segment, on a refreshed basis, have contributed to the improvement.

•

The retail partner cards delinquencies increased slightly over the prior quarter, exacerbated in part by the decline in loan balances, but remain lower than the first quarter. The 90+DPD balance has declined since the first quarter, driving the reduction in net credit losses—both in rate and dollars.

        The Company 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.

51

Note: Includes Puerto Rico.

Note: Includes Canada and Puerto Rico.

The Credit Card Accountability Responsibility and Disclosure Act of 2009

        On May 22, 2009, The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) was enacted into law. The CARD Act will affect various credit card practices of card issuers, including Citigroup, such as marketing, underwriting, pricing, billing and disclosure requirements, thus reshaping the way consumers have access to and use their credit cards. Currently, many of the provisions in the CARD Act are to take effect in February 2010, although some provisions were effective in August 2009 and some will take effect in August 2010. However, legislation has been introduced in Congress to accelerate certain provisions of the CARD Act.

        Certain provisions of the CARD Act are consistent with Citigroup's existing practices and will not require any changes or modifications. Other provisions, however, such as those that restrict the ability of an issuer to increase APRs on outstanding balances or that establish standards for penalty fees and payment allocation, will require Citigroup to make fundamental changes to its credit card business model. The impact of the CARD Act on Citigroup's credit businesses is not fully known at this time. The final impact will ultimately depend upon the successful implementation of changes to Citigroup's business model and the continued regulatory actions on and interpretations of the CARD Act, among other considerations.

52

U.S. Installment and Other Revolving Loans

        In the table below, the Company'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 September 30, 2009, the U.S. Installment portfolio totaled approximately $58 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 $21 billion of student loans originated under the Federal Family Education Loan Program where losses are substantially mitigated by federal guarantees if the loans are properly serviced.

        Approximately 44% of the Installment portfolio had FICO credit scores less than 620 on a refreshed basis. The Company continues to execute its strategy to wind down the assets in Citi Holdings. Approximately 29% of the Other Revolving portfolio is composed of loans having FICO less than 620.

Balances: September 30, 2009

Refreshed	Installment			Other Revolving
FICO ³ 660		41	%		56	%
620£FICO<660		15	%		15	%
FICO<620		44	%		29	%

Note: Based on balances of $56 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). 90+ DPD delinquency rate for balances where FICO was unavailable is 3.55% for Installment and 6.34% for Other Revolving vs. overall rate of 2.84% for Installment and 3.12% for Other Revolving.

        The table below provides delinquency statistics for loans 90+DPD for both the Installment and Other Revolving portfolios. 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.

90+DPD Delinquency Rate: September 30, 2009

Refreshed	Installment 90+DPD%			Other Revolving 90+DPD%
FICO ³ 660		0.1	%		0.0	%
620£FICO<660		0.3	%		0.4	%
FICO<620		6.2	%		9.2	%

Note: Based on balances of $56 billion for Installment and $0.9 billion for Other Revolving. Excludes Canada and Puerto Rico. Loans 90 days or more past due 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 the Company to the credit bureaus.

53

Corporate Loan Details

        For corporate clients and investment banking activities across Citigroup, the credit process is grounded in a series of fundamental policies, including:

•

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

•

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

•

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.

Corporate Credit Portfolio

        The following table presents credit data for the Company's corporate loans and unfunded lending commitments at September 30, 2009:

			At September 30, 2009
Corporate Loans(1) (in millions of dollars)			Recorded Investment in Loans(2)			% of Total(3)			Unfunded Lending Commitments		% of Total(3)
Investment grade(4)			$	96,689			57	%	$	275,556		88	%
Non-investment grade(4)
	Noncriticized			21,010			12			14,268		5
	Criticized performing(5)			36,803			22			20,384		6
		Commercial real estate (CRE)		6,170			4			1,786		0
		Commercial & Industrial		30,633			18			18,598		6
	Criticized non-performing(5)			14,776			9			3,246		1
		Commercial real estate (CRE)		3,783			3			913		0
		Commercial & Industrial		10,993			6			2,333		1
Total non-investment grade			$	72,589			43	%	$	37,898		12	%
Private Banking loans managed on a delinquency basis(4)(6)				14,565						2,275
Loans at fair value				1,475						—
Total Corporate Loans			$	185,318					$	315,754
Unearned income				(4,598	)					—
Corporate Loans, net of unearned income			$	180,720					$	315,754

(1)

Includes $575 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 corresponds to the Special Mention, Substandard and Doubtful asset categories defined by regulatory authorities.

(6)

Approximately $0.2 billion are 90+DPD.

54

        The following tables represent the corporate credit portfolio (excluding Private Banking), before consideration of collateral, by maturity at September 30, 2009. The corporate portfolio is broken out by direct outstandings which include drawn loans, overdrafts, interbank placements, bankers' acceptances, certain investment securities and leases and unfunded commitments which include unused commitments to lend, letters of credit and financial guarantees.

	At September 30, 2009
In billions of dollars	Due within 1 year		Greater than 1 year but within 5 years		Greater than 5 years		Total exposure
Direct outstandings	$	158	$	88	$	8	$	254
Unfunded lending commitments		182		126		9		317
Total	$	340	$	214	$	17	$	571

	At December 31, 2008
In billions of dollars	Due within 1 year		Greater than 1 year but within 5 years		Greater than 5 years		Total 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 (excluding Private Banking) is diverse across counterparty, industry and geography. The following table shows direct outstandings and unfunded commitments by region:

	September 30, 2009			December 31, 2008
North America		46	%		48	%
EMEA		32			31
Latin America		9			8
Asia		13			13
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.

        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 (excluding Private Banking) by facility risk rating at September 30, 2009 and December 31, 2008, as a percentage of the total portfolio:

	Direct outstandings and unfunded commitments
	September 30, 2009			December 31, 2008
AAA/AA/A		54	%		57	%
BBB		25			24
BB/B		13			13
CCC or below		8			6
Unrated		—			—
Total		100	%		100	%

        The corporate credit portfolio (excluding Private Banking) 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:

	Direct outstandings and unfunded commitments
	September 30, 2009			December 31, 2008
Government and central banks		14	%		12	%
Investment banks		6			7
Banks		10			7
Other financial institutions		5			5
Utilities		5			5
Insurance		4			4
Petroleum		5			4
Agriculture and food preparation		5			4
Telephone and cable		3			3
Industrial machinery and equipment		3			3
Global information technology		2			3
Chemicals		3			3
Other industries(1)		35			40
Total		100	%		100	%

(1)

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

55

Credit Risk Mitigation

        As part of its overall risk management activities, the Company 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 September 30, 2009 and December 31, 2008, $66.3 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 September 30, 2009 and December 31, 2008, the credit protection was economically hedging underlying credit exposure with the following risk rating distribution, respectively:

Rating of Hedged Exposure

	September 30, 2009			December 31, 2008
AAA/AA/A		45	%		54	%
BBB		37			32
BB/B		11			9
CCC or below		7			5
Total		100	%		100	%

        At September 30, 2009 and December 31, 2008, the credit protection was economically hedging underlying credit exposure with the following industry distribution, respectively:

Industry of Hedged Exposure

	September 30, 2009			December 31, 2008
Utilities		9	%		10	%
Telephone and cable		8			9
Agriculture and food preparation		7			7
Petroleum		6			7
Industrial machinery and equipment		6			6
Insurance		4			5
Chemicals		7			5
Retail		4			5
Other financial institutions		4			4
Autos		5			4
Pharmaceuticals		5			4
Natural gas distribution		4			4
Global information technology		3			4
Metals		4			3
Other industries(1)		24			23
Total		100	%		100	%

(1)

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

56

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 at September 30, 2009 and June 30, 2009:

In billions of dollars		June 30, 2009 exposures		Third Quarter 2009 write-ups (downs)(1)			Third Quarter 2009 Other(2)			September 30, 2009 exposures
Direct ABS CDO super senior exposures:
	Gross ABS CDO super senior exposures (A)	$	14.5							$	15.1
	Hedged exposures (B)		6.3								6.3
Net ABS CDO super senior exposures:
	ABCP/CDO(3)		7.3	$	1.6		$	(1.3	)		7.7
	High grade		0.7		0.1			—			0.8
	Mezzanine		0.2		0.2	(4)		(0.1	)		0.3
Total net ABS CDO super senior exposures (A-B=C)		$	8.3	$	2.0		$	(1.5	)(4)	$	8.8
Lending and structuring exposures (D)		$	1.4	$	—		$	(0.1	)	$	1.2
Total net exposures (C+D)(5)(6)		$	9.6	$	2.0		$	(1.7	)	$	10.0
Credit adjustment on hedged counterparty exposures (E)(7)				$	(0.1	)
Total net write-ups (downs) (C+D+E)				$	1.9

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

(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 September 30, 2009, $303 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)

These $10.0 billion in net direct exposures include the $8.0 billion of assets reflected in the table entitled "Assets within Special Asset Pool" under "Citi Holdings—Special Asset Pool" above.

(7)

Adjustment related to counterparty credit risk.

        Citi Holdings had approximately $10.0 billion in net U.S. subprime-related direct exposures in the Special Asset Pool at September 30, 2009. The exposure consisted of (a) approximately $8.8 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 $1.2 billion of exposures in its lending and structuring business.

        The Special Asset Pool 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 $8.8 billion in ABS CDO super senior exposures as of September 30, 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, the Company 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 valuation as of September 30, 2009 assumes a cumulative decline in U.S. housing prices from peak to trough of 30.5%. This rate assumes declines of 10% in 2009 and flat for 2010, respectively, the remainder of the 30.5% decline having already occurred before the end of 2008.

        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 $26 million change in the fair value of the Company's direct ABCP exposures as of September 30, 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 17 to the Consolidated Financial Statements, "Fair Value Measurement."

57

Lending and Structuring Exposures

        The $1.2 billion of subprime-related exposures includes approximately $0.8 billion of actively managed subprime loans purchased for resale or securitization at a discount to par during 2007 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

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

        (1)   Assets held at fair value include approximately $5.7 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 $1.0 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 OCI 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 HTM and $22.8 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 $4.9 billion of equity and other investments such as limited partner fund investments which 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.

58

Direct Exposure to Monolines

        Citi Holdings has exposure, via the Special Asset Pool, 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 an additional $61 million in downward CVA related to exposure to Monolines during the third quarter of 2009, bringing the total CVA balance to $5.3 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 September 30, 2009 and June 30, 2009.

	September 30, 2009					June 30, 2009
In millions of dollars	Fair-value exposure			Notional amount of transactions		Fair-value exposure			Notional amount of transactions
Direct subprime ABS CDO super senior—Ambac	$	4,495		$	5,295	$	4,525		$	5,328
Trading assets—non-subprime:
MBIA	$	1,898		$	3,871	$	2,123		$	3,868
FSA		74			847		128			1,108
Assured		80			458		126			466
Radian		8			150		19			150
Ambac		—			407		—			407
Subtotal trading assets—non-subprime	$	2,061		$	5,733	$	2,396		$	5,999
Total gross fair-value direct exposure	$	6,556				$	6,921
Credit valuation adjustment		(5,274	)				(5,213	)
Total net fair-value direct exposure	$	1,282				$	1,708

        The fair-value exposure, net of payable and receivable positions, represents the market value of the contract as of September 30, 2009 and June 30, 2009, 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 the Company'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 September 30, 2009 and June 30, 2009, Citi Holdings had $6.3 billion in notional amount of hedges against its direct subprime ABS CDO super senior positions. Of those amounts, $5.3 billion was purchased from Monolines and is included in the notional amount of transactions in the table above.

        With respect to Citi Holdings' trading assets, there were $2.1 billion and $2.4 billion of fair-value exposure to Monolines as of September 30, 2009 and June 30, 2009, 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 September 30, 2009 was $5.7 billion. Of the $5.7 billion, $5.0 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 $697 million primarily in interest-rate swaps with a corresponding fair value exposure of $9 million net payable.

        The notional amount of transactions related to the remaining non-subprime trading assets at June 30, 2009 was $6.0 billion with a corresponding fair value exposure of $2.4 billion. Of the $6.0 billion, $5.0 billion was in the form of credit default swaps and total return swaps with a fair value of $2.4 billion. The remaining notional amount comprised $955 million primarily in interest-rate swaps with a corresponding fair value exposure of $2.1 million net payable.

        The Company has purchased mortgage insurance from various monoline mortgage insurers on first mortgage loans. The notional amount of this insurance protection was approximately $243 million and $316 million as of September 30, 2009 and June 30, 2009, 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 the Company is not a contractual counterparty to the Monolines, but instead owns securities which 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.

59

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 (LOCOM); 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 the Company's recording pretax write-downs on funded and unfunded highly leveraged finance exposures of $24 million in the third quarter of 2009, bringing the cumulative write-downs for the first nine months of 2009 to $508 million.

        Citigroup's exposures to highly leveraged financing commitments totaled $6.2 billion at September 30, 2009 ($5.9 billion funded and $0.3 billion in unfunded commitments), reflecting a decrease of $2.3 billion from June 30, 2009.

        In 2008, the Company 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. The Company 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 the Company's Consolidated Balance Sheet.

        In addition, the Company 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, the Company believes that the transactions largely mitigate the Company's risk related to the transferred loans.

        The Company's sole remaining exposure to the transferred loans are the senior debt securities, which have an amortized cost basis of $6.8 billion and fair value of $6.9 billion at September 30, 2009, and the payables under the TRS, which have a fair value of $0.1 billion at September 30, 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 Note 14 to the Consolidated Financial Statements for additional information.

60

DERIVATIVES

        See Note 16 to the Consolidated Financial Statements for a discussion and disclosures related to the Company's Derivative activities. The following discussions relate to the Fair Valuation Adjustment for Derivatives and Credit Derivatives activities.

Fair Valuation Adjustments for Derivatives

        The fair value adjustments applied by the Company 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 17 to the Consolidated Financial Statements) 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.

•

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 the Company's own credit risk in the valuation.

        The Company's 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 CVA 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 first quarter of 2009, Citigroup's credit spreads widened and counterparty credit spreads generally narrowed, each of which positively affected revenues. Conversely, in the second and third quarters of 2009, Citigroup's credit spreads narrowed and negatively affected revenues.

        The table below summarizes pretax gains (losses) related to changes in CVAs on derivative instruments for the quarters ended September 30, 2009 and 2008, respectively:

	Credit valuation adjustment gain (loss)
In millions of dollars	2009			2008
Non-monoline counterparties	$	855		$	(851	)
Citigroup (own)		(1,534	)		1,951
Net non-monoline CVA	$	(679	)	$	1,100
Monoline counterparties		(61	)		(920	)
Total CVA—derivative instruments	$	(740	)	$	180

        The table below summarizes pretax gains (losses) related to changes in CVAs on derivative instruments for the nine months ended September 30, 2009 and 2008, respectively:

	Credit valuation adjustment gain (loss)
In millions of dollars	2009			2008
Non-monoline counterparties	$	5,387		$	(2,236	)
Citigroup (own)		(1,891	)		3,165
Net non-monoline CVA	$	3,496		$	929
Monoline counterparties		(995	)		(4,839	)
Total CVA—derivative instruments	$	2,501		$	(3,910	)

        The table below summarizes the CVA applied to the fair value of derivative instruments as of September 30, 2009 and December 31, 2008, respectively.

	Credit valuation adjustment Contra liability (contra asset)
In millions of dollars	September 30, 2009			December 31, 2008
Non-monoline counterparties	$	(2,878	)	$	(8,266	)
Citigroup (own)		1,754			3,611
Net non-monoline CVA	$	(1,124	)	$	(4,655	)
Monoline counterparties		(5,274	)		(4,279	)
Total CVA—derivative instruments	$	(6,398	)	$	(8,934	)

        The CVA 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

61

Note 17 to the Consolidated Financial Statements for further information.

•

The effect of counterparty credit risk embedded in non-derivative instruments. General spread widening has negatively affected the market value of 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

        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 portfolio basis. The Company 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 pre-defined events (settlement triggers). These settlement triggers are defined by the form of the derivative and the referenced credit and 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.

62

        The following tables summarize the key characteristics of the Company's credit derivative portfolio by counterparty and derivative instrument as of September 30, 2009 and December 31, 2008, respectively:

September 30, 2009:

	Fair values				Notionals
In millions of dollars	Receivable		Payable		Beneficiary		Guarantor
By Industry/Counterparty:
Bank	$	62,785	$	61,679	$	914,418	$	860,437
Broker-dealer		23,425		22,323		321,199		301,216
Monoline		6,572		1		8,299		—
Non-financial		181		193		3,405		2,127
Insurance and other financial institutions		19,264		16,379		202,054		151,326
Total by Industry/Counterparty	$	112,227	$	100,575	$	1,449,375	$	1,315,106
By Instrument:
Credit default swaps and options	$	107,770	$	99,376	$	1,418,691	$	1,314,282
Total return swaps		4,457		1,199		30,684		824
Total by Instrument	$	112,227	$	100,575	$	1,449,375	$	1,315,106

December 31, 2008(1):

	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		7,192		489		35,462		1,905
Total by Instrument	$	228,351	$	203,709	$	1,595,684	$	1,443,280

(1)

Reclassified to conform to the current period's presentation.

        The fair values shown are prior to the application of any netting agreements, cash collateral, and market or credit value adjustments.

        The Company 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. The Company 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.

        The Company actively monitors its counterparty credit risk in credit derivative contracts. Approximately 87% of the gross receivables as of September 30, 2009 are from counterparties with which the Company maintains collateral agreements. A majority of the Company'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 the Company may call for additional collateral. A number of the remaining significant counterparties are monolines.

63

MARKET RISK MANAGEMENT PROCESS

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

Interest Rate Exposure (IRE)

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

	September 30, 2009						June 30, 2009					September 30, 2008
In millions of dollars	Increase			Decrease			Increase			Decrease		Increase			Decrease
U.S. dollar
Instantaneous change	$	(1,193	)	$	1,427		$	(1,767	)	$	1,935	$	(1,811	)	$	893
Gradual change	$	(563	)	$	526		$	(1,005	)	$	936	$	(707	)	$	490
Mexican peso
Instantaneous change	$	25		$	(25	)	$	(21	)	$	21	$	(23	)	$	23
Gradual change	$	11		$	(11	)	$	(15	)	$	15	$	(19	)	$	19
Euro
Instantaneous change	$	52		$	(4	)	$	(29	)	$	21	$	(52	)	$	52
Gradual change	$	12		$	(12	)	$	(35	)	$	35	$	(41	)	$	41
Japanese yen
Instantaneous change	$	228			NM		$	215			NM	$	142			NM
Gradual change	$	135			NM		$	122			NM	$	72			NM
Pound sterling
Instantaneous change	$	(11	)	$	24		$	(11	)	$	11	$	16		$	(16	)
Gradual change	$	(11	)	$	11		$	(14	)	$	14	$	13		$	(13	)

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

        The changes in the U.S. dollar interest rate exposures from June 30, 2009 to September 30, 2009 are related to customer-related asset and liability mix, term debt issuance, as well as Citigroup's view of prevailing interest rates.

        Certain risk positions in the non-trading portfolio are economically hedged with offsetting positions in the mark-to-market portfolio, which are reflected in the Value at Risk metrics. If the effect of these hedging transactions were netted against the non-trading portfolio it would reduce Citi's risk from an instantaneous parallel increase in rates from ($1,193) million to ($569) million and decrease Citi's opportunity from an instantaneous parallel decrease in rates from $1,427 million to $803 million.

        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 3			Scenario 4			Scenario 5			Scenario 6
Overnight rate change (bp)		—			100			200			(200	)		(100	)		—
10-year rate change (bp)		(100	)		—			100			(100	)		—			100
Impact to net interest revenue (in millions of dollars)	$	8		$	(514	)	$	(1,131	)	$	62		$	269		$	(61	)

64

Value at Risk

        For Citigroup's major trading centers, the aggregate pretax value at risk (VAR) in the trading portfolios was $273 million, $277 million, $319 million and $237 million at September 30, 2009, June 30, 2009, December 31, 2008 and September 30, 2008, respectively. Daily Citigroup trading VAR averaged $281 million and ranged from $247 million to $312 million during the third quarter of 2009. The following table summarizes VAR for Citigroup trading portfolios at September 30, 2009, June 30, 2009, December 31, 2008 and September 30, 2008, including the total VAR, the specific risk only component of VAR, and general market factor VAR's, along with the quarterly averages:

In million of dollars	September 30, 2009			Third Quarter 2009 Average			June 30, 2009			Second Quarter 2009 Average			December 31, 2008			Fourth Quarter 2008 Average			September 30, 2008			Third Quarter 2008 Average
Interest rate	$	240		$	237		$	226		$	217		$	320		$	272		$	240		$	265
Foreign exchange		98			90			84			61			118			80			40			43
Equity		51			62			65			94			84			94			106			99
Commodity		41			38			36			38			15			16			20			20
Diversification benefit		(157	)		(146	)		(134	)		(150	)		(218	)		(167	)		(169	)		(187	)
Total—All market risk factors, including general and specific risk	$	273		$	281		$	277		$	260		$	319		$	295		$	237		$	240
Specific risk only component	$	12		$	17		$	18		$	20		$	8			25		$	20		$	14
Total—General market factors only	$	261		$	264		$	259		$	240		$	311		$	270		$	217		$	226

        The specific risk only component represents the level of equity and debt issuer-specific risk embedded in VAR. Citigroup's specific risk model conforms to the 4x-multiplier treatment and is subject to extensive annual hypothetical back-testing.

        The table below provides the range of market factor VARs, inclusive of specific risk, across the quarters ended:

	September 30, 2009				June 30, 2009				December 31, 2008				September 30, 2008
In millions of dollars	Low		High		Low		High		Low		High		Low		High
Interest rate	$	218	$	260	$	193	$	240	$	227	$	328	$	239	$	292
Foreign exchange		55		110		31		91		43		130		28		71
Equity		51		95		50		153		68		122		80		134
Commodity		32		45		26		50		12		22		12		46

        The following table provides the VAR for Citicorp's Securities and Banking business for the second and third quarters of 2009:

In millions of dollars	September 30, 2009		June 30, 2009
Total—All market risk factors, including general and specific risk	$	168	$	213
Average—during quarter		184		186
High—during quarter		247		214
Low—during quarter		148		148

65

OPERATIONAL RISK MANAGEMENT PROCESS

        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 the Company 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 Audit and Risk Review (ARR).

        The goal is to keep operational risk at appropriate levels relative to the characteristics of our businesses, the markets in which we operate our 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 has been established to provide 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 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 summarized for senior management and the Citigroup 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 of Citigroup. The Company 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.

66

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:

	September 30, 2009																December 31, 2008
In Billions of U.S. dollars
	Cross-Border Claims on Third Parties
	Banks		Public		Private		Total		Trading and Short-Term Claims		Investments in and Funding of Local Franchises		Total Cross-Border Outstandings		Commitments		Total Cross-Border Outstandings		Commitments
Germany	$	9.0	$	4.9	$	7.2	$	21.1	$	19.4	$	6.3	$	27.4	$	56.6	$	29.9	$	48.6
France		10.1		5.9		8.9		24.9		21.0		0.1		25.0		75.2		21.4		66.4
India		0.9		0.2		6.9		8.0		5.0		15.0		23.0		1.6		28.0		1.6
Netherlands		6.3		3.3		10.5		20.1		16.2		—		20.1		73.8		17.7		67.4
South Korea		2.0		0.9		5.1		8.0		7.8		11.2		19.2		14.1		22.0		15.7
United Kingdom		6.3		0.2		9.5		16.0		13.4		—		16.0		135.5		26.3		128.3
Italy		0.8		8.7		3.0		12.5		10.1		3.1		15.6		21.7		14.7		20.2
Cayman Islands		0.2		—		14.2		14.4		13.3		—		14.4		6.8		22.1		8.2
Canada		1.3		0.5		3.5		5.3		3.6		8.0		13.3		7.4		16.1		36.1

(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.

67

INTEREST REVENUE/EXPENSE AND YIELDS

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

In millions of dollars		3rd Qtr. 2009			2nd Qtr. 2009(1)			3rd Qtr. 2008(1)			Change 3Q09 vs. 3Q08
Interest Revenue(2)		$	18,678		$	19,671		$	26,130			(29	)%
Interest Expense(3)			6,680			6,842			12,726			(48	)
Net Interest Revenue(2)(3)		$	11,998		$	12,829		$	13,404			(10	)%
Interest Revenue—Average Rate			4.59	%		4.97	%		6.14	%		(155	) bps
Interest Expense—Average Rate			1.83	%		1.93	%		3.23	%		(140	) bps
Net Interest Margin (NIM)			2.95	%		3.24	%		3.15	%		(20	) bps
Interest Rate Benchmarks:
Federal Funds Rate—End of Period			0.00-0.25	%		0.00-0.25	%		2.00	%		(175+	) bps
2 Year U.S. Treasury Note—Average Rate			1.03	%		1.02	%		2.36	%		(133	) bps
10 Year U.S. Treasury Note—Average Rate			3.52	%		3.32	%		3.86	%		(34	) bps
	10 Year vs. 2 Year Spread		249 bps			230 bps			150 bps

(1)

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

(2)

Excludes taxable equivalent adjustment (based on the U.S. Federal statutory tax rate of 35%) of $387 million, $82 million, and $51 million for the third quarter of 2009, the second quarter of 2009, and the third quarter of 2008, respectively.

(3)

Excludes expenses associated with hybrid financial instruments and beneficial interest in consolidated VIEs. These obligations are classified as Long-term debt and are accounted for at fair value with changes recorded in Principal transactions.

        A significant portion of the Company'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 third quarter of 2009, the yields across both the interest earning assets as well as the interest earning liabilities dropped significantly from the same period in 2008. The lower asset yields more than offset the lower cost of funds, resulting in lower NIM compared to the prior-year period.

        Net interest margin decreased by 29 basis points compared to the second quarter of 2009, driven by two principal items. First, the Company experienced a higher cost of borrowings due to debt issuances outside of the government programs (e.g., non-TLGP debt) as well the increased interest paid on the additional trust preferred securities outstanding as a result of the completion of the exchange offers. Second, Citi's business spread compression, generally of two types—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 Company's deposit businesses as a result of the continued low interest rate environment.

68

AVERAGE BALANCES AND INTEREST RATES—ASSETS(1)(2)(3)(4)

		Average Volume						Interest Revenue						% Average Rate
In millions of dollars		3rd Qtr. 2009		2nd Qtr. 2009		3rd Qtr. 2008		3rd Qtr. 2009		2nd Qtr. 2009		3rd Qtr. 2008		3rd Qtr. 2009			2nd Qtr. 2009			3rd Qtr. 2008
Assets
Deposits with banks(5)		$	190,269	$	168,631	$	65,667	$	313	$	377	$	792		0.65	%		0.90	%		4.80	%
Federal funds sold and securities borrowed or purchased under agreements to resell(6)
In U.S. offices		$	140,756	$	131,522	$	157,355	$	476	$	515	$	1,272		1.34	%		1.57	%		3.22	%
In offices outside the U.S.(5)			70,790		61,382		73,631		252		279		943		1.41			1.82			5.10
Total		$	211,546	$	192,904	$	230,986	$	728	$	794	$	2,215		1.37	%		1.65	%		3.81	%
Trading account assets(7)(8)
In U.S. offices		$	138,781	$	134,334	$	210,248	$	1,668	$	1,785	$	2,740		4.77	%		5.33	%		5.18	%
In offices outside the U.S.(5)			129,135		120,468		150,985		986		1,136		1,397		3.03			3.78			3.68
Total		$	267,916	$	254,802	$	361,233	$	2,654	$	2,921	$	4,137		3.93	%		4.60	%		4.56	%
Investments(1)
In U.S. offices
	Taxable	$	122,608	$	123,181	$	118,950	$	1,568	$	1,674	$	1,185		5.07	%		5.45	%		3.96	%
	Exempt from U.S. income tax		18,666		16,293		13,057		226		247		136		4.80			6.08			4.14
In offices outside the U.S.(5)			121,950		118,891		92,241		1,489		1,514		1,276		4.84			5.11			5.50
Total		$	263,224	$	258,365	$	224,248	$	3,283	$	3,435	$	2,597		4.95	%		5.33	%		4.61	%
Loans (net of unearned income)(9)
Consumer loans
In U.S. offices		$	299,069	$	306,273	$	329,520	$	5,346	$	5,410	$	6,755		7.09	%		7.09	%		8.16	%
In offices outside the U.S.(5)			151,124		153,352		179,660		3,339		3,236		4,709		8.77			8.46			10.43
Total consumer loans		$	450,193	$	459,625	$	509,180	$	8,685	$	8,646	$	11,464		7.65	%		7.55	%		8.96	%
Corporate loans
In U.S. offices		$	71,401	$	79,074	$	73,976	$	593	$	844	$	778		3.30	%		4.28	%		4.18	%
In offices outside the U.S.(5)			117,087		117,242		135,766		2,323		2,439		3,286		7.87			8.34			9.63
Total corporate loans		$	188,488	$	196,316	$	209,742	$	2,916	$	3,283	$	4,064		6.14	%		6.71	%		7.71	%
Total loans		$	638,681	$	655,941	$	718,922	$	11,601	$	11,929	$	15,528		7.21	%		7.29	%		8.59	%
Other interest-earning Assets		$	43,869	$	57,416	$	91,182	$	99	$	215	$	861		0.90	%		1.50	%		3.76	%
Total interest-earning Assets		$	1,615,505	$	1,588,059	$	1,692,238	$	18,678	$	19,671	$	26,130		4.59	%		4.97	%		6.14	%
Non-interest-earning assets(7)			253,316		262,840		357,433
Total Assets from discontinued operations		$	21,418	$	19,048	$	45,337
Total assets		$	1,890,239	$	1,869,947	$	2,095,008

(1)

Interest revenue excludes the taxable equivalent adjustments (based on the U.S. federal statutory tax rate of 35%) of $387 million, $82 million, and $51 million for the third quarter of 2009, the second quarter of 2009, and the third quarter of 2008, 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.

(5)

Average rates reflect prevailing local interest rates, including inflationary effects and monetary correction 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 the 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.

69

AVERAGE BALANCES AND INTEREST RATES—LIABILITIES AND EQUITY, AND NET INTEREST REVENUE(1)(2)(3)(4)

		Average Volume						Interest Expense						% Average Rate
In millions of dollars		3rd Qtr. 2009		2nd Qtr. 2009		3rd Qtr. 2008		3rd Qtr. 2009		2nd Qtr. 2009		3rd Qtr. 2008		3rd Qtr. 2009			2nd Qtr. 2009			3rd Qtr. 2008
Liabilities
Deposits
In U.S. offices
	Savings deposits(5)	$	173,999	$	173,168	$	161,437	$	613	$	999	$	611		1.40	%		2.31	%		1.51	%
	Other time deposits		62,256		57,869		54,928		224		278		554		1.43			1.93			4.01
In offices outside the U.S.(6)			459,142		428,188		464,429		1,461		1,563		3,750		1.26			1.46			3.21
Total		$	695,397	$	659,225	$	680,794	$	2,298	$	2,840	$	4,915		1.31	%		1.73	%		2.87	%
Federal funds purchased and securities loaned or sold under agreements to repurchase(7)
In U.S. offices		$	131,641	$	133,948	$	160,202	$	248	$	288	$	1,185		0.75	%		0.86	%		2.94	%
In offices outside the U.S.(6)			72,302		74,346		99,047		524		643		1,536		2.88			3.47			6.17
Total		$	203,943	$	208,294	$	259,249	$	772	$	931	$	2,721		1.50	%		1.79	%		4.18	%
Trading account liabilities(8)(9)
In U.S. offices		$	21,204	$	19,592	$	30,251	$	28	$	50	$	251		0.52	%		1.02	%		3.30	%
In offices outside the U.S.(6)			39,431		36,652		41,816		15		19		34		0.15			0.21			0.32
Total		$	60,635	$	56,244	$	72,067	$	43	$	69	$	285		0.28	%		0.49	%		1.57	%
Short-term borrowings
In U.S. offices		$	108,474	$	136,200	$	149,398	$	259	$	209	$	729		0.95	%		0.62	%		1.94	%
In offices outside the U.S.(6)			30,985		35,299		45,497		91		106		195		1.17			1.20			1.71
Total		$	139,459	$	171,499	$	194,895	$	350	$	315	$	924		1.00	%		0.74	%		1.89	%
Long-term debt(10)
In U.S. offices		$	318,610	$	296,324	$	323,788	$	2,952	$	2,427	$	3,460		3.68	%		3.29	%		4.25	%
In offices outside the U.S.(6)			27,447		29,318		36,375		265		260		421		3.83			3.56			4.60
Total		$	346,057	$	325,642	$	360,163	$	3,217	$	2,687	$	3,881		3.69	%		3.31	%		4.29	%
Total interest-bearing liabilities		$	1,445,491	$	1,420,904	$	1,567,168	$	6,680	$	6,842	$	12,726		1.83	%		1.93	%		3.23	%
Demand deposits in U.S. offices			34,592		19,584		7,326
Other non-interest-bearing liabilities(8)			250,768		267,055		351,379
Total liabilities from discontinued operations			14,189		12,122		30,467
Total liabilities		$	1,745,040	$	1,719,665	$	1,956,340
Citigroup equity(11)		$	143,547	$	148,448	$	131,771
Noncontrolling Interest			1,652		1,834		6,897
Total Equity		$	145,199	$	150,282	$	138,668
Total Liabilities and Equity		$	1,890,239	$	1,869,947	$	2,095,008
Net interest revenue as a percentage of average interest-earning assets(12)
In U.S. offices		$	947,414	$	944,819	$	976,773	$	5,694	$	6,452		6,424		2.38	%		2.74	%		2.62	%
In offices outside the U.S.(6)			668,091		643,240		715,465		6,304		6,377		6,980		3.74			3.98			3.88
Total		$	1,615,505	$	1,588,059	$	1,692,238	$	11,998	$	12,829	$	13,404		2.95	%		3.24	%		3.15	%

(1)

Interest revenue excludes the taxable equivalent adjustments (based on the U.S. federal statutory tax rate of 35%) of $387 million, $82 million, and $51 million for the third quarter of 2009, the second quarter of 2009, and the third quarter of 2008, 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.

(5)

Savings deposits consist of Insured Money Market Rate accounts, NOW accounts, and other savings deposits. The second quarter of 2009 interest expense includes the one-time FDIC special assessment of $333 million.

(6)

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

(7)

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

(8)

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

(9)

Interest expense on Trading account liabilities of the 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.

(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 Corporate 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.

70

AVERAGE BALANCES AND INTEREST RATES—ASSETS(1)(2)(3)(4)

		Average Volume				Interest Revenue				% Average Rate
In millions of dollars		Nine Months 2009		Nine Months 2008		Nine Months 2009		Nine Months 2008		Nine Months 2009			Nine Months 2008
Assets
Deposits with banks(5)		$	176,014	$	63,190	$	1,126	$	2,329		0.86	%		4.92	%
Federal funds sold and securities borrowed or purchased under agreements to resell(6)
In U.S. offices		$	133,427	$	172,482	$	1,541	$	4,344		1.54	%		3.36	%
In offices outside the U.S.(5)			61,534		76,851		866		3,407		1.88			5.92
Total		$	194,961	$	249,333	$	2,407	$	7,751		1.65	%		4.15	%
Trading account assets(7)(8)
In U.S. offices		$	140,210	$	235,157	$	5,437	$	9,623		5.18	%		5.47	%
In offices outside the U.S.(5)			119,351		161,297		3,089		3,939		3.46			3.26
Total		$	259,561	$	396,454	$	8,526	$	13,562		4.39	%		4.57	%
Investments(1)
In U.S. offices
	Taxable	$	122,563	$	111,467	$	4,722	$	3,469		5.15	%		4.16	%
	Exempt from U.S. income tax		16,511		13,059		591		433		4.79			4.43
In offices outside the U.S.(5)			115,930		96,486		4,581		3,930		5.28			5.44
Total		$	255,004	$	221,012	$	9,894	$	7,832		5.19	%		4.73	%
Loans (net of unearned income)(9)
Consumer loans
In U.S. offices		$	309,443	$	343,107	$	16,807	$	20,913		7.26	%		8.14	%
In offices outside the U.S.(5)			151,272		180,010		10,087		14,129		8.92			10.48
Total consumer loans		$	460,715	$	523,117	$	26,894	$	35,042		7.80	%		8.95	%
Corporate loans
In U.S. offices		$	76,986	$	75,177	$	2,217	$	2,529		3.85	%		4.49	%
In offices outside the U.S.(5)			117,745		147,278		7,274		10,312		8.26			9.35
Total corporate loans		$	194,731	$	222,455	$	9,491	$	12,841		6.52	%		7.71	%
Total loans		$	655,446	$	745,572	$	36,385	$	47,883		7.42	%		8.58	%
Other interest-earning assets		$	50,972	$	100,709	$	594	$	3,271		1.56	%		4.34	%
Total interest-earning assets		$	1,591,958	$	1,776,270	$	58,932	$	82,628		4.95	%		6.21	%
Non-interest-earning assets(7)			277,243		375,399
Total assets from discontinued operations			20,183		53,742
Total assets		$	1,889,384	$	2,205,411

(1)

Interest revenue excludes the taxable equivalent adjustments (based on the U.S. federal statutory tax rate of 35%) of $566 million and $164 million for the first nine months of 2009 and 2008, 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.

(5)

Average rates reflect prevailing local interest rates, including inflationary effects and monetary correction 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 the 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.

71

AVERAGE BALANCES AND INTEREST RATES—LIABILITIES AND EQUITY, AND NET INTEREST REVENUE(1)(2)(3)(4)

		Average Volume				Interest Expense				% Average Rate
In millions of dollars		Nine Months 2009		Nine Months 2008		Nine Months 2009		Nine Months 2008		Nine Months 2009			Nine Months 2008
Liabilities
Deposits
In U.S. offices
	Savings deposits(5)	$	170,715	$	166,799	$	2,245	$	2,334		1.76	%		1.87	%
	Other time deposits		60,469		59,210		918		1,946		2.03			4.39
In offices outside the U.S.(6)			432,057		486,320		4,823		11,912		1.49			3.27
Total		$	663,241	$	712,329	$	7,986	$	16,191		1.61	%		3.04	%
Federal funds purchased and securities loaned or sold under agreements to repurchase(7)
In U.S. offices		$	139,282	$	188,653	$	852	$	4,519		0.82	%		3.20	%
In offices outside the U.S.(6)			71,611		100,437		1,955		5,040		3.65			6.70
Total		$	210,893	$	289,090	$	2,807	$	9,559		1.78	%		4.42	%
Trading account liabilities(8)(9)
In U.S. offices		$	20,503	$	32,576	$	171	$	934		1.12	%		3.83	%
In offices outside the U.S.(6)			35,728		46,387		49		130		0.18			0.37
Total		$	56,231	$	78,963	$	220	$	1,064		0.52	%		1.80	%
Short-term borrowings
In U.S. offices		$	131,116	$	156,458	$	835	$	2,695		0.85	%		2.30	%
In offices outside the U.S.(6)			33,833		54,438		293		538		1.16			1.32
Total		$	164,949	$	210,896	$	1,128	$	3,233		0.91	%		2.05	%
Long-term debt(10)
In U.S. offices		$	308,201	$	312,940	$	8,199	$	10,745		3.56	%		4.59	%
In offices outside the U.S.(6)			30,274		37,885		839		1,358		3.71			4.79
Total		$	338,475	$	350,825	$	9,038	$	12,103		3.57	%		4.61	%
Total interest-bearing liabilities		$	1,433,789	$	1,642,103	$	21,179	$	42,150		1.97	%		3.43	%
Demand deposits in U.S. offices			23,186		7,865
Other non-interest bearing liabilities(8)			272,809		387,673
Total liabilities from discontinued operations			12,670		31,013
Total liabilities		$	1,742,454	$	2,068,654
Total Citigroup equity(11)		$	145,097	$	131,245
Noncontrolling interest			1,833		5,512
Total Equity		$	146,930	$	136,757
Total liabilities and stockholders' equity		$	1,889,384	$	2,205,411
Net interest revenue as a percentage of average interest-earning assets(12)
In U.S. offices		$	954,220	$	1,025,789	$	18,789	$	19,187		2.63	%		2.50	%
In offices outside the U.S.(6)			637,738		750,481		18,964		21,291		3.98			3.79
Total		$	1,591,958	$	1,776,270	$	37,753	$	40,478		3.17	%		3.04	%

(1)

Interest revenue excludes the taxable equivalent adjustments (based on the U.S. federal statutory tax rate of 35%) of $566 million and $164 million for the first nine months of 2009 and 2008, 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.

(5)

Savings deposits consist of Insured Money Market Rate accounts, NOW accounts, and other savings deposits. The second quarter of 2009 interest expense includes the one-time FDIC special assessment of $333 million.

(6)

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

(7)

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

(8)

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

(9)

Interest expense on Trading account liabilities of the 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.

(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 Corporate Treasury to CitiCapital 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.

72

ANALYSIS OF CHANGES IN INTEREST REVENUE(1)(2)(3)

	3rd Qtr. 2009 vs. 2nd Qtr. 2009									3rd Qtr. 2009 vs. 3rd Qtr. 2008
	Increase (Decrease) Due to Change in:									Increase (Decrease) Due to Change in:
In millions of dollars	Average Volume			Average Rate			Net Change			Average Volume			Average Rate			Net Change
Deposits with banks(4)	$	44		$	(108	)	$	(64	)	$	611		$	(1,090	)	$	(479	)
Federal funds sold and securities borrowed or purchased under agreements to resell
In U.S. offices	$	34		$	(73	)	$	(39	)	$	(122	)	$	(674	)	$	(796	)
In offices outside the U.S.(4)		39			(66	)		(27	)		(35	)		(656	)		(691	)
Total	$	73		$	(139	)	$	(66	)	$	(157	)	$	(1,330	)	$	(1,487	)
Trading account assets(5)
In U.S. offices	$	58		$	(175	)	$	(117	)	$	(872	)	$	(200	)	$	(1,072	)
In offices outside the U.S.(4)		77			(227	)		(150	)		(186	)		(225	)		(411	)
Total	$	135		$	(402	)	$	(267	)	$	(1,058	)	$	(425	)	$	(1,483	)
Investments(1)
In U.S. offices	$	25		$	(152	)	$	(127	)	$	98		$	375		$	473
In offices outside the U.S.(4)		38			(63	)		(25	)		376			(163	)		213
Total	$	63		$	(215	)	$	(152	)	$	474		$	212		$	686
Loans—consumer
In U.S. offices	$	(128	)	$	64		$	(64	)	$	(591	)	$	(818	)	$	(1,409	)
In offices outside the U.S.(4)		(48	)		151			103			(689	)		(681	)		(1,370	)
Total	$	(176	)	$	215		$	39		$	(1,280	)	$	(1,499	)	$	(2,779	)
Loans—corporate
In U.S. offices	$	(76	)	$	(175	)	$	(251	)	$	(26	)	$	(159	)	$	(185	)
In offices outside the U.S.(4)		(3	)		(113	)		(116	)		(417	)		(546	)		(963	)
Total	$	(79	)	$	(288	)	$	(367	)	$	(443	)	$	(705	)	$	(1,148	)
Total loans	$	(255	)	$	(73	)	$	(328	)	$	(1,723	)	$	(2,204	)	$	(3,927	)
Other interest-earning assets	$	(43	)	$	(73	)	$	(116	)	$	(309	)	$	(453	)	$	(762	)
Total interest revenue	$	17		$	(1,010	)	$	(993	)	$	(2,162	)	$	(5,290	)	$	(7,452	)

(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.

(3)

Detailed average volume, interest revenue and interest expense exclude discontinued operations.

(4)

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

(5)

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.

73

ANALYSIS OF CHANGES IN INTEREST EXPENSE AND NET INTEREST REVENUE(1)(2)(3)

	3rd Qtr. 2009 vs. 2nd Qtr. 2009									3rd Qtr. 2009 vs. 3rd Qtr. 2008
	Increase (Decrease) Due to Change in:									Increase (Decrease) Due to Change in:
In millions of dollars	Average Volume			Average Rate			Net Change			Average Volume			Average Rate			Net Change
Deposits
In U.S. offices	$	28		$	(468	)	$	(440	)	$	99		$	(427	)	$	(328	)
In offices outside the U.S.(4)		108			(210	)		(102	)		(42	)		(2,247	)		(2,289	)
Total	$	136		$	(678	)	$	(542	)	$	57		$	(2,674	)	$	(2,617	)
Federal funds purchased and securities loaned or sold under agreements to repurchase
In U.S. offices	$	(5	)	$	(35	)	$	(40	)	$	(181	)	$	(756	)	$	(937	)
In offices outside the U.S.(4)		(17	)		(102	)		(119	)		(340	)		(672	)		(1,012	)
Total	$	(22	)	$	(137	)	$	(159	)	$	(521	)	$	(1,428	)	$	(1,949	)
Trading account liabilities(5)
In U.S. offices	$	4		$	(26	)	$	(22	)	$	(59	)	$	(164	)	$	(223	)
In offices outside the U.S.(4)		1			(5	)		(4	)		(2	)		(17	)		(19	)
Total	$	5		$	(31	)	$	(26	)	$	(61	)	$	(181	)	$	(242	)
Short-term borrowings
In U.S. offices	$	(49	)	$	99		$	50		$	(164	)	$	(306	)	$	(470	)
In offices outside the U.S.(4)		(13	)		(2	)		(15	)		(52	)		(52	)		(104	)
Total	$	(62	)	$	97		$	35		$	(216	)	$	(358	)	$	(574	)
Long-term debt
In U.S. offices	$	191		$	334		$	525		$	(55	)	$	(453	)	$	(508	)
In offices outside the U.S.(4)		(17	)		22			5			(93	)		(63	)		(156	)
Total	$	174		$	356		$	530		$	(148	)	$	(516	)	$	(664	)
Total interest expense	$	231		$	(393	)	$	(162	)	$	(889	)	$	(5,157	)	$	(6,046	)
Net interest revenue	$	(214	)	$	(617	)	$	(831	)	$	(1,273	)	$	(133	)	$	(1,406	)

(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.

(3)

Detailed average volume, interest revenue and interest expense exclude discontinued operations.

(4)

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

(5)

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.

74

ANALYSIS OF CHANGES IN INTEREST REVENUE, INTEREST EXPENSE, AND NET INTEREST REVENUE(1)(2)(3)

	Nine Months 2009 vs. Nine Months 2008
	Increase (Decrease) Due to Change in:
In millions of dollars	Average Volume			Average Rate			Net Change(2)
Deposits at interest with banks(4)	$	1,809		$	(3,012	)	$	(1,203	)
Federal funds sold and securities borrowed or purchased under agreements to resell
In U.S. offices	$	(827	)	$	(1,976	)	$	(2,803	)
In offices outside the U.S.(4)		(574	)		(1,967	)		(2,541	)
Total	$	(1,401	)	$	(3,943	)	$	(5,344	)
Trading account assets(5)
In U.S. offices	$	(3,705	)	$	(481	)	$	(4,186	)
In offices outside the U.S.(4)		(1,074	)		224			(850	)
Total	$	(4,779	)	$	(257	)	$	(5,036	)
Investments(1)
In U.S. offices	$	491		$	920		$	1,411
In offices outside the U.S.(4)		771			(120	)		651
Total	$	1,262		$	800		$	2,062
Loans—consumer
In U.S. offices	$	(1,946	)	$	(2,160	)	$	(4,106	)
In offices outside the U.S.(4)		(2,081	)		(1,961	)		(4,042	)
Total	$	(4,027	)	$	(4,121	)	$	(8,148	)
Loans—corporate
In U.S. offices	$	60		$	(372	)	$	(312	)
In offices outside the U.S.(4)		(1,914	)		(1,124	)		(3,038	)
Total	$	(1,854	)	$	(1,496	)	$	(3,350	)
Total loans	$	(5,881	)	$	(5,617	)	$	(11,498	)
Other interest-earning assets	$	(1,165	)	$	(1,512	)	$	(2,677	)
Total interest revenue	$	(10,155	)	$	(13,541	)	$	(23,696	)
Deposits
In U.S. offices	$	96		$	(1,212	)	$	(1,116	)
In offices outside the U.S.(4)		(1,206	)		(5,883	)		(7,089	)
Total	$	(1,110	)	$	(7,095	)	$	(8,205	)
Federal funds purchased and securities loaned or sold under agreements to repurchase
In U.S. offices	$	(954	)	$	(2,713	)	$	(3,667	)
In offices outside the U.S.(4)		(1,192	)		(1,893	)		(3,085	)
Total	$	(2,146	)	$	(4,606	)	$	(6,752	)
Trading account liabilities(5)
In U.S. offices	$	(262	)	$	(501	)	$	(763	)
In offices outside the U.S.(4)		(25	)		(56	)		(81	)
Total	$	(287	)	$	(557	)	$	(844	)
Short-term borrowings
In U.S. offices	$	(380	)	$	(1,480	)	$	(1,860	)
In offices outside the U.S.(4)		(185	)		(60	)		(245	)
Total	$	(565	)	$	(1,540	)	$	(2,105	)
Long-term debt
In U.S. offices	$	(160	)	$	(2,386	)	$	(2,546	)
In offices outside the U.S.(4)		(244	)		(275	)		(519	)
Total	$	(404	)	$	(2,661	)	$	(3,065	)
Total interest expense	$	(4,512	)	$	(16,459	)	$	(20,971	)
Net interest revenue	$	(5,643	)	$	2,918		$	(2,725	)

(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.

(3)

Detailed average volume, interest revenue and interest expense exclude discontinued operations.

(4)

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

(5)

Interest expense on Trading account liabilities of the 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.

75

CAPITAL RESOURCES AND LIQUIDITY

CAPITAL RESOURCES

Overview

        Generally, capital is generated by earnings from Citi's operating businesses. Primarily as a result of the exchange offers, Citigroup increased its Tier 1 Common by $63 billion from the second quarter of 2009 to $90 billion. In addition, the Company's Tangible Common Equity (TCE) increased by $62 billion from the second quarter of 2009 to $102 billion at September 30, 2009. Tier 1 Common, TCE and related ratios are used and relied on by the Company's banking regulators as a measure of capital adequacy, but are considered "non-GAAP financial measures" for SEC purposes. See "Capital Ratios," "Components of Capital Under Regulatory Guidelines" and "Tangible Common Equity" below for additional information on these measures.

        The Company may also augment its capital through issuances of common stock, convertible preferred stock, preferred stock, subordinated debt underlying trust preferred securities, and equity issued through awards under employee benefit plans. Future business results of the Company, including events such as corporate dispositions, also affect the Company's capital levels. Moreover, changes that the FASB has adopted regarding off-balance sheet assets, consolidation and sale treatment will have an incremental impact on Citi's capital ratios. For more information on this, see Note 1 "Future Application of Accounting Standards" and Note 15 to the Consolidated Financial Statements, including "Funding, Liquidity Facilities and Subordinate Interests."

        Capital is used primarily to support assets in the Company's businesses and to absorb expected and unexpected market, credit or operational losses. While capital may be used for other purposes, such as to pay dividends or repurchase common stock, the Company's ability to utilize its capital for these purposes is currently restricted due to its participation in TARP and other government programs, as explained more fully in the Company's 2008 Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q for the quarters ended June 30, 2009 and March 31, 2009, respectively.

        Citigroup's capital management framework is designed to ensure that Citigroup and its principal subsidiaries maintain sufficient capital consistent with the Company's risk profile, all applicable regulatory standards and guidelines, and 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 oversees the capital management process mainly through Citigroup's Finance and Asset and Liability Committee (FinALCO). The Committee 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, the Committee's responsibilities include: determining the financial structure of Citigroup and its principal subsidiaries; ensuring that Citigroup and its regulated entities are adequately capitalized; 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 risk-based capital guidelines issued by the FRB. Historically, capital adequacy has been measured, in part, based on two risk-based capital ratios, the Tier 1 and Total Capital (Tier 1 + Tier 2 Capital) ratios. Tier 1 Capital consists of core capital, while Total Capital also includes other items such as subordinated debt and allowance for credit losses. Both measures of capital adequacy are stated as a percentage of risk-weighted assets. In conjunction with the conclusion of the Supervisory Capital Assessment Program (SCAP), the banking regulators developed a new measure of capital called Tier 1 Common defined as Tier 1 Capital less non-common elements including qualifying perpetual preferred stock, qualifying noncontrolling interests in subsidiaries 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, under which 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 an FRB directive to maintain higher capital levels. The following table sets forth Citigroup's regulatory capital ratios as of September 30, 2009 and December 31, 2008.

76

Citigroup Regulatory Capital Ratios

	Sept. 30, 2009			Dec. 31, 2008
Tier 1 Common		9.12	%		2.30	%
Tier 1 Capital		12.76			11.92
Total Capital (Tier 1 and Tier 2)		16.58			15.70
Leverage(1)		6.87			6.08

(1)

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

        As noted in the table above, Citigroup was "well capitalized" under the federal bank regulatory agency definitions as of September 30, 2009 and December 31, 2008.

Components of Capital Under Regulatory Guidelines

In millions of dollars		Sept. 30, 2009			Dec. 31, 2008(1)
Tier 1 Common
Citigroup common stockholders' equity		$	140,530		$	70,966
Less: Net unrealized losses on securities available-for-sale, net of tax(2)			(4,242	)		(9,647	)
Less: Accumulated net losses on cash flow hedges, net of tax			(4,177	)		(5,189	)
Less: Pension liability adjustment, net of tax(3)			(2,619	)		(2,615	)
Less: Cumulative effect included in fair value of financial liabilities attributable to the change in own credit worthiness, net of tax(4)			1,862			3,391
Less: Disallowed deferred tax assets(5)			21,917			23,520
Less: Intangible assets:
	Goodwill(6)		26,436			27,132
	Other disallowed intangible assets(6)		10,179			10,607
Other			(892	)		(840	)
Total Tier 1 Common		$	90,282		$	22,927
Qualifying perpetual preferred stock		$	312		$	70,664
Qualifying mandatorily redeemable securities of subsidiary trusts			34,403			23,899
Qualifying noncontrolling interests			1,288			1,268
Total Tier 1 Capital		$	126,285		$	118,758
Tier 2 Capital
Allowance for credit losses(7)		$	12,701		$	12,806
Qualifying subordinated debt(8)			24,355			24,791
Net unrealized pretax gains on available-for- sale equity securities(2)			753			43
Total Tier 2 Capital		$	37,809		$	37,640
Total Capital (Tier 1 and Tier 2)		$	164,094		$	156,398
Risk-Weighted Assets(9)		$	989,711		$	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 pretax net unrealized gains on available-for-sale equity securities with readily determinable fair values.

(3)

The FRB granted interim capital relief for the impact of adopting ASC 715-20-65 (SFAS 158).

(4)

The impact of including Citigroup's own credit rating in valuing 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 the Company's approximately $38 billion of net deferred tax assets at September 30, 2009, approximately $13 billion of such assets were includable without limitation in regulatory capital pursuant to risk-based capital guidelines, while approximately $22 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. The Company's other approximately $3 billion of net deferred tax assets at September 30, 2009 primarily represented the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines. The Company had approximately $24 billion of disallowed deferred tax assets at December 31, 2008.

(6)

Includes goodwill/intangible assets of related to assets of discontinued operations held for sale and assets held for sale.

(7)

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

(8)

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

(9)

Includes risk-weighted credit equivalent amounts, net of applicable bilateral netting agreements, of $70.3 billion for interest rate, commodity, and equity derivative contracts, foreign-exchange contracts, and credit derivatives as of September 30, 2009, compared with $102.9 billion as of December 31, 2008. Market-risk-equivalent assets included in risk-weighted assets amounted to $91.1 billion at September 30, 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 for certain intangible assets and any excess allowance for credit losses.

Recent Actions Impacting Citigroup's Risk-Weighted Assets

        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 during the first and second quarters of 2009. 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.

        With respect to the Master Trust, in the first quarter of 2009, Citi subordinated a portion of its "seller's interest," which represents a senior interest in trust receivables, thus making those cash flows available to pay investor coupons each month. In addition, during the second quarter of 2009, a subordinated note with a $3 billion principal amount was issued by the Master Trust and retained by Citibank (South Dakota), N.A. in order to provide additional credit support for the senior note classes. The note is classified as a held-to-maturity investment security.

        With respect to the Omni Trust, in the second quarter of 2009, subordinated notes with a principal amount of $2 billion were issued by the trust and retained by Citibank (South Dakota), N.A. in order to provide additional credit support for the senior note classes. The notes are classified as Trading account assets. These notes are in addition to a $265 million subordinated note issued by Omni Trust and retained by Citibank (South Dakota), N.A. in the fourth quarter of 2008 for the same purpose of providing additional credit support for senior noteholders.

        With respect to the Broadway Trust, in the second quarter of 2009, subordinated notes with a principal amount of $82 million were issued by the trust and retained by Citibank, N.A. in order to provide additional credit support for the senior note classes. The notes are classified as Trading account assets.

        As a result of these actions, based on the applicable regulatory capital rules, Citigroup included the sold assets of the Master and Omni Trusts (commencing with the first quarter of

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2009) and the Broadway Trust (commencing with the second quarter of 2009) in its risk-weighted assets for purposes of calculating its risk-based capital ratios. 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 September 30, 2009.

Common Equity

        Citigroup's common stockholders' equity increased by approximately $70 billion to $141 billion, and represented 7.4% of total assets as of September 30, 2009, from $71 billion and 3.7% at December 31, 2008.

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

In billions of dollars
Common equity, December 31, 2008	$	71.0
Net income(1)		6.0
Employee benefit plans and other activities		0.5
Dividends		(3.4	)
Exchange offers(1)		58.9
Net change in Accumulated other comprehensive income (loss), net of tax		7.5
Common equity, September 30, 2009	$	140.5

(1)

Net income includes $0.9 billion related to the conversion of trust preferred securities held by public investors into common stock as described under "Significant Events in the Third Quarter of 2009—Exchange Offers" above.

        As of September 30, 2009, $6.7 billion of stock repurchases remained under authorized repurchase programs. No material repurchases were made in 2008 and the first nine months of 2009.

Tangible Common Equity

        TCE, as defined by Citigroup, represents Common equity less Goodwill and Intangible assets (excluding MSRs) net of the related net deferred tax liabilities. Other companies may calculate TCE in a manner different from Citigroup. Citi's TCE was $102.3 billion at September 30, 2009 and $31.1 billion at December 31, 2008.

        The TCE ratio (TCE divided by risk-weighted assets—see "Components of Capital Under Regulatory Guidelines" above) was 10.3% at September 30, 2009 and 3.1% at December 31, 2008. A reconciliation of Citigroup's total stockholders' equity to TCE follows:

In millions of dollars, except ratio			September 30, 2009			December 31, 2008
Total Citigroup Stockholders' Equity			$	140,842		$	141,630
Less:
	Preferred Stock			312			70,664
Common Equity			$	140,530		$	70,966
Less:
	Goodwill—as reported			25,423			27,132
	Intangible Assets (other than MSRs)—as reported			8,957			14,159
	Goodwill and Intangible Assets—recorded as Assets of Discontinued Operations Held for Sale			3,856			—
	Goodwill and Intangible Assets— recorded as Assets held-for-sale			1,377			—
		Less: Related Net Deferred Tax Liabilities		1,381			1,382
Tangible Common Equity (TCE)			$	102,298		$	31,057
Tangible Assets
GAAP Assets—as reported			$	1,888,599		$	1,938,470
Less:
	Goodwill—as reported			25,423			27,132
	Intangible Assets (other than MSRs)—as reported			8,957			14,159
	Goodwill and Intangible Assets— recorded as Assets of Discontinued Operations Held for Sale			3,856			—
	Goodwill and Intangible Assets— recorded as Assets held-for-sale			1,377			—
	Related deferred tax assets			1,272			1,285
Tangible Assets (TA)			$	1,847,714		$	1,895,894
Risk-Weighted Assets (RWA) under "Components of Capital Under Regulatory Guidelines"			$	989,711		$	996,247
TCE/TA RATIO				5.5	%		1.6	%
TCE RATIO (TCE/RWA)				10.3	%		3.1	%

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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 FRB's guidelines. 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 + 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 September 30, 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	Sept. 30, 2009			Dec. 31, 2008
Tier 1 Capital	$	95.8		$	71.0
Total Capital (Tier 1 and Tier 2)		110.8			108.4
Tier 1 Capital Ratio		15.16	%		9.94	%
Total Capital Ratio (Tier 1 and Tier 2)		17.53			15.18
Leverage Ratio(1)		8.37			5.82

(1)

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

        Citibank, N.A. had a net loss of $2.3 billion for the first nine months of 2009.

        In addition, during the first nine months of 2009, Citibank, N.A. received capital contributions from its immediate parent company, Citicorp, in the amount of $30.5 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 $6.5 billion outstanding at September 30, 2009, reflecting the redemption of $21.7 billion of subordinated notes in the first nine months of 2009.

        The significant events in the latter half of 2008 and the first nine months of 2009 impacting the capital of Citigroup also affected, or could affect, Citibank, N.A. which is subject to separate banking regulation and examination.

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        The following table presents the estimated sensitivity of Citigroup's and Citibank, N.A.'s capital ratios to changes of $100 million of Tier 1 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 September 30, 2009. This information is provided solely for the purpose of analyzing the impact that a change in the Company'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.

	Tier 1 Common Ratio				Tier 1 Capital Ratio				Total Capital Ratio				Leverage Ratio
	Impact of $100 million change in Tier 1 Common		Impact of $1 billion change in risk-weighted assets		Impact of $100 million change in Tier 1 Capital		Impact of $1 billion change in risk-weighted assets		Impact of $100 million change in total capital		Impact of $1 billion change in risk-weighted assets		Impact of $100 million change in Tier 1 Capital		Impact of $1 billion change in adjusted average total assets
Citigroup		1.0 bps		0.9 bps		1.0 bps		1.3 bps		1.0 bps		1.7 bps		0.5 bps		0.4 bps
Citibank, N.A.		—		—		1.6 bps		2.4 bps		1.6 bps		2.8 bps		0.9 bps		0.7 bps

Broker-Dealer Subsidiaries

        At September 30, 2009, Citigroup Global Markets Inc., 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 $9.1 billion, which exceeded the minimum requirement by $8.4 billion.

        In addition, certain of the Company'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. The Company's broker-dealer subsidiaries were in compliance with their capital requirements at September 30, 2009. The requirements applicable to these subsidiaries in the U.S. and in particular other jurisdictions are the subject of political debate and potential change in light of recent events.

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. The Company 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 debate and potential change in light of recent events.

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FUNDING AND LIQUIDITY

Overview

        Because Citigroup is a bank holding company, substantially all of its net earnings are generated within its operating subsidiaries. These subsidiaries make funds available to Citigroup, primarily in the form of dividends. Citigroup's liquidity management is structured to optimize the free flow of funds through the Company's legal and regulatory structure; however, various constraints, discussed below, limit certain subsidiaries' dividend-paying abilities. Consistent with these constraints, Citigroup's primary objectives for 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

        As a result of continued deleveraging, deposit growth, term securitization under government and non-government programs, and the issuance of long-term debt under government guarantees and non-guaranteed debt, over the last several quarters, Citigroup has substantially increased its cash balances and reduced its short-term borrowings. In addition, as of September 30, 2009, Citigroup had largely eliminated utilization of short-term government funding programs.

        Beginning in October 2008, Citi and certain of its subsidiaries participated in the FDIC's TLGP pursuant to which certain qualifying senior unsecured debt issued by such entities is guaranteed, pursuant to the applicable time period, in amounts up to 125% of the qualifying debt for each qualifying entity (see "Government Programs—FDIC's Temporary Liquidity Guarantee Program" above). As of September 30, 2009, Citigroup and its affiliates have issued a total of approximately $54.7 billion of long-term debt that is covered under the FDIC guarantee. Also as of September 30, 2009, Citigroup, through its subsidiaries, has issued approximately $4.37 billion in commercial paper and interbank deposits backed by the FDIC program.

        The TLGP expired on October 31, 2009 and Citigroup and its affiliates have elected not to participate in any FDIC- approved extension of the program. In anticipation of the expiration of the program, and as market conditions began to improve, Citigroup and its first tier subsidiaries have issued $20 billion of non-guaranteed debt outside of TLGP over the past six months. Such issuances have been at various maturities, with a weighted average maturity of over 10 years, in multiple currencies. In addition, beginning October 1, 2009, Citigroup has been issuing commercial paper, of any tenor, outside of the TLGP and the Company currently anticipates that commercial paper will continue to be an important funding source during 2010, although not at 2008/2009 levels.

        At September 30, 2009, long-term debt and commercial paper outstanding for Citigroup, CGMHI, Citigroup Funding Inc. (CFI) and other Citigroup subsidiaries, collectively, were as follows:

In billions of dollars	Citigroup parent company		CGMHI(1)		CFI(1)		Other Citigroup Subsidiaries
Long-term debt	$	215.0	$	15.4	$	51.2	$	98.0	(2)
Commercial paper	$	—	$	—	$	10.0	$	0.4

(1)

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

(2)

At September 30, 2009, approximately $30.6 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 four quarters.

In billions of dollars		4Q08		1Q09		2Q09			3Q09			Total
Debt issued under TLGP guarantee		$	5.8	$	21.9	$	17.0		$	10.0		$	54.7
Debt issued without TLGP guarantee:
	Citigroup parent company/CFI		0.3		2.0		7.4			12.6			22.3
	Other Citigroup subsidiaries		0.5		0.5		10.1	(1)		7.9	(2)		19.0
Total		$	6.6	$	24.4	$	34.5		$	30.5		$	96.0

(1)

Includes $8.5 billion issued by The Student Loan Corporation through the U.S. government sponsored Department of Education Conduit Facility, and $1 billion issued by Citigroup Pty. Ltd. in Australia and guaranteed by the Commonwealth of Australia.

(2)

Includes $3.3 billion issued by The Student Loan Corporation through the U.S. government sponsored Department of Education Conduit Facility, and $1 billion issued by Citigroup Pty. Ltd. in Australia and guaranteed by the Commonwealth of Australia.

        See Note 12 to the Consolidated Financial Statements for further detail on Citigroup's and its affiliates' long-term debt and commercial paper outstanding.

        Outside of long-term debt funding, Citi has been actively building its structural liquidity in two important ways. First, Citi has focused on growing a geographically diverse retail and corporate deposit base which stood at approximately $833 billion as of September 30, 2009, up $28 billion compared to June 30, 2009. On a volume basis, deposit increases were noted 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 on a volume basis. Citi's deposit base has increased sequentially over each of the last five quarters. These deposits are diversified across products and regions, with approximately 61% outside of the U.S. This diversification provides the Company 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.

        Second, total assets as of September 30, 2009 have declined 8% as compared to September 30, 2008. Loans, which are one of the Company's most illiquid assets, are down $107 billion, or approximately 15%.

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        As of September 30, 2009, Citigroup and affiliates liquidity portfolio and broker-dealer "cash box" totaled $76.0 billion as compared with $66.8 billion at December 31, 2008 and $50.5 billion at September 30, 2008, and Citigroup's bank subsidiaries had an aggregate of approximately $148.8 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 and Bank of Japan), compared with approximately $72 billion at December 31, 2008. These amounts are in addition to cash deposited from the broker-dealer "cash box" noted above. Citigroup's bank subsidiaries also have significant additional liquidity resources through unencumbered highly liquid securities and other assets 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 liquidity value of the liquid securities was $59.4 billion at September 30, 2009 compared with $53.3 billion at June 30, 2009. Significant amounts of cash and liquid securities are also available in other Citigroup entities.

        As a result of the actions described above and the Company's current funding levels, management currently believes Citi is largely pre-funded heading into 2010, with a deliberately liquid and flexible balance sheet. The combined parent and broker-dealer entities maintain sufficient liquidity to meet all maturing unsecured debt obligations due within a one-year time horizon, without accessing the unsecured markets.

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 OCC, 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 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 the third quarter of 2009.

Non-Banking Subsidiaries—Constraints on Dividends

        Citigroup's non-bank subsidiaries, including Citigroup Global Market Holdings Inc. (CGMHI), are generally not subject to regulatory restrictions on dividends. However, the ability of CGMHI to declare dividends can be restricted by capital considerations of its broker-dealer subsidiaries.

        CGMHI's consolidated balance sheet is liquid, with the vast majority of its assets consisting of marketable securities and collateralized short-term financing agreements arising from securities transactions. CGMHI monitors and evaluates the adequacy of its capital and borrowing base on a daily basis to maintain liquidity and to ensure that its capital base supports the regulatory capital requirements of its subsidiaries.

        Some of Citigroup's non-bank subsidiaries, including CGMHI, 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 a bank holding company and certain of its non-bank subsidiaries can borrow or obtain credit from Citigroup's subsidiary depository institutions or engage in certain other transactions with them. In general, these restrictions require that transactions be on arm's-length terms and be secured by designated amounts of specified collateral. See Note 12 to the Consolidated Financial Statements.

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® Table of Contents

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 highly dependent on its credit ratings. The table below indicates the current ratings for Citigroup. Generally, since May of 2009, Citigroup's ratings have largely been consistent and stable.

        As a result of the Citigroup guarantee, changes in ratings and ratings outlooks for CFI are the same as those of Citigroup noted above.

Citigroup's Debt Ratings as of September 30, 2009

	Citigroup Inc.			Citigroup Funding Inc.			Citibank, N.A.
	Senior debt	Commercial paper		Senior debt	Commercial paper		Long- term	Short- 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

        Ratings downgrades by Fitch Ratings, Moody's Investors Service or Standard & Poor's have had and could continue to have impacts on funding and liquidity, and could also have further explicit 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 would likely impact Citigroup Inc.'s commercial paper/short-term rating. As of September 30, 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 approximately $15.9 billion funding requirement in the form of collateral and cash obligations. Further, as of September 30, 2009, a one-notch downgrade of the senior debt/long-term ratings of Citibank, N.A. would result in an approximately $4.4 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.

        As a result of the adoption of SFAS No. 166 and SFAS 167 (see Note 1 to the Consolidated Financial Statements), certain credit rating agencies have raised concerns about the loss of GAAP sale treatment in certain securitization transactions and the resulting effects under the FDIC's securitization rule. Specifically, under the FDIC's securitization rule, so long as a securitization is accounted for as a sale for GAAP purposes and certain other conditions are satisfied, the FDIC, when acting as conservator or receiver of an insolvent bank, will also treat the transferred assets as sold and thus surrender its rights to reclaim the financial assets transferred in the securitization. With the adoption of SFAS 166 and SFAS 167, GAAP sales treatment will be eliminated in certain securitizations, thus potentially putting securitized assets at risk of seizure by the FDIC in cases of conservatorship or receivership.

        The FDIC is considering a revision to its current regulations that would continue to recognize the legal isolation of securitized assets after the adoption of SFAS 166 and SFAS 167; however, it is unclear at this time what changes to the rules, if any, will be made or if the affected securitization structures will need to be modified in order to comply with those rules. If the FDIC does not act and/or if the affected securitization vehicles are unable to take appropriate steps to restructure their programs, the bond ratings of certain notes issued by these securitization vehicles, including Citi's credit card securitization vehicles, could be lowered or withdrawn. In addition, these securitization vehicles may be unable to issue new bonds with a rating that is higher than the sponsoring bank's then-current rating.

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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 Local Consumer Lending. 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 about the Company's securitization activities and involvement in SPEs, see Note 15 to the Consolidated Financial Statements.

        The following tables describe certain characteristics of assets owned by certain identified significant unconsolidated variable interest entities (VIEs) as of September 30, 2009. These VIEs and the Company's exposure to the VIEs are described in Note 15 to the Consolidated Financial Statements.

        See also Note 1 to the Consolidated Financial Statements, "Elimination of QSPEs and Changes in the Consolidation Model for Variable Interest Entities."

				Credit rating distribution
Citi-Administered Asset-Backed Commercial Paper Conduits	Total assets (in billions)		Weighted average life	AAA			AA			A			BBB/BBB+ and below
	$	39.7	4.55 years		41	%		44	%		11	%		4	%

Asset class	% of total portfolio
Student loans		31	%
Trade receivables		9	%
Credit cards and consumer loans		4	%
Portfolio finance		11	%
Commercial loans and corporate credit		17	%
Export finance		19	%
Auto		5	%
Residential mortgage		4	%
Total		100	%

				Credit rating distribution
Collateralized Debt and Loan Obligations	Total assets (in billions)		Weighted average life	A or higher			BBB			BB/B			CCC			Unrated
Collateralized debt obligations (CDOs)	$	16.1	3.9 years		12	%		12	%		12	%		49	%		15	%
Collateralized loan obligations (CLOs)	$	13.8	6.6 years		1	%		1	%		45	%		8	%		45	%

	Credit rating distribution
Municipal Securities Tender Option Bond Trusts (TOB)	Total assets (in billions)		Weighted average life	AAA/Aaa			AA/Aa1 – AA-/Aa3			Less than AA-/Aa3
Customer TOB trusts (not consolidated)	$	8.5	12.4 years		12	%		85	%		3	%
Proprietary TOB trusts (consolidated and non-consolidated)	$	13.0	16.3 years		8	%		77	%		15	%
QSPE TOB trusts (not consolidated)	$	0.7	10.9 years		88	%		12	%		0	%

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CONTRACTUAL OBLIGATIONS

        See the Company's 2008 Annual Report on Form 10-K and Note 12 to the Consolidated Financial Statements, herein, for a discussion of contractual obligations.

FAIR VALUATION

        For a discussion of fair value of assets and liabilities, see Note 17 and Note 18 to the Consolidated Financial Statements.

CONTROLS AND PROCEDURES

Disclosure

        The Company's management, with the participation of the Company's CEO and CFO, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of September 30, 2009 and, based on that evaluation, the CEO and CFO have concluded that at that date the Company's disclosure controls and procedures were effective.

Financial Reporting

        There were no changes in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter ended September 30, 2009 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

FORWARD-LOOKING STATEMENTS

        Certain statements in this Form 10-Q, including but not limited to statements included within the "Management's Discussion and Analysis," 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 the Company'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 those described below:

•

the factors listed and described under "Risk Factors" in Citigroup's 2008 Annual Report on Form 10-K;

•

the Company's ability to continue to successfully execute its strategy in winding down Citi Holdings;

•

Citi's reputation and the continued strength and recognition of the Company's brand name on a global basis;

•

Citi's credit ratings and the credit ratings of our securitizations;

•

the Company's ability to continue to retain and motivate its employee talent, as well as attract new talent, particularly as a result of significant compensation restrictions imposed by recent government and legislative actions;

•

the realization of the Company's recognized net deferred tax asset at September 30, 2009 and the effect that an ownership change (as defined in Section 382 of the Internal Revenue Code) could have on the Company's ability to utilize its deferred tax asset, which is a component of TCE, to offset future taxable income;

•

the impact of The Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act) on the Company's credit card businesses;

•

the effectiveness of Citi's loan modification programs (both Citi-instituted programs and the Home Affordable Modification Program (HAMP)) and their impact on Citi's future results, including delinquency trends, loan loss reserves and net credit losses;

•

the impact that FASB-adopted changes regarding off-balance sheet assets, consolidation and sale treatment could have on Citi's financial statements and capital ratios;

•

the effectiveness of the hedging products used in connection with the Special Asset Pool's trading positions in U.S. subprime RMBS and related products, including ABS CDOs, in the event of material changes in market conditions; and

•

the outcome of legal, regulatory, legislative, judicial and other proceedings, both within and outside of the U.S.

85

Citigroup Inc.

CONSOLIDATED FINANCIAL STATEMENTS
AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

		Page No.
Financial Statements:
	Consolidated Statement of Income (Unaudited)—Three and Nine Months Ended September 30, 2009 and 2008	87
	Consolidated Balance Sheet—September 30, 2009 (Unaudited) and December 31, 2008	88
	Consolidated Statement of Changes in Equity (Unaudited)—Nine Months Ended September 30, 2009 and 2008	89
	Consolidated Statement of Cash Flows (Unaudited)—Nine Months Ended Sept 30, 2009 and 2008	91
	Consolidated Balance Sheet—Citibank, N.A. and Subsidiaries—September 30, 2009 (Unaudited) and December 31, 2008	92
Notes to Consolidated Financial Statements (Unaudited) :
	Note 1—Basis of Presentation	93
	Note 2—Discontinued Operations	99
	Note 3—Business Segments	101
	Note 4—Interest Revenue and Expense	102
	Note 5—Commissions and Fees	103
	Note 6—Retirement Benefits	104
	Note 7—Restructuring	105
	Note 8—Earnings Per Share	108
	Note 9—Trading Account Assets and Liabilities	109
	Note 10—Investments	110
	Note 11—Goodwill and Intangible Assets	120
	Note 12—Debt	122
	Note 13—Preferred Stock	125
	Note 14—Changes in Accumulated Other Comprehensive Income (Loss)	127
	Note 15—Securitizations and Variable Interest Entities	128
	Note 16—Derivatives Activities	150
	Note 17—Fair-Value Measurement	158
	Note 18—Fair-Value Elections	172
	Note 19—Fair Value of Financial Instruments	178
	Note 20—Guarantees	179
	Note 21—Contingencies	184
	Note 22—Citibank, N.A. Equity (Unaudited)	185
	Note 23—Subsequent Events	186
	Note 24—Condensed Consolidating Financial Statement Schedules	186

86

CONSOLIDATED FINANCIAL STATEMENTS

CITIGROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME (Unaudited)

Citigroup Inc. and Subsidiaries

		Three months ended September 30,						Nine months ended September 30,
In millions of dollars, except per share amounts		2009			2008			2009			2008
Revenues
Interest revenue		$	18,678		$	26,130		$	58,932		$	82,628
Interest expense			6,680			12,726			21,179			42,150
Net interest revenue		$	11,998		$	13,404		$	37,753		$	40,478
Commissions and fees		$	3,218		$	3,208		$	12,823		$	10,348
Principal transactions			1,660			(3,013	)		5,763			(15,447	)
Administration and other fiduciary fees			1,085			2,081			4,163			6,479
Realized gains (losses) on sales of investments			427			150			1,719			376
Other-than-temporary impairment losses on investments(1)
	Gross impairment losses		(2,453	)		(755	)		(6,161	)		(1,239	)
	Less: Impairments recognized in OCI		1,741			—			4,006			—
	Net impairment losses recognized in earnings	$	(712	)	$	(755	)	$	(2,155	)	$	(1,239	)
Insurance premiums			763			823			2,263			2,513
Other revenue			1,951			360			12,551			2,445
Total non-interest revenues		$	8,392		$	2,854		$	37,127		$	5,475
Total revenues, net of interest expense		$	20,390		$	16,258		$	74,880		$	45,953
Provisions for credit losses and for benefits and claims
Provision for loan losses		$	8,771		$	8,943		$	30,919		$	21,503
Policyholder benefits and claims			324			274			964			809
Provision for unfunded lending commitments			—			(150	)		195			(293	)
Total provisions for credit losses and for benefits and claims		$	9,095		$	9,067		$	32,078		$	22,019
Operating expenses
Compensation and benefits		$	6,136		$	7,544		$	18,730		$	24,798
Premises and equipment			1,035			1,342			3,209			3,983
Technology/communication			1,114			1,515			3,410			4,534
Advertising and marketing			317			496			1,002			1,713
Restructuring			(34	)		8			(79	)		(21	)
Other operating			3,256			3,102			9,236			9,591
Total operating expenses		$	11,824		$	14,007		$	35,508		$	44,598
Income (loss) from continuing operations before income taxes		$	(529	)	$	(6,816	)	$	7,294		$	(20,664	)
Provision (benefit) for income taxes			(1,122	)		(3,295	)		620			(9,628	)
Income (loss) from continuing operations		$	593		$	(3,521	)	$	6,674		$	(11,036	)
Discontinued operations
Income (loss) from discontinued operations		$	(204	)	$	507		$	(635	)	$	898
Gain (loss) on sale			—			9			2			(508	)
Provision (benefit) for income taxes			214			(97	)		44			(188	)
Income (loss) from discontinued operations, net of taxes		$	(418	)	$	613		$	(677	)	$	578
Net income (loss) before attribution of noncontrolling interests		$	175		$	(2,908	)	$	5,997		$	(10,458	)
Net Income (loss) attributable to noncontrolling interests			74			(93	)		24			(37	)
Citigroup's net income (loss)		$	101		$	(2,815	)	$	5,973		$	(10,421	)
Basic earnings per share(2)
Income (loss) from continuing operations		$	(0.23	)	$	(0.72	)	$	(0.10	)	$	(2.28	)
Income (loss) from discontinued operations, net of taxes			(0.04	)		0.11			(0.09	)		0.11
Net income (loss)		$	(0.27	)	$	(0.61	)	$	(0.19	)	$	(2.17	)
Weighted average common shares outstanding			12,104.3			5,341.8			7,629.6			5,238.3
Diluted earnings per share(2)
Income (loss) from continuing operations		$	(0.23	)	$	(0.72	)	$	(0.10	)	$	(2.28	)
Income (loss) from discontinued operations, net of taxes			(0.04	)		0.11			(0.09	)		0.11
Net income (loss)		$	(0.27	)	$	(0.61	)	$	(0.19	)	$	(2.17	)
Adjusted weighted average common shares outstanding			12,216.0			5,831.1			8,045.7			5,727.9

(1)

For the three and nine months ended September 30, 2009, OTTI losses on investments are accounted for in accordance ASC 320-10-65-1 (FSP FAS 115-2) (see "Accounting Changes" in Note 1 to the Consolidated Financial Statements).

(2)

The Company adopted ASC 260-10-45 to 65 (FSP EITF 03-6-1) on January 1, 2009. All prior periods have been restated to conform to the current presentation. 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.

87

CITIGROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

Citigroup Inc. and Subsidiaries

In millions of dollars, except shares		September 30, 2009			December 31, 2008
		(Unaudited)
Assets
Cash and due from banks (including segregated cash and other deposits)		$	26,482		$	29,253
Deposits with banks			217,730			170,331
Federal funds sold and securities borrowed or purchased under agreements to resell (including $87,886 and $70,305 as of September 30, 2009 and December 31, 2008, respectively, at fair value)			197,357			184,133
Brokerage receivables			34,667			44,278
Trading account assets (including $128,154 and $148,703 pledged to creditors at September 30, 2009 and December 31, 2008, respectively)			340,697			377,635
Investments (including $18,413 and $14,875 pledged to creditors at September 30, 2009 and December 31, 2008, respectively)			261,890			256,020
Loans, net of unearned income
	Consumer (including $30 and $36 at September 30, 2009 and December 31, 2008, respectively, at fair value)		441,491			481,387
	Corporate (including $1,475 and $2,696 at September 30, 2009 and December 31, 2008, respectively, at fair value)		180,720			212,829
Loans, net of unearned income		$	622,211		$	694,216
	Allowance for loan losses		(36,416	)		(29,616	)
Total loans, net		$	585,795		$	664,600
Goodwill			25,423			27,132
Intangible assets (other than MSRs)			8,957			14,159
Mortgage servicing rights (MSRs)			6,228			5,657
Other assets (including $13,670 and $21,372 as of September 30, 2009 and December 31, 2008 respectively, at fair value)			159,769			165,272
Assets of discontinued operations held for sale			23,604			—
Total assets		$	1,888,599		$	1,938,470
Liabilities
Deposits
	Non-interest-bearing deposits in U.S. offices	$	77,460		$	55,485
	Interest-bearing deposits in U.S. offices (including $919 and $1,335 at September 30, 2009 and December 31, 2008, respectively, at fair value)		244,856			234,491
Total U.S. deposits		$	322,316		$	289,976
	Non-interest-bearing deposits in offices outside the U.S.		40,606			37,412
	Interest-bearing deposits in offices outside the U.S. (including $1,110 and $1,271 at September 30, 2009 and December 31, 2008, respectively, at fair value)		469,681			446,797
Total international deposits		$	510,287		$	484,209
Total deposits		$	832,603		$	774,185
Federal funds purchased and securities loaned or sold under agreements to repurchase (including $116,693 and $138,866 as of September 30, 2009 and December 31, 2008, respectively, at fair value)			178,159			205,293
Brokerage payables			57,672			70,916
Trading account liabilities			130,540			165,800
Short-term borrowings (including $1,443 and $17,607 at September 30, 2009 and December 31, 2008, respectively, at fair value)			64,731			126,691
Long-term debt (including $27,186 and $27,263 at September 30, 2009 and December 31, 2008, respectively, at fair value)			379,557			359,593
Other liabilities (including $14,819 and $11,889 as of September 30, 2009 and December 31, 2008, respectively, at fair value)			86,384			91,970
Liabilities of discontinued operations held for sale			16,004			—
Total liabilities		$	1,745,650		$	1,794,448
Citigroup stockholders' equity
Preferred stock ($1.00 par value; authorized shares: 30 million), issued shares: 12,038 at September 30, 2009, at aggregate liquidation value		$	312		$	70,664
Common stock ($0.01 par value; authorized shares: 60 billion), issued shares: 23,044,331,654 and 5,671,743,807 at September 30, 2009 and December 31, 2008, respectively.			230			57
Additional paid-in capital			78,802			19,165
Retained earnings			85,208			86,521
Treasury stock, at cost: September 30, 2009—180,384,393 shares and December 31, 2008—221,675,719 shares			(6,059	)		(9,582	)
Accumulated other comprehensive income (loss)			(17,651	)		(25,195	)
Total Citigroup stockholders' equity		$	140,842		$	141,630
Noncontrolling interest			2,107			2,392
Total equity		$	142,949		$	144,022
Total liabilities and equity		$	1,888,599		$	1,938,470

See Notes to the Consolidated Financial Statements.

88

CITIGROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)

		Nine Months Ended September 30,
In millions of dollars, except shares in thousands		2009			2008
Preferred stock at aggregate liquidation value
	Balance, beginning of period	$	70,664		$	—
	Issuance of preferred stock		3,653			27,424
	Conversion of preferred stock		(74,005	)		—
Balance, end of period		$	312		$	27,424
Common stock and additional paid-in capital
	Balance, beginning of period	$	19,222		$	18,062
	Employee benefit plans		(3,508	)		(2,405	)
	Issuance of Common stock		173			4,911
	Issuance of shares for Nikko Cordial acquisition		—			(3,500	)
	Issuance of TARP-related warrants		88			—
	Reset of convertible preferred stock conversion price		1,285			—
	Conversion of preferred stock to common stock		61,790			—
	Other		(18	)		(127	)
Balance, end of period		$	79,032		$	16,941
Retained earnings
Balance, beginning of period		$	86,521		$	121,769
	Adjustment to opening balance, net of tax(1)		413			—
	Adjusted balance, beginning of period	$	86,934		$	121,769
	Net income (loss)		5,973			(10,421	)
	Common dividends(2)		(34	)		(5,175	)
	Preferred dividends		(3,201	)		(833	)
	Preferred stock Series H discount accretion		(124	)		—
	Reset of convertible preferred stock conversion price		(1,285	)		—
	Conversion of Preferred stock		(3,055	)		—
Balance, end of period		$	85,208		$	105,340
Treasury stock, at cost
Balance, beginning of period		$	(9,582	)	$	(21,724	)
	Issuance of shares pursuant to employee benefit plans		3,505			4,210
	Treasury stock acquired(3)		(3	)		(7	)
	Issuance of shares for Nikko Cordial acquisition		—			7,858
	Other		21			21
Balance, end of period		$	(6,059	)	$	(9,642	)
Accumulated other comprehensive income (loss)
Balance, beginning of period		$	(25,195	)	$	(4,660	)
	Adjustment to opening balance, net of tax(1)		(413	)		—
	Adjusted balance, beginning of period	$	(25,608	)	$	(4,660	)
	Net change in unrealized gains and losses on investment securities, net of tax		5,818			(6,657	)
	Net change in cash flow hedges, net of tax		1,012			(312	)
	Net change in FX translation adjustment, net of tax		1,131			(2,419	)
	Pension liability adjustment, net of tax		(4	)		47
	Net change in Accumulated other comprehensive income (loss)	$	7,957		$	(9,341	)
Balance, end of period		$	(17,651	)	$	(14,001	)
Total Citigroup common stockholders' equity (shares outstanding: 22,863,947 at September 30, 2009 and 5,450,068 at December 31, 2008)		$	140,530		$	98,638
Total Citigroup stockholders' equity		$	140,842		$	126,062
Noncontrolling interests
Balance, beginning of period		$	2,392		$	5,308
	Initial origination of a noncontrolling interest		124			1,409
	Transactions between noncontrolling interest shareholders and the related consolidating subsidiary		(134	)		(2,347	)
	Transactions between Citigroup and the noncontrolling interest shareholders		(350	)		(836	)
	Net income attributable to noncontrolling interest shareholders		24			(37	)
	Dividends paid to noncontrolling interest shareholders		(16	)		(136	)
	Accumulated other comprehensive income—Net change in unrealized gains and losses on investments securities, net of tax		7			3
	Accumulated other comprehensive income—Net change in FX translation adjustment, net of tax		31			6
	All other		29			92
Net change in noncontrolling interests		$	(285	)	$	(1,846	)
Balance, end of period		$	2,107		$	3,462
Total equity		$	142,949		$	129,524

89

Comprehensive income (loss)
	Net income (loss) before attribution of noncontrolling interests	$	5,997	$	(10,458	)
	Net change in accumulated other comprehensive income (loss)		7,995		(9,332	)
Total comprehensive income (loss)		$	13,992	$	(19,790	)
Comprehensive income (loss) attributable to the noncontrolling interest			62		(28	)
Comprehensive income (loss) attributable to Citigroup		$	13,930	$	(19,762	)

(1)

The adjustment to the opening balances for Retained earnings and Accumulated other comprehensive income (loss) represents the cumulative effect of initially adopting ASC 320-10-65-1 (FSP FAS 115-2). See Note 1 to the Consolidated Financial Statements for further disclosure.

(2)

Common dividends declared were $0.01 per share in the first quarter of 2009 and $0.32 per share in the first, second and third quarters of 2008.

(3)

All open market repurchases were transacted under an existing authorized share repurchase plan and relate to customer fails/errors.

See Notes to the Consolidated Financial Statements.

90

CITIGROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

		Nine Months Ended September 30,
In millions of dollars		2009			2008
Cash flows from operating activities of continuing operations
Net income (loss) before attribution of noncontrolling interests		$	5,997		$	(10,458	)
Net income (loss) attributable to noncontrolling interests			24			(37	)
Citigroup's net income (loss)		$	5,973		$	(10,421	)
	Income (loss) from discontinued operations, net of taxes		(679	)		882
	Gain (loss) on sale, net of taxes		2			(304	)
	Income (loss) from continuing operations—excluding noncontrolling interests	$	6,650		$	(10,999	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities of continuing operations
	Amortization of deferred policy acquisition costs and present value of future profits		298			252
	Additions to deferred policy acquisition costs		(354	)		(311	)
	Depreciation and amortization		1,290			1,953
	Provision for credit losses		31,114			21,210
	Change in trading account assets		28,355			81,930
	Change in trading account liabilities		(32,437	)		(12,799	)
	Change in federal funds sold and securities borrowed or purchased under agreements to resell		(19,061	)		48,657
	Change in federal funds purchased and securities loaned or sold under agreements to repurchase		(24,008	)		(53,824	)
	Change in brokerage receivables net of brokerage payables		(2,360	)		9,412
	Net losses (gains) from sales of investments		(1,719	)		863
	Change in loans held-for-sale		(1,605	)		22,398
	Other, net		3			(9,796	)
Total adjustments		$	(20,484	)	$	109,945
Net cash provided by (used in) operating activities of continuing operations		$	(13,834	)	$	98,946
Cash flows from investing activities of continuing operations
Change in deposits at interest with banks		$	(47,797	)	$	(9,326	)
Change in loans			(127,661	)		(187,859	)
Proceeds from sales and securitizations of loans			185,442			203,863
Purchases of investments			(167,115	)		(272,815	)
Proceeds from sales of investments			66,890			60,255
Proceeds from maturities of investments			90,218			194,312
Capital expenditures on premises and equipment			(859	)		(2,111	)
Proceeds from sales of premises and equipment, subsidiaries and affiliates, and repossessed assets			5,590			15,644
Net cash provided by investing activities of continuing operations		$	4,708		$	1,963
Cash flows from financing activities of continuing operations
Dividends paid		$	(3,235	)	$	(6,008	)
Issuance of common stock			—			4,961
Issuance (redemptions) of preferred stock			—			27,424
Treasury stock acquired			(3	)		(7	)
Stock tendered for payment of withholding taxes			(116	)		(377	)
Issuance of long-term debt			90,464			67,311
Payments and redemptions of long-term debt			(83,850	)		(94,073	)
Change in deposits			58,418			(32,411	)
Change in short-term borrowings			(56,143	)		(41,633	)
Net cash (used in) provided by financing activities of continuing operations		$	5,535		$	(74,813	)
Effect of exchange rate changes on cash and cash equivalents		$	582		$	(1,105	)
Net cash from discontinued operations		$	238		$	(171	)
Change in cash and due from banks		$	(2,771	)	$	24,820
Cash and due from banks at beginning of period		$	29,253		$	38,206
Cash and due from banks at end of period		$	26,482		$	63,026
Supplemental disclosure of cash flow information for continuing operations
Cash (received)paid during the period for income taxes		$	(1,251	)	$	2,123
Cash paid during the period for interest		$	21,338		$	44,294
Non-cash investing activities
Transfers to repossessed assets		$	2,149		$	2,574

See Notes to the Unaudited Consolidated Financial Statements.

91

CITIBANK, N.A. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

	Citibank, N.A. and Subsidiaries
In millions of dollars, except shares	September 30, 2009			December 31, 2008
	(Unaudited)
Assets
Cash and due from banks	$	21,016		$	22,107
Deposits with banks		207,082			156,774
Federal funds sold and securities purchased under agreements to resell		16,396			41,613
Trading account assets (including $9,539 and $12,092 pledged to creditors at September 30, 2009 and December 31, 2008, respectively)		163,542			197,052
Investments (including $2,633 and $3,028 pledged to creditors at September 30, 2009 and December 31, 2008, respectively)		187,406			165,914
Loans, net of unearned income		507,629			555,198
Allowance for loan losses		(23,299	)		(18,273	)
Total loans, net	$	484,330		$	536,925
Goodwill		10,210			10,148
Intangible assets		8,010			7,689
Premises and equipment, net		4,954			5,331
Interest and fees receivable		6,740			7,171
Other assets		77,068			76,316
Total assets	$	1,186,754		$	1,227,040
Liabilities
Non-interest-bearing deposits in U.S. offices	$	80,425		$	55,223
Interest-bearing deposits in U.S. offices		188,803			185,322
Non-interest-bearing deposits in offices outside the U.S.		39,403			33,769
Interest-bearing deposits in offices outside the U.S.		477,170			480,984
Total deposits	$	785,801		$	755,298
Trading account liabilities		56,917			108,921
Purchased funds and other borrowings		88,889			116,333
Accrued taxes and other expenses		9,347			8,192
Long-term debt and subordinated notes		85,573			113,381
Other liabilities		44,508			42,475
Total liabilities	$	1,071,035		$	1,144,600
Citibank stockholder's equity
Capital stock ($20 par value) outstanding shares: 37,534,553 in each period	$	751		$	751
Surplus		105,293			74,767
Retained earnings		19,988			21,735
Accumulated other comprehensive income (loss)(1)		(11,415	)		(15,895	)
Total Citibank stockholder's equity	$	114,617		$	81,358
Noncontrolling interest		1,102			1,082
Total equity	$	115,719		$	82,440
Total liabilities and equity	$	1,186,754		$	1,227,040

(1)

Amounts at September 30, 2009 and December 31, 2008 include the after-tax amounts for net unrealized gains (losses) on investment securities of ($4.653) billion and ($8.008) billion, respectively, for FX translation of ($3.114) billion and ($3.964) billion, respectively, for cash flow hedges of ($2.965) billion and ($3.247) billion, respectively, and for pension liability adjustments of ($683) million and ($676) million, respectively.

See Notes to the Consolidated Financial Statements.

92

CITIGROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.     BASIS OF PRESENTATION

        The accompanying Unaudited Consolidated Financial Statements as of September 30, 2009 and for the three- and nine-month periods ended September 30, 2009 include the accounts of Citigroup Inc. (Citigroup) and its subsidiaries (collectively, the Company). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation, have been reflected. The accompanying Unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes included in Citigroup's 2008 Annual Report on Form 10-K.

        Certain financial information that is normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles, but is not required for interim reporting purposes, has been condensed or omitted.

        Management must make estimates and assumptions that affect the Consolidated Financial Statements and the related footnote disclosures. While management makes its best judgment, actual results could differ from those estimates. Current market conditions increase the risk and complexity of the judgments in these estimates.

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

        As noted above, the Notes to Consolidated Financial Statements are unaudited.

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 (ASC 105). 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 have 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 existing standards.

Significant Accounting Policies

        The Company's accounting policies are fundamental to understanding management's discussion and analysis of results of operations and financial condition. The Company has identified six policies as being significant because they require management to make subjective and/or complex judgments about matters that are inherently uncertain. These policies relate to Valuations of Financial Instruments, Allowance for Credit Losses, Securitizations, Goodwill, Income Taxes and Legal Reserves. The Company, in consultation with the Audit and Risk Management Committee of the Board of Directors, has reviewed and approved these significant accounting policies, which are further described in the Company's 2008 Annual Report on Form 10-K.

ACCOUNTING CHANGES

Interim Disclosures about Fair Value of Financial Instruments

        In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial Instruments," (ASC 825-10-65-1). 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.

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" (ASC 320-10-65-1/FSP FAS 115-2), 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,

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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 using 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.

        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 10 to the Consolidated Financial Statements, Investments, for disclosures related to the Company's investment securities and OTTI.

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" (ASC 820-10-65-4). 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.

Measuring Liabilities at Fair Value

        In August 2009, the FASB issued ASU No. 2009-05, Fair Value Measurements and Disclosure (Topic 820): 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:

1.

A valuation technique that uses quoted prices for similar liabilities (or an identical liability) when traded as assets.



2.

Another valuation technique that is consistent with the principles of Topic 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 is effective immediately and does not have a material impact to Citigroup.

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" (ASC 260-10-45 to 65). 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 in the basic EPS calculation.

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        The following table shows the effect of adopting the changed accounting for participating securities on Citigroup's basic and diluted EPS for 2008 and 2009:

	1Q08			2Q08			3Q08			4Q08			Full Year 2008			1Q09
Basic and Diluted Earnings per Share(1)
As reported	$	(1.02	)	$	(0.54	)	$	(0.60	)	$	(3.40	)	$	(5.59	)		N/A
Two-class method	$	(1.03	)	$	(0.55	)	$	(0.61	)	$	(3.40	)	$	(5.61	)	$	(0.18	)

N/A    Not Applicable

(1)

Diluted EPS is the same as Basic EPS for all periods presented due to the net loss available to common shareholders. Using actual diluted shares would result in anti-dilution.

Additional Disclosures for Derivative Instruments

        On January 1, 2009, the Company adopted SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment to SFAS 133 (ASC 815-10-65-1 /SFAS 161). The standard requires enhanced disclosures about derivative instruments and hedged items that are accounted for under ASC 815-10 (SFAS 133) and related interpretations. No comparative information for periods prior to the effective date is required. See Note 16 to the Consolidated Financial Statements, Derivatives Activities, for disclosures related to the Company's hedging activities and derivative instruments. ASC 815-10-65-1 (SFAS 161) had no impact on how Citigroup accounts for these instruments.

Business Combinations

        In December 2007, the FASB issued Statement No. 141(revised), Business Combinations (ASC 805-10/SFAS 141(R)), 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 requirements 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; and (3) the acquirer will record a 100% step-up to fair value for all assets and liabilities, including the noncontrolling interest portion, and goodwill is recorded as if a 100% interest was acquired.

        Citigroup adopted ASC 805-10 (SFAS 141(R)) on January 1, 2009, and the standard is applied prospectively.

Noncontrolling Interests in Subsidiaries

        In December 2007, the FASB issued Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements (ASC 810-10-65-1/SFAS 160), 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. Upon adoption, ASC 810-10-65-1 (SFAS 160) 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 ASC 810-10-65-1 (SFAS 160) 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" (ASC 860-10-40). 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.

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FUTURE APPLICATION OF ACCOUNTING STANDARDS

Fair Value Disclosures about Pension Plan Assets

        In December 2008, the FASB issued FSP FAS 132(R)-1, "Employers' Disclosures about Postretirement Benefit Plan Assets" (ASC 715-20-65-2). This FSP requires that information about plan assets be disclosed on an annual basis. Citigroup will be required to separate plan assets into the three fair value hierarchy levels and provide a rollforward of the changes in fair value of plan assets classified as Level 3 in Citigroup's annual Consolidated Financial Statements.

        The disclosures about plan assets required by this FSP are effective for fiscal years ending after December 15, 2009. This FSP will have no effect on the Company's accounting for plan benefits and obligations.

Investments in Certain Entities that Calculate Net Asset Value per Share

        On September 30, 2009, the FASB issued Accounting Standards Update (ASU) 2009-12, Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent), to provide 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 its investments in certain investment funds. The ASU also requires additional disclosures regarding the nature and risks of such investments. The ASU provides guidance on the classification of such investments as Level 2 or Level 3 of the fair-value hierarchy. The ASU is effective for reporting periods ending after December 15, 2009. This ASU is not expected to have a material impact on the Company's accounting for its investments in alternative investment funds.

Proposed Additional Disclosures Regarding Fair Value Measurements

        On August 28, 2009, the FASB issued an exposure draft of a proposed ASU, Improving Disclosures About Fair Value Measurements, which proposes new disclosures about fair value measurements. Certain of the proposed amendments would be effective for reporting periods ending after December 15, 2009. Additional disclosures have been proposed that would require a sensitivity analysis regarding the impact of unobservable inputs on the fair valuation of Level 3 instruments, which would be effective for reporting periods ending after March 15, 2010.

Loss-Contingency Disclosures

        In June 2008, the FASB issued an exposure draft proposing expanded disclosures regarding loss contingencies accounted for under FASB Statement No. 5, Accounting for Contingencies (ASC 450-10 to 20), and ASC 805-10 (SFAS 141(R)). 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 proposed effective date for fiscal years ending after December 15, 2009, but will have no effect on the Company's accounting for loss contingencies.

Elimination of QSPEs and Changes in the Consolidation Model for Variable Interest Entities

        In May 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). This change will have a significant impact on Citigroup's Consolidated Financial Statements as the Company will lose sales treatment for certain assets previously sold to QSPEs, as well as for certain future sales, and for certain transfers of portions of assets that do not meet the definition of participating interests. SFAS 166 is effective for fiscal years that begin after November 15, 2009.

        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 and 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 expects to be required to 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 QSPEs, other than those presented below, needing to be consolidated. It is not currently anticipated, however, that any such newly identified VIEs and QSPEs would have a significant impact on Citigroup's Consolidated Financial Statements or capital position.

        In accordance with SFAS 167, Citigroup is currently evaluating two approaches for consolidating all of the VIEs and QSPEs that it expects to consolidate. The first approach would require initially measuring the assets, liabilities, and noncontrolling interests of the VIEs and 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 were to be designated as the primary beneficiary). The second approach under consideration would be to elect the fair value option, in which all of the financial assets and liabilities of certain designated VIEs and 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.

        While this review has not yet been completed, Citigroup's tentative approach would be to consolidate all of the VIEs and QSPEs that it expects to consolidate at carrying value, except for certain private label residential mortgages, for which the

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fair value option would be elected. The following tables present the pro forma impact of adopting these new accounting standards applying this tentative approach. The actual impact of adopting these new accounting requirements could, however, be significantly different should Citigroup change from this methodology. For instance, if Citigroup were to consolidate its off-balance sheet credit card securitization vehicles applying the fair value option, an associated allowance for loan losses would not be established upon adoption of SFAS 167, with an offsetting charge to Retained earnings. Rather, the charge to Retained earnings would be affected by the difference between the fair value of the assets and liabilities that Citigroup would consolidate, which would result in a lesser charge to Retained earnings than under the carrying value approach.

        The pro forma impact of these impending changes on incremental GAAP assets and resulting risk-weighted assets for those VIEs and former QSPEs that are currently expected to be consolidated or deconsolidated for accounting purposes as of January 1, 2010 (based on financial information as of September 30, 2009), reflecting Citigroup's present understanding of the new requirements, and assuming continued application of existing risk-based capital rules, would be as follows:

		Incremental
In billions of dollars		GAAP assets		Risk- weighted assets(1)
Impact of Consolidation:
Credit cards		$	84.2	$	0.9
Commercial paper conduits			39.7		—
Student loans			13.9		4.0
Private label consumer mortgages			7.7		4.6
Investment funds			3.8		0.4
Commercial mortgages			1.4		1.3
Muni bonds			0.6		0.1
Mutual fund deferred sales commissions			0.6		0.6
	Subtotal	$	151.9	$	11.9
Impact of Deconsolidation:
Collateralized debt obligations(2)		$	1.9	$	5.9
Total		$	153.8	$	17.8

(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 approximately $900 million as of June 30, 2009. See Note 15 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.

        In September 2009, the U.S. banking and thrift regulatory agencies issued a notice of proposed rulemaking in which the agencies proposed, in part, to eliminate the existing provision in the risk-based capital rules that permits a banking organization, if it is required to consolidate for accounting purposes a qualifying ABCP program that it sponsors, to exclude the consolidated assets from its risk-weighted assets.

        If this exclusion under the existing risk-based capital rules for qualifying ABCP programs, such as commercial paper conduits, were to be eliminated, as proposed, Citigroup's total incremental risk-weighted assets (based on financial information as of September 30, 2009) would be greater by approximately an additional $15.9 billion.

        The above table reflects: (i) the estimated portion of the assets of former QSPEs to which Citigroup, acting as principal, has transferred assets and received sales treatment as of September 30, 2009 (totaling approximately $733.5 billion), and (ii) the estimated assets of significant unconsolidated VIEs as of September 30, 2009 with which Citigroup is involved (totaling approximately $231.4 billion) that would be 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 is expected 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 September 30, 2009, would result in an estimated aggregate after-tax charge to Retained earnings of approximately $7.8 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 $12.5 billion and the recognition of related deferred tax assets amounting to approximately $4.7 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 September 30, 2009), and assuming the continued application of the existing risk-based capital rules, would be as follows:

	As of September 30, 2009
	As Reported			Pro Forma			Impact
Tier 1 Capital		12.76	%		11.44	%		(132) bps
Total Capital		16.58	%		15.26	%		(132) bps

        Elimination of the exclusion noted above under the existing risk-based capital rules for qualifying ABCP programs, such as commercial paper conduits, would further adversely affect certain of Citigroup's regulatory capital ratios. The pro forma impact on Citigroup's Tier 1 Capital and Total Capital ratios (based on financial information as of September 30, 2009), including the additional approximately $15.9 billion of risk-weighted assets arising from the consolidation of the commercial paper conduits, would be a total reduction in these ratios from those reported at September 30, 2009 of approximately 151 bps and 154 bps, respectively.

        The actual impact of adopting the new accounting standards on January 1, 2010 could differ, as financial information changes from the September 30, 2009 estimates

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and as several uncertainties in the application of these new standards are resolved.

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" (ASC 946-10/SOP 07-1), 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.

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2.     DISCONTINUED OPERATIONS

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 has a total cash value to Citi of ¥776 billion (US$8.7 billion at an exchange rate of ¥89.60 to US$1.00 as of September 30, 2009). The cash value is composed of the purchase price for the transferred business of ¥545 billion, the purchase price for certain Japanese-listed equity securities held by Nikko Cordial Securities of ¥30 billion, and ¥201 billion 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 (most of which has been recorded in the second and third quarters of 2009), the sale will result in an immaterial after-tax gain to Citigroup. A total of about 7,800 employees are included in the transaction.

        The Nikko Cordial operations had total assets and total liabilities as of September 30, 2009 of $23.6 billion and $16.0 billion, respectively.

        Results for all of the Nikko Cordial businesses sold are reported as Discontinued operations for all periods presented. The assets and liabilities of the businesses being sold are included in Assets of discontinued operations held for sale and Liabilities of discontinued operations held for sale on the Consolidated Balance Sheet.

        The following is a summary as of September 30, 2009 of the assets and liabilities of Discontinued operations held for sale on the Consolidated Balance Sheet for the operations related to the Nikko Cordial businesses to be sold:

In millions of dollars	September 30, 2009
Assets
Cash due from banks	$	224
Deposits at interest with banks		398
Federal funds sold and securities borrowed or purchased under agreements to resell		5,837
Brokerage receivables		1,293
Trading account assets		8,583
Investments		490
Goodwill		567
Intangibles		3,289
Other assets		2,923
Total assets	$	23,604
Liabilities
Federal funds purchased and securities loaned or sold under agreements to repurchase sold under agreements to repurchase	$	3,126
Brokerage payables		2,566
Trading account liabilities		2,823
Short term borrowings		5,817
Other liabilities		1,672
Total liabilities	$	16,004

        Summarized financial information for discontinued operations, including cash flows, related to the sale of Nikko Cordial follows:

	Three Months Ended Sept. 30,					Nine Months Ended Sept. 30,
In millions of dollars	2009			2008		2009			2008
Total revenues, net of interest expense	$	173		$	422	$	553		$	1,245
Income (loss) from discontinued operations	$	(221	)	$	6	$	(603	)	$	2
Provision (benefit) for income taxes and noncontrolling interest, net of taxes(1)		208			1		75			(9	)
Income (loss) from discontinued operations, net of taxes	$	(429	)	$	5	$	(678	)	$	11

(1)

Includes a tax expense of $290 million in the third quarter of 2009 related to the fourth quarter 2009 sale of Nikko Cordial.

	Nine Months Ended Sept. 30,
In millions of dollars	2009			2008
Cash flows from operating activities	$	(1,320	)	$	(4,519	)
Cash flows from investing activities		(9,579	)		(1,381	)
Cash flows from financing activities		11,108			5,907
Net cash provided by (used in) discontinued operations	$	209		$	7

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Sale of Citigroup's German Retail Banking Operations

        On December 5, 2008, Citigroup sold its German retail banking operations to Credit Mutuel for Euro 5.2 billion 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 did not include the corporate and investment banking business or the Germany-based European data center. Results for all of the German retail banking 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 the German retail banking operations is as follows:

	Three Months Ended Sept. 30,					Nine Months Ended Sept. 30,
In millions of dollars	2009		2008			2009			2008
Total revenues, net of interest expense	$	25	$	847		$	61		$	2,001
Income (loss) from discontinued operations	$	18	$	503		$	(21	)	$	851
Gain (loss) on sale(1)		—		—			(41	)		—
Provision (benefit) for income taxes and noncontrolling interest, net of taxes		6		(101	)		(42	)		22
Income (loss) from discontinued operations, net of taxes	$	12	$	604		$	(20	)	$	829

(1)

2009 YTD activity represents transactions related to a transitional service agreement between Citigroup and Credit Mutuel as well as adjustments against the gain on sale for the final settlement which occurred in April 2009.

	Nine Months Ended Sept. 30,
In millions of dollars	2009			2008
Cash flows from operating activities	$	6		$	(1,252	)
Cash flows from investing activities		1			1,833
Cash flows from financing activities		(7	)		(760	)
Net cash provided by (used in) discontinued operations	$	—		$	(179	)

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.

        Results for all of the CitiCapital 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 CitiCapital is as follows:

	Three Months Ended Sept. 30,						Nine Months Ended Sept. 30,
In millions of dollars	2009			2008			2009			2008
Total revenues, net of interest expense	$	7		$	96		$	37		$	14
Income (loss) from discontinued operations	$	(1	)	$	(2	)	$	(11	)	$	45
Gain (loss) on sale(1)		—			9			14			(508	)
Provision (benefit) for income taxes and noncontrolling interest, net of taxes		—			3			1			(201	)
Income (loss) from discontinued operations, net of taxes	$	(1	)	$	4		$	2		$	(262	)

(1)

The $3 million in income from discontinued operations for the first half of 2009 relates to a transitional service agreement.

	Nine Months Ended Sept. 30,
In millions of dollars	2009		2008
Cash flows from operating activities	$	—	$	(287	)
Cash flows from investing activities		—		349
Cash flows from financing activities		—		(61	)
Net cash provided by (used in) discontinued operations	$	—	$	1

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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 received during the first quarter of 2009 of $29 million pretax ($19 million after-tax) related to the sale of Citigroup's Asset Management business, which was sold in December 2005, is also included in these balances.

	Three Months Ended Sept. 30,						Nine Months Ended Sept. 30,
In millions of dollars	2009			2008			2009			2008
Total revenues, net of interest expense	$	205		$	1,365		$	651		$	3,260
Income (loss) from discontinued operations	$	(204	)	$	507		$	(635	)	$	898
Gain (loss) on sale		—			9			2			(508	)
Provision (benefit) for income taxes and noncontrolling interest, net of taxes		214			(97	)		44			(188	)
Income from discontinued operations, net of taxes	$	(418	)	$	613		$	(677	)	$	578

Cash Flows from Discontinued Operations

	Nine Months Ended Sept. 30,
In millions of dollars	2009			2008
Cash flows from operating activities	$	(1,314	)	$	(6,058	)
Cash flows from investing activities		(9,549	)		801
Cash flows from financing activities		11,101			5,086
Net cash provided by (used in) discontinued operations	$	238		$	(171	)

3.     BUSINESS SEGMENTS

        The following table presents certain information regarding the Company's operations by segment:

		Revenues, net of interest expense					Provision (benefit) for income taxes						Income (loss) from continuing operations(1)						Identifiable assets(2)
		Three Months Ended September 30,
In millions of dollars, except identifiable assets in billions																			Sept. 30, 2009		Dec. 31, 2008
		2009		2008			2009			2008			2009			2008
Regional Consumer Banking		$	5,675	$	6,109		$	(246	)	$	24		$	615		$	446		$	205	$	200
Institutional Clients Group			7,350		9,911			584			1,410			1,694			3,156			809		802
	Subtotal Citicorp		13,025		16,020			338			1,434			2,309			3,602			1,014		1,002
Citi Holdings			6,694		704			(1,588	)		(4,526	)		(1,818	)		(6,936	)		617		715
Corporate/Other			671		(466	)		128			(203	)		102			(187	)		258		221
Total		$	20,390	$	16,258		$	(1,122	)	$	(3,295	)	$	593		$	(3,521	)	$	1,889	$	1,938

		Revenues, net of interest expense					Provision (benefit) for income taxes						Income (loss) from continuing operations(1)
		Nine Months Ended September 30,
In millions of dollars		2009		2008			2009			2008			2009			2008
Regional Consumer Banking		$	17,051	$	19,964		$	(303	)	$	902		$	1,416		$	2,768
Institutional Clients Group			31,503		29,931			5,340			3,907			11,633			8,915
	Subtotal Citicorp		48,554		49,895			5,037			4,809			13,049			11,683
Citi Holdings			25,896		(1,735	)		(4,562	)		(13,619	)		(5,795	)		(21,311	)
Corporate/Other			430		(2,207	)		145			(818	)		(580	)		(1,408	)
Total		$	74,880	$	45,953		$	620		$	(9,628	)	$	6,674		$	(11,036	)

(1)

Includes pretax provisions for credit losses and for benefits and claims in Regional Consumer Banking results of $1.8 billion and $1.6 billion, in ICG results of $0.4 billion and $0.4 billion and in Citi Holdings results of $6.9 billion and $7.0 billion for the third quarters of 2009 and 2008, respectively. Includes pretax provisions for credit losses and for benefits and claims in Regional Consumer Banking results of $5.6 billion and $4.3 billion, ICG results of $1.6 billion and $0.9 billion and in Citi Holdings results of $24.8 billion and $16.8 billion for the nine months of 2009 and 2008, respectively.

(2)

Identifiable assets at September 30, 2009 include assets of discontinued operations held for sale of $23.6 billion recorded in Citi Holdings.

101

4.     INTEREST REVENUE AND EXPENSE

        For the three- and nine-month periods ended September 30, 2009 and 2008, interest revenue and expense consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions of dollars	2009		2008		2009		2008
Interest revenue
Loan interest, including fees	$	11,601	$	15,528	$	36,385	$	47,883
Deposits at interest with banks		313		792		1,126		2,329
Federal funds sold and securities purchased under agreements to resell		728		2,215		2,407		7,751
Investments, including dividends		3,283		2,597		9,894		7,832
Trading account assets(1)		2,654		4,137		8,526		13,562
Other interest		99		861		594		3,271
Total interest revenue	$	18,678	$	26,130	$	58,932	$	82,628
Interest expense
Deposits(2)	$	2,298	$	4,915	$	7,986	$	16,191
Federal funds purchased and securities loaned or sold under agreements to repurchase		772		2,721		2,807		9,559
Trading account liabilities(1)		43		285		220		1,064
Short-term borrowing		350		924		1,128		3,233
Long-term debt		3,217		3,881		9,038		12,103
Total interest expense	$	6,680	$	12,726	$	21,179	$	42,150
Net interest revenue	$	11,998	$	13,404	$	37,753	$	40,478
Provision for loan losses		8,771		8,943		30,919		21,503
Net interest revenue after provision for loan losses	$	3,227	$	4,461	$	6,834	$	18,975

(1)

Interest expense on trading account liabilities of the ICG is reported as a reduction of interest revenue for Trading account assets.

(2)

Includes FDIC deposit insurance fees and charges.

102

5.     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 three and nine months ended September 30, 2009 and 2008:

	Three Months Ended September 30,						Nine Months Ended September 30,
In millions of dollars	2009			2008			2009			2008
Credit cards and bank cards	$	1,048		$	1,113		$	3,025		$	3,504
Investment banking		774			545			2,659			2,337
Smith Barney		1			688			837			2,196
ICG trading-related		466			628			1,288			1,930
Other Consumer		323			235			935			870
Transaction services		337			359			980			1,076
Checking-related		261			282			773			868
Other ICG		176			338			364			582
Primerica		78			98			227			315
Loan servicing(1)		(339	)		(336	)		1,224			771
Corporate finance(2)		130			(649	)		551			(4,149	)
Other		(37	)		(93	)		(40	)		48
Total commissions and fees	$	3,218		$	3,208		$	12,823		$	10,348

(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 $24 million for the third quarter of 2009 and $508 million for the nine months ended September 30, 2009, and $792 million for the third quarter of 2008 and $4.3 billion for the nine months ended September 30, 2008, net of underwriting fees on funded and unfunded highly leveraged finance commitments. Write-downs were recorded on all highly leveraged finance commitments where there was value impairment, regardless of funding date.

103

6.     RETIREMENT BENEFITS

        The Company has several non-contributory defined benefit pension plans covering U.S. employees and has various defined benefit pension and termination indemnity plans covering employees outside the United States. The principal U.S. defined benefit plan which formerly covered substantially all U.S. employees, is closed to new entrants and effective January 1, 2008 no longer accrues benefits for most employees. Employees satisfying certain age and service requirements remain covered by a prior final pay formula.

        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. For information on the Company's retirement benefit plans and pension assumptions, see Citigroup's 2008 Annual Report on Form 10-K.

        The following tables summarize the components of the net expense recognized in the Consolidated Statement of Income for the three and nine months ended September 30, 2009 and 2008.

Net Expense (Benefit)

		Three Months Ended September 30,
		Pension Plans												Postretirement Benefit Plans
		U.S. Plans(1)						Plans Outside U.S.						U.S. Plans						Plans Outside U.S.
In millions of dollars		2009			2008			2009			2008			2009			2008			2009			2008
Benefits earned during the period		$	1		$	3		$	38		$	54		$	1		$	—		$	7		$	9
Interest cost on benefit obligation			177			176			78			93			16			17			23			26
Expected returns on plan assets			(232	)		(245	)		(87	)		(128	)		(2	)		(4	)		(19	)		(29	)
Amortization of unrecognized:
	Net transition obligation		—			—			(1	)		—			—			—			—			—
	Prior service cost (benefit)		—			—			1			1			(1	)		—			—			—
	Net actuarial loss		(1	)		—			18			6			—			3			4			5
Curtailment (gain) loss			29			—			—			—			—			—			—			—
Net expense (benefit)		$	(26	)	$	(66	)	$	47		$	26		$	14		$	16		$	15		$	11

		Nine Months Ended September 30,
		Pension Plans												Postretirement Benefit Plans
		U.S. Plans(1)						Plans Outside U.S.						U.S. Plans						Plans Outside U.S.
In millions of dollars		2009			2008			2009			2008			2009			2008			2009			2008
Benefits earned during the period		$	13		$	18		$	109		$	157		$	1		$	1		$	20		$	28
Interest cost on benefit obligation			503			505			222			275			46			47			66			76
Expected returns on plan assets			(690	)		(712	)		(249	)		(378	)		(7	)		(9	)		(57	)		(86	)
Amortization of unrecognized:
	Net transition obligation		—			—			(1	)		1			—			—			—			—
	Prior service cost (benefit)		(1	)		(1	)		3			3			(1	)		—			—			—
	Net actuarial loss		1			—			51			19			1			3			13			16
Curtailment (gain) loss			29			—			—			—			—			—			—			—
Net expense (benefit)		$	(145	)	$	(190	)	$	135		$	77		$	40		$	42		$	42		$	34

(1)

The U.S. plans exclude nonqualified pension plans for which the net expense was $12 million and $9 million for the three months ended September 30, 2009 and 2008, respectively, and $31 million and $29 million for the first nine months of 2009 and 2008, respectively.

104

Employer 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 the Employee Retirement Income Security Act of 1974 (ERISA), if appropriate to its tax and cash position and the plan's funded position. As of September 30, 2009, the Company contributions to the U.S. pension plan include $9 million relating to certain investment advisory fees that were paid by the Company. There were no minimum required contributions and no discretionary cash or non-cash contributions are currently planned for the U.S. plans. For the non-U.S. plans, the Company contributed $124 million as of September 30, 2009. Citigroup presently anticipates contributing an additional $113 million to fund its non-U.S. plans in 2009 for a total of $237 million.

7.     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 three months ended September 30, 2009, Citigroup recorded a pretax net restructuring release of $34 million composed of a gross charge of $12 million and a credit of $46 million due to changes in estimates. The charges related to the 2008 Re-engineering Projects Restructuring Initiative are reported in the Restructuring line 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, due to changes in estimates. The charges related to the 2007 Structural Expense Review Restructuring Initiative are reported in the Restructuring line 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.

105

        The following tables detail the Company's restructuring reserves.

2008 Re-engineering Projects Restructuring Charges

	Severance
							Contract termination costs			Asset write-downs(3)			Employee termination cost			Total Citigroup
In millions of dollars	ASC 712(1)			ASC 420(2)
Total Citigroup (pretax)
Original restructuring charge	$	1,254		$	79		$	55		$	123		$	19		$	1,530
Utilization		(114	)		(3	)		(2	)		(100	)		—			(219	)
Balance at December 31, 2008	$	1,140		$	76		$	53		$	23		$	19		$	1,311
Additional charge	$	14		$	6		$	4		$	5		$	—		$	29
Foreign exchange		(14	)		—			—			(12	)		(1	)		(27	)
Utilization		(541	)		(76	)		(11	)		(7	)		(5	)		(640	)
Changes in estimates		(38	)		(1	)		—			—			—			(39	)
Balance at March 31, 2009	$	561		$	5		$	46		$	9		$	13		$	634
Additional charge	$	6		$	17		$	1		$	1		$	—		$	25
Foreign exchange		26			—			2			1			—			29
Utilization		(190	)		(19	)		(8	)		(3	)		(1	)		(221	)
Changes in estimates		(53	)		(1	)		(1	)		—			(2	)		(57	)
Balance at June 30, 2009	$	350		$	2		$	40		$	8		$	10		$	410
Additional charge	$	—		$	5		$	6		$	1		$	—		$	12
Foreign exchange		3			—			1			—			—			4
Utilization		(84	)		(6	)		(6	)		(2	)		—			(98	)
Changes in estimates		(38	)		—			(2	)		(4	)		(2	)		(46	)
Balance at September 30, 2009	$	231		$	1		$	39		$	3		$	8		$	282

Note: The 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

	Severance
							Contract termination costs			Asset write-downs(3)			Employee termination cost			Total Citigroup
In millions of dollars	ASC 712(1)			ASC 420(2)
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	)		—			(1	)		—			—			(2	)
Utilization		(41	)		(10	)		(35	)		(9	)		—			(95	)
Changes in estimates		(1	)		—			(1	)		(1	)		—			(3	)
Balance at March 31, 2009	$	—		$	—		$	—		$	—		$	—		$	—

(1)

Accounted for in accordance with ASC 712 (SFAS No. 112, Employer's Accounting for Post Employment Benefits).

(2)

Accounted for in accordance with ASC 420 (SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities).

(3)

Accounted for in accordance with ASC 360 (SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets).

Note: The 2007 structural expense review restructuring initiative was fully utilized as of March 31, 2009.

106

        The total restructuring reserve balance and total charges as of September 30, 2009 and December 31, 2008 related to the 2008 Re-engineering Projects Restructuring Initiatives are presented below by business in the following tables. These charges are reported in the Restructuring line on the Company's Consolidated Statement of Income and are recorded in each business.

2008 Re-engineering Projects

	For the quarter ended September 30, 2009
In millions of dollars	Total restructuring reserve balance as of September 30, 2009		Restructuring charges recorded in the three months ended September 30, 2009		Total restructuring charges since inception(1)(2)
Citicorp	$	132	$	5	$	846
Citi Holdings		14		1		239
Corporate/Other		136		6		369
Total Citigroup (pretax)	$	282	$	12	$	1,454

(1)

Excludes pension curtailment charges of $51 million recorded during the fourth quarter of 2008.

(2)

Amounts shown net of $46 million, $57 million and $39 million related to changes in estimates recorded during the third, second and first quarters of 2009, respectively.

	For the year ended December 31, 2008
In millions of dollars	Total restructuring reserve balance as of December 31, 2008		Total restructuring charges(1)
Citicorp	$	789	$	890
Citi Holdings		184		267
Corporate/Other		338		373
Total Citigroup (pretax)	$	1,311	$	1,530

(1)

Represents the total charges incurred since inception and excludes pension curtailment charges of $51 million recorded during the fourth quarter of 2008.

107

8.     EARNINGS PER SHARE

        The following is a reconciliation of the income and share data used in the basic and diluted earnings per share computations for the three and nine months ended September 30, 2009 and 2008:

	Three Months Ended September 30,						Nine Months Ended September 30,
In millions, except per share amounts	2009			2008(1)			2009			2008(1)
Income (loss) before attribution of noncontrolling interests	$	593		$	(3,521	)	$	6,674		$	(11,036	)
Noncontrolling interest		74			(93	)		24			(37	)
Net income (loss) from continuing operations (for EPS purposes)	$	519		$	(3,428	)	$	6,650		$	(10,999	)
Income (loss) from discontinued operations, net of taxes		(418	)		613			(677	)		578
Citigroup's net income (loss)	$	101		$	(2,815	)	$	5,973		$	(10,421	)
Preferred dividends		(272	)		(389	)		(2,988	)		(833	)
Impact of the conversion price reset related to the $12.5 billion convertible preferred stock private issuance(2)		—			—			(1,285	)		—
Preferred stock Series H discount accretion		(16	)		—			(123	)		—
Impact of the Public and Private Preferred Stock exchange offer		(3,055	)		—			(3,055	)		—
Income (loss) available to common stockholders		(3,242	)		(3,204	)		(1,478	)		(11,254	)
Allocation of dividends to common stock and participating securities, net of forfeitures		—			(1,738	)		(63	)		(5,151	)
Undistributed earnings (loss) for basic EPS(3)		(3,242	)		(4,942	)		(1,541	)		(16,405	)
Effect of dilutive securities		—			270			540			606
Undistributed earnings (loss) for diluted EPS(4)	$	(3,242	)	$	(4,672	)	$	(1,001	)	$	(15,799	)
Weighted average common shares outstanding applicable to basic EPS		12,104.3			5,341.8			7,629.6			5,238.3
Effect of dilutive securities:
Convertible securities		111.7			489.2			416.1			489.2
Options		—			0.1			—			0.4
Adjusted weighted average common shares outstanding applicable to diluted EPS(3)		12,216.0			5,831.1			8,045.7			5,727.9
Basic earnings per share(3)(4)
Income (loss) from continuing operations	$	(0.23	)	$	(0.72	)	$	(0.10	)	$	(2.28	)
Discontinued operations		(0.04	)		0.11			(0.09	)		0.11
Net income (loss)	$	(0.27	)	$	(0.61	)	$	(0.19	)	$	(2.17	)
Diluted earnings per share(3)(4)
Income (loss) from continuing operations	$	(0.23	)	$	(0.72	)	$	(0.10	)	$	(2.28	)
Discontinued operations		(0.04	)		0.11			(0.09	)		0.11
Net income (loss)	$	(0.27	)	$	(0.61	)	$	(0.19	)	$	(2.17	)

(1)

The Company adopted ASC 260-10-45 to 65 (FSP EITF 03-6-1) on January 1, 2009. All prior periods have been restated to conform to the current period's presentation.

(2)

For the nine months ended September 30, 2009, income available to common shareholders includes a reduction of $1,285 million related to the conversion price reset pursuant to Citigroup's prior agreement with the purchasers of $12.5 billion convertible preferred stock issued in a private offering in January 2008. The conversion price was reset from $31.62 per share to $26.35 per share.

(3)

Due to the net loss available to common shareholders for Basic EPS in the three and nine months ended September 30, 2009 and 2008, loss available to common stockholders for basic EPS was used to calculate Diluted earnings per share. Adding back the effect of dilutive securities would result in anti-dilution.

(4)

Due to the net loss available to common shareholders for Diluted EPS in the three and nine months ended September 30, 2009 and 2008, basic shares were used to calculate Diluted earnings per share. Adding dilutive securities to the denominator would result in anti-dilution.

108

9.     TRADING ACCOUNT ASSETS AND LIABILITIES

        Trading account assets and liabilities, at fair value, consisted of the following at September 30, 2009 and December 31, 2008:

In millions of dollars		September 30, 2009		December 31, 2008
Trading account assets
Trading mortgage-backed securities
	Agency guaranteed	$	23,549	$	32,981
	Prime		1,177		1,416
	Alt-A		1,305		913
	Subprime		10,638		14,552
	Non-U.S. residential		1,923		2,447
	Commercial		3,975		2,501
Total trading mortgage-backed securities		$	42,567	$	54,810
U.S. Treasury and Federal Agencies
	U.S. Treasuries	$	20,803	$	7,370
	Agency and direct obligations		3,933		4,017
Total U.S. Treasury and Federal Agencies		$	24,736	$	11,387
State and municipal securities		$	7,196	$	9,510
Foreign government securities			66,425		57,422
Corporate			47,485		54,654
Derivatives(1)			68,670		115,289
Equity securities			46,463		48,503
Other debt securities			37,155		26,060
Total trading account assets		$	340,697	$	377,635
Trading account liabilities
Securities sold, not yet purchased		$	67,988	$	50,693
Derivatives(1)			62,552		115,107
Total trading account liabilities		$	130,540	$	165,800

(1)

Presented net, pursuant to master netting agreements. See Note 16 to the Consolidated Financial Statements, Derivatives Activities, for a discussion regarding the accounting and reporting for derivatives.

109

10.   INVESTMENTS

In millions of dollars	September 30, 2009		December 31, 2008
Securities available-for-sale	$	190,252	$	175,189
Debt securities held-to-maturity(1)		55,816		64,459
Non-marketable equity securities carried at fair value(2)		7,765		9,262
Non-marketable equity securities carried at cost(3)		8,057		7,110
Total investments	$	261,890	$	256,020

(1)

Recorded at amortized cost.

(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 (AFS) at September 30, 2009 and December 31, 2008 were as follows:

		September 30, 2009								December 31, 2008(1)
In millions of dollars		Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Debt securities available-for-sale:
Mortgage-backed securities
	U.S. government agency guaranteed	$	23,163	$	487	$	31	$	23,619	$	23,527	$	261	$	67	$	23,721
	Prime		7,436		102		1,260		6,278		8,475		3		2,965		5,513
	Alt-A		390		86		6		470		54		—		9		45
	Subprime		36		—		17		19		38		—		21		17
	Non-U.S. residential		271		—		5		266		185		2		—		187
	Commercial		919		10		120		809		519		—		134		385
Total mortgage-backed securities			32,215		685		1,439		31,461		32,798		266		3,196		29,868
U.S. Treasury and federal agency securities
	U.S. Treasury		6,194		41		1		6,234		3,465		125		—		3,590
	Agency obligations		16,897		84		14		16,967		20,237		215		77		20,375
Total U.S. Treasury and federal agency securities			23,091		125		15		23,201		23,702		340		77		23,965
State and municipal			17,967		197		1,339		16,825		18,156		38		4,370		13,824
Foreign government			79,965		974		268		80,671		79,505		945		408		80,042
Corporate			20,444		436		172		20,708		10,646		65		680		10,031
Other debt securities			11,701		201		255		11,647		11,784		36		224		11,596
Total debt securities available- for-sale			185,383		2,618		3,488		184,513		176,591		1,690		8,955		169,326
Marketable equity securities available-for-sale			4,065		1,929		255		5,739		5,768		554		459		5,863
Total securities available-for-sale		$	189,448	$	4,547	$	3,743	$	190,252	$	182,359	$	2,244	$	9,414	$	175,189

(1)

Reclassified to conform to the current period's presentation.

        The Company conducts and documents periodic reviews of all securities with unrealized losses to evaluate whether the impairment is other than temporary. As discussed in more detail below, prior to January 1, 2009, these reviews were conducted pursuant to FASB Staff Position No. 115-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments (ASC 320-10-35). 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 ASC 320-10-65-1 (FSP FAS 115-2 and FAS 124-2). Accordingly, any credit-related impairment related to debt securities the Company does not plan to sell and is more-likely-than-not will not to be required to sell is recognized in the Consolidated Statement of Income, with the non-credit-related impairment recognized in Other Comprehensive Income (OCI). For other impaired debt securities, the entire impairment is recognized in the Consolidated Statement of Income. See Note 1 to the Consolidated Financial Statements for additional information.

110

The table below shows the fair value of investments in AFS securities that have been in an unrealized loss position for less than 12 months or for 12 months or longer as of September 30, 2009 and December 31, 2008:

		Less than 12 months				12 months or longer				Total
In millions of dollar		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
September 30, 2009
Securities available-for-sale
Mortgage-backed securities
	U.S. government agency guaranteed	$	3,024	$	23	$	300	$	8	$	3,324	$	31
	Prime		4,999		1,224		268		36		5,267		1,260
	Alt-A		90		—		47		6		137		6
	Subprime		4		—		13		17		17		17
	Non-U.S. residential		266		5		—		—		266		5
	Commercial		84		64		389		56		473		120
Total mortgage-backed securities			8,467		1,316		1,017		123		9,484		1,439
U.S. Treasury and federal agency securities
	U.S. Treasury		97		—		61		1		158		1
	Agency obligations		2,995		14		1		—		2,996		14
Total U.S. Treasury and federal agency securities			3,092		14		62		1		3,154		15
State and municipal			4,321		214		877		1,125		5,198		1,339
Foreign government			22,290		129		5,732		139		28,022		268
Corporate			956		56		1,266		116		2,222		172
Other debt securities			1,183		93		1,378		162		2,561		255
Marketable equity securities available-for-sale			2,555		225		117		30		2,672		255
Total securities available-for-sale		$	42,864	$	2,047	$	10,449	$	1,696	$	53,313	$	3,743
December 31, 2008(1)
Securities available-for-sale
Mortgage-backed securities
	U.S. government agency guaranteed	$	5,281	$	9	$	432	$	58	$	5,713	$	67
	Prime		2,258		1,127		3,108		1,838		5,366		2,965
	Alt-A		38		8		5		1		43		9
	Subprime		—		—		15		21		15		21
	Non-U.S. residential		10		—		—		—		10		—
	Commercial		213		33		233		101		446		134
Total mortgage-backed securities			7,800		1,177		3,793		2,019		11,593		3,196
U.S. Treasury and federal agencies
	U.S. Treasury		—		—		—		—		—		—
	Agency obligations		1,654		76		1		1		1,655		77
Total U.S. Treasury and federal agency securities			1,654		76		1		1		1,655		77
State and municipal			12,827		3,872		3,762		498		16,589		4,370
Foreign government			10,697		201		9,080		207		19,777		408
Corporate			1,985		270		4,393		410		6,378		680
Other debt securities			944		96		303		128		1,247		224
Marketable equity securities available-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

(1)

Reclassified to conform to the current period's presentation.

111

        The following table presents the amortized cost and fair value of AFS debt securities by contractual maturity dates as of September 30, 2009, and December 31, 2008:

	September 30, 2009				December 31, 2008(1)
In millions of dollars	Amortized Cost		Fair value		Amortized cost		Fair value
Mortgage-backed securities(2)
Due within 1 year	$	2	$	2	$	87	$	80
After 1 but within 5 years		29		30		639		567
After 5 but within 10 years		690		658		1,362		1,141
After 10 years(3)		31,494		30,771		30,710		28,080
Total	$	32,215	$	31,461	$	32,798	$	29,868
U.S. Treasury and federal agencies
Due within 1 year	$	5,546	$	5,556	$	15,736	$	15,846
After 1 but within 5 years		7,600		7,629		5,755		5,907
After 5 but within 10 years		6,535		6,593		1,902		1,977
After 10 years(3)		3,410		3,423		309		235
Total	$	23,091	$	23,201	$	23,702	$	23,965
State and municipal
Due within 1 year	$	219	$	219	$	214	$	214
After 1 but within 5 years		111		121		84		84
After 5 but within 10 years		354		381		411		406
After 10 years(3)		17,283		16,104		17,447		13,120
Total	$	17,967	$	16,825	$	18,156	$	13,824
Foreign government
Due within 1 year	$	34,753	$	34,824	$	26,481	$	26,937
After 1 but within 5 years		37,442		37,945		45,652		45,462
After 5 but within 10 years		6,711		6,706		6,771		6,899
After 10 years(3)		1,059		1,196		601		744
Total	$	79,965	$	80,671	$	79,505	$	80,042
All other(4)
Due within 1 year	$	2,893	$	2,883	$	4,160	$	4,319
After 1 but within 5 years		23,456		23,711		2,662		2,692
After 5 but within 10 years		3,282		3,327		12,557		11,842
After 10 years(3)		2,514		2,434		3,051		2,774
Total	$	32,145	$	32,355	$	22,430	$	21,627
Total debt securities available-for-sale	$	185,383	$	184,513	$	176,591	$	169,326

(1)

Reclassified to conform to the current period's presentation.

(2)

Includes mortgage-backed securities of U.S. federal agencies.

(3)

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.

(4)

Includes corporate securities and other debt securities.

        The following tables present interest and dividends on investments for the periods ended September 30, 2009 and 2008:

	Three months ended
In millions of dollars	Sept 30, 2009		Sept 30, 2008
Taxable interest	$	2,956	$	2,334
Interest exempt from U.S. federal income tax		226		136
Dividends		101		127
Total interest and dividends	$	3,283	$	2,597

	Nine months ended
In millions of dollars	Sept 30, 2009		Sept 30, 2008
Taxable interest	$	9,084	$	7,019
Interest exempt from U.S. federal income tax		591		433
Dividends		219		380
Total interest and dividends	$	9,894	$	7,832

        The following table presents realized gains and losses on investments for the periods ended September 30, 2009 and 2008. The gross realized investment losses exclude losses from other-than-temporary impairment:

	Three months ended						Nine months ended
In millions of dollars	Sept 30, 2009			Sept 30, 2008			Sept 30, 2009			Sept 30, 2008
Gross realized investment gains	$	439		$	192		$	1,797		$	506
Gross realized investment losses		(12	)		(42	)		(78	)		(130	)
Net realized gains (losses)	$	427		$	150		$	1,719		$	376

112

Debt Securities Held-to-Maturity

        The carrying value and fair value of securities held-to-maturity (HTM) at September 30, 2009 and December 31, 2008 were as follows:

In millions of dollars		Amortized cost(1)		Net unrealized loss recognized in OCI		Carrying value(2)		Gross unrecognized gains		Gross unrecognized losses		Fair value
September 30, 2009
Debt securities held-to-maturity
Mortgage-backed securities
	U.S. government agency guaranteed	$	—	$	—	$	—	$	—	$	—	$	—
	Prime		6,388		1,211		5,177		50		50		5,177
	Alt-A		15,436		4,609		10,827		411		419		10,819
	Subprime		1,165		171		994		56		117		933
	Non-U.S. residential		9,485		1,168		8,317		364		240		8,441
	Commercial		1,308		52		1,256		—		377		879
	Total mortgage-backed securities		33,782		7,211		26,571		881		1,203		26,249
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			3,169		146		3,023		200		138		3,085
Corporate			7,365		307		7,058		472		138		7,392
Asset-backed securities			19,590		427		19,163		435		722		18,876
Other debt securities			7		6		1		—		—		1
Total debt securities held-to-maturity		$	63,913	$	8,097	$	55,816	$	1,988	$	2,201	$	55,603
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. 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 $8.1 billion as of September 30, 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.

113

        The table below shows the fair value of investments in HTM that have been in an unrealized loss position for less than 12 months or for 12 months or longer as of September 30, 2009 and December 31, 2008:

	Less than 12 months				12 months or longer				Total
In millions of dollars	Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
September 30, 2009
Debt securities held-to-maturity
Mortgage-backed securities	$	5,235	$	1,046	$	13,656	$	157	$	18,891	$	1,203
State and municipal		733		138		—		—		733		138
Corporate		2,801		138		—		—		2,801		138
Asset-backed securities		5,713		701		807		21		6,520		722
Other debt securities		—		—		—		—		—		—
Total debt securities held-to-maturity	$	14,482	$	2,023	$	14,463	$	178	$	28,945	$	2,201
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 unrealized losses presented in the above table is the $8.1 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 September 30, 2009 and December 31, 2008, respectively. Approximately $6.6 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 September 30, 2009 and December 31, 2008, respectively.

114

        The following table presents the carrying value and fair value of HTM debt securities by contractual maturity dates as of September 30, 2009 and December 31, 2008:

	September 30, 2009				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		479		314		363		282
After 5 but within 10 years		1,922		1,787		513		413
After 10 years(1)		24,169		24,147		29,155		26,287
Total	$	26,571	$	26,249	$	30,119	$	27,047
State and municipal
Due within 1 year	$	6	$	6	$	86	$	86
After 1 but within 5 years		48		81		105		105
After 5 but within 10 years		168		140		112		106
After 10 years(2)		2,801		2,858		2,885		2,652
Total	$	3,023	$	3,085	$	3,188	$	2,949
All other(2)
Due within 1 year	$	5,618	$	5,888	$	4,482	$	4,505
After 1 but within 5 years		5,636		5,587		10,892		10,692
After 5 but within 10 years		6,852		7,087		6,358		6,241
After 10 years(1)		8,116		7,707		9,420		8,943
Total	$	26,222	$	26,269	$	31,152	$	30,381
Total debt securities held-to-maturity	$	55,816	$	55,603	$	64,459	$	60,377

(1)

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.

(2)

Includes asset-backed securities and all other debt securities.

115

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 (ASC 320-10-35). 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 (ASC 320-10-65-1). Accordingly, 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.

        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 credit 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.

        For debt securities that are not deemed to be credit impaired, management performs additional analysis to assess whether it intends to sell or more-likely-than-not would not 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 more-likely-than-not that it will not 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 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 September 30, 2009.

        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.

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).

116

        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 September 30, 2009 are in the table below:

	September 30, 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.

        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 scenario's 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 primarily of bonds that are financed through Tender Option Bond programs. The process for identifying credit impairment for bonds 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.

        The remainder of Citigroup's AFS state and municipal bonds, outside of the Tender Option Bond Programs, are specifically reviewed for credit impairment based on instrument-specific estimates of cash flows, probability of default and loss given default.

117

Recognition and Measurement of Other-Than-Temporary Impairment

        The following table presents the total other-than-temporary impairments recognized during the three months and nine months ended September 30, 2009:

Other-Than-Temporary Impairments (OTTI) on Investments

		Three months ended Sept. 30, 2009						Nine months ended Sept. 30, 2009
In millions of dollars		AFS		HTM		Total		AFS		HTM		Total
Impairment losses related to securities which the Company does not intend to sell nor will likely be required to sell:
	Total OTTI losses recognized during the quarter ended September 30, 2009	$	158	$	2,182	$	2,340	$	263	$	5,730	$	5,993
	Less: portion of OTTI loss recognized in OCI (before taxes)		25		1,716		1,741		54		3,952		4,006
Net impairment losses recognized in earnings for securities that the Company does not intend to sell nor will likely be required to sell		$	133	$	466	$	599	$	209	$	1,778	$	1,987
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			113		—		113		168		—		168
Total impairment losses recognized in earnings		$	246	$	466	$	712	$	377	$	1,778	$	2,155

        The following is a three-month roll forward of the credit-related position recognized in earnings for AFS and HTM debt securities held as of September 30, 2009:

		Cumulative Other-Than-Temporary Impairment Credit Losses Recognized in Earnings
In millions of dollars		June 30, 2009 Balance		Credit impairments recognized in earnings on securities not previously impaired		Credit impairments recognized in earnings on securities than have been previously impaired		Reductions due to sales of credit impaired securities sold or matured			Sept. 30, 2009 Balance
AFS debt securities
Mortgage-backed securities
	Prime	$	7	$	92	$	—	$	—		$	99
	Commercial real estate		2		—		—		—			2
	Total mortgage-backed securities		9		92		—		—			101
Foreign government			14		—		—		(1	)		13
Corporate			97		24		10		—			131
Asset backed securities			3		—		5		—			8
Other debt securities			6		2		—		—			8
Total OTTI credit losses recognized for AFS debt securities		$	129	$	118	$	15	$	(1	)	$	261
HTM debt securities
Mortgage-backed securities
	Prime	$	14	$	93	$	1	$	—		$	108
	Alt-A		1,901		297		—		—			2,198
	Subprime		105		66		—		—			171
	Non-U.S. residential		96		—		—		—			96
	Commercial real estate		4		—		—		—			4
	Total mortgage-backed securities		2,120		456		1		—			2,577
Corporate			320		8		—		(3	)		325
Asset backed securities			32		—		—		—			32
Other debt securities			3		—		1		—			4
Total OTTI credit losses recognized for HTM debt securities		$	2,475	$	464	$	2	$	(3	)	$	2,938

118

        The following is a nine-month roll forward of the credit-related position recognized in earnings for AFS and HTM debt securities held as of September 30, 2009:

		Cumulative Other-Than-Temporary Impairment Credit Losses Recognized in Earnings
In millions of dollars		January 1, 2009 Balance		Credit impairments recognized in earnings on securities not previously impaired		Credit impairments recognized in earnings on securities than have been previously impaired		Reductions due to sales of credit impaired securities sold or matured			Sept. 30, 2009 Balance
AFS debt securities
Mortgage-backed securities
	Prime	$	—	$	99	$	—	$	—		$	99
	Commercial real estate		1		1		—		—			2
	Total mortgage-backed securities		1		100		—		—			101
Foreign government			—		14		—		(1	)		13
Corporate			53		54		25		(1	)		131
Asset backed securities			—		3		5		—			8
Other debt securities			—		8		—		—			6
Total OTTI credit losses recognized for AFS debt     securities		$	54	$	179	$	30	$	(2	)	$	261
HTM debt securities
Mortgage-backed securities
	Prime	$	8	$	99	$	1	$	—		$	108
	Alt-A		1,091		1,088		19		—			2,198
	Subprime		85		86		—		—			171
	Non- U.S. residential		28		68		—		—			96
	Commercial real estate		4		—		—		—			4
	Total mortgage-backed securities		1,216		1,341		20		—			2,577
Corporate			—		398		—		(73	)		325
Asset backed securities			17		15		—		—			32
Other debt securities			—		3		1		—			4
Total OTTI credit losses recognized for HTM debt     securities		$	1,233	$	1,757	$	21	$	(73	)	$	2,938

119

11.   GOODWILL AND INTANGIBLE ASSETS

Goodwill

        The changes in goodwill during the nine months ended September 30, 2009 were as follows:

In millions of dollars	Goodwill
Balance at December 31, 2008	$	27,132
Foreign exchange translation		(844	)
Purchase accounting adjustments and other		122
Balance at March 31, 2009	$	26,410
Morgan Stanley Smith Barney joint venture		(1,146	)
Estimated impact from the Sale of Nikko Cordial Securities, reclassified as Assets of discontinued operations held for sale		(533	)
Foreign exchange translation		847
Balance at June 30, 2009	$	25,578
Estimated impact from the Sale of Nikko Asset Management, reclassified as Other Assets of businesses held for sale		(446	)
Foreign exchange translation		409
Purchase accounting adjustments and other		(118	)
Balance at September 30, 2009	$	25,423

        During the first nine months of 2009, no goodwill was written off due to impairment. The Company performed its annual goodwill impairment test during the third quarter of 2009 and while no impairment was noted in step one for any of the reporting units, goodwill for the Latin America Regional Consumer Banking and Local Consumer Lending—Cards reporting units may be particularly sensitive to further deterioration in economic conditions. The fair value as a percentage of allocated book value for Latin America Regional Consumer Banking and Local Consumer Lending—Cards is 111% and 112%, respectively. 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 the $1,317 million and $4,751 million of goodwill remaining in our Latin America Regional Consumer Banking and Local Consumer Lending—Cards reporting units, respectively. 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 following tables present the Company's goodwill balances by reporting unit and by segment at September 30, 2009:

In millions of dollars		September 30, 2009
By Reporting Unit
North America Regional Consumer Banking		$	2,461
EMEA Regional Consumer Banking			342
Asia Regional Consumer Banking			5,375
Latin America Regional Consumer Banking			1,317
Securities and Banking			8,767
Transaction Services			1,579
Brokerage and Asset Management			831
Local Consumer Lending—Cards			4,751
Local Consumer Lending—Other			—
	Total	$	25,423
By Segment
Regional Consumer Banking		$	9,495
Institutional Clients Group			10,346
Citi Holdings			5,582
	Total	$	25,423

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Intangible Assets

        The components of intangible assets were as follows:

	September 30, 2009						December 31, 2008
In millions of dollars	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Purchased credit card relationships	$	8,138	$	4,684	$	3,454	$	8,443	$	4,513	$	3,930
Core deposit intangibles		1,351		744		607		1,345		662		683
Other customer relationships		696		170		526		4,031		168		3,863
Present value of future profits		416		275		141		415		264		151
Other(1)		4,965		1,292		3,673		5,343		1,285		4,058
Total amortizing intangible assets	$	15,566	$	7,165	$	8,401	$	19,577	$	6,892	$	12,685
Indefinite-lived intangible assets		556		N/A		556		1,474		N/A		1,474
Mortgage servicing rights		6,228		N/A		6,228		5,657		N/A		5,657
Total intangible assets	$	22,350	$	7,165	$	15,185	$	26,708	$	6,892	$	19,816

(1)

Includes contract-related intangible assets.

N/A    Not Applicable.

        The changes in intangible assets during the nine months ended September 30, 2009 were as follows:

In millions of dollars	Net carrying amount at December 31, 2008		Acquisitions / Divestitures			Amortization			Impairments			FX and other(1)		Net carrying amount at September 30, 2009
Purchased credit card relationships	$	3,930	$	(72	)	$	(444	)	$	—		$	40	$	3,454
Core deposit intangibles		683		—			(86	)		(3	)		13		607
Other customer relationships(2)		3,863		(3,253	)		(145	)		—			61		526
Present value of future profits		151		—			(10	)		—			—		141
Indefinite-lived intangible assets(2)		1,474		(967	)		—			—			49		556
Other		4,058		(133	)		(222	)		(53	)		23		3,673
	$	14,159	$	(4,425	)	$	(907	)	$	(56	)	$	186	$	8,957
Mortgage servicing rights(3)		5,657													6,228
Total intangible assets	$	19,816												$	15,185

(1)

Includes the impact of FX translation and purchase accounting adjustments.

(2)

Decrease during the third quarter of 2009 is due to the reclassification of assets of the Nikko asset management business to Other Assets as described in Note 2 to the Consolidated Financial Statements.

(3)

See Note 15 to the Consolidated Financial Statements for the roll-forward of mortgage servicing rights.

121

12.    DEBT

Short-Term Borrowings

        Short-term borrowings consist of commercial paper and other borrowings as follows:

In millions of dollars	September 30, 2009		December 31, 2008
Commercial paper
Citigroup Funding Inc.	$	9,983	$	28,654
Other Citigroup subsidiaries		433		471
	$	10,416	$	29,125
Other short-term borrowings		54,315		97,566
Total short-term borrowings	$	64,731	$	126,691

        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.

        Citigroup Global Markets Holdings Inc. (CGMHI) has committed financing with unaffiliated banks. At September 30, 2009, CGMHI had drawn down the full $1.175 billion available under these facilities, of which $725 million is guaranteed by Citigroup. CGMHI has a bilateral facility totaling $400 million with an unaffiliated bank maturing prior to year end. 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

In millions of dollars	September 30, 2009		December 31, 2008
Citigroup parent company	$	214,981	$	192,290
Other Citigroup subsidiaries(1)		97,965		109,306
Citigroup Global Markets Holdings Inc. (CGMHI)		15,403		20,623
Citigroup Funding Inc. (CFI)(2)		51,208		37,374
Total long term debt	$	379,557	$	359,593

(1)

At September 30, 2009 and December 31, 2008, collateralized advances from the Federal Home Loan Bank are $30.6 billion and $67.4 billion, respectively.

(2)

Includes Principal-Protected Trust Securities (Safety First Trust Securities) with carrying values of $521 million issued by Safety First Trust Series 2006-1, 2007-1, 2007-2, 2007-3, 2007-4, 2008-1, 2008-2, 2008-3, 2008-4, 2008-5, 2008-6, 2009-1, 2009-2, and 2009-3 (collectively, the "Safety First Trusts") at September 30, 2009 and $452 million issued by Safety First Trust Series 2006-1, 2007-1, 2007-2, 2007-3, 2007-4, 2008-1, 2008-2, 2008-3, 2008-4, 2008-5 and 2008-6 at December 31, 2008. CFI owns all of the voting securities of the Safety First Trusts. The Safety First Trusts have no assets, operations, revenues or cash flows other than those related to the issuance, administration, and repayment of the Safety First Trust Securities and the Safety First Trusts' common securities. The Safety First Trusts' obligations under the Safety First Trust Securities are fully and unconditionally guaranteed by CFI, and CFI's guarantee obligations are fully and unconditionally guaranteed by Citigroup.

        CGMHI has a syndicated five-year committed uncollateralized revolving line of credit facility with unaffiliated banks totaling $3.0 billion, which was undrawn at September 30, 2009 and matures in 2011. CGMHI also has committed long-term financing facilities with unaffiliated banks. At September 30, 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.

        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 impact of FX translation certain debt issuances.

        Citigroup and other U.S. financial services firms are currently benefiting from government programs that are improving markets and providing Citigroup and other institutions with significant current funding capacity and significant liquidity support, including the Temporary Liquidity Guarantee Program (TLGP). See "TARP and Other Regulatory Programs" above.

        Long-term debt at September 30, 2009 and December 31, 2008 includes $34.5 billion and $24.1 billion, 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 (1) issuing trust securities representing undivided beneficial interests in the assets of the trust; (2) investing the gross proceeds of the trust securities in junior subordinated deferrable interest debentures (subordinated debentures) of its parent; and (3) engaging in only those activities necessary or incidental thereto. Upon approval from the Federal Reserve Board, 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

122

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. In addition, see Note 23 to the Consolidated Financial Statements, "Exchange Offers," below.

        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.

123

        The following table summarizes the financial structure of each of the Company's subsidiary trusts at September 30, 2009:

												Junior subordinated debentures owned by trust
Trust securities with distributions guaranteed by Citigroup In millions of dollars, except share amounts	Issuance date		Securities issued		Liquidation value		Coupon rate			Common shares issued to parent		Amount(1)		Maturity		Redeemable by issuer beginning
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	%		1,350,050		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		160		6.829	%		50		160		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 XXIX		Nov. 2007		1,875,000		1,875		6.320	%		10		1,875		Mar. 15, 2041		Mar. 15, 2013
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		27,059,000		27,059		8.000	%		100		27,059		July 30, 2039		July 30, 2014
Adam Capital Trust III		Dec. 2002		17,500		18		3 mo. LIB +335 bp.			542		18		Jan. 7, 2033		Jan. 7, 2008
Adam Statutory Trust III		Dec. 2002		25,000		25		3 mo. LIB +325 bp.			774		26		Dec. 26, 2032		Dec. 26, 2007
Adam Statutory Trust IV		Sept. 2003		40,000		40		3 mo. LIB +295 bp.			1,238		41		Sept. 17, 2033		Sept. 17, 2008
Adam Statutory Trust V		Mar. 2004		35,000		35		3 mo. LIB +279 bp.			1,083		36		Mar. 17, 2034		Mar. 17, 2009
Total obligated					$	44,644						$	44,770

(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 USG in exchange for the Series G and I of preferred stock.

124

13.    PREFERRED STOCK

        The following table summarizes the Company's preferred stock outstanding at September 30, 2009, June 30, 2009, and December 31, 2008:

								Carrying value (in millions of dollars)
				Redemption price per depositary share / preference share
	Dividend rate					Number of depositary shares		September 30, 2009		June 30, 2009		December 31, 2008
Series A1(1)		7.000	%	$	50		137,600,000	$	—	$	6,880	$	6,880
Series B1(1)		7.000	%		50		60,000,000		—		3,000		3,000
Series C1(1)		7.000	%		50		20,000,000		—		1,000		1,000
Series D1(1)		7.000	%		50		15,000,000		—		750		750
Series E(2)		8.400	%		1,000		6,000,000		121		6,000		6,000
Series F(3)		8.500	%		25		81,600,000		71		2,040		2,040
Series G(4)		8.000	%		1,000,000		7,059		—		3,529		—
Series H(5)		5.000	%		1,000,000		25,000		—		23,835		23,727
Series I(6)		8.000	%		1,000,000		20,000		—		19,513		19,513
Series J1(1)		7.000	%		50		9,000,000		—		450		450
Series K1(1)		7.000	%		50		8,000,000		—		400		400
Series L2(1)		7.000	%		50		100,000		—		5		5
Series N1(1)		7.000	%		50		300,000		—		15		15
Series T(7)		6.500	%		50		63,373,000		23		3,169		3,169
Series AA(8)		8.125	%		25		148,600,000		97		3,715		3,715
								$	312	$	74,301	$	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. Redeemable in whole or in part on or after February 15, 2015. 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 (the "New Preferred Stock") for an equal number of shares of Old Preferred Stock. The terms and conditions of the New Preferred Stock were identical in all material respects to the terms and conditions of the Old Preferred Stock, except that the Conversion Price and Conversion Rate of the New Preferred Stock were reset to $26.3517 and 1,897.4108, respectively. All shares of the Old Preferred Stock were canceled. The dividend of $0.88 per depositary share was payable quarterly when, as and if declared by the Company's Board of Directors. Redemption was subject to a capital replacement covenant.

(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 $42.00 per depositary share and thereafter quarterly at a floating rate when, as and if declared by the Company's Board of Directors.

(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.

(4)

Issued on January 15, 2009 as shares of Cumulative Preferred Stock to the U.S. Treasury and the FDIC as consideration for guaranteeing approximately $300.8 billion of assets. Redeemable in whole or in part subject to approval of the investor and compliance with certain conditions. The dividend of $20,000 per preferred share was payable quarterly when, as and if declared by the Company's Board of Directors.

(5)

Issued on October 28, 2008 as shares of Cumulative Preferred Stock to the U.S. Treasury under the Troubled Asset Relief Program (TARP). Redeemable in whole or in part subject to approval of the investor and compliance with certain conditions. Dividends were payable quarterly for the first five years until February 15, 2013 at $12,500 per preferred share and thereafter at $22,500 per preferred share when, as and if declared by the Company's Board of Directors.

(6)

Issued on December 31, 2008 as shares of Cumulative Preferred Stock to the U.S. Treasury under TARP. Redeemable in whole or in part subject to approval of the investor and compliance with certain conditions. The dividend of $20,000 per preferred share was payable quarterly when, as and if declared by the Company's Board of Directors.

(7)

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 of $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.

(8)

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.

        Other than securities containing customary anti-dilution provisions, Citigroup's only outstanding instruments subject to potential resets are the warrant to purchase 210,084,034 shares of common stock issued to the U.S. Treasury as part of TARP on November 28, 2008, the warrant 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 warrant 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. Under the terms of the warrants, the number of shares of common stock for which the warrants are exercisable and the exercise price of the warrants will be subject to a reset if, prior to the third anniversary of issue date of the warrants, Citigroup issues shares of common stock (or

125

rights or warrants or other securities exercisable or convertible into or exchangeable for shares of common stock) (collectively, "convertible securities") without consideration or at a consideration per share (or having a conversion price per share) that is less than 90% of the market price of Citigroup's common stock on the last trading day preceding the date of the agreement on pricing such shares (or such convertible securities), subject to specified exceptions.

Exchange Offers

        During the third quarter of 2009, Citigroup closed its exchange offers with the private and public holders of preferred stock. The UST matched $25 billion of these exchange offers. In total, approximately $74 billion in preferred stock was exchanged for common stock and converted into TRuPs as a result of the completion of the exchange offers.

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14.    CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

        Changes in each component of Accumulated Other Comprehensive Income (Loss) (AOCI) for the first three quarters of 2009 were as follows:

In millions of dollars	Net unrealized gains (losses) on investment securities			Foreign currency translation adjustment, net of hedges			Cash flow hedges			Pension liability adjustments			Accumulated other comprehensive income (loss)
Balance, December 31, 2008	$	(9,647	)	$	(7,744	)	$	(5,189	)	$	(2,615	)	$	(25,195	)
Cumulative effect of accounting change (ASC 320-10-65- 1/FSP FAS 115-2)		(413	)		—			—			—			(413	)
Balance, January 1, 2009	$	(10,060	)	$	(7,744	)	$	(5,189	)	$	(2,615	)	$	(25,608	)
Decrease (increase) in net unrealized gains (losses) on investment securities, net of taxes(1)(3)		31			—			—			—			31
Less: Reclassification adjustment for gains included in net income, net of taxes		(11	)		—			—			—			(11	)
FX translation adjustment, net of taxes(2)		—			(2,974	)		—			—			(2,974	)
Cash flow hedges, net of taxes(3)		—			—			1,483			—			1,483
Pension liability adjustment, net of taxes		—			—			—			66			66
Change	$	20		$	(2,974	)	$	1,483		$	66		$	(1,405	)
Citigroup Stockholders AOCI balance, March 31, 2009	$	(10,040	)	$	(10,718	)	$	(3,706	)	$	(2,549	)	$	(27,013	)
Decrease (increase) in net unrealized gains (losses) on investment securities, net of taxes(1)(3)		2,890			—			—			—			2,890
Less: Reclassification adjustment for gains included in net income, net of taxes		95			—			—			—			95
FX translation adjustment, net of taxes(4)		—			2,406			—			—			2,406
Cash flow hedges, net of taxes(3)		—			—			41			—			41
Pension liability adjustment, net of taxes		—			—			—			(62	)		(62	)
Change	$	2,985		$	2,406		$	41		$	(62	)	$	5,370
Citigroup Stockholders AOCI balance, June 30, 2009	$	(7,055	)	$	(8,312	)	$	(3,665	)	$	(2,611	)	$	(21,643	)
Decrease (increase) in net unrealized gains (losses) on investment securities, net of taxes(1)(3)		2,968			—			—			—			2,968
Less: Reclassification adjustment for gains included in net income, net of taxes		(155	)		—			—			—			(155	)
FX translation adjustment, net of taxes(5)		—			1,699			—			—			1,699
Cash flow hedges, net of taxes(3)		—			—			(512	)		—			(512	)
Pension liability adjustment, net of taxes		—			—			—			(8	)		(8	)
Change	$	2,813		$	1,699		$	(512	)	$	(8	)	$	3,992
Citigroup Stockholders AOCI balance, September 30, 2009	$	(4,242	)	$	(6,613	)	$	(4,177	)	$	(2,619	)	$	(17,651	)

(1)

Primarily related to AFS Prime MBS, municipal and other debt securities.

(2)

Reflects, among other items, the movements in the Japanese Yen, Korean Won, Euro, Pound Sterling, Polish Zloty, Mexican Peso and the Singapore Dollar against the U.S. Dollar, and changes in related tax effects.

(3)

Decrease (increase) in net unrealized gains (losses) on investment securities, net of taxes includes the change in the hedged senior debt securities retained from the sale of a portfolio of highly leveraged loans. The offsetting change in the corresponding cash flow hedge is reflected in Cash Flow hedges, net of taxes.

(4)

Reflects, among other items, the movements in the British Pound, Mexican Peso, Japanese Yen, Australian Dollar, Korean Won, and the Euro against the U.S. dollar, and changes in related tax effects.

(5)

Reflects among other items, the movements in the Japanese Yen, Korean Won, Brazilian Real, Australian Dollar, Polish Zloty, Canadian Dollar, Euro, British Pound and the Mexican Peso against the U.S. dollar, and changes in related tax effects.

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15.    SECURITIZATIONS AND VARIABLE INTEREST ENTITIES

Overview

        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.

Variable Interest Entities

        VIEs are entities defined as 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".

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        Citigroup's involvement with QSPEs and Consolidated and Unconsolidated VIEs with which the Company holds significant variable interests as of September 30, 2009 and December 31, 2008 is presented below:

As of September 30, 2009
									Maximum exposure to loss in significant unconsolidated VIEs(1)
									Funded exposures(2)				Unfunded exposures(3)
	Total involvement with SPE assets
In millions of dollars			QSPE assets		Consolidated VIE assets		Significant unconsolidated VIE assets(4)		Debt investments		Equity investments		Funding commitments		Guarantees and derivatives
Citicorp
Credit card securitizations	$	78,346	$	78,346	$	—	$	—	$	—	$	—	$	—	$	—
Citi-administered asset-backed commercial paper conduits (ABCP)		24,733		—		—		24,733		109		—		24,250		374
Third-party commercial paper conduits		4,114		—		—		4,114		—		—		353		—
Collateralized debt obligations (CDOs)		3,477		—		—		3,477		15		—		—		—
Collateralized loan obligations (CLOs)		3,991		—		—		3,991		44		—		—		—
Mortgage loan securitization		82,916		82,916		—		—		—		—		—		—
Asset-based financing		19,763		—		1,426		18,337		3,965		44		649		491
Municipal securities tender option bond trusts (TOBs)		19,754		710		9,781		9,263		—		—		6,079		689
Municipal investments		577		—		—		577		—		40		17		—
Client intermediation		7,525		—		2,948		4,577		1,225		12		—		—
Investment funds		108		—		38		70		13		—		—		2
Trust preferred securities		34,531		—		—		34,531		—		128		—		—
Other		7,643		1,809		1,782		4,052		258		—		10		—
Total	$	287,478	$	163,781	$	15,975	$	107,722	$	5,629	$	224	$	31,358	$	1,556
Citi Holdings
Credit card securitizations	$	41,315	$	41,315	$	—	$	—	$	—	$	—	$	—	$	—
Mortgage securitizations		513,004		513,004		—		—		—		—		—		—
Student loan securitizations		14,691		14,691		—		—		—		—		—		—
Citi-administered asset-backed commercial paper conduits (ABCP)		15,106		—		153		14,953		—		—		14,935		18
Third-party commercial paper conduits		7,770		—		—		7,770		298		—		252		—
Collateralized debt obligations (CDOs)		21,148		—		8,491		12,657		962		—		—		463
Collateralized loan obligations (CLOs)		9,896		—		72		9,824		1,543		—		32		247
Asset-based financing		53,381		—		430		52,951		16,166		75		1,697		—
Municipal securities tender option bond trusts (TOBs)		2,336		—		2,336		—		—		—		—		—
Municipal investments		16,294		—		879		15,415		—		2,012		529		—
Client intermediation		671		—		226		445		43		—		—		353
Investment funds		10,042		—		1,283		8,759		— —		247		169		—
Other		3,427		694		1,866		867		203		125		224		—
Total	$	709,081	$	569,704	$	15,736	$	123,641	$	19,215	$	2,459	$	17,838	$	1,081
Total Citigroup	$	996,559	$	733,485	$	31,711	$	231,363	$	24,844	$	2,683	$	49,196	$	2,637

(1)

The definition of maximum exposure to loss is included in the text that follows.

(2)

Included in Citigroup's September 30, 2009 Consolidated Balance Sheet.

(3)

Not included in Citigroup's September 30, 2009 Consolidated Balance Sheet.

(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.

129

As of September 30, 2009 (continued)		As of December 31, 2008(1) In millions of dollars
Total maximum exposure to loss in significant unconsolidated VIEs (continued)(3)		Total involvement with SPEs		QSPE assets		Consolidated VIE assets		Significant unconsolidated VIE assets(2)		Maximum exposure to loss in significant unconsolidated VIE assets(3)
$	—	$	78,254	$	78,254	$	—	$	—	$	—
	24,733		36,108		—		—		36,108		36,108
	353		10,589		—		—		10,589		579
	15		4,042		—		—		4,042		12
	44		3,343		—		—		3,343		2
	—		84,953		84,953		—		—		—
	5,149		16,930		—		1,629		15,301		4,556
	6,768		27,047		5,964		12,135		8,948		7,884
	57		593		—		—		593		35
	1,237		8,332		—		3,480		4,852		1,476
	15		71		—		45		26		31
	128		23,899		—		—		23,899		162
	268		10,394		3,737		2,419		4,238		370
$	38,767	$	304,555	$	172,908	$	19,708	$	111,939	$	51,215
$	—	$	45,613	$	45,613	$	—	$	—	$	—
	—		586,410		586,407		3		—		—
	—		15,650		15,650		—		—		—
	14,953		23,527		—		—		23,527		23,527
	550		10,166		—		—		10,166		820
	1,425		26,018		—		11,466		14,552		1,461
	1,822		19,610		—		122		19,488		1,680
	17,938		85,224		—		2,218		83,006		23,676
	—		3,024		540		2,484		—		—
	2,541		16,545		—		866		15,679		2,915
	396		1,132		—		331		801		61
	416		10,330		—		2,084		8,246		158
	552		9,472		1,014		4,306		4,152		892
$	40,593	$	852,721	$	649,224	$	23,880	$	179,617	$	55,190
$	79,360	$	1,157,276	$	822,132	$	43,588	$	291,556	$	106,405

(1)

Reclassified to conform to the current period's presentation.

(2)

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.

(3)

The definition of maximum exposure to loss is included in the text that follows.

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        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.

        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.

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 September 30, 2009:

In billions of dollars	Liquidity Facilities		Loan Commitments
Citicorp
Citi-administered asset-backed commercial paper conduits (ABCP)	$	22,456	$	1,794
Third-party commercial paper conduits		353		—
Asset-based financing		—		649
Municipal securities tender option bond trusts (TOBs)		6,079		—
Municipal investments		—		17
Other		10		—
Total Citicorp	$	28,898	$	2,460
Citi Holdings
Citi-administered asset-backed commercial paper conduits (ABCP)	$	13,329	$	1,606
Third-party commercial paper conduits		252		—
Collateralized loan obligations (CLOs)		32		—
Asset-based financing		—		1,697
Municipal investments		—		529
Investment Funds		—		169
Other		—		224
Total Citi Holdings	$	13,613	$	4,225
Total Citigroup funding commitments	$	42,511	$	6,685

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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	September 30, 2009		December 31, 2008
Cash	$	0.0	$	0.7
Trading account assets		3.5		4.3
Investments		10.2		12.5
Loans		0.3		0.5
Other assets		2.0		1.7
Total assets of consolidated VIEs	$	16.0	$	19.7

        The following table presents the carrying amounts and classification of the third-party liabilities of the consolidated VIEs:

In billions of dollars	September 30, 2009		December 31, 2008
Short-term borrowings	$	9.4	$	14.2
Long-term debt		5.6		5.6
Other liabilities		0.2		0.9
Total liabilities of consolidated VIEs	$	15.2	$	20.7

        The consolidated VIEs included in the table 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 liabilities are excluded from the table.

Citi Holdings' 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	September 30, 2009		December 31, 2008
Cash	$	0.5	$	1.2
Trading account assets		10.9		16.6
Investments		3.1		3.3
Loans		0.6		2.1
Other assets		0.6		0.7
Total assets of consolidated VIEs	$	15.7	$	23.9

        The following table presents the carrying amounts and classification of the third-party liabilities of the consolidated VIEs:

In billions of dollars	September 30, 2009		December 31, 2008
Trading account liabilities	$	0.2	$	0.5
Short-term borrowings		3.0		2.8
Long-term debt		0.5		1.2
Other liabilities		1.2		2.1
Total liabilities of consolidated VIEs	$	4.9	$	6.6

Citicorp's Significant Interests in Unconsolidated VIEs—Balance Sheet Classification

        The following table presents the carrying amounts and classification of significant interests in unconsolidated VIEs:

In billions of dollars	September 30, 2009		December 31, 2008
Trading account assets	$	3.4	$	1.9
Investments		0.8		0.2
Loans		2.4		3.5
Other assets		0.6		0.4
Total assets of significant interest in unconsolidated VIEs	$	7.2	$	6.0

In billions of dollars	September 30, 2009		December 31, 2008
Long-term debt	$	0.5	$	0.4
Total liabilities of significant interest in unconsolidated VIEs	$	0.5	$	0.4

Citi Holdings' Significant Interests in Unconsolidated VIEs—Balance Sheet Classification

        The following table presents the carrying amounts and classification of significant interests in unconsolidated VIEs:

In billions of dollars	September 30, 2009		December 31, 2008
Trading account assets	$	2.8	$	4.4
Investments		8.8		8.2
Loans		12.6		12.4
Other assets		0.1		2.6
Total assets of significant interest in unconsolidated VIEs	$	24.3	$	27.6

In billions of dollars	September 30, 2009		December 31, 2008
Trading account liabilities	$	0.0	$	0.2
Other liabilities		0.3		0.6
Total liabilities of significant interest in unconsolidated VIEs	$	0.3	$	0.8

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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 at September 30, 2009 and December 31, 2008:

	Citicorp				Citi Holdings
In billions of dollars	September 30, 2009		December 31, 2008		September 30, 2009		December 31, 2008
Principal amount of credit card receivables in trusts	$	78.3	$	78.3	$	41.3	$	45.7
Ownership interests in principal amount of trust credit card receivables:
Sold to investors via trust-issued securities		65.5		68.2		26.5		30.0
Retained by Citigroup as trust-issued securities		5.1		1.2		9.5		5.4
Retained by Citigroup via non-certificated interests recorded as consumer loans		7.7		8.9		5.3		10.3
Total ownership interests in principal amount of trust credit card receivables	$	78.3	$	78.3	$	41.3	$	45.7
Other amounts recorded on the balance sheet related to interests retained in the trusts:
Other retained interests in securitized assets	$	1.3	$	1.2	$	1.6	$	2.0
Residual interest in securitized assets(1)		0.3		0.3		1.0		1.4
Amounts payable to trusts		1.1		1.0		0.7		0.7

(1)

September 30, 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 $0.3B for Citicorp and $0.3B for Citi Holdings.

Credit Card Securitizations—Citicorp

        In the third quarter of 2009 and 2008, the Company recorded net gains (losses) from securitization of Citicorp's credit card receivables of $102 million and ($682) million, and $253 million and ($828) million for the nine months ended September 30, 2009 and 2008, 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 tables summarize selected cash flow information related to Citicorp's credit card securitizations for the three and nine months ended September 30, 2009 and 2008:

	Three months ended
In billions of dollars	September 30, 2009		September 30, 2008
Proceeds from new securitizations	$	1.0	$	0.8
Proceeds from collections reinvested in new receivables		38.5		42.4
Contractual servicing fees received		0.3		0.3
Cash flows received on retained interests and other net cash flows		0.7		1.0

	Nine months ended
In billions of dollars	September 30, 2009		September 30, 2008
Proceeds from new securitizations	$	11.7	$	10.0
Proceeds from collections reinvested in new receivables		110.0		129.1
Contractual servicing fees received		1.0		1.0
Cash flows received on retained interests and other net cash flows		2.3		3.1

        As of September 30, 2009 and December 31, 2008, the residual interest in securitized credit card receivables was valued at $0 for Citicorp. As such, key assumptions used in measuring the fair value of the residual interest are not provided for the three months ended September 30, 2009 or as of September 30, 2009. Key assumptions used in measuring the fair value of the residual interests at the date of sale or securitization of Citicorp's credit card receivables for the three months ended September 30 are as follows:

	September 30, 2009	September 30, 2008
Discount rate	NA	14.5% to 17.4%
Constant prepayment rate	NA	5.9% to 20.0%
Anticipated net credit losses	NA	5.8% to 6.2%

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        At September 30, 2009, the sensitivity of the fair value to adverse changes of 10% and 20% in each of the key assumptions were as follows:

In millions of dollars		Residual interest		Retained certificates			Other retained interests
Carrying value of retained interests		$	—	$	5,186		$	1,547
Discount rates
	Adverse change of 10%	$	—	$	(6	)	$	(1	)
	Adverse change of 20%		—		(12	)		(2	)
Constant prepayment rate
	Adverse change of 10%	$	—	$	—		$	—
	Adverse change of 20%		—		—			—
Anticipated net credit losses
	Adverse change of 10%	$	—	$	—		$	(31	)
	Adverse change of 20%		—		—			(62	)

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 loans in billions	September 30, 2009		December 31, 2008
Loan amounts, at period end
On balance sheet	$	44.3	$	45.5
Securitized amounts		70.8		69.5
Total managed loans	$	115.1	$	115.0
Delinquencies, at period end
On balance sheet	$	1,160	$	1,126
Securitized amounts		1,730		1,543
Total managed delinquencies	$	2,890	$	2,669

Credit losses, net of recoveries, for the three months ended September 30,	2009		2008
On balance sheet	$	1,047	$	779
Securitized amounts		1,876		1,123
Total managed	$	2,923	$	1,902

Credit losses, net of recoveries, for the nine months ended September 30,	2009		2008
On balance sheet	$	2,862	$	2,117
Securitized amounts		5,205		3,046
Total managed	$	8,067	$	5,163

Credit Card Securitizations—Citi Holdings

        In the third quarter of 2009 and 2008, the Company recorded net gains (losses) from securitization of Citi Holding's credit card receivables of ($105) million and ($762) million, and ($781) million and ($570) million for the nine months ended September 30, 2009 and 2008, respectively.

        The following tables summarize selected cash flow information related to Citi Holding's credit card securitizations for the three and nine months ended September 30, 2009 and 2008:

	Three months ended
In billions of dollars	September 30, 2009		September 30, 2008
Proceeds from new securitizations	$	4.3	$	2.5
Proceeds from collections reinvested in new receivables		11.1		13.9
Contractual servicing fees received		0.2		0.2
Cash flows received on retained interests and other net cash flows		0.7		0.8

	Nine months ended
In billions of dollars	September 30, 2009		September 30, 2008
Proceeds from new securitizations	$	23.0	$	13.3
Proceeds from collections reinvested in new receivables		36.9		40.3
Contractual servicing fees received		0.5		0.5
Cash flows received on retained interests and other net cash flows		1.9		2.6

134

        Key assumptions used in measuring the fair value of the residual interest at the date of sale or securitization of Citi Holding's credit card receivables for the three months ended September 30, 2009 and 2008, respectively, are as follows:

	September 30, 2009	September 30, 2008
Discount rate	19.7%	17.9% to 20.9%
Constant prepayment rate	6.0% to 10.7%	6.4% to 12.4%
Anticipated net credit losses	13.1% to 13.2%	6.8% to 8.3%

        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 September 30, 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:

	September 30, 2009
Discount rate	19.7%
Constant prepayment rate	6.0% to 10.6%
Anticipated net credit losses	13.2%
Weighted average life	11.7 months

In millions of dollars		Residual interest			Retained certificates			Other retained interests
Carrying value of retained interests		$	628		$	9,398		$	1,926
Discount rates
	Adverse change of 10%	$	(31	)	$	(14	)	$	(6	)
	Adverse change of 20%		(61	)		(29	)		(12	)
Constant prepayment rate
	Adverse change of 10%	$	(33	)	$	—		$	—
	Adverse change of 20%		(63	)		—			—
Anticipated net credit losses
	Adverse change of 10%	$	(353	)	$	—		$	(41	)
	Adverse change of 20%		(628	)		—			(83	)

Managed Loans—Citi Holdings

        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 loans in billions	September 30, 2009		December 31, 2008
Loan amounts, at period end
On balance sheet	$	21.7	$	30.1
Securitized amounts		36.5		36.3
Total managed loans	$	58.2	$	66.4
Delinquencies, at period end
On balance sheet	$	885	$	1,017
Securitized amounts		1,219		1,113
Total managed delinquencies	$	2,104	$	2,130

Credit losses, net of recoveries, for the three months ended September 30,	2009		2008
On balance sheet	$	867	$	646
Securitized amounts		1,137		812
Total managed	$	2,004	$	1,458

Credit losses, net of recoveries, for the nine months ended September 30,	2009		2008
On balance sheet	$	2,640	$	1,694
Securitized amounts		3,472		2,248
Total managed	$	6,112	$	3,942

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 the first half of 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

135

weighted average maturity of the term notes issued by the Master Trust was 3.7 years as of September 30, 2009 and 3.8 years as of December 31, 2008.

Master Trust liabilities:

In billions of dollars	September 30, 2009		December 31, 2008
Term notes issued to multi- seller CP conduits	$	0.5	$	1.0
Term notes issued to other third parties		53.0		56.2
Term notes retained by Citigroup affiliates		5.1		1.2
Commercial paper		12.0		11.0
Total Master Trust liabilities	$	70.6	$	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 $5.2 billion at September 30, 2009 and $6.9 billion at December 31, 2008.

        In the third quarter of 2009, Omni Trust issued $3.7 billion of term notes that are eligible for the TALF program. The weighted average maturity of the third party term notes issued by the Omni Trust was 2.6 years as of September 30, 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 2.4 years as of September 30, 2009 and 3.3 years as of December 31, 2008.

Omni Trust liabilities:

In billions of dollars	September 30, 2009		December 31, 2008
Term notes issued to multi- seller CP conduits	$	12.3	$	17.8
Term notes issued to other third parties		8.3		2.3
Term notes retained by Citigroup affiliates		9.2		5.1
Commercial paper		4.4		8.5
Total Omni Trust liabilities	$	34.2	$	33.7

Broadway Trust liabilities:

In billions of dollars	September 30, 2009		December 31, 2008
Term notes issued to multi- seller CP 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

136

        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 September 30, 2009 and $8.5 billion at December 31, 2008. The liquidity commitment related to the Master Trust commercial paper program amounted to $12 billion at September 30, 2009 and $11 billion at December 31, 2008. As of September 30, 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 $5.2 billion at September 30, 2009 and $4 billion at December 31, 2008. As of September 30, 2009 and December 31, 2008, none of this liquidity commitment was drawn.

        All three of Citigroup's primary credit card securitization trusts have had bonds placed on ratings watch with negative implications by rating agencies during the first, second and third quarters of 2009. As a result of the ratings watch status, certain actions were taken with respect to each of the trusts. In general, the actions subordinated certain senior interests in the trust assets that were retained by Citigroup, which effectively placed these interests below investor interests in terms of priority of payment. With respect to the Master Trust, in the first quarter of 2009, Citigroup subordinated a portion of its "seller's interest", which represents a senior interest in Trust receivables, thus making those cash flows available to pay investor coupon each month. In addition, during the second quarter of 2009, a subordinated note with a $3 billion principal amount was issued by the Master Trust and retained by Citibank (South Dakota), N.A., in order to provide additional credit support for the senior note classes. The note is classified as held-to-maturity investment securities as Citigroup has the intent and ability to hold the security until its maturity. With respect to the Omni Trust, in the second quarter of 2009, subordinated notes with a principal amount of $2 billion were issued by the Trust and retained by Citibank (South Dakota), N.A., in order to provide additional credit support for the senior note classes. The notes are classified as Trading account assets. These notes are in addition to a $265 million subordinated note issued by Omni Trust and retained by Citibank (South Dakota), N.A. in the fourth quarter of 2008 for the purpose of providing additional credit support for senior noteholders. With respect to the Broadway Trust, subordinated notes with a principal amount of $82 million were issued by the Trust and retained by Citibank, N.A., in order to provide additional credit support for the senior note classes. The notes are classified as Trading account assets.

137

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 entitle 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 retains servicing for a limited number of its 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, thereby effectively transferring the risk of future credit losses to the purchasers of the securities issued by the trust. 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 three and nine months ended September 30, 2009 and 2008:

	Three months ended September 30, 2009				Three months ended September 30, 2008
In billions of dollars	U.S. agency sponsoredp mortgages		Non-agency sponsored mortgages		Agency and non-agency sponsored mortgages
Proceeds from new securitizations	$	3.5	$	1.5	$	0.7
Contractual servicing fees received		—		—		—
Cash flows received on retained interests and other net cash flows		—		—		—

	Nine months ended September 30, 2009				Nine months ended September 30, 2008
In billions of dollars	U.S. agency sponsoredp mortgages		Non-agency sponsored mortgages		Agency and non-agency sponsored mortgages
Proceeds from new securitizations	$	8.8	$	3.2	$	5.9
Contractual servicing fees received		—		—		—
Cash flows received on retained interests and other net cash flows		—		—		0.2

        Gains (losses) recognized on the securitization of agency sponsored mortgage activity during the third quarter of 2009 were $4 million. For the nine months ended September 30, 2009, gains (losses) recognized on the securitization of agency and non-agency sponsored mortgages were ($2) million and $21 million, respectively.

        Agency and non-agency securitization gains (losses) for the three and nine months ended September 30, 2008 were $1 and ($14) million, respectively.

138

        Key assumptions used in measuring the fair value of retained interests at the date of sale or securitization of mortgage receivables for the three months ended September 30, 2009 and 2008 are as follows:

	Three months ended September 30, 2009		Three months ended September 30, 2008
	U.S. agency sponsored mortgages	Non-agency sponsored mortgages	Agency and non-agency sponsored mortgages
Discount rate	2.6% to 43.3%	0.4% to 46.8%	4.6% to 53.8%
Constant prepayment rate	1.2% to 45.6%	4.0% to 31.3%	2.0% to 23.2%
Anticipated net credit losses	—	6.0% to 70.0%	25.0% to 80.0%

        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 and Special Asset Pool 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 September 30, 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:

	September 30, 2009
	U.S. agency sponsored mortgages	Non-agency sponsored mortgages
Discount rate	2.6% to 43.3%	0.4% to 46.8%
Constant prepayment rate	1.2% to 45.6%	4.0% to 31.3%
Anticipated net credit losses	NA	6.0% to 70.0%

In millions of dollars		U.S. agency sponsored mortgages			Non-agency sponsored mortgages
Carrying value of retained interests		$	396		$	655
Discount rates
	Adverse change of 10%	$	(8	)	$	(17	)
	Adverse change of 20%		(15	)		(33	)
Constant prepayment rate
	Adverse change of 10%	$	(2	)	$	(4	)
	Adverse change of 20%		(4	)		(8	)
Anticipated net credit losses
	Adverse change of 10%	$	—		$	(32	)
	Adverse change of 20%		—			(58	)

139

Mortgage Securitizations—Citi Holdings

        The following tables summarize selected cash flow information related to mortgage securitizations for the three and nine months ended September 30, 2009 and 2008:

	Three months ended September 30, 2009				Three months ended September 30, 2008
In billions of dollars	U.S. agency sponsored mortgages		Non-agency sponsored mortgages		Agency and non-agency sponsored mortgages
Proceeds from new securitizations	$	15.9	$	—	$	19.1
Contractual servicing fees received		0.3		—		0.4
Cash flows received on retained interests and other net cash flows		0.1		—		0.2

	Nine months ended September 30, 2009				Nine months ended September 30, 2008
In billions of dollars	U.S. agency sponsored mortgages		Non-agency sponsored mortgages		Agency and non-agency sponsored mortgages
Proceeds from new securitizations	$	61.0	$	—	$	65.5
Contractual servicing fees received		1.0		—		1.1
Cash flows received on retained interests and other net cash flows		0.3		0.1		0.6

        The Company did not recognize gains (losses) on the securitization of U.S. agency and non-agency sponsored mortgages in the third quarter of 2009, as well as the nine months ended September 30, 2009. There were gains (losses) from the securitization of agency and non-agency sponsored mortgages of ($81) million and ($4) million in the third quarter of 2008 and the nine months ended September 30, 2008, respectively.

        Key assumptions used in measuring the fair value of retained interests at the date of sale or securitization of mortgage receivables for the three months ended September 30, 2009 and 2008 are as follows:

	Three months ended September 30, 2009		Three months ended September 30,2008
	U.S. agency sponsored mortgages	Non-agency sponsored mortgages	Agency and non-agency sponsored mortgages
Discount rate	11.7% to 12.0%	NA	10.8% to 15.3%
Constant prepayment rate	3.7% to 4.2%	NA	4.7% to 8.0%
Anticipated net credit losses	—	NA	—

140

        The range in the key assumptions for the retained interests in Special Asset Pool 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 September 30, 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:

	September 30, 2009
	U.S. agency sponsored mortgages	Non-agency sponsored mortgages
Discount rate	13.1%	0.4% to 41.3%
Constant prepayment rate	14.4%	4.0% to 33.6%
Anticipated net credit losses	0.1%	0.3% to 70.0%
Weighted average life	6.0 years	0.1 to 7.8 years

In millions of dollars		U.S. agency sponsored mortgages			Non-agency sponsored mortgages
Carrying value of retained interests		$	6,037		$	1,011
Discount rates
	Adverse change of 10%	$	(201	)	$	(41	)
	Adverse change of 20%		(388	)		(79	)
Constant prepayment rate
	Adverse change of 10%	$	(361	)	$	(51	)
	Adverse change of 20%		(693	)		(96	)
Anticipated net credit losses
	Adverse change of 10%	$	(19	)	$	(44	)
	Adverse change of 20%		(37	)		(86	)

Mortgage Servicing Rights

        The fair value of capitalized mortgage loan servicing rights (MSR) was $6.2 billion and $8.3 billion at September 30, 2009 and 2008, respectively. The MSRs correspond to principal loan balances of $577 billion and $648 billion as of September 30, 2009 and 2008, respectively. The following table summarizes the changes in capitalized MSRs for the three and nine months ended September 30, 2009 and 2008:

	Three Months Ended September 30,
In millions of dollars	2009			2008
Balance, at June 30	$	6,770		$	8,934
Originations		267			297
Purchases		—			—
Changes in fair value of MSRs due to changes in inputs and assumptions		(490	)		(595	)
Transfer to Trading account assets		—			—
Other changes(1)		(319	)		(290	)
Balance, at September 30	$	6,228		$	8,346

	Nine Months Ended September 30,
In millions of dollars	2009			2008
Balance, beginning of period	$	5,657		$	8,380
Originations		893			1,066
Purchases		—			1
Changes in fair value of MSRs due to changes in inputs and assumptions		1,027			(90	)
Transfer to Trading account assets		—			(163	)
Other changes(1)		(1,349	)		(848	)
Balance, end of period	$	6,228		$	8,346

(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.

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        The Company receives fees during the course of servicing previously securitized mortgages. The amount of these fees for the months ended September 30, 2009 and 2008 were as follows:

	Three months ended,				Nine months ended,
In millions of dollars	2009		2008		2009		2008
Servicing fees	$	397	$	429	$	1,255	$	1,261
Late fees		23		25		71		75
Ancillary fees		18		16		60		50
Total MSR fees	$	438	$	470	$	1,386	$	1,386

        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 three and nine months ended September 30, 2009 and 2008:

	Three months ended
In billions of dollars	September 30, 2009		September 30, 2008
Proceeds from new securitizations	$	—	$	—
Proceeds from collections reinvested in new receivables		—		—
Contractual servicing fees received		—		—
Cash flows received on retained interests and other net cash flows		—		—

	Nine months ended
In billions of dollars	September 30, 2009		September 30, 2008
Proceeds from new securitizations	$	—	$	2.0
Proceeds from collections reinvested in new receivables		—		—
Contractual servicing fees received		0.1		0.1
Cash flows received on retained interests and other net cash flows		0.1		0.1

        The Company did not recognize any gains or losses during the third quarters of 2009 and 2008. The company recognized a gain of $1 million during the 9 months ended September 30, 2008.

        Key assumptions used in measuring the fair value of the residual interest at the date of sale or securitization of Citi Holding's student loan receivables for the three months ended September 30, 2009 and 2008, respectively, are as follows:

	September 30, 2009	September 30, 2008
Discount rate	NA	11.1% to 14.1%
Constant prepayment rate	NA	1.1% to 9.9%
Anticipated net credit losses	NA	0.3% to 0.9%

        At September 30, 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:

	Retained interests
Discount rate	10.8% to 16.3%
Constant prepayment rate	0.2% to 5.2%
Anticipated net credit losses	0.3% to 0.7%
Weighted average life	4.1 to 10.4 years

In millions of dollars		Retained interests
Carrying value of retained interests		$	1,045
Discount rates
	Adverse change of 10%	$	(29	)
	Adverse change of 20%		(55	)
Constant prepayment rate
	Adverse change of 10%	$	(4	)
	Adverse change of 20%		(9	)
Anticipated net credit losses
	Adverse change of 10%	$	(5	)
	Adverse change of 20%		(10	)

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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:

In billions of dollars	September 30, 2009			December 31, 2008
Cash	$	0.7		$	0.3
Available-for-sale securities		0.1			0.1
Loans		21.8			7.5
Allowance for loan losses		(0.2	)		(0.1	)
Other		1.0			—
Total assets	$	23.4		$	7.8
Long-term debt	$	17.2		$	6.3
Other liabilities		3.9			0.3
Total liabilities	$	21.1		$	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 30-45 days. As of September 30, 2009 and December 31, 2008, the weighted average life of the commercial paper issued was approximately 47 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 10 month to 6 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 $3.7 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

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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 September 30, 2009, the Company owned $109 million of the commercial paper issued by its administered conduits.

        The Company is required to quantitatively analyze the expected variability of the conduit 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 September 30, 2009, the notional amount of these facilities was approximately $903 million and $298 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

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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 September 30, 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 and 2008, the Company has consolidated 30 of the 46 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.

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Cash Flows and Retained Interests—Citi Holdings

        The following tables summarize selected cash flow information related to CDO and CLO securitizations for the three and nine months ended September 30, 2009:

	Three months ended September 30, 2009
In billions of dollars	CDOs		CLOs
Cash flows received on retained interests		—		—

	Nine months ended September 30, 2009
In billions of dollars	CDOs		CLOs
Cash flows received on retained interests		—		—

        The key assumptions, used for the securitization of CDOs and CLOs during the three months ended September 30, 2009, in measuring the fair value of retained interests at the date of sale or securitization, are as follows:

	CDOs	CLOs
Discount rate	36.4% to 39.7%	5.7% to 6.3%

        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
Carrying value of retained interests		$	251		$	709
Discount rates
	Adverse change of 10%	$	(24	)	$	(11	)
	Adverse change of 20%		(47	)		(23	)

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 September 30, 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 Type	Total assets		Maximum exposure
Commercial and other real estate	$	0.6	$	—
Hedge funds and equities		5.8		3.1
Airplanes, ships and other assets		11.9		2.1
Total	$	18.3	$	5.2

Asset-Based Financing—Citi Holdings

        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 Citi Holdings' asset-based financing, total assets of the unconsolidated VIEs with significant involvement and the Company's maximum exposure to loss at September 30, 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 Type	Total assets		Maximum exposure
Commercial and other real estate	$	36.9	$	7.0
Hedge funds and equities		2.2		0.8
Corporate loans		7.9		6.7
Airplanes, ships and other assets		6.0		3.4
Total	$	53.0	$	17.9

        The following table summarizes selected cash flow information related to asset-based financing for the three months ended September 30, 2009 and 2008:

	Three months ended September 30,
In billions of dollars	2009		2008
Cash flows received on retained interests and other net cash flows	$	0.4	$	—

	Nine months ended September 30,
In billions of dollars	2009		2008
Cash flows received on retained interests and other net cash flows	$	2.4	$	—

        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		Asset based financing
Carrying value of retained interests		$	6,882
Value of underlying portfolio
	Adverse change of 10%	$	—
	Adverse change of 20%		(436	)

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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 Services—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 $0.8 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 September 30, 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 September 30, 2009, liquidity agreements provided with respect to customer TOB trusts totaled $6.1 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

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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 remarking 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 three and nine months ended September 30, 2009 and 2008:

	Three months ended September 30,
In billions of dollars	2009		2008
Proceeds from new securitizations	$	0.1	$	0.6
Cash flows received on retained interests and other net cash flows	$	0.1	$	0.1

	Nine months ended September 30,
In billions of dollars	2009		2008
Proceeds from new securitizations	$	0.3	$	1.1
Cash flows received on retained interests and other net cash flows	$	0.7	$	0.4

        The following table summarizes selected cash flow information related to Citi Holdings' municipal bond securitizations for the three and nine months ended September 30, 2009 and 2008:

	Three months ended September 30,
In billions of dollars	2009		2008
Proceeds from new securitizations	$	—	$	—
Cash flows received on retained interests and other net cash flows	$	—	$	—

	Nine months ended September 30,
In billions of dollars	2009		2008
Proceeds from new securitizations	$	—	$	0.1
Cash flows received on retained interests and other net cash flows	$	—	$	—

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

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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 a recourse and non-recourse basis 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.

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16.    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.

        The notional amounts of Citigroup's derivative instruments for both long and short derivative positions, representing the volume of derivative activity, as of September 30, 2009 are presented in the table below:

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Notionals

		Hedging Instruments under ASC 815 (SFAS 133)(1)		Other Derivative Instruments
In millions of dollars at September 30, 2009				Trading Derivatives		Management Hedges(2)
Interest rate contracts
	Swaps	$	130,241	$	14,903,492	$	194,225
	Futures and forwards		—		3,876,745		84,999
	Written options		—		3,214,707		9,493
	Purchased options		—		3,468,676		43,537
Total interest rate contract notionals		$	130,241	$	25,463,620	$	332,254
Foreign exchange contracts
	Swaps	$	61,527	$	867,475	$	101,151
	Futures and forwards		18,190		2,025,595		10,672
	Written options		316		392,903		15,150
	Purchased options		501		415,386		2,603
Total foreign exchange contract notionals		$	80,534	$	3,701,359	$	129,576
Equity contracts
	Swaps	$	—	$	81,620	$	—
	Futures and forwards		—		14,567		—
	Written options		—		528,027		—
	Purchased options		—		505,812		—
Total equity contract notionals		$	—	$	1,130,026	$	—
Commodity and other contracts
	Swaps	$	—	$	29,746	$	—
	Futures and forwards		—		101,574		—
	Written options		—		39,066		—
	Purchased options		—		40,662		—
Total commodity and other contract notionals		$	—	$	211,048	$	—
Credit derivatives(3)
	Citigroup as the Guarantor	$	—	$	1,315,106	$	—
	Citigroup as the Beneficiary		6,773		1,442,602		—
Total credit derivatives		$	6,773	$	2,757,708	$	—
Total derivative notionals		$	217,548	$	33,263,761	$	461,830

(1)

Derivatives in hedge accounting relationships 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 (the "beneficiary") to transfer the credit risk of a "reference asset" to another party (the "guarantor"). These arrangements allow a guarantor to assume the credit risk associated with the reference asset without directly purchasing it. 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.

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Mark-to-Market (MTM) Receivables/Payables

		Derivatives classified in Trading account assets / liabilities(1)						Derivatives classified in Other assets / liabilities
In millions of dollars at September 30, 2009		Assets			Liabilities			Assets			Liabilities
Derivative instruments designated as hedges
	Interest rate contracts	$	2,860		$	4,380		$	5,551		$	1,156
	Foreign exchange contracts		134			1,246			3,942			2,826
	Credit derivatives		—			—			—			110
Total derivative instruments designated as hedges		$	2,994		$	5,626		$	9,493		$	4,092
Other derivative instruments
	Interest rate contracts	$	523,370		$	505,442		$	3,062		$	4,727
	Foreign exchange contracts		88,944			89,225			1,233			1,240
	Equity contracts		23,706			47,070			—			—
	Commodity and other contracts		16,692			16,275			—			—
	Credit derivatives(2)		112,227			100,575			—			—
Total other derivative instruments		$	764,939		$	758,587		$	4,295		$	5,967
Total derivatives		$	767,933		$	764,213		$	13,788		$	10,059
Cash collateral paid/received			54,169			43,471			510			5,720
	Less: Netting agreements and market value adjustments		(753,432	)		(745,132	)		(4,713	)		(4,713	)
Net receivables/ payables		$	68,670		$	62,552		$	9,585		$	11,066

(1)

The trading derivatives fair values are presented in Note 9—Trading Assets and Liabilities.

(2)

The credit derivatives trading assets are comprised of $88,903 million related to protection purchased and $23,324 million related protection sold at September 30, 2009. The credit derivatives trading liabilities are comprised of $76,581 million related to protection sold and $23,994 related to protection purchased at September 30, 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 September 30, 2009 the amount of payables in respect of cash collateral received that was netted with unrealized gains from derivatives was $36 billion, while the amount of receivables in respect of cash collateral paid that was netted with unrealized losses from derivatives was $46 billion.

        The amounts recognized in principal transactions in the Consolidated Statement of Income for the three and nine months ended September 30, 2009 related to derivatives not designated in a qualifying hedging relationship are shown 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 that these portfolios are risk managed.

In millions of dollars		Gains (losses) Three months ended September 30, 2009			Gains (losses) Nine months ended September 30, 2009
	Fixed Income	$	428		$	5,359
	Foreign exchange		445			2,157
	Equity		(353	)		550
	Commodity and other products		162			990
	Credit products		846			(3,500	)
Total(1)		$	1,528		$	5,556

(1)

Balance excludes gains (losses) on derivatives designated within qualifying FAS 133 hedging relationships.

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        The amounts recognized in other revenue in the Consolidated Statement of Income for the three and nine months ended September 30, 2009 related to derivatives not designated in a qualifying hedging relationship, and not recorded within Trading account assets or liabilities are shown below.

In millions of dollars		Gains (losses) Three months ended September 30, 2009			Gains (losses) Nine months ended September 30, 2009
	Interest rate contracts	$	(384	)	$	36
	Foreign exchange contracts		(2,130	)		(4,496	)
	Equity contracts		—			—
	Commodity and other contracts		—			—
	Credit derivatives		—			—
Total(1)		$	(2,514	)	$	(4,460	)

(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 (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 (SFAS 133) 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 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 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 hedge requirements cannot be achieved or management decides not to apply hedge accounting. Another alternative for the Company would be to elect to carry the debt at fair value. 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 also reflected in earnings, 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 a fair-value hedge.

        Key aspects of achieving 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.

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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 three and nine months ended September 30, 2009:

		Three months ended September 30, 2009						Nine months ended September 30, 2009
In millions of dollars		Principal Transactions			Other Revenue			Principal Transactions			Other Revenue
Gain (loss) on designated and qualifying fair value hedges
	Interest rate contracts	$	(238	)	$	1,511		$	727		$	(4,375	)
	Foreign exchange contracts		(640	)		323			663			645
Total gain (loss) on fair value designated and qualifying hedges		$	(878	)	$	1,834		$	1,390		$	(3,730	)
Gain (loss) on the hedged item in designated and qualifying fair value hedges
	Interest rate hedges	$	293		$	(1,516	)	$	(749	)	$	4,474
	Foreign exchange hedges		717			(293	)		(434	)		(576	)
Total gain (loss) on the hedged item in designated and qualifying fair value hedge		$	1,010		$	(1,809	)	$	(1,183	)	$	3,898
Hedge ineffectiveness recognized in earnings on designated and qualifying fair value hedges
	Interest rate hedges	$	182		$	(106	)	$	313		$	(21	)
	Foreign exchange hedges		14			60			22			92
Total hedge ineffectiveness recognized in earnings on designated and qualifying fair value hedges		$	196		$	(46	)	$	335		$	71
Net gain (loss) excluded from assessment of the effectiveness of fair value hedges
	Interest rate contracts	$	(127	)	$	101		$	(335	)	$	120
	Foreign exchange contracts		63			(30	)		207			(23	)
Total net gain (loss) excluded from assessment of the effectiveness of fair value hedges		$	(64	)	$	71		$	(128	)	$	97

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Cash flow hedges

Hedging of benchmark interest rate risk

        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. For some hedges, the hedge ineffectiveness is eliminated by matching all terms of the hedged item and the hedging derivative at inception and on an ongoing basis. Citigroup does not exclude any terms from consideration when applying the matched terms method. To the extent all terms are not perfectly matched, 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 even when the terms do not match perfectly.

Hedging of foreign exchange risk

        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". 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 $3 million for the three months ended September 30, 2009 and $12 million for the nine months ended September 30, 2009.

        The pretax change in Accumulated other comprehensive income (loss) from cash flow hedges for the three and nine months ended September 30, 2009 is presented below:

In millions of dollars		Three months ended September 30, 2009			Nine months ended September 30, 2009
Effective portion of cash flow hedges included in AOCI
	Interest rate contracts	$	(291	)	$	279
	Foreign exchange contracts		(312	)		321
	Credit derivatives		(404	)		(46	)
Total effective portion of cash flow hedges included in AOCI		$	(1,007	)	$	554
Effective portion of cash flow hedges reclassified from AOCI to Earnings
	Interest rate contracts(1)	$	(431	)	$	(1,288	)
	Foreign exchange contracts(2)		(149	)		(128	)
	Credit derivatives		—			—
Total effective portion of cash flow hedges reclassified from AOCI to Earnings		$	(580	)	$	(1,416	)

(1)

The amount reclassified from AOCI, related to interest rate cash flow hedges, to Other revenue and Principal transactions is ($404) million and ($27) million, respectively for the three months ended September 30, 2009, and ($1,166) million and ($122) million for the nine months ended September 30, 2009, respectively.

(2)

The amount reclassified from AOCI, related to foreign exchange cash flow hedges, to Other Revenue and Principal transactions is $(146) million and ($3) million, respectively, for the three months ended September 30, 2009, and $(121) million and ($7) million for the nine months ended September 30, 2009, respectively.

        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 September 30, 2009 is approximately $2.1 billion.

        The impact of cash flow hedges on AOCI is also included within Note 14 to the Consolidated Financial Statements—Changes in Accumulated Comprehensive Income (Loss).

Net investment hedges

        ASC 815-20-25-58 (SFAS 133) 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

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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. 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 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 cumulative 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 following table summarizes certain information related to the Company's net investment hedges for the three and nine months ended September 30, 2009:

Net Investments Hedges(1) In millions of dollars	Three months ended September 30, 2009			Nine months ended September 30, 2009
Pretax gain (loss) included in FX translation adjustment with AOCI	$	(1,232	)	$	(4,144	)
Gain (loss) on hedge ineffectiveness on net investment hedges included in Other revenue	$	—		$	4

(1)

No amount, related to the effective portion of net investment hedges, was reclassed from AOCI to earnings for the three and nine months ended September 30, 2009. Additionally, no amount was excluded from the assessment of the effectiveness of the net investment hedges during the three and nine months ended September 30, 2009.

Credit Derivatives

        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 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 (guarantor) agrees to reimburse a protection buyer (beneficiary) 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 guarantor makes no payments to the beneficiary and receives only the contractually specified fee. However, if a credit event occurs as defined in the specific derivative contract sold, the guarantor will be required to make a payment to the beneficiary.

        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 (beneficiary) receives a floating rate of interest and any depreciation on the reference asset from the protection seller (guarantor) 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 beneficiary will be obligated to make a payment any time 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 (guarantor) and the protection buyer (beneficiary).

        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 (guarantor) assumes the obligation to purchase or sell the reference asset at a specified "strike" spread level. The option purchaser (beneficiary) 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 September 30, 2009 and December 31,

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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 (guarantor) as of September 30, 2009 and December 31, 2008:

In millions of dollars as of September 30, 2009	Maximum potential amount of future payments		Fair value payable(1)
By industry/counterparty
Bank	$	860,437	$	46,071
Broker-dealer		301,216		17,661
Monoline		—		—
Non-financial		2,127		96
Insurance and other financial institutions		151,326		12,753
Total by industry/counterparty	$	1,315,106	$	76,581
By instrument:
Credit default swaps and options	$	1,314,282	$	76,383
Total return swaps		824		198
Total by instrument	$	1,315,106	$	76,581
By rating:
Investment grade	$	759,845		23,362
Non-investment grade		422,865		33,231
Not rated		132,396		19,988
Total by rating	$	1,315,106	$	76,581

(1)

In addition, fair value amounts receivable under credit derivatives sold were $23,324 million.

In millions of dollars as of December 31, 2008	Maximum potential amount of future payments		Fair value payable(1)
By industry/counterparty
Bank	$	943,949	$	118,428
Broker-dealer		365,664		55,458
Monoline		139		91
Non-financial		7,540		2,556
Insurance and other financial institutions		125,988		21,700
Total by industry/counterparty	$	1,443,280	$	198,233
By instrument:
Credit default swaps and options	$	1,441,375	$	197,981
Total return swaps		1,905		252
Total by instrument	$	1,443,280	$	198,233
By rating:
Investment grade	$	851,426	$	83,672
Non-investment grade		410,483		87,508
Not rated		181,371		27,053
Total by rating	$	1,443,280	$	198,233

(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 guarantor 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 September 30, 2009 is $21 billion. The Company has posted $13 billion as collateral for this exposure in the normal course of business as of September 30, 2009. Each downgrade would trigger additional collateral requirements for the Company and its affiliates. However, in the event that each legal entity was downgraded to below investment grade credit rating as of September 30, 2009, the Company would be required to post additional collateral of up to $5 billion.

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17.    FAIR-VALUE MEASUREMENT

        Effective January 1, 2007, the Company adopted ASC 820-10 (SFAS 157). ASC 820-10 (SFAS 157) 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 some 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 (SFAS 157) 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:

•

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 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 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 in 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 in 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

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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 in 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 in 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 in 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 and CDO-squared positions, the high-grade and mezzanine positions are now largely hedged through the ABX and bond short positions, which are, by necessity, 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 valuation of the ABCP and CDO-squared positions are 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, 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 and CDO-squared 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

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uses recent mortgage performance data, a period of sharp home price declines and high levels of mortgage foreclosures.

        The valuation as of September 30, 2009 assumes a cumulative decline in U.S. housing prices from peak to trough of 30.5%. This rate assumes declines of 10% in 2009 and flat in 2010, respectively, the remainder of the 30.5% decline having already occurred before the end of 2008.

        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 super senior 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.

Investments

        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 in 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 in 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 in 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 September 30, 2009, Citigroup continued to act in the capacity of primary dealer for approximately $31.5 billion of outstanding ARS.

        The Company classifies its ARS as held-to-maturity, available-for-sale and trading securities.

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        Prior to our 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 in 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 in 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 in Level 3 of the fair-value hierarchy.

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Highly Leveraged Financing Commitments

        The Company reports approximately $900 million of highly leveraged loans 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 in 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 in 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.

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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 September 30, 2009 and December 31, 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.

In millions of dollars at September 30, 2009				Level 1		Level 2		Level 3		Gross inventory		Netting(1)			Net balance
Assets
Federal funds sold and securities borrowed or purchased under agreements to resell				$	—	$	114,841	$	—	$	114,841	$	(26,955	)	$	87,886
Trading securities
	Trading mortgage-backed securities
		U.S. government sponsored			—	$	22,387	$	1,162	$	23,549	$	—		$	23,549
		Prime			—		719		458		1,177		—			1,177
		Alt-A			—		743		562		1,305		—			1,305
		Subprime			—		880		9,758		10,638		—			10,638
		Non-U.S. residential			—		1,633		290		1,923		—			1,923
		Commercial			—		1,244		2,731		3,975		—			3,975
	Total trading mortgage-backed securities			$	—	$	27,606	$	14,961	$	42,567	$	—		$	42,567
		U.S. Treasury and federal agencies securities
		U.S. Treasury		$	20,527	$	276	$	—	$	20,803	$	—		$	20,803
		Agency obligations			—		3,854		79		3,933		—			3,933
	Total U.S. Treasury and federal agencies securities			$	20,527	$	4,130	$	79	$	24,736	$	—		$	24,736
	Other trading securities
	State and municipal			$	—	$	6,744	$	452	$	7,196		—		$	7,196
	Foreign government				48,200		17,781		444		66,425		—			66,425
	Corporate				—		38,856		8,629		47,485		—			47,485
	Equity securities				34,989		10,319		1,155		46,463		—			46,463
	Other debt securities				—		20,789		16,366		37,155		—			37,155
Total trading securities				$	103,716	$	126,225	$	42,086	$	272,027	$	—		$	272,027
Derivatives				$	4,977	$	786,659	$	30,466	$	822,102	$	(753,432	)	$	68,670
Investments
	Mortgage-backed securities
		U.S. government sponsored		$	1,387	$	22,232	$	—	$	23,619	$	—		$	23,619
		Prime			—		5,405		873		6,278		—			6,278
		Alt-A			—		403		67		470		—			470
		Subprime			—		—		19		19		—			19
		Non-U.S. Residential			—		266		—		266		—			266
		Commercial			—		45		764		809		—			809
	Total investment mortgage-backed securities			$	1,387	$	28,351	$	1,723	$	31,461	$	—		$	31,461
	U.S. Treasury and federal Agency securities
			U.S. Treasury	$	4,599	$	1,635	$	—	$	6,234	$	—		$	6,234
			Agency obligations		—		16,963		4		16,967		—			16,967
	Total U.S. Treasury and federal agency			$	4,599	$	18,598	$	4	$	23,201	$	—		$	23,201
	State and municipal			$	—	$	16,571	$	254	$	16,825	$	—		$	16,825
	Foreign government				37,313		43,087		271		80,671		—			80,671
	Corporate				—		19,303		1,405		20,708		—			20,708
	Equity securities				3,088		109		2,542		5,739		—			5,739
	Other debt securities				553		2,492		8,602		11,647		—			11,647
	Non-marketable equity securities				—		119		7,646		7,765		—			7,765
Total investments				$	46,940	$	128,630	$	22,447	$	198,017	$	—		$	198,017

163

In millions of dollars at September 30, 2009		Level 1			Level 2			Level 3			Gross inventory			Netting(1)			Net balance
Loans(2)			—		$	1,290		$	215		$	1,505			—		$	1,505
Mortgage servicing rights			—			—			6,228			6,228			—			6,228
Assets of discontinued operations held for sale(3)			5,961			2,516			727			9,204			—			9,204
Other financial assets measured on a recurring basis			—			17,199			1,184			18,383			(4,713	)	$	13,670
Total assets		$	161,594		$	1,177,360		$	103,353		$	1,442,307		$	(785,100	)	$	657,207
			11.2	%		81.6	%		7.2	%		100.0	%
Liabilities
Interest-bearing deposits		$	—		$	1,998		$	31		$	2,029		$	—		$	2,029
Federal funds purchased and securities loaned or sold under agreements to repurchase			—			135,165			8,483			143,648			(26,955	)		116,693
Trading account liabilities
	Securities sold, not yet purchased		43,864			22,905			1,219			67,988			—			67,988
	Derivatives		5,601			772,149			29,934			807,684			(745,132	)		62,552
Short-term borrowings			—			1,284			159			1,443			—			1,443
Long-term debt			—			16,080			11,106			27,186			—			27,186
Liabilities of discontinued operations held for sale(3)			1,302			1,521			—			2,823			—			2,823
Other financial liabilities measured on a recurring basis			—			19,531			1			19,532			(4,713	)		14,819
Total liabilities		$	50,767		$	970,633		$	50,933		$	1,072,333		$	(776,800	)	$	295,533
			4.7	%		90.6	%		4.7	%		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.

(3)

Represents the assets and liabilities of Nikko Cordial businesses sold that are measured at fair value. See Note 2 to the Consolidated Financial Statements, "Discontinued Operations," for further discussion.

164

In millions of dollars at December 31, 2008		Level 1			Level 2			Level 3			Gross inventory			Netting(1)			Net 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	%

(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.

165

Changes in Level 3 Fair-Value Category

        The following tables present the changes in the Level 3 fair-value category for the three months ended September 30, 2009 and December 31, 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 gains (losses) included in
											Transfers in and/or out of Level 3			Purchases, issuances and settlements					Unrealized gains (losses) still held(3)
In millions of dollars			June 30, 2009		Principal transactions			Other(1)(2)									Sept. 30, 2009
Assets
Trading securities
	Trading mortgage-backed securities
		U.S. government sponsored	$	1,244	$	(71	)	$	—		$	127		$	(138	)	$	1,162	$	(116	)
		Prime		623		(76	)		—			(39	)		(50	)		458		(37	)
		Alt-A		777		18			—			(75	)		(158	)		562		18
		Subprime		10,001		1,752			—			(515	)		(1,480	)		9,758		1,785
		Non-U.S. residential		345		(3	)		—			(142	)		90			290		(3	)
		Commercial		2,808		(1	)		—			114			(190	)		2,731		2
	Total trading mortgage-backed securities		$	15,798	$	1,619		$	—		$	(530	)	$	(1,926	)	$	14,961	$	1,649
	U.S. Treasury and federal agencies securities
		U.S. Treasury	$	—	$	—		$	—		$	—		$	—		$	—	$	—
		Agency obligations		49		9			—			5			16			79		9
	Total U.S. Treasury and federal agencies securities		$	49	$	9		$	—		$	5		$	16		$	79	$	9
	State and municipal		$	109	$	(49	)	$	—		$	300		$	92		$	452	$	(49	)
	Foreign government			590		24			—			(134	)		(36	)		444		4
	Corporate			9,435		404			—			(764	)		(446	)		8,629		431
	Equity securities			1,866		161			—			(899	)		27			1,155		25
	Other debt securities			16,846		1,133						(1,122	)		(491	)		16,366		1,018
Total trading securities			$	44,693	$	3,301		$	—		$	(3,144	)	$	(2,764	)	$	42,086	$	3,087
Derivatives, net(4)			$	1,180	$	(2,407	)	$	—		$	(1,107	)	$	2,866		$	532	$	(3,064	)
Investments
	Mortgage-backed securities
		U.S. government sponsored	$	78	$	—		$	1		$	—		$	(79	)	$	—	$	1
		Prime		775		—			50			99			(51	)		873		59
		Alt-A		271		—			11			(114	)		(101	)		67		16
		Subprime		17		—			—			2			—			19		—
		Commercial		719		—			62			2			(19	)		764		14
	Total investment mortgage-backed debt securities		$	1,860	$	—		$	124		$	(11	)	$	(250	)	$	1,723	$	90
	U.S. Treasury and federal agencies securities
		U.S. Treasury	$	—	$	—		$	—		$	—		$	—		$	—	$	—
		Agency obligations		9		—			—			—			(5	)		4		—
	Total U.S. Treasury and federal agencies securities		$	9	$	—		$	—		$	—		$	(5	)	$	4	$	—
	State and municipal		$	252	$	—		$	2		$	—		$	—		$	254	$	—
	Foreign government			168		—			—			89			14			271		—
	Corporate			1,688		—			3			(86	)		(200	)		1,405	$	5
	Equity securities			2,818		—			(15	)		(22	)		(239	)		2,542		10
	Other debt securities			8,429		—			523			(194	)		(156	)		8,602		454
	Non-marketable equity securities			7,800		—			(40	)		(8	)		(106	)		7,646		(226	)
Total investments			$	23,024	$	—		$	597		$	(232	)	$	(942	)	$	22,447	$	333

166

				Net realized/ unrealized gains (losses) included in
										Transfers in and/or out of Level 3			Purchases, issuances and settlements					Unrealized gains (losses) still held(3)
In millions of dollars		June 30, 2009		Principal transactions			Other(1)(2)									Sept. 30, 2009
Loans		$	196	$	—		$	24		$	—		$	(5	)	$	215	$	24
Mortgage servicing rights		$	6,770	$	—		$	(444	)	$	—		$	(98	)	$	6,228	$	(444	)
Other financial assets measured on a recurring basis			1,645		—			(347	)		(67	)		(47	)		1,184	$	(347	)
Liabilities
Interest-bearing deposits		$	112	$	—		$	63		$	—		$	(18	)	$	31	$	63
Federal funds purchased and securities loaned or sold under agreements to repurchase			7,204		(32	)		—			1,622			(375	)		8,483		(40	)
Trading account liabilities
	Securities sold, not yet purchased		961		(14	)		—			(166	)		410			1,219		15
Short-term borrowings			377		—			9			(75	)		(134	)		159		9
Long-term debt			11,201		—			(385	)		414			(894	)		11,106		(456	)
Other financial liabilities measured on a recurring basis			19		—			(2	)		—			(20	)		1		(1	)

					Net realized/ unrealized gains (losses) included in
											Transfers in and/or out of Level 3			Purchases, issuances and settlements					Unrealized gains (losses) still held(3)
In millions of dollars			December 31, 2008		Principal transactions			Other(1)(2)									Sept. 30, 2009
Assets
Trading securities
	Trading mortgage-backed securities
		U.S. government sponsored	$	1,325	$	145		$	—		$	137		$	(445	)	$	1,162	$	89
		Prime		147		(131	)		—			400			42			458		(83	)
		Alt-A		1,153		(101	)		—			(262	)		(228	)		562		(101	)
		Subprime		13,844		56			—			(1,225	)		(2,917	)		9,758		2,262
		Non-U.S. residential		858		(77	)		—			(632	)		141			290		12
		Commercial		2,949		(196	)		—			273			(295	)		2,731		(207	)
	Total trading mortgage-backed securities		$	20,276	$	(304	)	$	—		$	(1,309	)	$	(3,702	)	$	14,961	$	1,972
	U.S. Treasury and federal agencies securities
		U.S. Treasury	$	—	$	—		$	—		$	—		$	—		$	—	$	—
		Agency obligations		59		—			—			2			18			79		2
	Total U.S. Treasury and federal agencies securities		$	59	$	—		$	—		$	2		$	18		$	79	$	2
	State and municipal		$	233	$	(71	)	$	—		$	220		$	70		$	452	$	(49	)
	Foreign government			1,261		120			—			(501	)		(436	)		444		29
	Corporate			13,027		(299	)		—			(1,556	)		(2,543	)		8,629		457
	Equity securities			1,387		252			—			(778	)		294			1,155		90
	Other debt securities			14,530		1,144			—			(2,320	)		3,012			16,366		1,044
Total trading securities			$	50,773	$	842		$	—		$	(6,242	)	$	(3,287	)	$	42,086	$	3,545
Derivatives, net(4)			$	3,586	$	(4,783	)	$	—		$	(1,824	)	$	3,553		$	532	$	(3,026	)
Investments
	Mortgage-backed securities
		U.S. government sponsored	$	—	$	—		$	1		$	75		$	(76	)	$	—	$	3
		Prime		1,163		—			211			132			(633	)		873		213
		Alt-A		111		—			44			(51	)		(37	)		67		17
		Subprime		25		—			(9	)		(8	)		11			19		—
		Commercial		964		—			71			(461	)		190			764		29
	Total investment mortgage-backed debt securities		$	2,263	$	—		$	318		$	(313	)	$	(545	)	$	1,723	$	262
	U.S. Treasury and federal agencies securities
		U.S. Treasury	$	—	$	—		$	—		$	—		$	—		$	—	$	—
		Agency obligations		—		—			—			9			(5	)		4		—
	Total U.S. Treasury and federal agencies securities		$	—	$	—		$	—		$	9		$	(5	)	$	4	$	—

167

				Net realized/ unrealized gains (losses) included in
									Transfers in and/or out of Level 3			Purchases, issuances and settlements					Unrealized gains (losses) still held(3)
In millions of dollars		December 31, 2008		Principal transactions		Other(1)(2)									Sept. 30, 2009
	State and municipal	$	222	$	—	$	2		$	30		$	—		$	254	$	—
	Foreign government		571		—		—			(313	)		13			271		(1	)
	Corporate		1,019		—		47			568			(229	)		1,405		40
	Equity securities		3,807		—		(495	)		(152	)		(618	)		2,542		(34	)
	Other debt securities		11,324		—		96			(1,142	)		(1,676	)		8,602		643
	Non-marketable equity securities		9,067		—		(746	)		(247	)		(428	)		7,646		(238	)
Total investments		$	28,273	$	—	$	(778	)	$	(1,560	)	$	(3,488	)	$	22,447	$	672
Loans		$	160	$	—	$	43		$	—		$	12		$	215	$	24
Mortgage servicing rights		$	5,657	$	—	$	996		$	—		$	(425	)	$	6,228	$	996
Other financial assets measured on a recurring basis			359		—		205			689			(69	)		1,184	$	205
Liabilities
Interest-bearing deposits		$	54	$	—	$	4		$	—		$	(19	)	$	31	$	49
Federal funds purchased and securities loaned or sold under agreements to repurchase			11,167		276		—			(2,098	)		(310	)		8,483		(320	)
Trading account liabilities
	Securities sold, not yet purchased		653		30		—			(181	)		777			1,219		25
Short-term borrowings			1,329		—		(56	)		(821	)		(405	)		159		(72	)
Long-term debt			11,198		—		(349	)		88			(529	)		11,106		(215	)
Other financial liabilities measured on a recurring basis			1		—		(45	)		—			(45	)		1		—

				Net realized/ unrealized gains (losses) included in
												Purchases, issuances and settlements					Unrealized gains (losses) still held(3)
In millions of dollars		June 30, 2008		Principal transactions			Other(1)(2)			Transfers in and/or out of Level 3					September 30, 2008
Assets
Trading account assets
	Trading securities and loans	$	76,819	$	(5,640	)	$	—		$	13,283	$	857		$	85,319	$	(5,439	)
Investments			27,086		—			(1,287	)		3,818		(1,381	)		28,236		(1,190	)
Loans			145		(14	)		—			—		24			155		(22	)
Mortgage servicing rights			8,934		—			(396	)		—		(192	)		8,346		(396	)
Other financial assets measured on a recurring basis			1,451		—			(26	)		353		(102	)		1,676		(3	)
Liabilities
Interest-bearing deposits		$	111	$	10		$	—		$	—	$	(17	)	$	84	$	8
Securities sold under agreements to repurchase			3,166		(159	)		—			73		(579	)		2,819		(39	)
Trading account liabilities
	Securities sold, not yet purchased		1,718		3			—			366		(950	)		1,131		34
	Derivatives, net(4)		102		2,904			—			3,072		2,878			3,148		3,092
Short-term borrowings			1,160		54			—			511		274			1,891		38
Long-term debt			38,355		940			—			3,277		(6,877	)		33,815		403
Other financial liabilities measured on a recurring basis			26		—			(45	)		—		(46	)		25		(45	)

168

				Net realized/ unrealized gains (losses) included in
										Transfers in and/or out of Level 3			Purchases, issuances and settlements					Unrealized gains (losses) still held(3)
In millions of dollars		December 31, 2007		Principal transactions			Other(1)(2)									September 30, 2008
Assets
Securities purchased under agreements to resell		$	16	$	—		$	—		$	—		$	(16	)	$	—	$	—
Trading account assets
	Trading securities and loans		75,573		(18,831	)		—			32,028			(3,451	)		85,319		(14,065	)
Investments			17,060		—			(2,834	)		6,789			7,221			28,236		(1,268	)
Loans			9		(3	)		—			—			149			155		(2	)
Mortgage servicing rights			8,380		—			568			—			(602	)		8,346		568
Other financial assets measured on a recurring basis			1,171		—			21			422			62			1,676		21
Liabilities
Interest-bearing deposits		$	56	$	(9	)	$	—		$	13		$	6		$	84	$	(3	)
Securities sold under agreements to repurchase			6,158		(88	)		—			(2,293	)		(1,134	)		2,819		45
Trading account liabilities
	Securities sold, not yet purchased		473		(5	)		—			998			(345	)		1,131		118
	Derivatives, net(4)		2,470		5,701			—			3,178			3,201			3,148		3,638
Short-term borrowings			5,016		203			—			(1,772	)		(1,150	)		1,891		110
Long-term debt			8,953		1,349			—			41,296			(15,085	)		33,815		875
Other financial liabilities measured on a recurring basis			1		—			(59	)		—			(35	)		25		(5	)

(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 September 30, 2009 and 2008.

(4)

Total Level 3 derivative exposures have been netted in these tables for presentation purposes only.

169

        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 June 30, 2009 to September 30, 2009 Level 3 assets and liabilities are due to:

•

A net decrease in trading securities of $2.6 billion that was driven by:



(i)

Net realized / unrealized gains of $3.3 billion recorded in Principal transactions, composed mainly of gains on subprime mortgage-backed securities ($1.7 billion) and other debt securities ($1.1 billion);



(ii)

Net transfers to Level 2 of $3.1 billion, which relates mainly to securities issued by credit card securitization trusts, for which significant inputs into valuations became more readily observable during the quarter;



(iii)

Net settlements of $2.8 billion, including liquidations of subprime trading securities of $1.5 billion during the third quarter.

•

A net increase in federal funds purchased and securities loaned or sold under agreements to repurchase of $1.3 billion. This was driven mainly by transfers to Level 3 during the third quarter of $1.6 billion, and relates to structured repurchase agreements with longer effective maturity dates.

The significant changes from December 31, 2008 to September 30, 2009 Level 3 assets and liabilities are due to:

•

A net decrease in trading securities of $8.7 billion that was mainly driven by:



(i)

Net transfers of $6.2 billion to Level 2 inventory, including corporate debt ($1.6 billion) and subprime trading securities ($1.2 billion) and other debt trading securities ($2.3 billion). The transfer of other debt securities to Level 2 was mainly due to securities issued by credit card securitization trusts, for which significant inputs into valuations became more readily observable;



(ii)

Net realized / unrealized gains of $0.8 billion recorded in Principal transactions.



(iii)

Net settlements of $3.3 billion, primarily due to liquidations of subprime trading securities of $2.9 billion.

•

A net decrease in investments of $5.8 billion that resulted from:



(i)

Net realized / unrealized losses recorded in other income of $0.8 billion, due primarily to losses on private equity investments and real estate fund investments;



(ii)

Net settlements of investment securities of $3.5 billion due to pay-downs and sales.



(iii)

Net transfers of $1.5 billion of investments to Level 2.

        A decrease in trading derivatives of $3.1 billion includes net realized and unrealized losses of $4.8 billion recorded in Principal transactions, mainly on complex derivative contracts such as those linked to credit and equity exposures. These losses are partially offset by gains recognized on instruments that have been classified in Levels 1 and 2.

        The following is a discussion of the changes to the Level 3 balances for each of the rollforward tables presented above.

•

For the period June 30, 2008 to September 30, 2008, the changes in Level 3 assets and liabilities are due to:

•

The increase in trading securities and loans of $8.5 billion, which was driven primarily by the net transfer of $13.3 billion of trading assets into Level 3, including ABS securities, warehouse loans backed by auto lease receivables, and certificates issued by the U.S. credit card securitization trust that are retained by the Company. This was offset by various write-downs recognized by the Company during the quarter.

•

The increase in net derivative trading account liabilities of $3.0 billion was due to $3.1 billion of net transfers into Level 3, as illiquid markets continued to negatively impact the availability of observable pricing inputs. $2.9 billion of net additions was offset by $2.9 billion of mark-to-market gains. A portion of these gains was offset by losses recognized for positions classified in Level 2.

•

The decrease in long-term debt of $4.5 billion as maturities of the consolidated SIV's debt was offset by the transfer of certain debt obligations from Level 2 to Level 3. Long-term debt was also reduced by mark-to-market gains, driven by the widening of Company's own-credit spreads.

•

The significant changes from December 31, 2007 to September 30, 2008 in Level 3 assets and liabilities are due to:

•

A net increase in trading securities and loans of $9.7 billion as net write-downs recognized on various trading securities and net reductions from settlements/sales were more than offset by the net transfer of trading securities into Level 3. The continued lack of availability of observable pricing inputs was the primary cause of this net transfer.

•

The increase in investments of $11.2 billion primarily resulted from the $8.7 billion in senior debt securities retained from the Company's April 17, 2008 sale of a corporate loan portfolio that included highly leveraged loans. In addition, $1.4 billion of

170

certificates issued by the U.S credit card securitization trust and retained by the Company were transferred from Level 2 to Level 3 during the third quarter of 2008.

•

The reduction in securities sold under agreement to repurchase of $3.3 billion, was primarily driven by the transfer of positions from Level 3 to Level 2 as valuation methodology inputs considered to be unobservable were determined to be insignificant to the overall valuation.

•

The decrease in short-term borrowings of $3.1 billion, which was primarily due to net transfers out of $1.8 billion as valuation methodology inputs considered to be unobservable were determined to be insignificant to the overall valuation, and payments of $1.2 billion against the short-term debt obligations.

•

The increase in long-term debt of $24.9 billion was driven by the transfer of consolidated SIV liabilities to Level 3 due to the lack of observable inputs, offset by the payments made against this debt in the second and third quarters of 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, assets such as loans held for sale that are measured at the lower of cost or market (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 in 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 September 30, 2009 and December 31, 2008 (in billions):

	Aggregate Cost		Fair Value		Level 2		Level 3
September 30, 2009	$	2.8	$	1.6	$	0.5	$	1.1
December 31, 2008		3.1		2.1		0.8		1.3

171

18.    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 17 to the Consolidated Financial Statements.

        All servicing rights must now be recognized initially at fair value. At its initial adoption, the standard permits 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 15 to the Consolidated Financial Statements for further discussions regarding the accounting and reporting of mortgage servicing rights.

172

        The following table presents, as of September 30, 2009, the fair value of those positions selected for fair-value accounting, as well as the changes in fair value for the nine months ended September 30, 2009 and September 30, 2008.

		Fair Value at				Changes in fair value gains (losses) for nine months ended September 30,
In millions of dollars		September 30, 2009		December 31, 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)	$	87,886	$	70,305	$	(1,284	)	$	675
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		28		—		61			(2	)
	Certain credit products		16,695		16,254		5,461			(1,143	)
	Certain hybrid financial instruments		6		33		—			3
	Retained interests from asset securitizations		2,153		3,026		1,522			(521	)
Total trading account assets		$	18,882	$	19,313	$	7,044		$	(1,676	)
Investments:
	Certain investments in private equity and real estate ventures	$	359	$	469	$	(52	)	$	(54	)
	Other		237		295		(83	)		(60	)
Total investments		$	596	$	764	$	(135	)	$	(114	)
Loans:
	Certain credit products	$	997	$	2,315	$	26		$	(54	)
	Certain mortgage loans		30		36		(2	)		(22	)
	Certain hybrid financial instruments		478		381		54			5
Total loans		$	1,505	$	2,732	$	78		$	(71	)
Other assets:
	Mortgage servicing rights	$	6,228	$	5,657	$	996		$	568
	Certain mortgage loans		2,857		4,273		81			21
	Certain equity method investments		769		936		174			(154	)
Total other assets		$	9,854	$	10,866	$	1,251		$	435
Total		$	118,723	$	103,980	$	6,954		$	(751	)
Liabilities
Interest-bearing deposits:
	Certain structured liabilities	$	234	$	320	$	—		$	—
	Certain hybrid financial instruments		1,795		2,286		(562	)		557
Total interest-bearing deposits		$	2,029	$	2,606	$	(562	)	$	557
Federal funds purchased and securities loaned or sold under agreements to repurchase
	Selected portfolios of securities sold under agreements to repurchase, securities loaned(2)	$	116,693	$	138,866	$	213		$	(44	)
Trading account liabilities:
	Selected letters of credit hedged by credit default swaps or participation notes	$	—	$	72	$	37		$	—
	Certain hybrid financial instruments		5,980		4,679		(1,798	)		2,618
Total trading account liabilities		$	5,980	$	4,751	$	(1,761	)	$	2,618
Short-term borrowings:
	Certain non-collateralized short-term borrowings	$	188	$	2,303	$	50		$	45
	Certain hybrid financial instruments		523		2,112		(84	)		176
	Certain structured liabilities		3		3		—			10
	Certain non-structured liabilities		729		13,189		(33	)		—
Total short-term borrowings		$	1,443	$	17,607	$	(67	)	$	231
Long-term debt:
	Certain structured liabilities	$	3,395	$	3,083	$	(64	)	$	446
	Certain non-structured liabilities		7,510		7,189		(102	)		3,441
	Certain hybrid financial instruments		16,281		16,991		(1,572	)		2,335
Total long-term debt		$	27,186	$	27,263	$	(1,738	)	$	6,222
Total		$	153,331	$	191,093	$	(3,915	)	$	9,584

(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.

173

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 spread. 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 $1.019 billion and a gain of $1.525 billion for the three months ended September 30, 2009 and September 30, 2008, respectively, and a loss of $2.447 billion and a gain of $2.577 billion for the nine months ended September 30, 2009 and September 30, 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 $2.48 billion and a gain of $3.53 billion for the three and nine months ended September 30, 2008, respectively.

The Fair-Value Option for Financial Assets and Financial Liabilities

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 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.

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 to mitigate accounting mismatches.

        The notional amount of these unfunded letters of credit was $1.8 billion as of September 30, 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 September 30, 2009 and December 31, 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.

174

        The following table provides information about certain credit products carried at fair value:

	September 30, 2009					December 31, 2008(1)
In millions of dollars	Trading assets		Loans			Trading assets		Loans
Carrying amount reported on the Consolidated Balance Sheet	$	16,695	$	997		$	16,254	$	2,315
Aggregate unpaid principal balance in excess of fair value	$	1,016	$	(38	)	$	6,501	$	3
Balance of non-accrual loans or loans more than 90 days past due	$	794	$	—		$	77	$	—
Aggregate unpaid principal balance in excess of fair value for non-accrual loans or loans more than 90 days past due	$	461	$	—		$	190	$	—

(1)

Reclassified to conform to current period's presentation.

        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 September 30, 2009 and December 31, 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 nine months ended September 30, 2009 and 2008 due to instrument-specific credit risk totaled to a loss of $32 million and $32 million, respectively.

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 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 $208 million and $671 million as of September 30, 2009 and December 31, 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 $41 million and $220 million as of September 30, 2009 and December 31, 2008, respectively.

        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 $637 million and $856 million as of September 30, 2009 and December 31, 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.

175

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. This election was effective for applicable instruments originated or purchased on or after September 1, 2007.

        The following table provides information about certain mortgage loans carried at fair value:

In millions of dollars	September 30, 2009		December 31, 2008
Carrying amount reported on the Consolidated Balance Sheet	$	2,857	$	4,273
Aggregate fair value in excess of unpaid principal balance	$	87	$	138
Balance of non-accrual loans or loans more than 90 days past due	$	8	$	9
Aggregate unpaid principal balance in excess of fair value for non-accrual loans or loans more than 90 days past due	$	6	$	2

        The changes in fair values of these mortgage loans is reported in Other revenue in the Company's Consolidated Statement of Income. The changes in fair value during the nine months ended September 30, 2009 and September 30, 2008 due to instrument-specific credit risk resulted in a $6 million loss and $6 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.

Items selected for fair-value accounting

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 $2.4 billion and $4.1 billion as of September 30, 2009 and December 31, 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.

176

Mortgage servicing rights

        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 15 to the Consolidated Financial Statements for further discussions regarding the accounting and reporting of MSRs.

        These MSRs, which totaled $6.2 billion and $5.7 billion as of September 30, 2009 and December 31, 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.

177

19.    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 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.

	September 30, 2009				December 31, 2008
In billions of dollars	Carrying value		Estimated fair value		Carrying value		Estimated fair value
Assets
Investments	$	261.9	$	261.7	$	256.0	$	251.9
Federal funds sold and securities borrowed or purchased under agreements to resell		197.4		197.4		184.1		184.1
Trading account assets		340.7		340.7		377.6		377.6
Loans(1)		582.7		573.6		660.9		642.7
Other financial assets(2)		344.9		344.7		316.6		316.6

	September 30, 2009				December 31, 2008
In billions of dollars	Carrying value		Estimated fair value		Carrying value		Estimated fair value
Liabilities
Deposits	$	832.6	$	832.3	$	774.2	$	772.9
Federal funds purchased and securities loaned or sold under agreements to repurchase		178.2		178.2		205.3		205.3
Trading account liabilities		130.5		130.5		165.8		165.8
Long-term debt		379.6		374.9		359.6		317.1
Other financial liabilities(3)		171.7		171.7		255.6		255.6

(1)

The carrying value of loans is net of the Allowance for loan losses of $36.4 billion for September 30, 2009 and $29.6 billion for December 31, 2008. In addition, the carrying values exclude $3.1 billion and $3.7 billion of lease finance receivables at September 30, 2009 and December 31, 2008, respectively.

(2)

Includes cash and due from banks, deposits with banks, brokerage receivables, reinsurance recoverable, mortgage servicing rights, 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, 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 $9.1 billion and $18.2 billion at September 30, 2009 and December 31, 2008, respectively. At September 30, 2009, the carrying values, net of allowances, exceeded the estimated fair values by $7 billion and $2 billion for consumer loans and corporate loans, respectively.

        Citigroup has determined that it is not practicable to estimate the fair value on an ongoing basis of the loss sharing program with the United States Government because the program is a unique contract tailored to fit the specific portfolio of assets held by Citigroup, contains various public policy and other non-financial elements, and provides a significant Tier 1 Capital benefit.

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20.    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 September 30, 2009 and December 31, 2008:

	Maximum potential amount of future payments
In billions of dollars at September 30, except carrying value in millions	Expire within 1 year		Expire after 1 year		Total amount outstanding		Carrying value (in millions)
2009
Financial standby letters of credit	$	48.8	$	48.2	$	97.0	$	465.7
Performance guarantees		9.1		5.4		14.5		32.5
Derivative instruments considered to be guarantees		6.8		9.6		16.4		855.2
Loans sold with recourse		—		0.3		0.3		65.6
Securities lending indemnifications(1)		66.1		—		66.1		—
Credit card merchant processing(1)		59.4		—		59.4		—
Custody indemnifications and other		—		27.5		27.5		154.6
Total	$	190.2	$	91.0	$	281.2	$	1,573.6

	Maximum potential amount of future payments
In billions of dollars at December 31, except carrying value in millions	Expire within 1 year		Expire after 1 year		Total amount outstanding		Carrying value (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

(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.

(2)

Reclassified to conform to current period presentation.

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 guarantees, which are presented in the table 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 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

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dealers in these markets, and may therefore not hold the underlying instruments). However, credit derivatives sold by the Company are excluded from this presentation. 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. The Company's credit derivative portfolio as protection seller (guarantor) is presented in Note 16 to the Consolidated Financial Statements, "Derivative Activities."

        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 at September 30, 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 September 30, 2009 and December 31, 2008, this maximum potential exposure was estimated to be $59 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 September 30, 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

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of September 30, 2009, the carrying value of the reserve was $155 million. This reserve is 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 September 30, 2009 and December 31, 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. There are no amounts reflected on the Consolidated Balance Sheet as of September 30, 2009 and December 31, 2008, related to these indemnifications and they are not included in the table.

        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 not considered to be guarantees, 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 September 30, 2009 or December 31, 2008 for potential obligations that could arise from the Company's involvement with VTN associations.

        At September 30, 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 $1.6 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 September 30, 2009 and December 31, 2008, Other liabilities on the Consolidated Balance Sheet include an allowance for credit losses of $1,074 million and $887 million relating to letters of credit and unfunded lending commitments, respectively.

Collateral

        Cash collateral available to the Company to reimburse losses realized under these guarantees and indemnifications amounted to $36 billion at September 30, 2009 and $33 billion at December 31, 2008. Securities and other marketable assets held as collateral amounted to $39 billion and $27 billion at September 30, 2009 and December 31, 2008, 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 $900 million and $503 million at September 30, 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.

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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 is the maximum potential amount of future payments classified based upon internal and external credit ratings as of September 30, 2009 and December 31, 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.

	Maximum potential amount of future payments
In billions of dollars as of September 30, 2009	Investment grade		Non-investment grade		Not rated		Total
Financial standby letters of credit	$	48.5	$	21.1	$	27.4	$	97.0
Performance guarantees		7.0		3.7		3.8		14.5
Derivative instruments deemed to be guarantees		—		—		16.4		16.4
Loans sold with recourse		—		—		0.3		0.3
Securities lending indemnifications		—		—		66.1		66.1
Credit card merchant processing		—		—		59.4		59.4
Custody indemnifications and other		22.3		5.2		—		27.5
Total	$	77.8	$	30.0	$	173.4	$	281.2

	Maximum potential amount of future payments
In billions of dollars as of December 31, 2008	Investment grade		Non-investment grade		Not 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

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Credit Commitments

        The table below summarizes Citigroup's other commitments as of September 30, 2009 and December 31, 2008.

In millions of dollars	U.S.		Outside of U.S.		September 30, 2009		December 31, 2008
Commercial and similar letters of credit	$	1,691	$	5,625	$	7,316	$	8,215
One- to four-family residential mortgages		1,002		260		1,262		937
Revolving open-end loans secured by one- to four-family residential properties		22,186		2,919		25,105		25,212
Commercial real estate, construction and land development		1,059		604		1,663		2,702
Credit card lines		680,750		134,402		815,152		1,002,437
Commercial and other consumer loan commitments		172,708		89,451		262,159		309,997
Total	$	879,396	$	233,261	$	1,112,657	$	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 customers 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 them upon presentation of documentary evidence that the supplier has performed in accordance with the terms of the letter of credit. When drawn, the customer then is 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. In addition, undistributed loan proceeds where there is an obligation to advance for construction progress, are also included in this line. However, this line only includes those extensions of credit that once funded will be classified as Loans 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 commercial commitments to make or purchase loans, to purchase third-party receivables and to provide note issuance or revolving underwriting facilities. Amounts include $130 billion and $140 billion with an original maturity of less than one year at September 30, 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.

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21.    CONTINGENCIES

        The Company is a defendant in numerous lawsuits and other legal proceedings arising out of alleged misconduct in connection with certain matters. In view of the large number of such matters, the uncertainties of the timing and outcome of this type of litigation, the novel issues presented, and the significant amounts involved, it is possible that the ultimate costs of these matters may exceed or be below the Company's litigation reserves. The Company will continue to defend itself vigorously in these cases, and seek to resolve them in the manner management believes is in the best interests of the Company.

        In addition, in the ordinary course of business, Citigroup and its subsidiaries are defendants or co-defendants or parties in various litigation and regulatory matters incidental to and typical of the businesses in which they are engaged. In the opinion of the Company's management, the ultimate resolution of these legal and regulatory proceedings would not be likely to have a material adverse effect on the consolidated financial condition of the Company but, if involving monetary liability, may be material to the Company's operating results for any particular period.

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22.    CITIBANK, N.A. EQUITY

Statement of Changes in Equity (Unaudited)

	Nine Months Ended September 30,
In millions of dollars, except shares	2009			2008
Common stock ($20 par value)
Balance, beginning of period—Shares: 37,534,553 in 2009 and 2008	$	751		$	751
Balance, end of period—Shares: 37,534,553 in 2009 and 2008	$	751		$	751
Surplus
Balance, beginning of period	$	74,767		$	69,135
Capital contribution from parent company		30,492			77
Employee benefit plans		34			107
Balance, end of period	$	105,293		$	69,319
Retained earnings
Balance, beginning of period	$	21,735		$	31,915
Adjustment to opening balance, net of taxes(1)		402			—
Adjusted balance, beginning of period	$	22,137		$	31,915
Net income (loss)		(2,270	)		(1,450	)
Dividends paid		4			(34	)
Other(2)		117			—
Balance, end of period	$	19,988		$	30,431
Accumulated other comprehensive income (loss)
Balance, beginning of period	$	(15,895	)	$	(2,495	)
Adjustment to opening balance, net of taxes(1)		(402	)		—
Adjusted balance, beginning of period	$	(16,297	)	$	(2,495	)
Net change in unrealized gains (losses) on investment securities available-for-sale, net of taxes		3,758			(4,971	)
Net change in FX translation adjustment, net of taxes		850			(2,244	)
Net change in cash flow hedges, net of taxes		281			(214	)
Pension liability adjustment, net of taxes		(7	)		90
Net change in Accumulated other comprehensive income (loss)	$	4,882		$	(7,339	)
Balance, end of period	$	(11,415	)	$	(9,834	)
Total Citibank common stockholder's equity and total Citibank stockholder's equity	$	114,617		$	90,667
Noncontrolling interest
Balance, beginning of period	$	1,082		$	1,266
Initial consolidation of a noncontrolling interest		123			—
Net income attributable to noncontrolling interest shareholders		46			88
Dividends paid to noncontrolling interest shareholders		(16	)		(86	)
Accumulated other comprehensive income—Net change in unrealized gains and losses on investments securities, net of tax		7			3
Accumulated other comprehensive income—Net change in FX translation adjustment, net of tax		15			6
All other		(155	)		(5	)
Net change in noncontrolling interest	$	20		$	6
Balance, end of period	$	1,102		$	1,272
Total equity	$	115,719		$	91,939
Comprehensive income (loss)
Net income (loss) before attribution of noncontrolling interest	$	(2,224	)	$	(1,362	)
Net change in Accumulated other comprehensive income (loss)		4,904			(7,330	)
Total comprehensive income (loss)	$	2,680		$	(8,692	)
Comprehensive income attributable to the noncontrolling interest		68			97
Comprehensive income attributable to Citibank	$	2,612		$	(8,789	)

(1)

The adjustment to the opening balances for Retained earnings and Accumulated other comprehensive income (loss) represents the cumulative effect of initially adopting ASC 320-10-65-1 (FSP FAS 115-2). See Note 1 to the Consolidated Financial Statements.

(2)

Represents the accounting for the transfers of assets and liabilities between Citibank, N.A. and other affiliates under the common control of Citigroup.

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23.    SUBSEQUENT EVENTS

        The Company has evaluated subsequent events through November 6, 2009, which is the date its Consolidated Financial Statements were issued.

24.    CONDENSED CONSOLIDATING FINANCIAL STATEMENT SCHEDULES

        These unaudited condensed consolidating financial statement 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 First Capital Corporation (described below). 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 (described above).

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.

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CONDENSED CONSOLIDATING STATEMENT OF INCOME

	Three Months Ended September 30, 2009
In millions of dollars	Citigroup parent company			CGMHI			CFI			CCC			Associates			Other Citigroup subsidiaries, eliminations			Consolidating adjustments			Citigroup consolidated
Revenues
Dividends from subsidiary banks and bank holding companies	$	1,005		$	—		$	—		$	—		$	—		$	—		$	(1,005	)	$	—
Interest revenue	$	57			1,682		$	—		$	1,526		$	1,759		$	15,180		$	(1,526	)	$	18,678
Interest revenue—intercompany		477			(90	)		1,053			1,689			96			(1,536	)		(1,689	)		—
Interest expense		2,495			644			400			17			84			3,057			(17	)		6,680
Interest expense—intercompany		(137	)		(165	)		260			2,212			377			(335	)		(2,212	)		—
Net interest revenue	$	(1,824	)	$	1,113		$	393		$	986		$	1,394		$	10,922		$	(986	)	$	11,998
Commissions and fees	$	—		$	1,229		$	—		$	16		$	36		$	1,953		$	(16	)	$	3,218
Commissions and fees—intercompany		—			188			—			51			63			(251	)		(51	)		—
Principal transactions		317			2,431			(610	)		—			2			(480	)		—			1,660
Principal transactions—intercompany		(493	)		(1,380	)		192			—			(13	)		1,694			—			—
Other income		(1,158	)		676			(100	)		112			142			3,954			(112	)		3,514
Other income—intercompany		2,485			23			77			—			5			(2,590	)		—			—
Total non-interest revenues	$	1,151		$	3,167		$	(441	)	$	179		$	235		$	4,280		$	(179	)	$	8,392
Total revenues, net of interest expense	$	332		$	4,280		$	(48	)	$	1,165		$	1,629		$	15,202		$	(2,170	)	$	20,390
Provisions for credit losses and for benefits and claims	$	—		$	58		$	—		$	770		$	875		$	8,162		$	(770	)	$	9,095
Expenses
Compensation and benefits	$	(44	)	$	1,471		$	—		$	134		$	179		$	4,530		$	(134	)	$	6,136
Compensation and benefits— intercompany		2			68			—			35			35			(105	)		(35	)		—
Other expense		192			683			1			169			209			4,603			(169	)		5,688
Other expense—intercompany		163			198			2			143			160			(523	)		(143	)		—
Total operating expenses	$	313		$	2,420		$	3		$	481		$	583		$	8,505		$	(481	)	$	11,824
Income (Loss) before taxes and equity in undistributed income of subsidiaries	$	19		$	1,802		$	(51	)	$	(86	)	$	171		$	(1,465	)	$	(919	)	$	(529	)
Income taxes (benefits)		(392	)		608			(18	)		(53	)		37			(1,357	)		53			(1,122	)
Equities in undistributed income of subsidiaries		(310	)		—			—			—			—			—			310			—
Income (Loss) from continuing operations	$	101		$	1,194		$	(33	)	$	(33	)	$	134		$	(108	)	$	(662	)	$	593
Income from discontinued operations, net of taxes		—			—			—			—			—			(418	)		—			(418	)
Net income (Loss) before attribution of Noncontrolling Interests	$	101		$	1,194		$	(33	)	$	(33	)	$	134		$	(526	)	$	(662	)	$	175
Net Income (Loss) attributable to Noncontrolling Interests		—			19			—			—			—			55			—			74
Citigroup's Net Income (Loss)	$	101		$	1,175		$	(33	)	$	(33	)	$	134		$	(581	)	$	(662	)	$	101

187

CONDENSED CONSOLIDATING STATEMENT OF INCOME

	Nine Months Ended September 30, 2009
In millions of dollars	Citigroup parent company			CGMHI			CFI			CCC			Associates			Other Citigroup subsidiaries, eliminations			Consolidating adjustments			Citigroup consolidated
Revenues
Dividends from subsidiary banks and bank holding companies	$	1,040		$	—		$	—		$	—		$	—		$	—		$	(1,040	)	$	—
Interest revenue	$	234		$	5,881		$	1		$	4,732		$	5,418		$	47,398		$	(4,732	)	$	58,932
Interest revenue—intercompany		1,833			2,079			3,143			46			325			(7,380	)		(46	)		—
Interest expense		6,707			2,060			1,365			63			303			10,744			(63	)		21,179
Interest expense—intercompany		(667	)		1,635			699			1,677			1,242			(2,909	)		(1,677	)		—
Net interest revenue	$	(3,973	)	$	4,265		$	1,080		$	3,038		$	4,198		$	32,183		$	(3,038	)	$	37,753
Commissions and fees	$	—		$	4,711		$	—		$	38		$	95		$	8,017		$	(38	)	$	12,823
Commissions and fees—intercompany		—			247			—			86			107			(354	)		(86	)		—
Principal transactions		434			1,302			(869	)		—			2			4,894			—			5,763
Principal transactions—intercompany		(714	)		2,530			133			—			(99	)		(1,850	)		—			—
Other income		3,514			13,296			(25	)		321			489			1,267			(321	)		18,541
Other income—intercompany		(1,906	)		(12	)		16			2			37			1,865			(2	)		—
Total non-interest revenues	$	1,328		$	22,074		$	(745	)	$	447		$	631		$	13,839		$	(447	)	$	37,127
Total revenues, net of interest expense	$	(1,605	)	$	26,339		$	335		$	3,485		$	4,829		$	46,022		$	(4,525	)	$	74,880
Provisions for credit losses and for benefits and claims	$	—		$	96		$	—		$	2,708		$	3,044		$	28,938		$	(2,708	)	$	32,078
Expenses
Compensation and benefits	$	(89	)	$	5,144		$	—		$	393		$	514		$	13,161		$	(393	)	$	18,730
Compensation and benefits— intercompany		5			403			—			106			106			(514	)		(106	)		—
Other expense		600			2,011			2			358			471			13,694			(358	)		16,778
Other expense—intercompany		260			538			7			416			465			(1,270	)		(416	)		—
Total operating expenses	$	776		$	8,096		$	9		$	1,273		$	1,556		$	25,071		$	(1,273	)	$	35,508
Income (Loss) before taxes and equity in undistributed income of subsidiaries	$	(2,381	)	$	18,147		$	326		$	(496	)	$	229		$	(7,987	)	$	(544	)	$	7,294
Income taxes (benefits)		(1,437	)		6,772			97			(201	)		52			(4,864	)		201			620
Equities in undistributed income of subsidiaries		6,917			—			—			—			—			—			(6,917	)		—
Income (Loss) from continuing operations	$	5,973		$	11,375		$	229		$	(295	)	$	177		$	(3,123	)	$	(7,662	)	$	6,674
Income from discontinued operations, net of taxes		—			—			—			—			—			(677	)		—			(677	)
Net income (Loss) before attribution of Noncontrolling Interests	$	5,973		$	11,375		$	229		$	(295	)	$	177		$	(3,800	)	$	(7,662	)	$	5,997
Net Income (Loss) attributable to Noncontrolling Interests		—			(32	)		—			—			—			56			—			24
Citigroup's Net Income (Loss)	$	5,973		$	11,407		$	229		$	(295	)	$	177		$	(3,856	)	$	(7,662	)	$	5,973

188

CONDENSED CONSOLIDATING STATEMENT OF INCOME

	Three Months Ended September 30, 2008
In millions of dollars	Citigroup parent company			CGMHI			CFI			CCC			Associates			Other Citigroup subsidiaries, eliminations			Consolidating adjustments			Citigroup consolidated
Revenues
Dividends from subsidiary banks and bank holding companies	$	169		$	—		$	—		$	—		$	—		$	—		$	(169	)	$	—
Interest revenue	$	226		$	4,455		$	—		$	1,819		$	2,084		$	19,365		$	(1,819	)	$	26,130
Interest revenue—intercompany		1,098			565			1,269			21			147			(3,079	)		(21	)		—
Interest expense		2,388			2,740			835			33			154			6,609			(33	)		12,726
Interest expense—intercompany		(101	)		1,867			(1	)		605			490			(2,255	)		(605	)		—
Net interest revenue	$	(963	)	$	413		$	435		$	1,202		$	1,587		$	11,932		$	(1,202	)	$	13,404
Commissions and fees	$	—		$	1,841		$	—		$	20		$	43		$	1,324		$	(20	)	$	3,208
Commissions and fees—intercompany		346			21			—			9			11			(378	)		(9	)		—
Principal transactions		(497	)		(3,318	)		2,239			—			(1	)		(1,436	)		—			(3,013	)
Principal transactions—intercompany		335			(900	)		(1,542	)		—			36			2,071			—			—
Other income		332			784			(130	)		65			87			1,586			(65	)		2,659
Other income—intercompany		206			35			97			8			3			(341	)		(8	)		—
Total non-interest revenues	$	722		$	(1,537	)	$	664		$	102		$	179		$	2,826		$	(102	)	$	2,854
Total revenues, net of interest expense	$	(72	)	$	(1,124	)	$	1,099		$	1,304		$	1,766		$	14,758		$	(1,473	)	$	16,258
Provisions for credit losses and for benefits and claims	$	—		$	7		$	—		$	1,288		$	1,368		$	7,692		$	(1,288	)	$	9,067
Expenses
Compensation and benefits	$	(57	)	$	2,244		$	—		$	174		$	232		$	5,125		$	(174	)	$	7,544
Compensation and benefits— intercompany		2			226			—			46			46			(274	)		(46	)		—
Other expense		42			925			1			159			208			5,287			(159	)		6,463
Other expense—intercompany		451			(120	)		3			174			162			(496	)		(174	)		—
Total operating expenses	$	438		$	3,275		$	4		$	553		$	648		$	9,642		$	(553	)	$	14,007
Income (Loss) before taxes and equity in undistributed income of subsidiaries	$	(510	)	$	(4,406	)	$	1,095		$	(537	)	$	(250	)	$	(2,576	)	$	368		$	(6,816	)
Income taxes (benefits)		(868	)		(1,893	)		376			(185	)		(77	)		(833	)		185			(3,295	)
Equities in undistributed income of subsidiaries		(3,386	)		—			—			—			—			—			3,386			—
Income (Loss) from continuing operations	$	(3,028	)	$	(2,513	)	$	719		$	(352	)	$	(173	)	$	(1,743	)	$	3,569		$	(3,521	)
Income from discontinued operations, net of taxes		213			—			—			—			—			400			—			613
Net income (Loss) before attribution of Noncontrolling Interests	$	(2,815	)	$	(2,513	)	$	719		$	(352	)	$	(173	)	$	(1,343	)	$	3,569		$	(2,908	)
Net Income (Loss) attributable to Noncontrolling Interests		—			—			—			—			—			(93	)		—			(93	)
Citigroup's Net Income (Loss)	$	(2,815	)	$	(2,513	)	$	719		$	(352	)	$	(173	)	$	(1,250	)	$	3,569		$	(2,815	)

189

CONDENSED CONSOLIDATING STATEMENT OF INCOME

	Nine Months Ended September 30, 2008
In millions of dollars	Citigroup parent company			CGMHI			CFI			CCC			Associates			Other Citigroup subsidiaries, eliminations			Consolidating adjustments			Citigroup consolidated
Revenues
Dividends from subsidiary banks and bank holding companies	$	1,617		$	—		$	—		$	—		$	—		$	—		$	(1,617	)	$	—
Interest revenue	$	544		$	15,239		$	1		$	5,447		$	6,278		$	60,566		$	(5,447	)	$	82,628
Interest revenue—intercompany		3,508			1,564			3,911			57			441			(9,424	)		(57	)
Interest expense		6,987			10,076			2,645			108			491			21,951			(108	)		42,150
Interest expense—intercompany		(242	)		4,293			186			1,837			1,651			(5,888	)		(1,837	)		—
Net interest revenue	$	(2,693	)	$	2,434		$	1,081		$	3,559		$	4,577		$	35,079		$	(3,559	)	$	40,478
Commissions and fees	$	—		$	6,381		$	1		$	61		$	135		$	3,831		$	(61	)	$	10,348
Commissions and fees—intercompany		—			453			—			24			32			(485	)		(24	)		—
Principal transactions		5			(20,400	)		3,524			—			(1	)		1,425			—			(15,447	)
Principal transactions—intercompany		115			4,680			(2,647	)		—			26			(2,174	)		—			—
Other income		443			2,798			(45	)		286			378			7,000			(286	)		10,574
Other income—intercompany		(33	)		619			33			21			78			(697	)		(21	)
Total non-interest revenues	$	530		$	(5,469	)	$	866		$	392		$	648		$	8,900		$	(392	)	$	5,475
Total revenues, net of interest expense	$	(546	)	$	(3,035	)	$	1,947		$	3,951		$	5,225		$	43,979		$	(5,568	)	$	45,953
Provisions for credit losses and for benefits and claims	$	—		$	307		$	—		$	3,046		$	3,315		$	18,397		$	(3,046	)	$	22,019
Expenses
Compensation and benefits	$	(106	)	$	7,728		$	—		$	545		$	747		$	16,429		$	(545	)	$	24,798
Compensation and benefits— intercompany		6			693			—			145			146			(845	)		(145	)		—
Other expense		158			2,855			2			416			550			16,235			(416	)		19,800
Other expense—intercompany		596			711			49			336			367			(1,723	)		(336	)		—
Total operating expenses	$	654		$	11,987		$	51		$	1,442		$	1,810		$	30,096		$	(1,442	)	$	44,598
Income (Loss) before taxes and equity in undistributed income of subsidiaries	$	(1,200	)	$	(15,329	)	$	1,896		$	(537	)	$	100		$	(4,514	)	$	(1,080	)	$	(20,664	)
Income taxes (benefits)		(1,643	)		(6,273	)		656			(174	)		54			(2,422	)		174			(9,628	)
Equities in undistributed income of subsidiaries		(11,077	)		—			—			—			—			—			11,077			—
Income (Loss) from continuing operations	$	(10,634	)	$	(9,056	)	$	1,240		$	(363	)	$	46		$	(2,092	)	$	9,823		$	(11,036	)
Income from discontinued operations, net of taxes		213			—			—			—			—			365			—			578
Net income (Loss) before attribution of Noncontrolling Interests	$	(10,421	)	$	(9,056	)	$	1,240		$	(363	)	$	46		$	(1,727	)	$	9,823		$	(10,458	)
Net Income (Loss) attributable to Noncontrolling Interests		—			(7	)		—			—			—			(30	)		—			(37	)
Citigroup's Net Income (Loss)	$	(10,421	)	$	(9,049	)	$	1,240		$	(363	)	$	46		$	(1,697	)	$	9,823		$	(10,421	)

190

CONDENSED CONSOLIDATING BALANCE SHEET

	September 30, 2009
In millions of dollars	Citigroup parent company		CGMHI			CFI		CCC			Associates			Other Citigroup subsidiaries and eliminations			Consolidating adjustments			Citigroup consolidated
Assets
Cash and due from banks	$	—	$	2,798		$	—	$	181		$	257		$	23,427		$	(181	)	$	26,482
Cash and due from banks—intercompany		16		1,609			1		140			159			(1,785	)		(140	)		—
Federal funds sold and resale agreements		—		176,406			—		—			—			20,951			—			197,357
Federal funds sold and resale agreements—intercompany		—		23,165			—		—			—			(23,165	)		—			—
Trading account assets		25		145,444			41		—			16			195,171			—			340,697
Trading account assets—intercompany		1,152		8,592			811		—			6			(10,561	)		—			—
Investments		11,227		274			—		2,456			2,720			247,669			(2,456	)		261,890
Loans, net of unearned income		—		430			—		43,534			49,907			571,874			(43,534	)		622,211
Loans, net of unearned income—intercompany		—		—			144,343		3,512			6,716			(151,059	)		(3,512	)		—
Allowance for loan losses		—		(139	)		—		(3,425	)		(3,766	)		(32,511	)		3,425			(36,416	)
Total loans, net	$	—	$	291		$	144,343	$	43,621		$	52,857		$	388,304		$	(43,621	)	$	585,795
Advances to subsidiaries		145,529		—			—		—			—			(145,529	)		—			—
Investments in subsidiaries		210,989		—			—		—			—			—			(210,989	)		—
Other assets		12,295		69,947			728		6,161			7,014			362,790			(6,161	)		452,774
Other assets—intercompany		10,853		54,776			3,235		31			1,353			(70,217	)		(31	)		—
Assets of discontinued operations held for sale		—		—			—		—			—			23,604			—			23,604
Total assets	$	392,086	$	483,302		$	149,159	$	52,590		$	64,382		$	1,010,659		$	(263,579	)	$	1,888,599
Liabilities and equity
Deposits	$	—	$	—		$	—	$	—		$	—		$	832,603		$	—		$	832,603
Federal funds purchased and securities loaned or sold		—		139,681			—		—			—			38,478			—			178,159
Federal funds purchased and securities loaned or sold—intercompany		185		4,485			—		—			—			(4,670	)		—			—
Trading account liabilities		—		77,681			52		—			—			52,807			—			130,540
Trading account liabilities—intercompany		989		8,839			1,260		—			—			(11,088	)		—			—
Short-term borrowings		1,249		5,554			10,065		—			434			47,429			—			64,731
Short-term borrowings—intercompany		—		91,015			80,610		5,135			34,483			(206,108	)		(5,135	)		—
Long-term debt		214,981		15,403			51,208		1,677			6,348			91,617			(1,677	)		379,557
Long-term debt—intercompany		445		46,273			1,208		37,868			15,453			(63,379	)		(37,868	)		—
Advances from subsidiaries		21,958		—			—		—			—			(21,958	)		—			—
Other liabilities		5,819		66,135			651		1,910			1,588			69,863			(1,910	)		144,056
Other liabilities—intercompany		5,618		9,378			177		700			325			(15,498	)		(700	)		—
Liabilities of discontinued operations held for sale		—		—			—		—			—			16,004			—			16,004
Total liabilities	$	251,244	$	464,444		$	145,231	$	47,290		$	58,631		$	826,100		$	(47,290	)	$	1,745,650
Citigroup stockholder's equity	$	140,842	$	18,443		$	3,928	$	5,300		$	5,751		$	182,867		$	(216,289	)	$	140,842
Noncontrolling interest		—		415			—		—			—			1,692			—			2,107
Total equity	$	140,842	$	18,858		$	3,928	$	5,300		$	5,751		$	184,559		$	(216,289	)	$	142,949
Total liabilities and equity	$	392,086	$	483,302		$	149,159	$	52,590		$	64,382		$	1,010,659		$	(263,579	)	$	1,888,599

191

CONDENSED CONSOLIDATING BALANCE SHEET

	December 31, 2008
In millions of dollars	Citigroup parent company		CGMHI			CFI		CCC			Associates			Other Citigroup subsidiaries and eliminations			Consolidating adjustments			Citigroup consolidated
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 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			37,374		2,214			8,333			100,973			(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			855		1,907			1,808			77,629			(1,907	)		162,886
Other liabilities—intercompany		9,172		10,213			232		833			332			(19,949	)		(833	)		—
Total liabilities	$	228,445	$	546,246		$	139,622	$	52,036		$	67,987		$	812,148		$	(52,036	)	$	1,794,448
Citigroup stockholders' equity		141,630		7,819			3,698		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 equity	$	370,075	$	554,540		$	$143,320	$	57,440		$	73,300		$	946,659		$	(206,864	)	$	1,938,470

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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30, 2009
In millions of dollars	Citigroup parent company			CGMHI			CFI			CCC			Associates			Other Citigroup subsidiaries and eliminations			Consolidating adjustments			Citigroup Consolidated
Net cash (used in) provided by operating activities	$	(1,854	)	$	18,928		$	2,185		$	3,312		$	3,757		$	(36,850	)	$	(3,312	)	$	(13,834	)
Cash flows from investing activities
Change in loans	$	—		$	—		$	(9,324	)	$	1,528		$	1,504		$	(119,841	)	$	(1,528	)	$	(127,661	)
Proceeds from sales and securitizations of loans		—			163			—			—			—			185,279			—			185,442
Purchases of investments		(13,777	)		(13	)		—			(531	)		(579	)		(152,746	)		531			(167,115	)
Proceeds from sales of investments		6,892			—			—			398			435			59,563			(398	)		66,890
Proceeds from maturities of investments		20,209			—			—			230			309			69,700			(230	)		90,218
Changes in investments and advances—intercompany		(20,968	)		—			—			(290	)		4,202			16,766			290			—
Business acquisitions		—			—			—			—			—			—			—			—
Other investing activities		—			(775	)		—			—			—			(42,291	)		—			(43,066	)
Net cash (used in) provided by investing activities	$	(7,644	)	$	(625	)	$	(9,324	)	$	1,335		$	5,871		$	16,430		$	(1,335	)	$	4,708
Cash flows from financing activities
Dividends paid	$	(3,235	)	$	—		$	—		$	—		$	—		$	—		$	—			(3,235	)
Dividends paid—intercompany		(122	)		(1,000	)		—			—			—			1,122			—			—
Issuance of common stock		—			—			—			—			—			—			—			—
Issuance of preferred stock		—			—			—			—			—			—			—			—
Treasury stock acquired		(3	)		—			—			—			—			—			—			(3	)
Proceeds/(Repayments) from issuance of long-term debt—third-party, net		12,235			(2,406	)		14,020			(537	)		(1,985	)		(15,250	)		537			6,614
Proceeds/(Repayments) from issuance of long-term debt—intercompany, net		—			(14,450	)		—			(2,854	)		(2,202	)		16,652			2,854			—
Change in deposits		—			—			—			—			—			58,418			—			58,418
Net change in short-term borrowings and other investment banking and brokerage borrowings—third-party		(1,339	)		(4,181	)		(20,932	)		(1,225	)		(226	)		(29,465	)		1,225			(56,143	)
Net change in short-term borrowings and other advances—intercompany		2,081			3,583			14,056			—			(5,154	)		(14,566	)		—			—
Capital contributions from parent		—			—			—			—			—			—			—			—
Other financing activities		(116	)		—			(5	)		—			(41	)		46			—			(116	)
Net cash provided by (used in) financing activities	$	9,501		$	(18,454	)	$	7,139		$	(4,616	)	$	(9,608	)	$	16,957		$	4,616		$	5,535
Effect of exchange rate changes on cash and due from banks	$	—			—			—			—			—		$	582			—		$	582
Net cash used in discontinued operations	$	—			—			—			—			—		$	238			—		$	238
Net increase (decrease) in cash and due from banks	$	3		$	(151	)	$	—		$	31		$	20		$	(2,643	)	$	(31	)	$	(2,771	)
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	$	16		$	4,406		$	1		$	321		$	416		$	21,643		$	(321	)	$	26,482
Supplemental disclosure of cash flow information
Cash paid during the year for:
Income taxes	$	613		$	(743	)	$	422		$	96		$	381		$	(1,924	)	$	(96	)	$	(1,251	)
Interest		6,190			6,006			2,232			2,454			469			6,441			(2,454	)		21,338
Non-cash investing activities:
Transfers to repossessed assets	$	—		$	—		$	—		$	1,217		$	1,261		$	888		$	(1,217	)	$	2,149

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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30, 2008
In millions of dollars	Citigroup parent company			CGMHI			CFI			CCC			Associates			Other Citigroup subsidiaries and eliminations			Consolidating adjustments			Citigroup Consolidated
Net cash (used in) provided by operating activities of continuing operations	$	(1,519	)	$	4,587		$	1,981		$	3,232		$	2,920		$	90,977		$	(3,232	)	$	98,946
Cash flows from investing activities
Change in loans	$	—		$	67		$	1,379		$	(3,434	)	$	(2,003	)	$	(187,302	)		3,434		$	(187,859	)
Proceeds from sales and securitizations of loans		—			91			—			—			—			203,772			—			203,863
Purchases of investments		(167,093	)		(134	)		—			(945	)		(1,142	)		(104,446	)		945			(272,815	)
Proceeds from sales of investments		11,727			—			—			208			473			48,055			(208	)		60,255
Proceeds from maturities of investments		137,005			—			2			475			584			56,721			(475	)		194,312
Changes in investments and advances—intercompany		(20,954	)		—			—			(1,054	)		913			20,041			1,054			—
Business acquisitions		—			—			—			—			—			—			—			—
Other investing activities		—			(19,046	)		—			—			—			23,253			—			4,207
Net cash (used in) provided by investing activities	$	(39,315	)	$	(19,022	)	$	1,381		$	(4,750	)	$	(1,175	)	$	60,094		$	4,750		$	1,963
Cash flows from financing activities
Dividends paid	$	(6,008	)	$	—		$	—		$	—		$	—		$	—		$	—		$	(6,008	)
Dividends paid-intercompany		(180	)		(84	)		—			—			—			264			—			—
Issuance of common stock		4,961			—			—			—			—			—			—			4,961
Issuance/(Redemptions) of preferred stock		27,424			—			—			—			—			—			—			27,424
Treasury stock acquired		(6	)		—			—			—			—			(1	)		—			(7	)
Proceeds/(Repayments) from issuance of long-term debt—third-party, net		14,608			(9,068	)		6,188			(720	)		(2,223	)		(36,267	)		720			(26,762	)
Proceeds/(Repayments) from issuance of long-term debt—intercompany, net		—			23,322			—			(1,513	)		(2,181	)		(21,141	)		1,513			—
Change in deposits		—			—			—			—			—			(32,411	)		—			(32,411	)
Net change in short-term borrowings and other investment banking and brokerage borrowings—third-party		(3,196	)		(5,269	)		(9,096	)		—			(105	)		(23,967	)		—			(41,633	)
Net change in short-term borrowings and other advances—intercompany		3,622			4,873			(448	)		3,724			2,721			(10,768	)		(3,724	)		—
Capital contributions from parent		—			—			(1	)		—			—			1			—			—
Other financing activities		(377	)		—			—			—			—			—			—			(377	)
Net cash provided by (used in) financing activities	$	40,848		$	13,774		$	(3,357	)	$	1,491		$	(1,788	)	$	(124,290	)	$	(1,491	)	$	(74,813	)
Effect of exchange rate changes on cash and due from banks	$	—		$	—		$	—		$	—		$	—		$	(1,105	)	$	—		$	(1,105	)
Net cash from discontinued operations	$	—		$	—		$	—		$	—		$	—		$	(171	)	$	—		$	(171	)
Net increase (decrease) in cash and due from banks	$	14		$	(661	)	$	5		$	(27	)	$	(43	)	$	25,505		$	27		$	24,820
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	$	33		$	4,636		$	7		$	294		$	397		$	57,953			(294	)	$	63,026
Supplemental disclosure of cash flow information
Cash paid during the year for:
Income taxes	$	339		$	(2,867	)	$	261		$	304		$	261		$	4,129		$	(304	)	$	2,123
Interest		7,083			14,582			2,916			1,428			252			19,461			(1,428	)		44,294
Non-cash investing activities:
Transfers to repossessed assets	$	—		$	—		$	—		$	1,108		$	1,148		$	1,426		$	(1,108	)	$	2,574

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PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

        The following information supplements and amends our discussion set forth under Part I, Item 3 "Legal Proceedings" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, as updated by our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009 and June 30, 2009.

Subprime Mortgage—Related Litigation and Other Matters

        Securities Actions.    On July 22, 2009, plaintiffs in BRECHER, ET AL. v. CGMI, ET AL. voluntarily dismissed the claims against the individual defendants and moved to remand the remaining action against Citigroup, CGMI, and the Personnel and Compensation Committee to state court. On September 8, 2009, the United States District Court for the Southern District of California ordered that defendants show cause as to why there was federal jurisdiction over the case. On September 17, 2009, defendants responded to the district court's order.

        On August 7, 2009, the Judicial Panel on Multidistrict Litigation transferred BRECHER, ET AL. v. CITIGROUP INC., ET AL. to the Southern District of New York for coordination with IN RE CITIGROUP INC. SECURITIES LITIGATION.

        On August 19, 2009, KOCH, ET AL. v. CITIGROUP INC., ET AL., a putative class action, was filed in the United States District Court for the Southern District of California on behalf of participants in Citigroup's Voluntary FA Capital Accumulation Program ("FA CAP Program") against various defendants, including Citigroup and CGMI, asserting claims under the Securities Act of 1933, the Securities Exchange Act of 1934, and Minnesota state law in connection with plaintiffs' acquisition of certain securities through the FA CAP Program. On September 30, 2009, the Judicial Panel on Multidistrict Litigation conditionally transferred KOCH to the United States District Court for the Southern District of New York as a potential tag-along to IN RE CITIGROUP INC. SECURITIES LITIGATION. On October 8, 2009, a consolidated amended complaint was filed in BRECHER, ET AL. v. CITIGROUP INC., ET AL. in the United States District Court for the Southern District of New York, asserting claims under the federal securities laws and Minnesota and California state law. The complaint purports to consolidate the similar claims asserted in KOCH.

        On August 31, 2009, ASHER, ET AL. v. CITIGROUP INC., ET AL. and PELLEGRINI, ET AL. v. CITIGROUP INC., ET AL. were consolidated with IN RE CITIGROUP INC. BOND LITIGATION.

        On October 14, 2009, INTERNATIONAL FUND MANAGEMENT S.A., ET AL. v. CITIGROUP INC., ET AL. was filed by several foreign investment funds and fund management companies and the City of Richmond in the United States District Court for the Southern District of New York, asserting, among other claims, claims under the Securities Exchange Act of 1934 against various defendants, including Citigroup and several current and former Citigroup executives. The claims asserted in this action are similar to those asserted in IN RE CITIGROUP INC. SECURITIES LITIGATION.

        Derivative Actions.    On August 25, 2009, the United States District Court for the Southern District of New York dismissed without prejudice the complaint in IN RE CITIGROUP INC. SHAREHOLDER DERIVATIVE LITIGATION for failure to make a pre-suit demand on the Board of Directors and failure to plead demand futility. On September 18, 2009, plaintiffs filed a motion for leave to amend the complaint.

        Citigroup has received letters on behalf of purported shareholders demanding that the Board of Directors take remedial action, including the filing of legal claims, with respect to certain of the matters alleged in the subprime mortgage—related securities and derivative litigations, among other matters. The Board has formed a committee to consider the demands asserted in the letters.

        ERISA Actions.    On August 31, 2009, the United States District Court for the Southern District of New York dismissed the complaint in IN RE CITIGROUP ERISA LITIGATION for failure to state a claim that defendants breached their fiduciary duties by offering Citigroup stock as an investment option in the ERISA plans and entered judgment in favor of defendants. On September 8, 2009, plaintiffs appealed the dismissal to the United States Court of Appeals for the Second Circuit.

        Other Matters.    Underwriting Actions. American Home Mortgage. On July 27, 2009, UTAH RETIREMENT SYSTEMS v. STRAUSS, ET AL. was filed in the United States District Court for the Eastern District of New York asserting, among other claims, claims under the Securities Act of 1933 and Utah state law arising out of an offering of American Home Mortgage common stock underwritten by CGMI.

        On July 31, 2009, the United States District Court for the Eastern District of New York entered an order preliminarily approving settlements reached with all defendants (including Citigroup and CGMI) in IN RE AMERICAN HOME MORTGAGE SECURITIES LITIGATION.

        AIG.    On August 5, 2009, the underwriter defendants, including CGMI and CGML, moved to dismiss the consolidated amended complaint in IN RE AMERICAN INTERNATIONAL GROUP, INC. 2008 SECURITIES LITIGATION.

        Discrimination in Lending Actions. On September 21, 2009, the United States District Court for the Central District of California denied defendant CitiMortgage's motion for summary judgment and granted its motion to strike the jury demand in NAACP v. AMERIQUEST MORTGAGE CO., ET AL.

        Public Nuisance and Related Actions. On August 7, 2009, the City of Cleveland dismissed, without prejudice, its claims against CitiFinancial and CitiMortgage in CITY OF CLEVELAND v. JP MORGAN CHASE BANK, N.A., ET AL.

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        Counterparty Actions. On October 7, 2009, defendants filed a motion to dismiss the complaint in AMBAC CREDIT PRODUCTS, LLC v. CITIGROUP INC., ET AL.

        Governmental and Regulatory Matters.    Citigroup and certain of its affiliates and current and former employees are subject to formal and informal investigations, as well as subpoenas and/or requests for information, from various governmental and self-regulatory agencies relating to subprime mortgage—related activities. Citigroup and its affiliates are cooperating fully and are engaged in efforts to resolve certain of these matters.

Auction Rate Securities—Related Litigation and Other Matters

        Securities Actions.    On July 23, 2009, the Judicial Panel on Multidistrict Litigation issued an order transferring K-V PHARMACEUTICAL CO. v. CGMI from the United States District Court for the Eastern District of Missouri to the United States District Court for the Southern District of New York for coordination with IN RE CITIGROUP AUCTION RATE SECURITIES LITIGATION. On August 24, 2009, CGMI moved to dismiss the complaint.

        On September 11, 2009, the United States District Court for the Southern District of New York dismissed without prejudice the complaint in IN RE CITIGROUP AUCTION RATE SECURITIES LITIGATION. On October 15, 2009, lead plaintiff filed a second consolidated amended complaint asserting claims under Sections 10 and 20 of the Securities Exchange Act of 1934.

        On October 2, 2009, the Judicial Panel on Multidistrict Litigation transferred OCWEN FINANCIAL CORP., ET AL. v. CGMI to the United States District Court for the Southern District of New York for coordination with IN RE CITIGROUP AUCTION RATE SECURITIES LITIGATION.

        Derivative Actions.    On September 10, 2009, the United States District Court for the Southern District of New York dismissed without prejudice the complaint in LOUISIANA MUNICIPAL POLICE EMPLOYEES RETIREMENT SYSTEM v. PANDIT, ET AL. for failure to make a pre-suit demand on the Board of Directors and failure to plead demand futility. On September 16, 2009, Citigroup received a letter on behalf of plaintiff demanding that the Board of Directors take remedial action, including the filing of legal claims, with respect to the matters alleged in the dismissed complaint. The Board has formed a committee to consider the demands asserted in the letter. On September 23, 2009, plaintiff filed a motion for reconsideration of the district court's order of dismissal.

        Governmental and Regulatory Actions.    Citigroup and certain of its affiliates and current and former employees are subject to formal and informal investigations, as well as subpoenas and/or requests for information, from various governmental and self-regulatory agencies relating to auction rate securities. Citigroup and its affiliates are cooperating fully and are engaged in discussions on these matters.

Falcon and ASTA/MAT-Related Litigation and Other Matters

        ECA Acquisitions, Inc., et al. v. MAT Three LLC, et al.    On September 14, 2009, defendants filed a motion to dismiss the amended complaint.

        Governmental and Regulatory Matters.    Citigroup and certain of its affiliates are subject to formal and informal investigations, as well as subpoenas and/or requests for information, from various governmental and self-regulatory agencies relating to the marketing and management of the Falcon and ASTA/MAT funds. Citigroup and its affiliates are cooperating fully and are engaged in discussions on these matters.

Adelphia Communications Corporation

        Trial of the Adelphia Recovery Trust's claims against Citigroup and numerous other defendants is scheduled to begin in April 2010.

IPO Securities Litigation

        In October 2009, the District Court entered an order granting final approval of the settlement.

Other Matters

        Destiny Litigations.    On June 9 and 12, 2009, two actions—DESTINY USA HOLDINGS, LLC v. CITIGROUP GLOBAL MARKETS REALTY CORP. and CONGEL, ET. AL. v. CITIGROUP GLOBAL MARKETS REALTY CORP.—were filed in New York State Supreme Court, Onondaga County, against Citigroup Global Markets Realty Corp. (CGMRC), respectively relating to CGMRC's issuance of Deficiency and Default Notices (the "Notices") pursuant to a construction loan agreement with Destiny USA Holdings, LLC (Destiny). Destiny seeks declaratory and injunctive relief and damages for CGMRC's alleged breach of the loan agreement. On July 17, 2009, the court granted Destiny's motion for a preliminary injunction, vacated the Notices, and directed CGMRC to pay all sums due under Destiny's existing funding requests and to pay all future sums due as requested under the loan agreement. That order has been stayed pending the outcome of CGMRC's state court appeal.

        Investor Actions.    Investors in municipal bonds and other instruments affected by the collapse of the credit markets have sued Citigroup on a variety of theories. On August 10, 2009, certain such investors, a Norwegian securities firm and seven Norwegian municipalities, filed an action—TERRA SECURITIES ASA KONKURSBO, ET AL. v. CITIGROUP INC., ET AL.—in the United States District Court for the Southern District of New York against Citigroup, CGMI and Citigroup Alternative Investments LLC, asserting claims under Sections 10 and 20 of the Securities Exchange Act of 1934 and state law arising out of the municipalities' investment in certain notes. On October 7, 2009, defendants filed a motion to dismiss.

        Japan Regulatory Matters.    Beginning in late 2008, certain Citigroup affiliates received requests for information from Japanese regulators relating to the accuracy of their large shareholding reporting in Japan. These Citigroup affiliates are cooperating fully with such requests and, among other things, in the third quarter of 2009 filed approximately 900 public reports in Japan correcting and supplementing previous large

196

shareholding reports. Administrative fines and other penalties may be imposed against these Citigroup affiliates.

        Lehman Brothers—Structured Notes.    Retail customers outside of the United States continue to file, and threaten to file, claims for the loss in value of their investments. There are currently 99 civil actions pending in six European countries related to the distribution of Lehman structured notes. The first court hearing in the Belgian criminal case (in which more than 1300 customers are expected to file as civil complainants seeking compensation) is expected to take place on December 1, 2009. A criminal investigation has begun in Poland, and the criminal investigations in Greece continue. Scrutiny by regulatory authorities outside of the United States is ongoing, and there have been a number of adverse regulatory findings.

        Pension Plan Litigation.    On October 19, 2009, the United States Court of Appeals for the Second Circuit reversed the district court's order granting summary judgment in favor of plaintiffs and dismissed plaintiffs' complaint. The Second Circuit held that Citigroup's pension plan did not violate ERISA's minimum benefit accrual rules and that there had been no violation of ERISA's notice requirements.

        W.R. Huff Asset Management Co., LLC v. Kohlberg Kravis Roberts & Co., L.P.    On August 6, 2009, the Circuit Court of Jefferson County, Alabama, granted defendant Robinson Humphrey Co. LLC's motion to strike the Fourth Amended Complaint on statute of limitations grounds, thereby dismissing Robinson Humphrey Co. LLC from the case. On August 25, 2009, the case was consolidated for discovery purposes, but not for trial, with the related case against Salomon Brothers, Inc., 27001 PARTNERSHIP, ET AL. v. BT SECURITIES CORP., ET AL. Trial in the 27001 PARTNERSHIP action remains scheduled to commence in February 2010. On September 18, 2009, defendants Salomon Brothers, Inc. and Chemical Securities, Inc. moved for summary judgment, and plaintiffs moved for partial summary judgment.

Settlement Payments

        Any payments required by Citigroup or its affiliates in connection with the settlement agreements described above either have been made, or are covered by existing litigation reserves.

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Item 1A.    Risk Factors

        There are no material changes from the risk factors set forth under Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

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Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

(c)   Share Repurchases

        Under its long-standing repurchase program, the Company may buy back common shares in the market or otherwise from time to time. This program may be used for many purposes, including to offset dilution from stock-based compensation programs.

        The following table summarizes the Company's share repurchases during the first nine months of 2009:

In millions, except per share amounts		Total shares purchased(1)		Average price paid per share		Approximate dollar value of shares that may yet be purchased under the plans or 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
July 2009
	Open market repurchases(1)		0.4	$	3.09	$	6,739
	Employee transactions(2)		1.1		3.08		N/A
August 2009
	Open market repurchases(1)		—	$	—	$	6,739
	Employee transactions(2)		0.1		3.66		N/A
September 2009
	Open market repurchases(1)		0.1	$	4.67	$	6,739
	Employee transactions(2)		0.1		4.52		N/A
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
Year-to-date 2009
	Open market repurchases(1)		0.9	$	3.18	$	6,739
	Employee transactions(2)		16.4		3.56		N/A
Total year-to-date 2009			17.3	$	3.54	$	6,739

(1)

All open market repurchases were transacted under an existing authorized share repurchase plan. On April 17, 2006, the Board of Directors authorized up to an additional $10 billion in share repurchases. Shares repurchased in the first, second and third quarters of 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 the Company's employee restricted or deferred stock program, where shares are withheld to satisfy tax requirements.

N/A    Not applicable.

        In accordance with the recent exchange agreements with the USG, the Company agreed not to pay a quarterly common stock dividend exceeding $0.01 per share per quarter for so long as the USG holds any debt or equity security of Citigroup (or any affiliate thereof) acquired by the USG in connection with the public and private exchange offers, without the consent of the USG. Any dividend on Citi's outstanding common stock would need to be made in compliance with Citi's obligations to any remaining outstanding preferred stock. In addition, pursuant to various of its agreements with the USG, the Company agreed not to repurchase its common stock subject to certain limited exceptions, including in the ordinary course of business as part of employee benefit programs, without the consent of the USG.

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Item 4. Submission of Matters to a Vote of Security Holders

        On the July 24, 2009 voting deadline for Citigroup's Preferred Proxy Statement dated June 18, 2009, the votes cast on the proposals to amend the Company's restated certificate of incorporation and the certificates of designation of certain series of the Company's preferred stock did not meet the required quorum of a majority of the outstanding shares of the Company's common stock. As a result, the proposals were not approved.

        Set forth below, with respect to the proposals covered by Citigroup's Preferred Proxy Statement dated June 18, 2009, are the number of votes consenting to approve the proposal, the number of votes withholding consent, and the number of abstentions.

		CONSENT		WITHHOLD CONSENT		ABSTAIN
(1)	Proposal to eliminate certain requirements with respect to the declaration and payment of dividends on the Company's preferred stock.		1,616,485,022		133,242,379		188,213,673
(2)	Proposal to eliminate the right of holders of the Company's preferred stock to elect two directors if dividends on that preferred stock have not been paid.		1,608,466,652		137,116,210		192,358,085
(3)	Proposal to clarify that shares of certain series of the Company's preferred stock acquired by the Company will be restored to the status of authorized but unissued shares without designation as to series.		1,134,202,301		607,909,223		195,824,857
(4)	Proposal to increase the number of authorized shares of preferred stock from 30 million to 2 billion.		1,105,887,808		629,622,756		192,425,539

        On September 3, 2009, the Company announced that its common stockholders had approved the three proposed amendments to the Company's restated certificate of incorporation submitted to common stockholders in Citigroup's Common Proxy Statement dated June 18, 2009.

        Set forth below, with respect to the proposals covered by Citigroup's Common Proxy Statement dated June 18, 2009, are the number of votes consenting to approve the proposal, the number of votes withholding consent, and the number of abstentions.

		CONSENT		WITHHOLD CONSENT		ABSTAIN
(1)	Proposal to increase the number of authorized shares of common stock from 15 billion to 60 billion shares.		7,056,506,251		188,694,489		26,840,344
(2)	Proposal to effect a reverse stock split of the Company's common stock at any time prior to June 30, 2010 at one of seven reverse split ratios, at the sole discretion of the Company's Board of Directors.		8,558,930,213		537,925,274		78,420,206
(3)	Proposal to eliminate the voting rights of shares of common stock with respect to any amendment to the Company's restated certificate of incorporation that relates solely to the terms of one or more outstanding series of the Company's preferred stock.		6,629,778,336		604,659,624		37,525,290

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Item 6. Exhibits

        See Exhibit Index.

201

SIGNATURES

        Pursuant to the requirements 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 6th day of November, 2009.

CITIGROUP INC.     (Registrant)
By	/s/ JOHN C. GERSPACH John C. Gerspach Chief Financial Officer (Principal Financial Officer)
By	/s/ JEFFREY R. WALSH Jeffrey R. Walsh Controller and Chief Accounting Officer (Principal Accounting Officer)

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EXHIBIT INDEX

2.01		Amended and Restated Joint Venture Contribution and Formation Agreement, dated May 29, 2009, by and among Citigroup Inc. (the Company), Morgan Stanley and Morgan Stanley Smith Barney Holdings LLC, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed June 3, 2009 (File No. 1-9924).
2.02		Share Purchase Agreement, dated May 1, 2009, by and among Nikko Citi Holdings Inc., Nikko Cordial Securities Inc., Nikko Citi Business Services Inc., Nikko Citigroup Limited, and Sumitomo Mitsui Banking Corporation, incorporated by reference to Exhibit 2.02 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2009 (File No. 1-9924).
3.01	+	Restated Certificate of Incorporation of the Company, dated October 30, 2009.
3.02		By-Laws of the Company, as amended, effective October 16, 2007, incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed October 19, 2007 (File No. 1-9924).
4.01		Warrant, dated October 28, 2008, issued by the Company to the United States Department of the Treasury (the UST), incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed October 30, 2008 (File No. 1-9924).
4.02		Warrant, dated December 31, 2008, issued by the Company to the UST, incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed December 31, 2008 (File No. 1-9924).
4.03		Warrant, dated January 15, 2009, issued by the Company to the UST, incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed January 16, 2009 (File No. 1-9924).
4.04		Tax Benefits Preservation Plan, dated June 9, 2009, between the Company and Computershare Trust Company, N.A., incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed June 10, 2009 (File No. 1-9924).
10.01	+	Form of Citigroup Equity or Deferred Cash Award Agreement (effective November 1, 2009).
12.01	+	Calculation of Ratio of Income to Fixed Charges.
12.02	+	Calculation of Ratio of Income to Fixed Charges (including preferred stock dividends).
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.
101.01	+	Financial statements from the Quarterly Report on Form 10-Q of Citigroup Inc. for the quarter ended September 30, 2009, filed on November 6, 2009, 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 Securities and Exchange Commission upon request.

+

Filed herewith

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EX-3.01

Exhibit 3.01

RESTATED

CERTIFICATE OF INCORPORATION

OF

CITIGROUP INC.

Citigroup Inc., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

The name of the corporation is Citigroup Inc. (hereinafter the “Corporation”) and the date of filing of its original Certificate of Incorporation with the Delaware Secretary of State is March 8, 1988.  The name under which the Corporation filed its Certificate of Incorporation is Commercial Credit Group, Inc.  A Restated Certificate of Incorporation, which restated and integrated, but did not further amend, the Certificate of Incorporation as amended or supplemented theretofore, was filed with the Delaware Secretary of State on December 11, 1998.

The text of the Restated Certificate of Incorporation as amended or supplemented heretofore is hereby restated and integrated, but not amended, to read as herein set forth in full and there is no discrepancy between the provisions of the Restated Certificate of Incorporation as so amended or supplemented and the provisions of this Restated Certificate of Incorporation.  Following the effective time of this Restated Certificate of Incorporation, all references hereinafter to “Certificate of Incorporation” shall refer to this Restated Certificate of Incorporation.

FIRST:The name of the Corporation is:

Citigroup Inc.

SECOND:The registered office of the Corporation is to be located at the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, in the county of New Castle, in the State of Delaware.  The name of its registered agent at that address is The Corporation Trust Company.

THIRD:The purpose of the Corporation is:

 To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH:A.The total number of shares of all classes of stock which the Corporation shall have authority to issue is Sixty Billion Thirty Million (60,030,000,000). The total number of shares of Common Stock which the Corporation shall have authority to issue is Sixty Billion (60,000,000,000) shares of Common Stock having a par value of one cent ($.01) per share.  The total number of shares of Preferred Stock which the Corporation shall have the authority to issue is Thirty Million (30,000,000) shares having a par value of one dollar ($1.00)per share.

B.The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of this Article FOURTH, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof.  The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:

(i)The number of shares constituting that series and the distinctive designation of that series;

(ii)The dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;

(iii)Whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;

(iv)Whether that series shall have conversion or exchange privileges, and, if so, the terms and conditions of such conversion or exchange, including provision for adjustment of the conversion or exchange rate in such events as the Board of Directors shall determine;

(v)Whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the manner of selecting shares for redemption if less than all shares are to be redeemed, the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

(vi)Whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;

(vii)The right of the shares of that series to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary, upon the issue of any additional stock (including additional shares of such series or any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any subsidiary of any outstanding stock of the Corporation;

(viii)The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and

2

(ix)Any other relative, participating, optional or other special rights, qualifications, limitations or restrictions of that series.

C.Dividends on outstanding shares of Preferred Stock shall be paid, or declared and set apart for payment, before any dividends shall be paid or declared and set apart for payment on outstanding shares of Common Stock.  If upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the assets available for distribution to holders of shares of Preferred Stock of all series shall be insufficient to pay such holders the full preferential amount to which they are entitled, then such assets shall be distributed ratably among the shares of all series of Preferred Stock in accordance with the respective preferential amounts (including unpaid cumulative dividends, if any) payable with respect thereto.

D.Shares of any series of Preferred Stock which have been redeemed (whether through the operation of a sinking fund or otherwise) or which, if convertible or exchangeable, have been converted into or exchanged for shares of stock of any other class or classes shall have the status of authorized and unissued shares of Preferred Stock of the same series and may be reissued as a part of the series of which they were originally a part or may be reclassified and reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors or as part of any other series of Preferred Stock, all subject to the conditions and the restrictions on issuance set forth in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of Preferred Stock.

E.Subject to the provisions of any applicable law or except as otherwise provided by the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of outstanding shares of Common Stock shall exclusively possess voting power for the election of directors and for all other purposes; each holder of record of shares of Common Stock being entitled to one vote for each share of Common Stock standing in his name on the books of the Corporation; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate relating to shares of Preferred Stock contemplated or authorized by Section B or Section J of this Article FOURTH) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Restated Certificate of Incorporation (including any certificate relating to shares of Preferred Stock contemplated or authorized by Section B or Section J of this Article FOURTH).

F.Except as otherwise provided by the resolution or resolutions providing for the issue of any series of Preferred Stock, after payment shall have been made to the holders of Preferred Stock of the full amount of dividends to which they shall be entitled pursuant to the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of Common Stock shall be entitled, to the exclusion of the holders of Preferred Stock of any and all series, to receive such dividends as from time to time may be declared by the Board of Directors.

3

G.Except as otherwise provided by the resolution or resolutions providing for the issue of any series of Preferred Stock, in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment shall have been made to the holders of Preferred Stock of the full amount to which they shall be entitled pursuant to the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of Common Stock shall be entitled, to the exclusion of the holders of Preferred Stock of any and all series, to share ratably according to the number of shares of Common Stock held by them, in all remaining assets of the Corporation available for distribution.

H.The issuance of any shares of Common Stock or Preferred Stock authorized hereunder and any other actions permitted to be taken by the Board of Directors pursuant to this Article FOURTH must be authorized by the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the entire Board of Directors or by a committee of the Board of Directors constituted by the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the entire Board of Directors.

I.              Notwithstanding any other provision of this Certificate of Incorporation, the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares entitled to vote thereon shall be required to amend, alter, change or repeal, or adopt any provision as part of this Certificate of Incorporation inconsistent with the purpose and intent of, Section B through I of this Article FOURTH.

J.             Pursuant to the authority conferred by this Article FOURTH, the following series of Preferred Stock are hereby provided for, with the number of shares to be included in each such series, and the designation, powers, preference and rights, and qualifications, limitations or restrictions thereof fixed as stated and expressed with respect to each such series in the respective exhibit attached hereto as specified below and incorporated herein by reference:

Exhibit I	8.125% Non-Cumulative Preferred Stock, Series AA
Exhibit II	8.40% Fixed Rate / Floating Rate Non-Cumulative Preferred Stock, Series E
Exhibit III	8.50% Non-Cumulative Preferred Stock, Series F
Exhibit IV	Series R Participating Cumulative Preferred Stock
Exhibit V	6.5% Non-Cumulative Convertible Preferred Stock, Series T

FIFTH:The Directors need not be elected by written ballot unless and to the extent the By-Laws so require.

SIXTH:The books and records of the Corporation may be kept (subject to any mandatory requirement of law) outside the State of Delaware at such place or places as may be determined from time to time by or pursuant to authority granted by the Board of Directors or by

4

the By-Laws.

SEVENTH:The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors, the exact number of directors to be determined from time to time by resolution adopted by affirmative vote of a majority of the entire Board of Directors. At each annual meeting, each director shall be elected for a one-year term. A director shall hold office until the annual meeting held the year in which his or her term expires and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office.  Any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy occurring in the Board of Directors may be filled by a majority of the directors then in office, even if less than a quorum, or a sole remaining director.  Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his or her predecessor.  Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation applicable thereto.

EIGHTH:A.In addition to any affirmative vote required by law or this Certificate of Incorporation or the By-Laws of the Corporation, and except as otherwise expressly provided in Section B of this Article EIGHTH, a Business Combination (as hereinafter defined) shall require the affirmative vote of not less than a majority of the votes cast affirmatively and negatively by the holders of Voting Stock (as hereinafter defined), voting together as a single class. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage or separate class vote may be specified, by law or in any agreement with any national securities exchange or otherwise.

B.The provisions of Section A of this Article EIGHTH shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote, if any, as is required by law or by any other provision of this Certificate of Incorporation or the By-Laws of the Corporation or otherwise, if all of the conditions specified in either of the following Paragraphs 1 or 2 are met; provided, however, that in the case of a Business Combination that does not involve the payment of consideration to the holders of the Corporation’s outstanding Capital Stock (as hereinafter defined), then the provisions of Section A of this Article EIGHTH must be satisfied unless the conditions specified in the following Paragraph 1 are met:

1.The Business Combination shall have been approved (and such approval not subsequently rescinded) by a majority of the Continuing Directors (as hereinafter defined), either specifically or as a transaction which is within an approved category of transactions with an Interested Stockholder.  Such approval may be given prior to or subsequent to the acquisition of, or announcement or public disclosure of the intention to acquire, beneficial ownership of the Voting Stock that caused the Interested Stockholder to become an

5

Interested Stockholder; provided, however, that approval shall be effective for the purposes of this Paragraph 1 only if obtained at a meeting at which a Continuing Director Quorum (as hereinafter defined) was present; and provided further, that such approval may be rescinded by a majority of the Continuing Directors at any meeting at which a Continuing Director Quorum is present and which is held prior to consummation of the proposed Business Combination.

2.All of the following conditions, if applicable, shall have been met:

The aggregate amount of cash and the Fair Market Value (as hereinafter defined), as of the date of the consummation of the Business Combination (the “Consummation Date”), of consideration other than cash to be received per share by holders of shares of any class or series of outstanding Capital Stock in such Business Combination shall be at least equal to the amount determined, as applicable, under Paragraph 2(a) or 2(b) below:

(a)if the Fair Market Value per share of such class or series of Capital Stock on the date of the first public announcement of the proposed Business Combination (the “Announcement Date”) is less than the Fair Market Value per share of such class or series of Capital Stock on the date on which the Interested Stockholder became an Interested Stockholder (the “Determination Date”), an amount (the “Premium Capital Stock Price”) equal to the sum of (i) the Fair Market Value per share of such class or series of Capital Stock on the Announcement Date plus (ii) the product of the Fair Market Value per share of such class or series of Capital Stock on the Announcement Date multiplied by the highest percentage premium over the closing sale price per share of such class or series of Capital Stock paid on any day by or on behalf of the Interested Stockholder for any share of such class or series of Capital Stock in connection with the acquisition by the Interested Stockholder of beneficial ownership of shares of such class or series of Capital Stock within the two-year period immediately prior to the Announcement Date or in the transaction in which it became an Interested Stockholder; provided, however, that if the Premium Capital Stock Price as determined above is greater than the highest per share price paid by or on behalf of the Interested Stockholder for any share of such class or series of Capital Stock in connection with the acquisition by the Interested Stockholder of beneficial ownership of shares of such class or series of Capital Stock within the two-year period immediately prior to the Announcement Date, the amount required under this Paragraph 2(a) shall be the higher of (A) such highest price paid by or on behalf of the Interested Stockholder, and (B) the Fair Market Value per share of such class or series of Capital Stock on the Announcement Date (the Fair Market Value and other prices per share of such class or series of Capital Stock referred to in this Paragraph 2(a) shall be in each case appropriately adjusted for any subsequent stock split, stock dividend, subdivision or reclassification with respect to such class or series of Capital Stock); or

6

(b)if the Fair Market Value per share of such class or series of Capital Stock on the Announcement Date is greater than or equal to the Fair Market Value per share of such class or series of Capital Stock on the Determination Date, in each case as appropriately adjusted for any subsequent stock split, stock dividend, subdivision or reclassification with respect to such class or series of Capital Stock, a price per share equal to the Fair Market Value per share of such class or series of Capital Stock on the Announcement Date.

The provisions of this Paragraph 2 shall be required to be met with respect to every class or series of outstanding Capital Stock which is the subject of the Business Combination whether or not the Interested Stockholder has previously acquired beneficial ownership of any shares of a particular class or series of Capital Stock.

(c)After the Determination Date and prior to the Consummation Date of such Business Combination: (i) except as approved by a majority of the Continuing Directors at a meeting at which a Continuing Director Quorum is present, there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) payable in accordance with the terms of any outstanding Capital Stock; (ii) there shall have been an increase in the annual rate of dividends paid on the Common Stock as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction that has the effect of reducing the number of outstanding shares of Common Stock, unless the failure so to increase such annual rate is approved by a majority of the Continuing Directors at a meeting at which a Continuing Director Quorum is present; and (iii) such Interested Stockholder shall not have become the beneficial owner of any additional shares of Capital Stock except as part of the transaction that results in such Interested Stockholders becoming an Interested Stockholder and except in a transaction that, after giving effect thereto, would not result in any increase in the Interested Stockholder’s percentage beneficial ownership of any class or series of Capital Stock.

(d)After the Determination Date, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise.

(e)A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (the “Act”) (or

7

any subsequent provisions replacing such Act, rules or regulations), shall be mailed to all stockholders of the Corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions).  The proxy or information statement shall contain on the first page thereof, in a prominent place, any statement as to the advisability (or inadvisability) of the Business Combination that the Continuing Directors, or any of them, may choose to make and, if deemed advisable by a majority of the Continuing Directors, the opinion of an investment banking firm selected by a majority of the Continuing Directors as to the fairness (or not) of the terms of the Business Combination from a financial point of view to the holders of the outstanding shares of Capital Stock other than the Interested Stockholder and its Affiliates or Associates (as hereinafter defined), such investment banking firm to be paid a reasonable fee for its services by the Corporation.

(f)Such Interested Stockholder shall not have made any major change in the Corporation’s business or equity capital structure without the approval of at least a majority of the Continuing Directors.

C.The following definitions shall apply with respect to this Article EIGHTH:

1.The term “Business Combination” shall mean:

(a)any merger or consolidation of the Corporation or any Major Subsidiary (as hereinafter defined) with, or any sale, lease, exchange, transfer or other disposition of substantially all the assets or outstanding shares of capital stock of the Corporation or any Major Subsidiary with or for the benefit of, (i) any Interested Stockholder or (ii) any other company (whether or not itself an Interested Stockholder) which is or after such merger, consolidation or sale, lease, exchange, transfer or other disposition would be an Affiliate or Associate of an Interested Stockholder; or

(b)any sale, lease, exchange, mortgage, pledge, transfer or other disposition or security arrangement, investment, loan, advance, guarantee, agreement to purchase, agreement to pay, extension of credit, joint venture participation or other arrangement (in one transaction or a series of transactions) with or for the benefit of any Interested Stockholder or any Affiliate or Associate of any Interested Stockholder involving any assets, securities or commitments of the Corporation, any Major Subsidiary or any Interested Stockholder or any Affiliate or Associate of any Interested Stockholder having an aggregate Fair Market Value and/or involving aggregate commitments of Twenty-Five Million dollars ($25,000,000) or more; or

(c)any reclassification of securities (including any reverse stock

8

split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries (as hereinafter defined) or any other transaction (whether or not with or otherwise involving an Interested Stockholder) that has the effect, directly or indirectly, of increasing the proportionate share of any class or series of Capital Stock, or any securities convertible into Capital Stock or into equity securities of any Subsidiary, that is beneficially owned by any Interested Stockholder or any Affiliate or Associate of any Interested Stockholder; or

(d)any agreement, contract or other arrangement providing for any one or more of the actions specified in the foregoing clauses (a) to (d);

provided, however, that no such aforementioned transaction shall be deemed to be a Business Combination subject to this Article EIGHTH if the Announcement Date of such transaction occurs more than eighteen months after the Determination Date with respect to such Interested Stockholder.

2.The term “Capital Stock” shall mean all capital stock of the Corporation authorized to be issued from time to time under Article FOURTH of this Certificate of Incorporation, including, without limitation, the Common Stock, and the term “Voting Stock” shall mean all Capital Stock which by its terms may be voted on all matters submitted to stockholders of the Corporation generally.

3.The term “person” shall mean any individual, firm, company or other entity and shall include any group comprised of any person and any other person with whom such person or any Affiliate or Associate of such person has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of Capital Stock.

4.The term “Interested Stockholder” shall mean any person (other than the Corporation or any Subsidiary and other than any profit-sharing, employee stock ownership or other employee benefit plan of the Corporation or any trustee of or fiduciary with respect to any such plan when acting in such capacity) who (a) is, or has announced or publicly disclosed a plan or intention to become, the beneficial owner of Voting Stock representing twenty-five percent (25%) or more of the votes entitled to be cast by the holders of all then outstanding shares of Voting Stock; or (b) is an Affiliate or Associate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner of Voting Stock representing twenty-five percent (25%) or more of the votes entitled to be cast by the holders of all then outstanding shares of Voting Stock.

5.A person shall be a “beneficial owner” of any Capital Stock (a) which such person or any of its Affiliates or Associates beneficially owns directly or indirectly; (b) which such person or any of its Affiliates or Associates has, directly or indirectly, (i) the right to acquire (whether such right is exercisable immediately or subject only to the passage of time),

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pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or understanding; or (c) which is beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Capital Stock.  For the purposes of determining whether a person is an Interested Stockholder pursuant to Paragraph 4 of this Section C, the number of shares of Capital Stock deemed to be outstanding shall include shares deemed beneficially owned by such person through application of this Paragraph 5 of Section C, but shall not include any other shares of Capital Stock that may be reserved for issuance or issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

6.The terms “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 under the Act as in effect on the date that this Article EIGHTH is approved and adopted by the Sole Incorporator (the term “registrant” in said Rule 12b-2 meaning in this case the Corporation); provided, however, that the terms “Affiliate” and “Associate” shall not include any profit-sharing, employee stock ownership or other employee benefit plan of the Corporation or any trustee of or fiduciary with respect to any such plan when acting in such capacity.

7.The term “Subsidiary” means any company of which a majority of any class of equity security is beneficially owned by the Corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in Paragraph 4 of this Section C, the term “Subsidiary” shall mean only a company of which a majority of each class of equity security is beneficially owned by the Corporation.

8.The term “Major Subsidiary” means a Subsidiary having assets of twenty-five million dollars ($25,000,000) or more as reflected in the most recent fiscal year-end audited, or if unavailable, unaudited, consolidated balance sheet, prepared in accordance with applicable state insurance law with respect to Subsidiaries engaged in an insurance business, and in accordance with generally accepted accounting principles with respect to Subsidiaries engaged in a business other than an insurance business.

9.The term “Continuing Director” means any member of the Board of Directors of the Corporation, while such person is a member of the Board of Directors, who is not an Affiliate or Associate or representative of the Interested Stockholder and who was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Continuing Director while such successor is a member of the Board of Directors, who is not an Affiliate or Associate or representative of the Interested Stockholder and who is recommended or elected to succeed the Continuing Director by a majority of the Continuing Directors; provided, however, that the term “Continuing Director” shall not include any officer of the Corporation or of any Affiliate or Associate of the Corporation.

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10.           The term “Fair Market Value” means (a) in the case of cash, the amount of such cash; (b) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any similar system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by a majority of the Continuing Directors in good faith; and (c) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined in good faith by a majority of the Continuing Directors.

11.           The term “Continuing Director Quorum” means at least two (2) Continuing Directors capable of exercising the power conferred upon them under the provisions of the Certificate of Incorporation and By-Laws of the Corporation.

12.           In the event of any Business Combination in which the Corporation survives, the phrase “consideration other than cash to be received” as used in Paragraph 2 of Section B of this Article EIGHTH shall include the shares of Common Stock and/or the shares of any other class or series of Capital Stock retained by the holders of such shares.

D.            A majority of the Continuing Directors at a meeting at which a Continuing Director Quorum is present shall have the power and duty to determine the purposes of this Article EIGHTH, on the basis of information known to them after reasonable inquiry, and to determine all questions arising under this Article EIGHTH, including, without limitation, (a) whether a person is an Interested Stockholder, (b) the number of shares of Capital Stock or other securities beneficially owned by any person, (c) whether a person is an Affiliate or Associate of another, (d) whether the assets that are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of twenty-five million dollars ($25,000,000) or more as provided in Paragraph 1(b) of Section C of this Article EIGHTH and (e) whether a Subsidiary is a Major Subsidiary.  Any such determination made in good faith shall be binding and conclusive on all parties.  In the event a Continuing Director Quorum cannot be attained at such meeting, all such determinations shall be made by the Delaware Court of Chancery.

E.             Nothing contained in this Article EIGHTH shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law.

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F.             The fact that any Business Combination complies with the provisions of Section B of this Article EIGHTH shall not be construed to impose any fiduciary duty, obligation or responsibility on the Board of Directors, or any member thereof, to approve such Business Combination or recommend its adoption or approval to the stockholders of the Corporation, nor shall such compliance limit, prohibit or otherwise restrict in any manner the Board of Directors, or any member thereof, with respect to evaluations of or actions and responses taken with respect to such Business Combination.

G.            Notwithstanding any other provisions of this Certificate of Incorporation or the By-Laws of the Corporation (and notwithstanding the fact that a lesser percentage or separate class vote may be specified by law, this Certificate of Incorporation or the By-Laws of the Corporation), the affirmative vote of the holders of not less than a majority of the voting power of the outstanding shares entitled to vote thereon, voting together as a single class, shall be required to amend, alter, change or repeal, or adopt any provision as part of this Certificate of Incorporation inconsistent with the purpose and intent of this Article EIGHTH.

NINTH:          In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware, the Board of Directors shall have the power to adopt, amend, alter or repeal the Corporation’s By-Laws.  The affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the entire Board of Directors shall be required to adopt, amend, alter or repeal the Corporation’s By-Laws.  Notwithstanding any other provisions of this Certificate of Incorporation or the By-Laws of the Corporation (and notwithstanding the fact that a lesser percentage or separate class vote may be specified by law, this Certificate of Incorporation or the By-Laws of the Corporation), the affirmative vote of the holders of not less than a majority of the voting power of the outstanding shares entitled to vote thereon shall be required to adopt, amend, alter or repeal, or adopt any provision as part of this Certificate of Incorporation inconsistent with the purpose and intent of, this Article NINTH.

TENTH:         No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit.

ELEVENTH:  Except as provided in Articles FOURTH, SEVENTH, EIGHTH and NINTH of this Certificate of Incorporation, the Corporation reserves the right to amend and repeal any provision contained in this Certificate of Incorporation in the manner prescribed by the laws of the State of Delaware, and all rights of stockholders shall be subject to this reservation.

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This Restated Certificate of Incorporation was duly adopted by the Board of Directors in accordance with Section 245 of the General Corporation Law of the State of Delaware.

This Restated Certificate of Incorporation shall be effective upon filing.

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be signed by its duly authorized officer, this 30th day of October, 2009.

CITIGROUP INC.
By:	/s/ Michael S. Helfer
Name:	Michael S. Helfer
Title:	Corporate Secretary

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Exhibit I

8.125% Non-Cumulative Preferred Stock, Series AA

Section 1.              Designation.

The designation of the series of preferred stock shall be “8.125% Non-Cumulative Preferred Stock, Series AA” (the “Series AA Preferred Stock”).  Each share of Series AA Preferred Stock shall be identical in all respects to every other share of Series AA Preferred Stock.  Series AA Preferred Stock will rank equally with Parity Stock, if any, will rank senior to Junior Stock and will rank junior to Senior Stock, if any, with respect to the payment of dividends and/or the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Section 2.              Number of Shares.

The number of authorized shares of Series AA Preferred Stock shall be 149,500.  That number from time to time may be increased (but not in excess of the total number of authorized shares of preferred stock) or decreased (but not below the number of shares of Series AA Preferred Stock then outstanding) by further resolution duly adopted by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof and by the filing of a certificate pursuant to the provisions of the General Corporation Law of the State of Delaware stating that such increase or reduction, as the case may be, has been so authorized.  The Company shall have the authority to issue fractional shares of Series AA Preferred Stock.

Section 3.              Definitions.  As used herein with respect to Series AA Preferred Stock:

“Agent Members” has the meaning set forth in Section 15(c).

“Board of Directors” has the meaning set forth in the recitals above.

“Business Day” means any weekday that is not a legal holiday in New York, New York and is not a day on which banking institutions in New York, New York are authorized or required by law or regulation to be closed.

“Common Stock” means the common stock of the Company, par value $0.01 per share, or any other shares of the capital stock of the Company into which such shares of common stock shall be reclassified or changed.

“Depositary” means DTC or its nominee or any successor depositary appointed by the Company.

“Dividend Payment Date” shall have the meaning set forth in Section 4(a) hereof.

“Dividend Period” shall have the meaning set forth in Section 4(a) hereof.

Exhibit I - 1

“Dividend Record Date” shall have the meaning set forth in Section 4(a) hereof.

“DTC” means The Depository Trust Company.

“Global Series AA Preferred Stock” has the meaning set forth in Section 15(a).

“Holder” means the Person in whose name the shares of the Series AA Preferred Stock are registered, which may be treated by the Company, Transfer Agent, Registrar and paying agent as the absolute owner of the shares of Series AA Preferred Stock for the purpose of making payment and for all other purposes.

“Junior Stock” means the Common Stock and any other class or series of stock of the Company now existing or hereafter authorized over which Series AA Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the Company.

“Nonpayment” shall have the meaning set forth in Section 7(b)(i) hereof.

“Officer” means the Chief Executive Officer, the Chairman, the Chief Administrative Officer, any Vice Chairman, the Chief Financial Officer, the Controller, the Chief Accounting Officer, the Treasurer and Head of Corporate Finance, any Assistant Treasurer, the General Counsel and Corporate Secretary and any Assistant Secretary of the Company.

“Parity Stock” means any class or series of stock of the Company hereafter authorized that ranks equally with the Series AA Preferred Stock in the payment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Company.

“Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company or trust.

“Preferred Stock Director” shall have the meaning set forth in Section 7(b)(i) hereof.

“Registrar” means the Transfer Agent acting in its capacity as registrar for the Series AA Preferred Stock, and its successors and assigns.

“Senior Stock” means any class or series of stock of the Company now existing or hereafter authorized which has preference or priority over the Series AA Preferred Stock as to the payment of dividends or in the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the Company.

“Series AA Preferred Stock” shall have the meaning set forth in Section 1 hereof.

“Transfer Agent” means The Bank of New York Mellon acting as Transfer Agent, Registrar and paying agent for the Series AA Preferred Stock, and its successors and assigns.

“Trust” shall have the meaning set forth in Section 6(d).

Exhibit I - 2

Section 4.              Dividends.

(a) Rate. Holders shall be entitled to receive, if, as and when declared by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, but only out of assets legally available therefor, non-cumulative cash dividends on the liquidation preference of $25,000 per share of Series AA Preferred Stock, and no more, payable quarterly in arrears on each February 15, May 15, August 15 and November 15; provided, however, if any such day is not a Business Day, then payment of any dividend otherwise payable on that date will be made on the next succeeding day that is a Business Day, unless that day falls in the next calendar year, in which case payment of such dividend will occur on the immediately preceding Business Day (in either case, without any interest or other payment in respect of such delay) (each such day on which dividends are payable a “Dividend Payment Date”).  The period from and including the date of issuance of the Series AA Preferred Stock or any Dividend Payment Date to, but excluding, the next Dividend Payment Date is a “Dividend Period.”  Dividends on each share of Series AA Preferred Stock will accrue on the liquidation preference of $25,000 per share at a rate per annum equal to 8.125%. The record date for payment of dividends on the Series AA Preferred Stock will be the fifteenth day of the calendar month immediately preceding the month during which the Dividend Payment Date falls or such other record date fixed by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).  Any such day that is a Dividend Record Date will be a Dividend Record Date whether or not such day is a Business Day.  The amount of dividends payable will be computed on the basis of a 360-day year of twelve 30-day months.

(b) Non-Cumulative Dividends.  If the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof does not declare a dividend on the Series AA Preferred Stock for any Dividend Period prior to the related Dividend Payment Date, that dividend will not accrue, and the Company will have no obligation to pay, and Holders shall have no right to receive, a dividend for that Dividend Period on the related Dividend Payment Date or at any future time, whether or not dividends on the Series AA Preferred Stock or any other series of preferred stock or common stock are declared for any subsequent Dividend Period with respect to Series AA Preferred Stock, Parity Stock, Junior Stock or any other class or series of authorized preferred stock of the Company.  References herein to the “accrual” of dividends refer only to the determination of the amount of such dividend and do not imply that any right to a dividend arises prior to the date on which a dividend is declared.

(c)  Priority of Dividends.  So long as any share of Series AA Preferred Stock remains outstanding, unless as to a Dividend Payment Date full dividends on all outstanding shares of the Series AA Preferred Stock have been declared and paid or declared and a sum sufficient for the payment of those dividends has been set aside for the Dividend Period then ending, the Company will not, and will cause its subsidiaries not to, during the next succeeding Dividend Period that commences on such Dividend Payment Date, declare or pay any dividend on, make any distributions relating to, or redeem, purchase, acquire or make a liquidation payment relating to, any Junior Stock, or make any guarantee payment with respect thereto, other than:

Exhibit I - 3

(i) purchases, redemptions or other acquisitions of shares of Junior Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants;

(ii) purchases of shares of Common Stock pursuant to a contractually binding requirement to buy stock existing prior to the commencement of the then-current dividend period, including under a contractually binding stock repurchase plan;

(iii) as a result of an exchange or conversion of any class or series of Junior Stock for any other class or series of Junior Stock;

(iv) the purchase of fractional interests in shares of Junior Stock pursuant to the conversion or exchange provisions of such Junior Stock or the security being converted or exchanged;

(v) the purchase of Junior Stock by an investment banking subsidiary of the Company in connection with the distribution thereof; or

(vi) the purchase of Junior Stock by any investment banking subsidiary of the Company in connection with market-making or other secondary market activities in the ordinary course of the business of such subsidiary.

The foregoing restriction, however, will not apply to any Junior Stock dividends paid by the Company where the dividend stock is the same stock as that on which the dividend is being paid.

Except as provided below, for so long as any share of Series AA Preferred Stock remains outstanding, if dividends are not declared and paid in full upon the shares of Series AA Preferred Stock and any Parity Stock, all dividends declared upon shares of Series AA Preferred Stock and any Parity Stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the then-current Dividend Period per share of Series AA Preferred Stock and accrued dividends for the then-current Dividend Period per share of any Parity Stock (including, in the case of any such Parity Stock that bears cumulative dividends, all accrued and unpaid dividends) bear to each other.

Subject to the foregoing, and not otherwise, such dividends payable in cash, stock or otherwise, as may be determined by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, may be declared and paid on any Junior Stock and Parity Stock from time to time out of any assets legally available for such payment, and Holders will not be entitled to participate in those dividends.

Section 5.              Liquidation Rights.

(a) Liquidation.  In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, Holders shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Company may be made to or

Exhibit I - 4

set aside for the holders of any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with Series AA Preferred Stock upon liquidation and the rights of the Company’s depositors and other creditors, to receive in full a liquidating distribution in the amount of the liquidation preference of $25,000 per share, plus any dividends thereon from the last dividend payment date to, but excluding, the date of the liquidation, dissolution or winding up if and to the extent declared.  Holders shall not be entitled to any further payments in the event of any such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company other than what is expressly provided for in this Section 5.

(b) Partial Payment. If the assets of the Company are not sufficient to pay in full the liquidation preference plus any dividends which have been declared but not yet paid to all Holders and all holders of any Parity Stock, the amounts paid to the Holders and to the holders of all Parity Stock shall be pro rata in accordance with the respective aggregate liquidating distributions to which they would otherwise be entitled.

(c) Residual Distributions. If the respective aggregate liquidating distributions to which all Holders and all holders of any Parity Stock are entitled have been paid, the holders of Junior Stock shall be entitled to receive all remaining assets of the Company according to their respective rights and preferences.

(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Company shall not be deemed a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, nor shall the merger, consolidation or any other business combination transaction of the Company into or with any other corporation or person or the merger, consolidation or any other business combination transaction of any other corporation or person into or with the Company be deemed to be a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company.

Section 6.              Redemption.

(a) Optional Redemption. The Company, at the option of its Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, may redeem out of funds legally available therefor, in whole or in part, the shares of Series AA Preferred Stock at the time outstanding, on any Dividend Payment Date as to which the Company has declared a dividend in full on the Series AA Preferred Stock on or after the Dividend Payment Date on February 15, 2018, upon notice given as provided in Section 6(b) below, and at a redemption price equal to $25,000 per share; provided, however, that the Company may not effect a partial redemption of the Series AA Preferred Stock unless at least 2,000 shares ($50,000,000 aggregate liquidation amount) of Series AA Preferred Stock, excluding shares of Series AA Preferred Stock held by the Company or its subsidiaries, remain outstanding after giving effect to such partial redemption.

Exhibit I - 5

(b) Notice of Redemption.  Notice of every redemption of shares of Series AA Preferred Stock shall be mailed by first class mail, postage prepaid, addressed to the Holders of such shares to be redeemed at their respective last addresses appearing on the stock register of the Company.  Such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Section 6(b) shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any Holder of shares of Series AA Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Series AA Preferred Stock. Each notice shall state:

(i)the redemption date;

(ii)the number of shares of Series AA Preferred Stock to be redeemed and, if fewer than all the shares of a Holder are to be redeemed, the number of such shares to be redeemed;

(iii)the redemption price;

(iv)the place or places where the certificates for such shares are to be surrendered for payment of the redemption price; and

(v)that dividends on the shares to be redeemed will cease to accrue on the redemption date.

Notwithstanding the foregoing, if the Series AA Preferred Stock is held in book-entry form through DTC, the Company may give such notice in any manner permitted by DTC.

(c) Partial Redemption.  In case of any redemption of only part of the shares of Series AA Preferred Stock at the time outstanding, the shares of Series AA Preferred Stock to be redeemed shall be selected pro rata from the Holders in proportion to the number of shares of Series AA Preferred Stock held by such Holders, by lot or in such other manner as the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof may determine to be fair and equitable.  Subject to the provisions of this Section 6, the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which shares of Series AA Preferred Stock shall be redeemed from time to time.

(d) Effectiveness of Redemption.  If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption have been set aside by the Company, separate and apart from its other assets, in trust for the pro rata benefit of the Holders of the shares called for redemption, so as to be and continue to be available therefor, or deposited by the Company with a bank or trust company selected by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof (the “Trust”) in trust for the pro rata benefit of the Holders of the shares called for redemption, then, notwithstanding that any certificate for any share so called for redemption has not been

Exhibit I - 6

surrendered for cancellation, on and after the redemption date all shares so called for redemption shall cease to be outstanding, all dividends with respect to such shares shall cease to accrue on such redemption date, and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the Holders thereof to receive the amount payable on such redemption from the Trust at any time after the redemption date from the funds so deposited, without interest.  The Company shall be entitled to receive, from time to time, from the Trust any interest accrued on such funds, and the Holders of any shares called for redemption shall have no claim to any such interest. Any funds so deposited and unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released or repaid to the Company, and in the event of such repayment to the Company, the Holders of the shares so called for redemption shall be deemed to be unsecured creditors of the Company for an amount equivalent to the amount deposited as stated above for the redemption of such shares and so repaid to the Company, but shall in no event be entitled to any interest.

Section 7.Voting Rights.

(a)  General. The Holders shall not be entitled to vote on any matter except as set forth in Section 7(b) below or as required by Delaware law.

(b)  Special Voting Right.

(i) Voting Right.  If and whenever dividends on the Series AA Preferred Stock or any other class or series of preferred stock that ranks on parity with Series AA Preferred Stock as to payment of dividends, and upon which voting rights equivalent to those granted by this Section 7(b)(i) have been conferred and are exercisable, have not been paid in an aggregate amount equal, as to any class or series, to at least six quarterly Dividend Periods (whether consecutive or not) (a “Nonpayment”), the number of directors constituting the Board of Directors shall be increased by two, and the Holders (together with holders of any class or series of the Company’s authorized preferred stock having equivalent voting rights), shall have the right, voting separately as a single class without regard to class or series (and with voting rights allocated pro rata based on the liquidation preference of each such class or series), to the exclusion of the holders of Common Stock, to elect two directors of the Company to fill such newly created directorships (and to fill any vacancies in the terms of such directorships), provided that the Holders and the holders of any such other class or series shall not be entitled to elect such directors to the extent such election would cause the Company to violate the corporate governance requirements of the New York Stock Exchange (or other exchange on which the Company’s securities may be listed) that listed companies must have a majority of independent directors and further provided that the Board of Directors shall at no time include more than two such directors. Each such director elected by the Holders and any other class or series of preferred stock that ranks on parity with the Series AA Preferred Stock as to payment of dividends and having equivalent voting rights is a “Preferred Stock Director.”

(ii) Election. The election of the Preferred Stock Directors will take place at any

Exhibit I - 7

annual meeting of stockholders or any special meeting of the Holders and any other class or series of stock of the Company that ranks on parity with Series AA Preferred Stock as to payment of dividends and having equivalent voting rights and for which dividends have not been paid, called as provided herein. At any time after the special voting power has vested pursuant to Section 7(b)(i) above, the secretary of the Company may, and upon the written request of the Holders of at least 20% of the Series AA Preferred Stock or the holders of at least 20% of such other series (addressed to the secretary at the Company’s principal office) must (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election shall be held at such next annual or special meeting of stockholders), call a special meeting of the Holders and any other class or series of preferred stock that ranks on parity with Series AA Preferred Stock as to payment of dividends and having equivalent voting rights and for which dividends have not been paid for the election of the two directors to be elected by them as provided in Section 7(b)(iii) below. The Preferred Stock Directors shall each be entitled to one vote per director on any matter.

(iii)  Notice of Special Meeting.  Notice for a special meeting will be given in a similar manner to that provided in the Company’s by-laws for a special meeting of the stockholders.  If the secretary of the Company does not call a special meeting within 20 days after receipt of any such request, then any Holder may (at the expense of the Company) call such meeting, upon notice as provided in this Section 7(b)(iii), and for that purpose will have access to the stock register of the Company.  The Preferred Stock Directors elected at any such special meeting will hold office until the next annual meeting of the stockholders of the Company unless they have been previously terminated or removed pursuant to Section 7(b)(iv).  In case any vacancy in the office of a Preferred Stock Director occurs (other than prior to the initial election of the Preferred Stock Directors), the vacancy may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in office, by the vote of the Holders (together with holders of any other class of the Company’s authorized preferred stock having equivalent voting rights, whether or not the holders of such preferred stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of the stockholders.

(iv) Termination; Removal.  Whenever the Company has paid full dividends for at least four consecutive quarterly dividend periods following a Nonpayment on the Series AA Preferred Stock and any other class or series of non-cumulative preferred stock ranking on parity with Series AA Preferred Stock as to payment of dividends, if any, and has paid cumulative dividends in full on any class or series of cumulative preferred stock ranking on parity with the Series AA Preferred Stock as to payment of dividends (in each case, upon which equivalent voting rights to those set forth in Section 7(b)(iii) have been conferred and are exercisable), then the right of the Holders to elect the Preferred Stock Directors will cease (but subject always to the same provisions for the vesting of the special voting rights in the case of any similar non-payment of dividends in respect of future Dividend Periods).  The terms of office of the Preferred Stock Directors will immediately terminate, and the number of directors constituting the Board of Directors will be reduced accordingly.  Any Preferred Stock Director may be removed at any time

Exhibit I - 8

without cause by the Holders of a majority of the outstanding shares of the Series AA Preferred Stock (together with holders of any other class of the Company’s authorized preferred stock having equivalent voting rights, whether or not the holders of such preferred stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described in this Section 7(b).

(c) Senior Issuances; Adverse Changes.  So long as any shares of Series AA Preferred Stock are outstanding, the vote or consent of the Holders of at least two-thirds of the shares of Series AA Preferred Stock at the time outstanding, voting as a class with all other series of preferred stock ranking equally with the Series AA Preferred Stock and entitled to vote thereon, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary for effecting or validating any of the following actions, whether or not such approval is required by Delaware law:

(i) any amendment, alteration or repeal of any provision of the Company’s Certificate of Incorporation (including the certificate of designation creating the Series AA Preferred Stock) or the Company’s by-laws that would alter or change the voting powers, preferences or special rights of the Series AA Preferred Stock so as to affect them adversely;

(ii) any amendment or alteration of the Company’s certificate of incorporation to authorize or create, or increase the authorized amount of, any shares of, or any securities convertible into shares of, any class or series of the Company’s capital stock ranking prior to the Series AA Preferred Stock in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding-up of the Company; or

(iii) the consummation of a binding share exchange or reclassification involving the Series AA Preferred Stock or a merger or consolidation of the Company with another entity, except that holders of Series AA Preferred Stock will have no right to vote under this provision or otherwise under Delaware law if in each case (i) the Series AA Preferred Stock remains outstanding or, in the case of any such merger or consolidation with respect to which the Company is not the surviving or resulting entity, is converted into or exchanged for preferred securities of the surviving or resulting entity or its ultimate parent, that is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and that is a corporation for U.S. federal income tax purposes (or if such entity is not a corporation, the Company having received an opinion of nationally recognized counsel experienced in such matters to the effect that Holders will be subject to tax for U.S. federal income tax purposes with respect to such new preferred securities after such merger or consolidation in the same amount, at the same time and otherwise in the same manner as would have been the case under the Series AA Preferred Stock prior to such merger or consolidation), and (ii) such Series AA Preferred Stock remaining outstanding or such preferred securities, as the case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series AA Preferred Stock, taken as a whole; provided, however, that any increase in the amount of the authorized or issued Series AA

Exhibit I - 9

Preferred Stock or authorized preferred stock or any securities convertible into preferred stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of preferred stock or any securities convertible into preferred stock ranking equally with and/or junior to the Series AA Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon the Company’s liquidation, dissolution or winding up will not be deemed to adversely affect the voting powers, preferences or special rights of the Series AA Preferred Stock and Holders will have no right to vote on such an increase, creation or issuance.

If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would adversely affect one or more but not all series of preferred stock of the Company, then only such series of preferred stock as are adversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of preferred stock).

(d) No Vote if Redemption.  No vote or consent of the Holders shall be required pursuant to Section 7(b) or (c) if, at or prior to the time when the act with respect to such vote or consent would otherwise be required shall be effected, the Company shall have redeemed or shall have called for redemption all outstanding shares of Series AA Preferred Stock, with proper notice and sufficient funds having been set aside for such redemption, in each case pursuant to Section 6 above.

Section 8.  Preemption and Conversion Rights.

The Holders shall not have any rights of preemption or conversion.

Section 9.  Rank.

Notwithstanding anything set forth in the Certificate of Incorporation or this Certificate of Designation to the contrary, the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, without the vote of the Holders, may authorize and issue additional shares of Junior Stock or Parity Stock.

Section 10.  Repurchase.

Subject to the limitations imposed herein, the Company may purchase and sell Series AA Preferred Stock from time to time to such extent, in such manner, and upon such terms as the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof may determine; provided, however, that the Company shall not use any of its funds for any such purchase when there are reasonable grounds to believe that the Company is, or by such purchase would be, rendered insolvent; provided, further, however, that in the event that the Company beneficially owns any Series AA Preferred Stock the Company will procure that voting rights in respect of such Series AA Preferred Stock are not exercised.

Exhibit I - 10

Section 11.  Unissued or Reacquired Shares.

Shares of Series AA Preferred Stock not issued or which have been issued and redeemed or otherwise purchased or acquired by the Company shall be restored to the status of authorized but unissued shares of preferred stock without designation as to series.

Section 12.  No Sinking Fund.

Shares of Series AA Preferred Stock are not subject to the operation of a sinking fund.

Section 13.  Transfer Agent, Registrar and Paying Agent.

The duly appointed Transfer Agent, Registrar and paying agent for the Series AA Preferred Stock shall be The Bank of New York Mellon.  The Company may, in its sole discretion, remove the Transfer Agent in accordance with the agreement between the Company and the Transfer Agent; provided that the Company shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal.  Upon any such removal or appointment, the Company shall send notice thereof by first-class mail, postage prepaid, to the Holders.

Section 14. Replacement Certificates.

Mutilated, Destroyed, Stolen and Lost Certificates. If physical certificates are issued, the Company shall replace any mutilated certificate at the Holder’s expense upon surrender of that certificate to the Transfer Agent.  The Company shall replace certificates that become destroyed, stolen or lost at the Holder’s expense upon delivery to the Company and the Transfer Agent of satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Transfer Agent and the Company.

Section 15.  Form.

(a) Global Series AA Preferred Stock. Series AA Preferred Stock may be issued in the form of one or more permanent global shares of Series AA Preferred Stock in definitive, fully registered form with a global legend in substantially the form attached hereto as Exhibit A (each, a “Global Series AA Preferred Stock”), which is hereby incorporated in and expressly made a part of this Restated Certificate of Incorporation.  The Global Series AA Preferred Stock may have notations, legends or endorsements required by law, stock exchange rules, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  The aggregate number of shares represented by each Global Series AA Preferred Stock may from time to time be increased or decreased by adjustments made on the records of the Registrar and the Depositary or its nominee as hereinafter provided.  This Section 15(a) shall apply only to a Global Series AA Preferred Stock deposited with or on behalf of the Depositary.

(b) Delivery to Depositary.  If Global Series AA Preferred Stock is issued, the Company

Exhibit I - 11

shall execute and the Registrar shall, in accordance with this Section, countersign and deliver initially one or more Global Series AA Preferred Stock that (i) shall be registered in the name of Cede & Co. or other nominee of the Depositary and (ii) shall be delivered by the Registrar to the Depositary or pursuant to instructions received from the Depositary or held by the Registrar as custodian for the Depositary pursuant to an agreement between the Depositary and the Registrar.

(c) Agent Members.  If Global Series AA Preferred Stock is issued, members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Certificate of Designation with respect to any Global Series AA Preferred Stock held on their behalf by the Depositary or by the Registrar as the custodian of the Depositary or under such Global Series AA Preferred Stock, and the Depositary may be treated by the Company, the Registrar and any agent of the Company or the Registrar as the absolute owner of such Global Series AA Preferred Stock for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Registrar or any agent of the Company or the Registrar from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of the Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Series AA Preferred Stock.  If Global Series AA Preferred Stock is issued, the Depositary may grant proxies or otherwise authorize any Person to take any action that a Holder is entitled to take pursuant to the Series AA Preferred Stock, or this Certificate of Designation or the Certificate of Incorporation.

(d) Physical Certificates. Owners of beneficial interests in any Global Series AA Preferred Stock shall not be entitled to receive physical delivery of certificated shares of Series AA Preferred Stock, unless (x) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for the Global Series AA Preferred Stock and the Company does not appoint a qualified replacement for the Depositary within 90 days, (y) the Depositary ceases to be a “clearing agency” registered under the Exchange Act and the Company does not appoint a qualified replacement for the Depositary within 90 days or (z) the Company decides to discontinue the use of book-entry transfer through the Depositary.  In any such case, the Global Series AA Preferred Stock shall be exchanged in whole for definitive shares of Series AA Preferred Stock in registered form, with the same terms and of an equal aggregate Liquidation Preference.  Such definitive shares of Series AA Preferred Stock shall be registered in the name or names of the Person or Persons specified by the Depositary in a written instrument to the Registrar.

(e) Signature. An Officer shall sign any Global Series AA Preferred Stock for the Company, in accordance with the Company’s by-laws and applicable law, by manual or facsimile signature.  If an Officer whose signature is on a Global Series AA Preferred Stock no longer holds that office at the time the Transfer Agent countersigned the Global Series AA Preferred Stock, the Global Series AA Preferred Stock shall be valid nevertheless. A Global Series AA Preferred Stock shall not be valid until an authorized signatory of the Transfer Agent manually countersigns Global Series AA Preferred Stock.  Each Global Series AA Preferred Stock shall be dated the date of its countersignature.

Exhibit I - 12

Section 16.  Taxes.

(a) Transfer Taxes. The Company shall pay any and all stock transfer, documentary, stamp and similar taxes that may be payable in respect of any issuance or delivery of shares of Series AA Preferred Stock or shares of Common Stock or other securities issued on account of Series AA Preferred Stock pursuant hereto or certificates representing such shares or securities.  The Company shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Series AA Preferred Stock, shares of Common Stock or other securities in a name other than that in which the shares of Series AA Preferred Stock with respect to which such shares or other securities are issued or delivered were registered, or in respect of any payment to any Person other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment unless and until the Person otherwise entitled to such issuance, delivery or payment has paid to the Company the amount of any such tax or has established, to the satisfaction of the Company, that such tax has been paid or is not payable.

(b) Withholding.  All payments and distributions (or deemed distributions) on the shares of Series AA Preferred Stock shall be subject to withholding and backup withholding of tax to the extent required by law, subject to applicable exemptions, and amounts withheld, if any, shall be treated as received by Holders.

Section 17.  Notices.

All notices referred to herein shall be in writing, and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three Business Days after the mailing thereof if sent by registered or certified mail (unless first class mail shall be specifically permitted for such notice under the terms of this Certificate of Designation) with postage prepaid, addressed: (i) if to the Company, to its office at 399 Park Avenue, New York, New York 10043 (Attention: Corporate Secretary) or to the Transfer Agent at its office at 480 Washington Boulevard, 29th Floor, Jersey City, New Jersey 07310 (Attention: Corporate Trust Office), or other agent of the Company designated as permitted by this Certificate of Designation, or (ii) if to any Holder, to such Holder at the address of such Holder as listed in the stock record books of the Company (which may include the records of the Transfer Agent) or (iii) to such other address as the Company or any such Holder, as the case may be, shall have designated by notice similarly given.

Exhibit I - 13

Exhibit A

FORM OF

8.125% NON-CUMULATIVE PREFERRED STOCK, SERIES AA

FACE OF SECURITY

[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT.  BY ITS ACQUISITION HEREOF, THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE DATE THAT IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH CITIGROUP INC. (THE “COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS SHARES OF THE SERIES AA PREFERRED STOCK ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRANSFER AGENT’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]

[IF GLOBAL PREFERRED STOCK IS ISSUED: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF DESIGNATION REFERRED TO BELOW.]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND TRANSFER AGENT MAY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

Exhibit I - 14

Certificate Number	Number of Shares of Series AA Preferred Stock
		CUSIP NO.:

CITIGROUP INC.

8.125% Non-Cumulative Preferred Stock, Series AA

(par value $1.00 per share)

(liquidation preference $25,000 per share)

Citigroup Inc., a Delaware corporation (the “Company”), hereby certifies that [      ] (the “Holder”) is the registered owner of [      ](1)  [        , or such number as is indicated in the records of the Registrar and the Depository,](2)  fully paid and non-assessable shares of the Company’s designated 8.125% Non-Cumulative Preferred Stock, Series AA, with a par value of $1.00 per share and a liquidation preference of $25,000 per share (the “Series AA Preferred Stock”).  The shares of Series AA Preferred Stock are transferable on the books and records of the Registrar, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer.  The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Series AA Preferred Stock represented hereby are and shall in all respects be subject to the provisions of the Certificate of Designation dated January 24. 2008 as the same may be amended from time to time (the “Certificate of Designation”).  Capitalized terms used herein but not defined shall have the meaning given them in the Certificate of Designation.  The Company will provide a copy of the Certificate of Designation to a Holder without charge upon written request to the Company at its principal place of business.

Reference is hereby made to select provisions of the Series AA Preferred Stock set forth on the reverse hereof, and to the Certificate of Designation, which select provisions and the Certificate of Designation shall for all purposes have the same effect as if set forth at this place.

Upon receipt of this certificate, the Holder is bound by the Certificate of Designation and is entitled to the benefits thereunder.

Unless the Registrar has properly countersigned, these shares of Series AA Preferred Stock shall not be entitled to any benefit under the Certificate of Designation or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, this certificate has been executed on behalf of the Company by its [Title] this        day of                   ,                   .

CITIGROUP INC.

By:

Name:

Title:

(1) This phrase should be included only if the share certificate evidences certificated shares of Series AA Preferred Stock.

(2) This phrase should be included only if the share certificate evidences Global Series AA Preferred Stock.

Exhibit I - 15

REGISTRAR’S COUNTERSIGNATURE

These are shares of Series AA Preferred Stock referred to in the within-mentioned Certificate of Designation.

Dated:

THE BANK OF NEW YORK MELLON, as Registrar

By:

Name:

Title:

Exhibit I - 16

REVERSE OF CERTIFICATE

Dividends on each share of Series AA Preferred Stock shall be payable at the rate provided in the Certificate of Designation.

The shares of Series AA Preferred Stock shall be redeemable at the option of the Company in the manner and in accordance with the terms set forth in the Certificate of Designation.

The Company shall furnish without charge to each holder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class or series of share capital issued by the Company and the qualifications, limitations or restrictions of such preferences and/or rights.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of Series AA Preferred Stock evidenced hereby to:

(Insert assignee’s social security or taxpayer identification number)

(Insert address and zip code of assignee)

and irrevocably appoints:

as agent to transfer the shares of Series AA Preferred Stock evidenced hereby on the books of the Transfer Agent.  The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Certificate)

Signature Guarantee:

(Signature must be guaranteed by an “eligible guarantor institution” that is a bank, stockbroker. savings and loan association or credit union meeting the requirements of the Transfer Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Transfer Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)

Exhibit I - 17

Exhibit II

8.40% Fixed Rate / Floating Rate Non-Cumulative Preferred Stock, Series E

Section 1.  Designation.

The designation of the series of preferred stock shall be “8.40% Fixed Rate / Floating Rate Non-Cumulative Preferred Stock, Series E.”  Each share of Series E Preferred Stock shall be identical in all respects to every other share of Series E Preferred Stock.  Series E Preferred Stock will rank equally with Parity Stock, will rank senior to Junior Stock and will rank junior to Senior Stock, if any, with respect to the payment of dividends and/or the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Section 2.  Number of Shares.

The number of authorized shares of Series E Preferred Stock shall be 240,000.  That number from time to time may be increased (but not in excess of the total number of authorized shares of preferred stock) or decreased (but not below the number of shares of Series E Preferred Stock then outstanding) by further resolution duly adopted by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof and by the filing of a certificate pursuant to the provisions of the General Corporation Law of the State of Delaware stating that such increase or reduction, as the case may be, has been so authorized.  The Company shall have the authority to issue fractional shares of Series E Preferred Stock.

Section 3.  Definitions.  As used herein with respect to Series E Preferred Stock:

“Agent Members” has the meaning set forth in Section 15(c).

“Board of Directors” has the meaning set forth in the recitals above.

“Business Day” means any weekday that is not a legal holiday in New York City and is not a day on which banking institutions in New York City are authorized or required by law or regulation to be closed.

“Calculation Agent” means the Transfer Agent acting in its capacity as calculation agent for the Series E Preferred Stock, and its successors and assigns.

“Common Stock” means the common stock of the Company, par value $0.01 per share, or any other shares of the capital stock of the Company into which such shares of common stock shall be reclassified or changed.

“Depositary” means DTC or its nominee or any successor depositary appointed by the Company.

“Dividend Payment Date” shall have the meaning set forth in Section 4(a) hereof.

Exhibit II - 1

“Dividend Period” shall have the meaning set forth in Section 4(a) hereof.

“Dividend Record Date” shall have the meaning set forth in Section 4(a) hereof.

“DTC” means The Depository Trust Company.

“Global Series E Preferred Stock” has the meaning set forth in Section 15(a).

“Holder” means the Person in whose name the shares of the Series E Preferred Stock are registered, which may be treated by the Company, Calculation Agent, Transfer Agent, Registrar and paying agent as the absolute owner of the shares of Series E Preferred Stock for the purpose of making payment and for all other purposes.

“Junior Stock” means the Common Stock and any other class or series of stock of the Company now existing or hereafter authorized over which Series E Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the Company.

“LIBOR Determination Date” means the second London Banking Day immediately preceding the first day of the relevant Dividend Period.

“London Banking Day” means any day on which commercial banks are open for general business (including dealings in deposits in United States dollars) in London.

“Nonpayment” shall have the meaning set forth in Section 7(b)(i) hereof.

“Officer” means the Chief Executive Officer, the Chairman, the Chief Administrative Officer, any Vice Chairman, the Chief Financial Officer, the Controller, the Chief Accounting Officer, the Treasurer and Head of Corporate Finance, any Assistant Treasurer, the General Counsel and Corporate Secretary and any Assistant Secretary of the Company.

“Parity Stock” means any class or series of stock of the Company now existing or hereafter authorized that ranks equally with the Series E Preferred Stock in the payment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Company.

“Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company or trust.

“Preferred Stock Director” shall have the meaning set forth in Section 7(b)(i) hereof.

“Registrar” means the Transfer Agent acting in its capacity as registrar for the Series E Preferred Stock, and its successors and assigns.

Exhibit II - 2

“Reuters Screen LIBOR01 Page” means the display designated on the Reuters Screen LIBOR01 Page (or such other page as may replace Reuters Screen LIBOR01 Page on the service or such other service as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for United States dollar deposits).

“Senior Stock” means any class or series of stock of the Company now existing or hereafter authorized which has preference or priority over the Series E Preferred Stock as to the payment of dividends or in the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the Company.

“Series E Preferred Stock” shall have the meaning set forth in Section 1 hereof.

“Three-month LIBOR” means the rate (expressed as a percentage per annum) for deposits in United States dollars for a three-month period commencing on the first day of a Dividend Period that appears on the Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time) on the LIBOR Determination Date for that Dividend Period. If such rate does not appear on Reuters Screen LIBOR01 Page, Three-month LIBOR will be determined on the basis of the rates at which deposits in United States dollars for a three-month period commencing on the first day of that Dividend Period and in a principal amount of not less than $1 million are offered to prime banks in the London interbank market by four major banks in the London interbank market selected by the Calculation Agent (after consultation with the Company), at approximately 11:00 a.m., London time, on the LIBOR Determination Date for that Dividend Period. The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, Three-month LIBOR with respect to that Dividend Period will be the arithmetic mean (rounded upward if necessary to the nearest whole multiple of 0.00001%) of such quotations. If fewer than two quotations are provided, Three-month LIBOR with respect to that Dividend Period will be the arithmetic mean (rounded upward if necessary to the nearest whole multiple of 0.00001%) of the rates quoted by three major banks in New York City selected by the Calculation Agent (after consultation with the Company), at approximately 11:00 a.m., New York City time, on the LIBOR Determination Date for that Dividend Period for loans in United States dollars to leading European banks for a three-month period commencing on the first day of that Dividend Period and in a principal amount of not less than $1 million. However, if fewer than three banks selected by the Calculation Agent to provide quotations are quoting as described above, Three-month LIBOR for that Dividend Period will be the same Three-month LIBOR as determined for the previous Dividend Period or, in the case of the Dividend Period beginning on April 30, 2018, 2.920%. The determination of Three-month LIBOR for each relevant Dividend Period by the Calculation Agent will (in the absence of manifest error) be final and binding.

“Transfer Agent” means The Bank of New York Mellon acting as Transfer Agent, Calculation Agent, Registrar and paying agent for the Series E Preferred Stock, and its successors and assigns.

“Trust” shall have the meaning set forth in Section 6(d).

Exhibit II - 3

Section 4.  Dividends.

(a) Rate.  Holders shall be entitled to receive, if, as and when declared by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee of the Board of Directors, but only out of assets legally available therefor, non-cumulative cash dividends on the liquidation preference of $25,000 per share of Series E Preferred Stock, and no more, payable (i) semi-annually in arrears on each April 30 and October 30 from the date of issuance to, but excluding, April 30, 2018, and (ii) quarterly in arrears on each January 30, April 30, July 30, and October 30 from and including April 30, 2018; provided, however, if any such day is not a Business Day, then payment of any dividend otherwise payable on that date will be made on the next succeeding day that is a Business Day (i) on or prior to April 30, 2018, without any interest or other payment in respect of such delay, and (ii) after April 30, 2018, with dividends accruing to the actual payment date (each such day on which dividends are payable a “Dividend Payment Date”).  The period from and including the date of issuance of the Series E Preferred Stock or any Dividend Payment Date to, but excluding, the next Dividend Payment Date is a “Dividend Period.”  Dividends on each share of Series E Preferred Stock will accrue on the liquidation preference of $25,000 per share at a rate per annum equal to (i) 8.40%, for each Dividend Period from and including the date of issuance to, but excluding, April 30, 2018 and (ii) the greater of (x) Three-month LIBOR plus 4.0285% and (y) 7.7575%, for each Dividend Period from and including April 30, 2018. The record date for payment of dividends on the Series E Preferred Stock will be the fifteenth day of the calendar month immediately preceding the month during which the Dividend Payment Date falls or such other record date fixed by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).  Any such day that is a Dividend Record Date will be a Dividend Record Date whether or not such day is a Business Day.  The amount of dividends payable on or prior to April 30, 2018 will be computed on the basis of a 360-day year of twelve 30-day months. The amount of dividends payable after April 30, 2018 will be computed on the basis of a 360-day year and the actual number of days elapsed.

(b) Non-Cumulative Dividends.  If the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof does not declare a dividend on the Series E Preferred Stock for any Dividend Period prior to the related Dividend Payment Date, that dividend will not accrue, and the Company will have no obligation to pay, and Holders shall have no right to receive, a dividend for that Dividend Period on the related Dividend Payment Date or at any future time, whether or not dividends on the Series E Preferred Stock or any other series of preferred stock or common stock are declared for any subsequent Dividend Period with respect to Series E Preferred Stock, Parity Stock, Junior Stock or any other class or series of authorized preferred stock of the Company.  References herein to the “accrual” of dividends refer only to the determination of the amount of such dividend and do not imply that any right to a dividend arises prior to the date on which a dividend is declared.

(c) Priority of Dividends.  So long as any share of Series E Preferred Stock remains outstanding, unless as to a Dividend Payment Date full dividends on all outstanding shares of the Series E Preferred Stock have been declared and paid or declared and a sum sufficient for the payment of those dividends has been set aside for the Dividend Period then ending, the Company

Exhibit II - 4

will not, and will cause its subsidiaries not to, during the next succeeding Dividend Period that commences on such Dividend Payment Date, declare or pay any dividend on, make any distributions relating to, or redeem, purchase, acquire or make a liquidation payment relating to, any Junior Stock, or make any guarantee payment with respect thereto, other than:

(i) purchases, redemptions or other acquisitions of shares of Junior Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants;

(ii) purchases of shares of Common Stock pursuant to a contractually binding requirement to buy stock existing prior to the commencement of the then-current dividend period, including under a contractually binding stock repurchase plan;

(iii) as a result of an exchange or conversion of any class or series of Junior Stock for any other class or series of Junior Stock;

(iv) the purchase of fractional interests in shares of Junior Stock pursuant to the conversion or exchange provisions of such Junior Stock or the security being converted or exchanged;

(v) the purchase of Junior Stock by an investment banking subsidiary of the Company in connection with the distribution thereof; or

(vi) the purchase of Junior Stock by any investment banking subsidiary of the Company in connection with market-making or other secondary market activities in the ordinary course of the business of such subsidiary.

The foregoing restriction, however, will not apply to any Junior Stock dividends paid by the Company where the dividend stock is the same stock as that on which the dividend is being paid.

Except as provided below, for so long as any share of Series E Preferred Stock remains outstanding, if dividends are not declared and paid in full upon the shares of Series E Preferred Stock and any Parity Stock, all dividends declared upon shares of Series E Preferred Stock and any Parity Stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the then-current Dividend Period per share of Series E Preferred Stock and accrued dividends for the then-current Dividend Period per share of any Parity Stock (including, in the case of any such Parity Stock that bears cumulative dividends, all accrued and unpaid dividends) bear to each other.

Subject to the foregoing, and not otherwise, such dividends payable in cash, stock or otherwise, as may be determined by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, may be declared and paid on any Junior Stock and Parity Stock from time to time out of any assets legally available for such payment, and Holders will not be entitled to participate in those dividends.

Exhibit II - 5

Section 5.  Liquidation Rights.

(a) Liquidation.  In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, Holders shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Company may be made to or set aside for the holders of any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with Series E Preferred Stock upon liquidation and the rights of the Company’s depositors and other creditors, to receive in full a liquidating distribution in the amount of the liquidation preference of $25,000 per share, plus any accrued dividends thereon from the last dividend payment date to, but excluding, the date of the liquidation, dissolution or winding up if and to the extent declared.  Holders shall not be entitled to any further payments in the event of any such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company other than what is expressly provided for in this Section 5.

(b) Partial Payment.  If the assets of the Company are not sufficient to pay in full the liquidation preference plus any dividends which have been declared but not yet paid to all Holders and all holders of any Parity Stock, the amounts paid to the Holders and to the holders of all Parity Stock shall be pro rata in accordance with the respective aggregate liquidating distributions to which they would otherwise be entitled.

(c) Residual Distributions.  If the respective aggregate liquidating distributions to which all Holders and all holders of any Parity Stock are entitled have been paid, the holders of Junior Stock shall be entitled to receive all remaining assets of the Company according to their respective rights and preferences.

(d) Merger, Consolidation and Sale of Assets Not Liquidation.  For purposes of this Section 5, the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Company shall not be deemed a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, nor shall the merger, consolidation or any other business combination transaction of the Company into or with any other corporation or person or the merger, consolidation or any other business combination transaction of any other corporation or person into or with the Company be deemed to be a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company.

Section 6.  Redemption.

(a) Optional Redemption.  The Company, at the option of its Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, may redeem out of funds legally available therefor, in whole or in part, the shares of Series E Preferred Stock at the time outstanding, on any Dividend Payment Date on or after April 30, 2018 as to which the Company has declared a dividend in full on the Series E Preferred Stock, upon notice given as provided in Section 6(b) below, and at a redemption price equal to $25,000 per share; provided, however, that the Company may not effect a partial redemption of the Series E Preferred Stock unless at least 2,000 shares ($50,000,000 aggregate liquidation amount) of Series E Preferred

Exhibit II - 6

Stock, excluding shares of Series E Preferred Stock held by the Company or its subsidiaries, remain outstanding after giving effect to such partial redemption.

(b) Notice of Redemption.  Notice of every redemption of shares of Series E Preferred Stock shall be mailed by first class mail, postage prepaid, addressed to the Holders of such shares to be redeemed at their respective last addresses appearing on the stock register of the Company.  Such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption.  Any notice mailed as provided in this Section 6(b) shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any Holder of shares of Series E Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Series E Preferred Stock.  Each notice shall state:

(i) the redemption date;

(ii) the number of shares of Series E Preferred Stock to be redeemed and, if fewer than all the shares of a Holder are to be redeemed, the number of such shares to be redeemed;

(iii) the redemption price;

(iv) the place or places where the certificates for such shares are to be surrendered for payment of the redemption price; and

(v) that dividends on the shares to be redeemed will cease to accrue on the redemption date.

Notwithstanding the foregoing, if the Series E Preferred Stock is held in book-entry form through DTC, the Company may give such notice in any manner permitted by DTC.

(c) Partial Redemption.  In case of any redemption of only part of the shares of Series E Preferred Stock at the time outstanding, the shares of Series E Preferred Stock to be redeemed shall be selected pro rata from the Holders in proportion to the number of shares of Series E Preferred Stock held by such Holders, by lot or in such other manner as the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof may determine to be fair and equitable.  Subject to the provisions of this Section 6, the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which shares of Series E Preferred Stock shall be redeemed from time to time.

(d) Effectiveness of Redemption.  If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption have been set aside by the Company, separate and apart from its other assets, in trust for the pro rata benefit of the Holders of the shares called for redemption, so as to be and continue to be available therefor, or deposited by the Company with a bank or trust company selected by the Board of

Exhibit II - 7

Directors, the Preferred Stock Committee or any other duly authorized committee thereof (the “Trust”) in trust for the pro rata benefit of the Holders of the shares called for redemption, then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date all shares so called for redemption shall cease to be outstanding, all dividends with respect to such shares shall cease to accrue on such redemption date, and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the Holders thereof to receive the amount payable on such redemption from the Trust at any time after the redemption date from the funds so deposited, without interest.  The Company shall be entitled to receive, from time to time, from the Trust any interest accrued on such funds, and the Holders of any shares called for redemption shall have no claim to any such interest.  Any funds so deposited and unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released or repaid to the Company, and in the event of such repayment to the Company, the Holders of the shares so called for redemption shall be deemed to be unsecured creditors of the Company for an amount equivalent to the amount deposited as stated above for the redemption of such shares and so repaid to the Company, but shall in no event be entitled to any interest.

Section 7.  Voting Rights.

(a) General.  The Holders shall not be entitled to vote on any matter except as set forth in Section 7(b) below or as required by Delaware law.

(b) Special Voting Right.

(i) Voting Right.  If and whenever dividends on the Series E Preferred Stock or any other class or series of preferred stock that ranks on parity with Series E Preferred Stock as to payment of dividends, and upon which voting rights equivalent to those granted by this Section 7(b)(i) have been conferred and are exercisable, have not been paid in an aggregate amount equal, as to any class or series, to at least three semi-annual or six quarterly Dividend Periods (whether consecutive or not) (a “Nonpayment”), the number of directors constituting the Board of Directors shall be increased by two, and the Holders (together with holders of any class or series of the Company’s authorized preferred stock having equivalent voting rights), shall have the right, voting separately as a single class without regard to class or series (and with voting rights allocated pro rata based on the liquidation preference of each such class or series), to the exclusion of the holders of Common Stock, to elect two directors of the Company to fill such newly created directorships (and to fill any vacancies in the terms of such directorships), provided that the Holders and the holders of any such other class or series shall not be entitled to elect such directors to the extent such election would cause the Company to violate the corporate governance requirements of the New York Stock Exchange (or other exchange on which the Company’s securities may be listed) that listed companies must have a majority of independent directors and further provided that the Board of Directors shall at no time include more than two such directors.  Each such director elected by the Holders and any other class or series of preferred stock that ranks on parity with the Series E Preferred Stock as to payment of dividends and having equivalent voting rights is a “Preferred Stock Director.”

Exhibit II - 8

(ii) Election.  The election of the Preferred Stock Directors will take place at any annual meeting of stockholders or any special meeting of the Holders and any other class or series of stock of the Company that ranks on parity with Series E Preferred Stock as to payment of dividends and having equivalent voting rights and for which dividends have not been paid, called as provided herein.  At any time after the special voting power has vested pursuant to Section 7(b)(i) above, the secretary of the Company may, and upon the written request of the Holders of at least 20% of the Series E Preferred Stock or the holders of at least 20% of such other series (addressed to the secretary at the Company’s principal office) must (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election shall be held at such next annual or special meeting of stockholders), call a special meeting of the Holders and any other class or series of preferred stock that ranks on parity with Series E Preferred Stock as to payment of dividends and having equivalent voting rights and for which dividends have not been paid for the election of the two directors to be elected by them as provided in Section 7(b)(iii) below.  The Preferred Stock Directors shall each be entitled to one vote per director on any matter.

(iii) Notice of Special Meeting.  Notice for a special meeting will be given in a similar manner to that provided in the Company’s by-laws for a special meeting of the stockholders.  If the secretary of the Company does not call a special meeting within 20 days after receipt of any such request, then any Holder may (at the expense of the Company) call such meeting, upon notice as provided in this Section 7(b)(iii), and for that purpose will have access to the stock register of the Company.  The Preferred Stock Directors elected at any such special meeting will hold office until the next annual meeting of the stockholders of the Company unless they have been previously terminated or removed pursuant to Section 7(b)(iv).  In case any vacancy in the office of a Preferred Stock Director occurs (other than prior to the initial election of the Preferred Stock Directors), the vacancy may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in office, by the vote of the Holders (together with holders of any other class of the Company’s authorized preferred stock having equivalent voting rights, whether or not the holders of such preferred stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of the stockholders.

(iv) Termination; Removal.  Whenever the Company has paid full dividends for at least two consecutive semi-annual or four consecutive quarterly dividend periods following a Nonpayment on the Series E Preferred Stock and any other class or series of non-cumulative preferred stock ranking on parity with Series E Preferred Stock as to payment of dividends, if any, and has paid cumulative dividends in full on any class or series of cumulative preferred stock ranking on parity with the Series E Preferred Stock as to payment of dividends (in each case, upon which equivalent voting rights to those set forth in Section 7(b)(iii) have been conferred and are exercisable), then the right of the Holders to elect the Preferred Stock Directors will cease (but subject always to the same provisions for the vesting of the special voting rights in the case of any similar non-payment of dividends in respect of future Dividend Periods).  The terms of office of the

Exhibit II - 9

Preferred Stock Directors will immediately terminate, and the number of directors constituting the Board of Directors will be reduced accordingly.  Any Preferred Stock Director may be removed at any time without cause by the Holders of a majority of the outstanding shares of the Series E Preferred Stock (together with holders of any other class of the Company’s authorized preferred stock having equivalent voting rights, whether or not the holders of such preferred stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described in this Section 7(b).

(c) Senior Issuances; Adverse Changes.  So long as any shares of Series E Preferred Stock are outstanding, the vote or consent of the Holders of at least two-thirds of the shares of Series E Preferred Stock at the time outstanding, voting as a class with all other series of preferred stock ranking equally with the Series E Preferred Stock and entitled to vote thereon, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary for effecting or validating any of the following actions, whether or not such approval is required by Delaware law:

(i)any amendment, alteration or repeal of any provision of the Company’s Certificate of Incorporation (including the certificate of designation creating the Series E Preferred Stock) or the Company’s by-laws that would alter or change the voting powers, preferences or special rights of the Series E Preferred Stock so as to affect them adversely;

(ii)any amendment or alteration of the Company’s certificate of incorporation to authorize or create, or increase the authorized amount of, any shares of, or any securities convertible into shares of, any class or series of the Company’s capital stock ranking prior to the Series E Preferred Stock in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding-up of the Company; or

(iii) the consummation of a binding share exchange or reclassification involving the Series E Preferred Stock or a merger or consolidation of the Company with another entity, except that holders of Series E Preferred Stock will have no right to vote under this provision or otherwise under Delaware law if in each case (i) the Series E Preferred Stock remains outstanding or, in the case of any such merger or consolidation with respect to which the Company is not the surviving or resulting entity, is converted into or exchanged for preferred securities of the surviving or resulting entity or its ultimate parent, that is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and that is a corporation for U.S. federal income tax purposes (or if such entity is not a corporation, the Company having received an opinion of nationally recognized counsel experienced in such matters to the effect that Holders will be subject to tax for U.S. federal income tax purposes with respect to such new preferred securities after such merger or consolidation in the same amount, at the same time and otherwise in the same manner as would have been the case under the Series E Preferred Stock prior to such merger or consolidation), and (ii) such Series E Preferred Stock remaining outstanding or such preferred securities, as the case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as

Exhibit II - 10

are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series E Preferred Stock, taken as a whole;

provided, however, that any increase in the amount of the authorized or issued Series E Preferred Stock or authorized preferred stock or any securities convertible into preferred stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of preferred stock or any securities convertible into preferred stock ranking equally with and/or junior to the Series E Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon the Company’s liquidation, dissolution or winding up will not be deemed to adversely affect the voting powers, preferences or special rights of the Series E Preferred Stock and Holders will have no right to vote on such an increase, creation or issuance.

If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would adversely affect one or more but not all series of preferred stock of the Company, then only such series of preferred stock as are adversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of preferred stock).

(d) No Vote if Redemption.  No vote or consent of the Holders shall be required pursuant to Section 7(b) or (c) if, at or prior to the time when the act with respect to such vote or consent would otherwise be required shall be effected, the Company shall have redeemed or shall have called for redemption all outstanding shares of Series E Preferred Stock, with proper notice and sufficient funds having been set aside for such redemption, in each case pursuant to Section 6 above.

Section 8.  Preemption and Conversion Rights.

The Holders shall not have any rights of preemption or conversion.

Section 9.  Rank.

Notwithstanding anything set forth in the Certificate of Incorporation or this Certificate of Designation to the contrary, the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, without the vote of the Holders, may authorize and issue additional shares of Junior Stock or Parity Stock.

Section 10.  Repurchase.

Subject to the limitations imposed herein, the Company may purchase and sell Series E Preferred Stock from time to time to such extent, in such manner, and upon such terms as the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof may determine; provided, however, that the Company shall not use any of its funds for any such purchase when there are reasonable grounds to believe that the Company is, or by such purchase would be, rendered insolvent; provided, further, however, that in the event that the

Exhibit II - 11

Company beneficially owns any Series E Preferred Stock, the Company will procure that voting rights in respect of such Series E Preferred Stock are not exercised.

Section 11.  Unissued or Reacquired Shares.

Shares of Series E Preferred Stock not issued or which have been issued and redeemed or otherwise purchased or acquired by the Company shall be restored to the status of authorized but unissued shares of preferred stock without designation as to series.

Section 12.  No Sinking Fund.

Shares of Series E Preferred Stock are not subject to the operation of a sinking fund.

Section 13.  Transfer Agent, Calculation Agent, Registrar and Paying Agent.

The duly appointed Transfer Agent, Calculation Agent, Registrar and paying agent for the Series E Preferred Stock shall be The Bank of New York Mellon.  The Company may, in its sole discretion, remove the Transfer Agent in accordance with the agreement between the Company and the Transfer Agent; provided that the Company shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal.  Upon any such removal or appointment, the Company shall send notice thereof by first-class mail, postage prepaid, to the Holders.

Section 14.  Replacement Certificates.

Mutilated, Destroyed, Stolen and Lost Certificates.  If physical certificates are issued, the Company shall replace any mutilated certificate at the Holder’s expense upon surrender of that certificate to the Transfer Agent.  The Company shall replace certificates that become destroyed, stolen or lost at the Holder’s expense upon delivery to the Company and the Transfer Agent of satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Transfer Agent and the Company.

Section 15. Form.

(a)  Global Series E Preferred Stock.  Series E Preferred Stock may be issued in the form of one or more permanent global shares of Series E Preferred Stock in definitive, fully registered form with a global legend in substantially the form attached hereto as Exhibit A (each, a “Global Series E Preferred Stock”), which is hereby incorporated in and expressly made a part of this Certificate of Designation.  The Global Series E Preferred Stock may have notations, legends or endorsements required by law, stock exchange rules, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  The aggregate number of shares represented by each Global Series E Preferred Stock may from time to time be increased or decreased by adjustments made on the records of the Registrar and the Depositary or its nominee as hereinafter provided.  This Section 15(a) shall apply only to a Global Series E Preferred Stock deposited with or on behalf of the Depositary.

Exhibit II - 12

(b) Delivery to Depositary.  If Global Series E Preferred Stock is issued, the Company shall execute and the Registrar shall, in accordance with this Section, countersign and deliver initially one or more Global Series E Preferred Stock that (i) shall be registered in the name of Cede & Co. or other nominee of the Depositary and (ii) shall be delivered by the Registrar to the Depositary or pursuant to instructions received from the Depositary or held by the Registrar as custodian for the Depositary pursuant to an agreement between the Depositary and the Registrar.

(c) Agent Members.  If Global Series E Preferred Stock is issued, members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Certificate of Designation with respect to any Global Series E Preferred Stock held on their behalf by the Depositary or by the Registrar as the custodian of the Depositary or under such Global Series E Preferred Stock, and the Depositary may be treated by the Company, the Registrar and any agent of the Company or the Registrar as the absolute owner of such Global Series E Preferred Stock for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Registrar or any agent of the Company or the Registrar from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of the Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Series E Preferred Stock.  If Global Series E Preferred Stock is issued, the Depositary may grant proxies or otherwise authorize any Person to take any action that a Holder is entitled to take pursuant to the Series E Preferred Stock, this Certificate of Designation or the Certificate of Incorporation.

(d) Physical Certificates.  Owners of beneficial interests in any Global Series E Preferred Stock shall not be entitled to receive physical delivery of certificated shares of Series E Preferred Stock, unless (x) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for the Global Series E Preferred Stock and the Company does not appoint a qualified replacement for the Depositary within 90 days, (y) the Depositary ceases to be a “clearing agency” registered under the Exchange Act and the Company does not appoint a qualified replacement for the Depositary within 90 days or (z) the Company decides to discontinue the use of book-entry transfer through the Depositary.  In any such case, the Global Series E Preferred Stock shall be exchanged in whole for definitive shares of Series E Preferred Stock in registered form, with the same terms and of an equal aggregate Liquidation Preference.  Such definitive shares of Series E Preferred Stock shall be registered in the name or names of the Person or Persons specified by the Depositary in a written instrument to the Registrar.

(e) Signature.  An Officer shall sign any Global Series E Preferred Stock for the Company, in accordance with the Company’s by-laws and applicable law, by manual or facsimile signature.  If an Officer whose signature is on a Global Series E Preferred Stock no longer holds that office at the time the Transfer Agent countersigned the Global Series E Preferred Stock, the Global Series E Preferred Stock shall be valid nevertheless.  A Global Series E Preferred Stock shall not be valid until an authorized signatory of the Transfer Agent manually countersigns Global Series E Preferred Stock.  Each Global Series E Preferred Stock shall be dated the date of its countersignature.

Exhibit II - 13

Section 16.  Taxes.

(a) Transfer Taxes.  The Company shall pay any and all stock transfer, documentary, stamp and similar taxes that may be payable in respect of any issuance or delivery of shares of Series E Preferred Stock or shares of Common Stock or other securities issued on account of Series E Preferred Stock pursuant hereto or certificates representing such shares or securities.  The Company shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Series E Preferred Stock, shares of Common Stock or other securities in a name other than that in which the shares of Series E Preferred Stock with respect to which such shares or other securities are issued or delivered were registered, or in respect of any payment to any Person other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment unless and until the Person otherwise entitled to such issuance, delivery or payment has paid to the Company the amount of any such tax or has established, to the satisfaction of the Company, that such tax has been paid or is not payable.

(b) Withholding.  All payments and distributions (or deemed distributions) on the shares of Series E Preferred Stock shall be subject to withholding and backup withholding of tax to the extent required by law, subject to applicable exemptions, and amounts withheld, if any, shall be treated as received by Holders.

Section 17.  Notices.

All notices referred to herein shall be in writing, and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three Business Days after the mailing thereof if sent by registered or certified mail (unless first class mail shall be specifically permitted for such notice under the terms of this Certificate of Designation) with postage prepaid, addressed: (i) if to the Company, to its office at 399 Park Avenue, New York, New York 10043 (Attention:  Corporate Secretary) or to the Transfer Agent at its office at 480 Washington Boulevard, 29th Floor, Jersey City, New Jersey 07310 (Attention:  Corporate Trust Office), or other agent of the Company designated as permitted by this Certificate of Designation, or (ii) if to any Holder, to such Holder at the address of such Holder as listed in the stock record books of the Company (which may include the records of the Transfer Agent) or (iii) to such other address as the Company or any such Holder, as the case may be, shall have designated by notice similarly given.

Exhibit II - 14

Exhibit A

FORM OF
% FIXED RATE / FLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES E

FACE OF SECURITY

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF DESIGNATION REFERRED TO BELOW.

Exhibit II - 15

Certificate Number	Number of Shares of Series E Preferred Stock
		CUSIP NO.:

CITIGROUP INC.

% Fixed Rate / Floating Rate Non-Cumulative Preferred Stock, Series E

(par value $1.00 per share)

(liquidation preference $25,000 per share)

Citigroup Inc., a Delaware corporation (the “Company”), hereby certifies that [   ] (the “Holder”) is the registered owner of [     ] fully paid and non-assessable shares of the Company’s designated % Fixed Rate / Floating Rate Non-Cumulative Preferred Stock, Series E, with a par value of $1.00 per share and a liquidation preference of $25,000 per share (the “Series E Preferred Stock”).  The shares of Series E Preferred Stock are transferable on the books and records of the Registrar, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer.  The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Series E Preferred Stock represented hereby are and shall in all respects be subject to the provisions of the Certificate of Designation dated April 25, 2008 as the same may be amended from time to time (the “Certificate of Designation”). Capitalized terms used herein but not defined shall have the meaning given them in the Certificate of Designation.  The Company will provide a copy of the Certificate of Designation to a Holder without charge upon written request to the Company at its principal place of business.

Reference is hereby made to select provisions of the Series E Preferred Stock set forth on the reverse hereof, and to the Certificate of Designation, which select provisions and the Certificate of Designation shall for all purposes have the same effect as if set forth at this place.

Upon receipt of this certificate, the Holder is bound by the Certificate of Designation and is entitled to the benefits thereunder.

Unless the Registrar has properly countersigned, these shares of Series E Preferred Stock shall not be entitled to any benefit under the Certificate of Designation or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, this certificate has been executed on behalf of the Company by its [Title] this      day of                  ,                 .

CITIGROUP INC.

By:

Name:

Title:

Exhibit II - 16

REGISTRAR’S COUNTERSIGNATURE

These are shares of Series E Preferred Stock referred to in the within-mentioned Certificate of Designation.

Dated:

THE BANK OF NEW YORK MELLON, as Registrar

By:

Name:

Title:

Exhibit II - 17

REVERSE OF CERTIFICATE

Dividends on each share of Series E Preferred Stock shall be payable at the rate provided in the Certificate of Designation.

The shares of Series E Preferred Stock shall be redeemable at the option of the Company in the manner and in accordance with the terms set forth in the Certificate of Designation.

The Company shall furnish without charge to each holder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class or series of share capital issued by the Company and the qualifications, limitations or restrictions of such preferences and/or rights.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of Series E Preferred Stock evidenced hereby to:

(Insert assignee’s social security or taxpayer identification number, if any)

(Insert address and zip code of assignee)

and irrevocably appoints:

as agent to transfer the shares of Series E Preferred Stock evidenced hereby on the books of the Transfer Agent.  The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Certificate)

Signature Guarantee:

(Signature must be guaranteed by an “eligible guarantor institution” that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Transfer Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Transfer Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)

Exhibit II - 18

Exhibit III

8.50% Non-Cumulative Preferred Stock, Series F

Section 1. Designation.

The designation of the series of preferred stock shall be “8.50% Non-Cumulative Preferred Stock, Series F” (the “Series F Preferred Stock”).  Each share of Series F Preferred Stock shall be identical in all respects to every other share of Series F Preferred Stock.  Series F Preferred Stock will rank equally with Parity Stock, will rank senior to Junior Stock and will rank junior to Senior Stock, if any, with respect to the payment of dividends and/or the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Section 2. Number of Shares.

The number of authorized shares of Series F Preferred Stock shall be 92,000.  That number from time to time may be increased (but not in excess of the total number of authorized shares of preferred stock) or decreased (but not below the number of shares of Series F Preferred Stock then outstanding) by further resolution duly adopted by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof and by the filing of a certificate pursuant to the provisions of the General Corporation Law of the State of Delaware stating that such increase or reduction, as the case may be, has been so authorized.  The Company shall have the authority to issue fractional shares of Series F Preferred Stock.

Section 3. Definitions.  As used herein with respect to Series F Preferred Stock:

“Agent Members” has the meaning set forth in Section 15(c).

“Board of Directors” has the meaning set forth in the recitals above.

“Business Day” means any weekday that is not a legal holiday in New York City and is not a day on which banking institutions in New York City are authorized or required by law or regulation to be closed.

“Common Stock” means the common stock of the Company, par value $0.01 per share, or any other shares of the capital stock of the Company into which such shares of common stock shall be reclassified or changed.

“Depositary” means DTC or its nominee or any successor depositary appointed by the Company.

“Dividend Payment Date” shall have the meaning set forth in Section 4(a) hereof.

“Dividend Period” shall have the meaning set forth in Section 4(a) hereof.

Exhibit III - 1

“Dividend Record Date” shall have the meaning set forth in Section 4(a) hereof.

“DTC” means The Depository Trust Company.

“Global Series F Preferred Stock” has the meaning set forth in Section 15(a).

“Holder” means the Person in whose name the shares of the Series F Preferred Stock are registered, which may be treated by the Company, Transfer Agent, Registrar and paying agent as the absolute owner of the shares of Series F Preferred Stock for the purpose of making payment and for all other purposes.

“Junior Stock” means the Common Stock and any other class or series of stock of the Company now existing or hereafter authorized over which Series F Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the Company.

“Nonpayment” shall have the meaning set forth in Section 7(b)(i) hereof.

“Officer” means the Chief Executive Officer, the Chairman, the Chief Administrative Officer, any Vice Chairman, the Chief Financial Officer, the Controller, the Chief Accounting Officer, the Treasurer and Head of Corporate Finance, any Assistant Treasurer, the General Counsel and Corporate Secretary and any Assistant Secretary of the Company.

“Parity Stock” means any class or series of stock of the Company now existing or hereafter authorized that ranks equally with the Series F Preferred Stock in the payment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Company.

“Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company or trust.

“Preferred Stock Director” shall have the meaning set forth in Section 7(b)(i) hereof.

“Registrar” means the Transfer Agent acting in its capacity as registrar for the Series F Preferred Stock, and its successors and assigns.

“Senior Stock” means any class or series of stock of the Company now existing or hereafter authorized which has preference or priority over the Series F Preferred Stock as to the payment of dividends or in the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the Company.

“Series F Preferred Stock” shall have the meaning set forth in Section 1 hereof.

“Transfer Agent” means The Bank of New York Mellon acting as Transfer Agent, Registrar and paying agent for the Series F Preferred Stock, and its successors and assigns.

Exhibit III - 2

“Trust” shall have the meaning set forth in Section 6(d).

Section 4. Dividends.

(a) Rate. Holders shall be entitled to receive, if, as and when declared by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee of the Board of Directors, but only out of assets legally available therefor, non-cumulative cash dividends on the liquidation preference of $25,000 per share of Series F Preferred Stock, and no more, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, beginning on June 15, 2008; provided, however, if any such day is not a Business Day, then payment of any dividend otherwise payable on that date will be made on the next succeeding day that is a Business Day, (without any interest or other payment in respect of such delay) (each such day on which dividends are payable a “Dividend Payment Date”). The period from and including the date of issuance of the Series F Preferred Stock or any Dividend Payment Date to, but excluding, the next Dividend Payment Date is a “Dividend Period.” Dividends on each share of Series F Preferred Stock will accrue on the liquidation preference of $25,000 per share at a rate per annum equal to 8.50%.  The record date for payment of dividends on the Series F Preferred Stock will be the fifteenth day of the calendar month immediately preceding the month during which the Dividend Payment Date falls or such other record date fixed by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Date will be a Dividend Record Date whether or not such day is a Business Day.  The amount of dividends payable will be computed on the basis of a 360-day year of twelve 30-day months.

(b) Non-Cumulative Dividends. If the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof does not declare a dividend on the Series F Preferred Stock for any Dividend Period prior to the related Dividend Payment Date, that dividend will not accrue, and the Company will have no obligation to pay, and Holders shall have no right to receive, a dividend for that Dividend Period on the related Dividend Payment Date or at any future time, whether or not dividends on the Series F Preferred Stock or any other series of preferred stock or common stock are declared for any subsequent Dividend Period with respect to Series F Preferred Stock, Parity Stock, Junior Stock or any other class or series of authorized preferred stock of the Company.  References herein to the “accrual” of dividends refer only to the determination of the amount of such dividend and do not imply that any right to a dividend arises prior to the date on which a dividend is declared.

(c) Priority of Dividends. So long as any share of Series F Preferred Stock remains outstanding, unless as to a Dividend Payment Date full dividends on all outstanding shares of the Series F Preferred Stock have been declared and paid or declared and a sum sufficient for the payment of those dividends has been set aside for the Dividend Period then ending, the Company will not, and will cause its subsidiaries not to, during the next succeeding Dividend Period that commences on such Dividend Payment Date, declare or pay any dividend on, make any distributions relating to, or redeem, purchase, acquire or make a liquidation payment relating to, any Junior Stock, or make any guarantee payment with respect thereto, other than:

Exhibit III - 3

(i) purchases, redemptions or other acquisitions of shares of Junior Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants;

(ii) purchases of shares of Common Stock pursuant to a contractually binding requirement to buy stock existing prior to the commencement of the then-current dividend period, including under a contractually binding stock repurchase plan;

(iii) as a result of an exchange or conversion of any class or series of Junior Stock for any other class or series of Junior Stock;

(iv) the purchase of fractional interests in shares of Junior Stock pursuant to the conversion or exchange provisions of such Junior Stock or the security being converted or exchanged;

(v) the purchase of Junior Stock by an investment banking subsidiary of the Company in connection with the distribution thereof; or

(vi) the purchase of Junior Stock by any investment banking subsidiary of the Company in connection with market-making or other secondary market activities in the ordinary course of the business of such subsidiary.

The foregoing restriction, however, will not apply to any Junior Stock dividends paid by the Company where the dividend stock is the same stock as that on which the dividend is being paid.

Except as provided below, for so long as any share of Series F Preferred Stock remains outstanding, if dividends are not declared and paid in full upon the shares of Series F Preferred Stock and any Parity Stock, all dividends declared upon shares of Series F Preferred Stock and any Parity Stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the then current Dividend Period per share of Series F Preferred Stock and accrued dividends for the then-current Dividend Period per share of any Parity Stock (including, in the case of any such Parity Stock that bears cumulative dividends, all accrued and unpaid dividends) bear to each other.

Subject to the foregoing, and not otherwise, such dividends payable in cash, stock or otherwise, as may be determined by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, may be declared and paid on any Junior Stock and Parity Stock from time to time out of any assets legally available for such payment, and Holders will not be entitled to participate in those dividends.

Section 5.  Liquidation Rights.

(a) Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, Holders shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Company may be made to or

Exhibit III - 4

set aside for the holders of any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with Series F Preferred Stock upon liquidation and the rights of the Company’s depositors and other creditors, to receive in full a liquidating distribution in the amount of the liquidation preference $25,000 per share, plus any accrued dividends thereon from the last dividend payment date to, but excluding, the date of the liquidation, dissolution or winding up if and to the extent declared.  Holders shall not be entitled to any further payments in the event of any such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company other than what is expressly provided for in this Section 5.

(b) Partial Payment.  If the assets of the Company are not sufficient to pay in full the liquidation preference plus any dividends which have been declared but not yet paid to all Holders and all holders of any Parity Stock, the amounts paid to the Holders and to the holders of all Parity Stock shall be pro rata in accordance with the respective aggregate liquidating distributions to which they would otherwise be entitled.

(c) Residual Distributions.  If the respective aggregate liquidating distributions to which all Holders and all holders of any Parity Stock are entitled have been paid, the holders of Junior Stock shall be entitled to receive all remaining assets of the Company according to their respective rights and preferences.

(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Company shall not be deemed a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, nor shall the merger, consolidation or any other business combination transaction of the Company into or with any other corporation or person or the merger, consolidation or any other business combination transaction of any other corporation or person into or with the Company be deemed to be a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company.

Section 6. Redemption.

(a) Optional Redemption.  The Company, at the option of its Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, may redeem out of funds legally available therefor, in whole or in part, the shares of Series F Preferred Stock at the time outstanding, on any Dividend Payment Date as to which the Company has declared a dividend in full on the Series F Preferred Stock on or after the Dividend Payment Date on June 15, 2013, upon notice given as provided in Section 6(b) below, and at a redemption price equal to $25,000 per share.

(b) Notice of Redemption.  Notice of every redemption of shares of Series F Preferred Stock shall be mailed by first class mail, postage prepaid, addressed to the Holders of such shares to be redeemed at their respective last addresses appearing on the stock register of the Company.  Such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption.  Any notice mailed as provided in this Section 6(b) shall be conclusively presumed

Exhibit III - 5

to have been duly given, whether or not the Holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any Holder of shares of Series F Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Series F Preferred Stock.  Each notice shall state:

(i) the redemption date;

(ii) the number of shares of Series F Preferred Stock to be redeemed and, if fewer than all the shares of a Holder are to be redeemed, the number of such shares to be redeemed;

(iii) the redemption price;

(iv) the place or places where the certificates for such shares are to be surrendered for payment of the redemption price; and

(v) that dividends on the shares to be redeemed will cease to accrue on the redemption date.

Notwithstanding the foregoing, if the Series F Preferred Stock is held in book-entry form through DTC, the Company may give such notice in any manner permitted by DTC.

(c) Partial Redemption. In case of any redemption of only part of the shares of Series F Preferred Stock at the time outstanding, the shares of Series F Preferred Stock to be redeemed shall be selected pro rata from the Holders in proportion to the number of shares of Series F Preferred Stock held by such Holders, by lot or in such other manner as the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof may determine to be fair and equitable.  Subject to the provisions of this Section 6, the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which shares of Series F Preferred Stock shall be redeemed from time to time.

(d) Effectiveness of Redemption.  If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption have been set aside by the Company, separate and apart from its other assets, in trust for the pro rata benefit of the Holders of the shares called for redemption, so as to be and continue to be available therefor, or deposited by the Company with a bank or trust company selected by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof (the “Trust”) in trust for the pro rata benefit of the Holders of the shares called for redemption, then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date all shares so called for redemption shall cease to be outstanding, all dividends with respect to such shares shall cease to accrue on such redemption date, and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the Holders thereof to receive the amount payable on such redemption from the Trust at any time after the redemption date from

Exhibit III - 6

the funds so deposited, without interest.  The Company shall be entitled to receive, from time to time, from the Trust any interest accrued on such funds, and the Holders of any shares called for redemption shall have no claim to any such interest.  Any funds so deposited and unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released or repaid to the Company, and in the event of such repayment to the Company, the Holders of the shares so called for redemption shall be deemed to be unsecured creditors of the Company for an amount equivalent to the amount deposited as stated above for the redemption of such shares and so repaid to the Company, but shall in no event be entitled to any interest.

Section 7. Voting Rights.

(a) General. The Holders shall not be entitled to vote on any matter except as set forth in Section 7(b) below or as required by Delaware law.

(b) Special Voting Right.

(i) Voting Right. If and whenever dividends on the Series F Preferred Stock or any other class or series of preferred stock that ranks on parity with Series F Preferred Stock as to payment of dividends, and upon which voting rights equivalent to those granted by this Section 7(b)(i) have been conferred and are exercisable, have not been paid in an aggregate amount equal, as to any class or series, to at least six quarterly Dividend Periods (whether consecutive or not) (a “Nonpayment”), the number of directors constituting the Board of Directors shall be increased by two, and the Holders (together with holders of any class or series of the Company’s authorized preferred stock having equivalent voting rights), shall have the right, voting separately as a single class without regard to class or series (and with voting rights allocated pro rata based on the liquidation preference of each such class or series), to the exclusion of the holders of Common Stock, to elect two directors of the Company to fill such newly created directorships (and to fill any vacancies in the terms of such directorships), provided that the Holders and the holders of any such other class or series shall not be entitled to elect such directors to the extent such election would cause the Company to violate the corporate governance requirements of the New York Stock Exchange (or other exchange on which the Company’s securities may be listed) that listed companies must have a majority of independent directors and further provided that the Board of Directors shall at no time include more than two such directors.  Each such director elected by the Holders and any other class or series of preferred stock that ranks on parity with the Series F Preferred Stock as to payment of dividends and having equivalent voting rights is a “Preferred Stock Director.”

(ii) Election. The election of the Preferred Stock Directors will take place at any annual meeting of stockholders or any special meeting of the Holders and any other class or series of stock of the Company that ranks on parity with Series F Preferred Stock as to payment of dividends and having equivalent voting rights and for which dividends have not been paid, called as provided herein.  At any time after the special voting power has vested pursuant to Section 7(b)(i) above, the secretary of the Company may, and upon the written request of the Holders of at least 20% of the Series F Preferred Stock or the

Exhibit III - 7

holders of at least 20% of such other series (addressed to the secretary at the Company’s principal office) must (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election shall be held at such next annual or special meeting of stockholders), call a special meeting of the Holders and any other class or series of preferred stock that ranks on parity with Series F Preferred Stock as to payment of dividends and having equivalent voting rights and for which dividends have not been paid for the election of the two directors to be elected by them as provided in Section 7(b)(iii) below.  The Preferred Stock Directors shall each be entitled to one vote per director on any matter.

(iii) Notice of Special Meeting. Notice for a special meeting will be given in a similar manner to that provided in the Company’s by-laws for a special meeting of the stockholders.  If the secretary of the Company does not call a special meeting within 20 days after receipt of any such request, then any Holder may (at the expense of the Company) call such meeting, upon notice as provided in this Section 7(b)(iii), and for that purpose will have access to the stock register of the Company.  The Preferred Stock Directors elected at any such special meeting will hold office until the next annual meeting of the stockholders of the Company unless they have been previously terminated or removed pursuant to Section 7(b)(iv).  In case any vacancy in the office of a Preferred Stock Director occurs (other than prior to the initial election of the Preferred Stock Directors), the vacancy may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in office, by the vote of the Holders (together with holders of any other class of the Company’s authorized preferred stock having equivalent voting rights, whether or not the holders of such preferred stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of the stockholders.

(iv) Termination; Removal.  Whenever the Company has paid full dividends for at least four consecutive quarterly dividend periods following a Nonpayment on the Series F Preferred Stock and any other class or series of non-cumulative preferred stock ranking on parity with Series F Preferred Stock as to payment of dividends, if any, and has paid cumulative dividends in full on any class or series of cumulative preferred stock ranking on parity with the Series F Preferred Stock as to payment of dividends (in each case, upon which equivalent voting rights to those set forth in Section 7(b)(iii) have been conferred and are exercisable), then the right of the Holders to elect the Preferred Stock Directors will cease (but subject always to the same provisions for the vesting of the special voting rights in the case of any similar non-payment of dividends in respect of future Dividend Periods). The terms of office of the Preferred Stock Directors will immediately terminate, and the number of directors constituting the Board of Directors will be reduced accordingly. Any Preferred Stock Director may be removed at any time without cause by the Holders of a majority of the outstanding shares of the Series F Preferred Stock (together with holders of any other class of the Company’s authorized preferred stock having equivalent voting rights, whether or not the holders of such preferred stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described in this Section 7(b).

Exhibit III - 8

(c) Senior Issuances; Adverse Changes.  So long as any shares of Series F Preferred Stock are outstanding, the vote or consent of the Holders of at least two-thirds of the shares of  Series F Preferred Stock at the time outstanding, voting as a class with all other series of preferred stock ranking equally with the Series F Preferred Stock and entitled to vote thereon, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary for effecting or validating any of the following actions, whether or not such approval is required by Delaware law:

(i) any amendment, alteration or repeal of any provision of the Company’s Certificate of Incorporation (including the certificate of designation creating the Series F Preferred Stock) or the Company’s by-laws that would alter or change the voting powers, preferences or special rights of the Series F Preferred Stock so as to affect them adversely;

(ii) any amendment or alteration of the Company’s certificate of incorporation to authorize or create, or increase the authorized amount of, any shares of, or any securities convertible into shares of, any class or series of the Company’s capital stock ranking prior to the Series F Preferred Stock in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding-up of the Company; or

(iii)  the consummation of a binding share exchange or reclassification involving the Series F Preferred Stock or a merger or consolidation of the Company with another entity, except that holders of Series F Preferred Stock will have no right to vote under this provision or otherwise under Delaware law if in each case (i) the Series F Preferred Stock remains outstanding or, in the case of any such merger or consolidation with respect to which the Company is not the surviving or resulting entity, is converted into or exchanged for preferred securities of the surviving or resulting entity or its ultimate parent that is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and that is a corporation for U.S. federal income tax purposes (or if such entity is not a corporation the Company having received an opinion of nationally recognized counsel experienced in such matters to the effect that Holders will be subject to tax for U.S. federal income tax purposes with respect to such new preferred securities after such merger or consolidation in the same amount, at the same time and otherwise in the same manner as would have been the case under the Series F Preferred Stock prior to such merger or consolidation), and (ii) such Series F Preferred Stock remaining outstanding or such preferred securities, as the case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series F Preferred Stock taken as a whole; provided, however, that any increase in the amount of the authorized or issued Series F Preferred Stock or authorized preferred stock or any securities convertible into preferred stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of preferred stock or any securities convertible into preferred stock ranking equally with and/or junior to the Series F Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon the Company’s liquidation, dissolution or winding up will not

Exhibit III - 9

be deemed to adversely affect the voting powers, preferences or special rights of the Series F Preferred Stock and Holders will have no right to vote on such an increase, creation or issuance.

If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 7(c) would adversely affect one or more but not all series of preferred stock of the Company, then only such series of preferred stock as are adversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of preferred stock).

(d) No Vote if Redemption.  No vote or consent of the Holders shall be required pursuant to Section 7(b) or (c) if, at or prior to the time when the act with respect to such vote or consent would otherwise be required shall be effected, the Company shall have redeemed or shall have called for redemption all outstanding shares of Series F Preferred Stock, with proper notice and sufficient funds having been set aside for such redemption, in each case pursuant to Section 6 above.

Section 8. Preemption and Conversion Rights.

The Holders shall not have any rights of preemption or conversion.

Section 9. Rank.

Notwithstanding anything set forth in the Certificate of Incorporation or this Certificate of Designation to the contrary, the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, without the vote of the Holders, may authorize and issue additional shares of Junior Stock or Parity Stock.

Section 10. Repurchase.

Subject to the limitations imposed herein, the Company may purchase and sell Series F Preferred Stock from time to time to such extent, in such manner, and upon such terms as the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof may determine; provided, however, that the Company shall not use any of its funds for any such purchase when there are reasonable grounds to believe that the Company is, or by such purchase would be, rendered insolvent; provided, further, however, that in the event that the Company beneficially owns any Series F Preferred Stock, the Company will procure that voting rights in respect of such Series F Preferred Stock are not exercised.

Section 11.  Unissued or Reacquired Shares.

Shares of Series F Preferred Stock not issued or which have been issued and redeemed or otherwise purchased or acquired by the Company shall be restored to the status of authorized but unissued shares of preferred stock without designation as to series.

Exhibit III - 10

Section 12.  No Sinking Fund.

Shares of Series F Preferred Stock are not subject to the operation of a sinking fund.

Section 13.  Transfer Agent, Registrar and Paying Agent.

The duly appointed Transfer Agent, Registrar and paying agent for the Series F Preferred Stock shall be The Bank of New York Mellon.  The Company may, in its sole discretion, remove the Transfer Agent in accordance with the agreement between the Company and the Transfer Agent; provided that the Company shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal.  Upon any such removal or appointment, the Company shall send notice thereof by first-class mail, postage prepaid, to the Holders.

Section 14.  Replacement Certificates.

Mutilated, Destroyed, Stolen and Lost Certificates.  If physical certificates are issued, the Company shall replace any mutilated certificate at the Holder’s expense upon surrender of that certificate to the Transfer Agent.  The Company shall replace certificates that become destroyed, stolen or lost at the Holder’s expense upon delivery to the Company and the Transfer Agent of satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Transfer Agent and the Company.

Section 15. Form.

(a) Global Series F Preferred Stock. Series F Preferred Stock may be issued in the form of one or more permanent global shares of Series F Preferred Stock in definitive, fully registered form with a global legend in substantially the form attached hereto as Exhibit A (each, a “Global Series F Preferred Stock”), which is hereby incorporated in and expressly made a part of this Certificate of Designation.  The Global Series F Preferred Stock may have notations, legends or endorsements required by law, stock exchange rules, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  The aggregate number of shares represented by each Global Series F Preferred Stock may from time to time be increased or decreased by adjustments made on the records of the Registrar and the Depositary or its nominee as hereinafter provided.  This Section 15(a) shall apply only to a Global Series F Preferred Stock deposited with or on behalf of the Depositary.

(b) Delivery to Depositary.  If Global Series F Preferred Stock is issued, the Company shall execute and the Registrar shall, in accordance with this Section, countersign and deliver initially one or more Global Series F Preferred Stock that (i) shall be registered in the name of Cede & Co. or other nominee of the Depositary and (ii) shall be delivered by the Registrar to the Depositary or pursuant to instructions received from the Depositary or held by the Registrar as custodian for the Depositary pursuant to an agreement between the Depositary and the Registrar.

(c) Agent Members.  If Global Series F Preferred Stock is issued, members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Certificate of

Exhibit III - 11

Designation with respect to any Global Series F Preferred Stock held on their behalf by the Depositary or by the Registrar as the custodian of the Depositary or under such Global Series F Preferred Stock and the Depositary may be treated by the Company, the Registrar and any agent of the Company or the Registrar as the absolute owner of such Global Series F Preferred Stock for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Registrar or any agent of the Company or the Registrar from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members the operation of customary practices of the Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Series F Preferred Stock.  If Global Series F Preferred Stock is issued, the Depositary may grant proxies or otherwise authorize any Person to take any action that a Holder is entitled to take pursuant to the Series F Preferred Stock, this Certificate of Designation or the Certificate of Incorporation.

(d) Physical Certificates. Owners of beneficial interests in any Global Series F Preferred Stock shall not be entitled to receive physical delivery of certificated shares of Series F Preferred Stock, unless (x) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for the Global Series F Preferred Stock and the Company does not appoint a qualified replacement for the Depositary within 90 days, (y) the Depositary ceases to be a “clearing agency” registered under the Exchange Act and the Company does not appoint a qualified replacement for the Depositary within 90 days or (z) the Company decides to discontinue the use of book-entry transfer through the Depositary.  In any such case, the Global Series F Preferred Stock shall be exchanged in whole for definitive shares of Series F Preferred Stock in registered form, with the same terms and of an equal aggregate Liquidation Preference.  Such definitive shares of Series F Preferred Stock shall be registered in the name or names of the Person or Persons specified by the Depositary in a written instrument to the Registrar.

(e) Signature. An Officer shall sign any Global Series F Preferred Stock for the Company in accordance with the Company’s by-laws and applicable law, by manual or facsimile signature.  If an Officer whose signature is on a Global Series F Preferred Stock no longer holds that office at the time the Transfer Agent countersigned the Global Series F Preferred Stock, the Global Series F Preferred Stock shall be valid nevertheless.  A Global Series F Preferred Stock shall not be valid until an authorized signatory of the Transfer Agent manually countersigns Global Series F Preferred Stock.  Each Global Series F Preferred Stock shall be dated the date of its countersignature.

Section 16. Taxes.

(a) Transfer Taxes. The Company shall pay any and all stock transfer, documentary, stamp and similar taxes that may be payable in respect of any issuance or delivery of shares of Series F Preferred Stock or shares of Common Stock or other securities issued on account of Series F Preferred Stock pursuant hereto or certificates representing such shares or securities.  The Company shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Series F Preferred Stock, shares of Common Stock or other securities in a name other than that in which the shares of Series F Preferred Stock with respect to which such shares or other securities are issued or delivered were

Exhibit III - 12

registered, or in respect of any payment to any Person other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment unless and until the Person otherwise entitled to such issuance, delivery or payment has paid to the Company the amount of any such tax or has established, to the satisfaction of the Company, that such tax has been paid or is not payable.

(b) Withholding. All payments and distributions (or deemed distributions) on the shares of Series F Preferred Stock shall be subject to withholding and backup withholding of tax to the extent required by law, subject to applicable exemptions, and amounts withheld, if any, shall be treated as received by Holders.

Section 17.  Notices.

All notices referred to herein shall be in writing, and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three Business Days after the mailing thereof if sent by registered or certified mail (unless first class mail shall be specifically permitted for such notice under the terms of this Certificate of Designation) with postage prepaid, addressed: (i) if to the Company, to its office at 399 Park Avenue, New York, New York 10043 (Attention: Corporate Secretary) or to the Transfer Agent at its office at 480 Washington Boulevard, 29th Floor, Jersey City, New Jersey 07310 (Attention: Corporate Trust Office), or other agent of the Company designated as permitted by this Certificate of Designation, or (ii) if to any Holder, to such Holder at the address of such Holder as listed in the stock record books of the Company (which may include the records of the Transfer Agent) or (iii) to such other address as the Company or any such Holder, as the case may be, shall have designated by notice similarly given.

Exhibit III - 13

Exhibit A

FORM OF

8.50% NON-CUMULATIVE PREFERRED STOCK, SERIES F

FACE OF SECURITY

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF DESIGNATION REFERRED TO BELOW.

Exhibit III - 14

Certificate Number Number of Shares of Series F Preferred Stock

CUSIP NO:

CITIGROUP INC.

8.50% Non-Cumulative Preferred Stock, Series F

(par value $1.00 per share)

(liquidation preference $25,000 per share)

Citigroup Inc., a Delaware corporation (the “Company”), hereby certifies that [        ] (the “Holder”) is the registered owner of [    ](1) [       , or such number as is indicated in the records of the Registrar and the Depository,](2) fully paid and non-assessable shares of the Company’s designated 8.50% Non-Cumulative Preferred Stock, Series F, with a par value of $1.00 per share and a liquidation preference of $25,000 per share (the “Series F Preferred Stock”).  The shares of Series F Preferred Stock are transferable on the books and records of the Registrar, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer.  The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Series F Preferred Stock represented hereby are and shall in all respects be subject to the provisions of the Certificate of Designation  dated May 12, 2008 as the same may be amended from time to time (the “Certificate of Designation”).  Capitalized terms used herein but not defined shall have the meaning given them in the Certificate of Designation.  The Company will provide a copy of the Certificate of Designation to a Holder without charge upon written request to the Company at its principal place of business.

Reference is hereby made to select provisions of the Series F Preferred Stock set forth on the reverse hereof, and to the Certificate of Designation, which select provisions and the Certificate of Designation shall for all purposes have the same effect as if set forth at this place.

Upon receipt of this certificate, the Holder is bound by the Certificate of Designation and is entitled to the benefits thereunder.

Unless the Registrar has properly countersigned, these shares of Series F Preferred Stock shall not be entitled to any benefit under the Certificate of Designation or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, this certificate has been executed on behalf of the Company by its [Title] this        day of                      ,                       .

CITIGROUP [NC.

By:

Name:

Title:

(1)This phrase should be included only if the share certificate evidences certificated shares of Series F Preferred Stock.

(2)This phrase should be included only if the share certificate evidences Global Series F Preferred Stock.

Exhibit III - 15

REGISTRAR’S COUNTERSIGNATURE

These are shares of Series F Preferred Stock referred to in the within-mentioned Certificate of Designation.

Dated:

THE BANK OF NEW YORK MELLON, as Registrar

By:

Name:

Title:

Exhibit III - 16

REVERSE OF CERTIFICATE

Dividends on each share of Series F Preferred Stock shall be payable at the rate provided in the Certificate of Designation.

The shares of Series F Preferred Stock shall be redeemable at the option of the Company in the manner and in accordance with the terms set forth in the Certificate of Designation.

The Company shall furnish without charge to each holder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class or series of share capital issued by the Company and the qualifications. limitations or restrictions of such preferences and/or rights.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of Series F Preferred Stock evidenced hereby to:

(Insert assignee’s social security or taxpayer identification number, if any)

(Insert address and zip code of assignee)

and irrevocably appoints:

as agent to transfer the shares of Series F Preferred Stock evidenced hereby on the books of the Transfer Agent.  The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Certificate)

Signature Guarantee:

(Signature must be guaranteed by an “eligible guarantor institution” that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Transfer Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Transfer Agent in addition to, or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)

Exhibit III - 17

Exhibit IV

Series R Participating Cumulative Preferred Stock

Section 1.  Designation and Number of Shares.

The shares of such series shall be designated as “Series R Participating Cumulative Preferred Stock” (the “Series R Preferred Stock”), and the number of shares constituting such series shall be 28,000.  Such number of shares of the Series R Preferred Stock may be increased or decreased by resolution of the Board of Directors; provided that no decrease shall reduce the number of shares of Series R Preferred Stock to a number less than the number of shares then outstanding plus the number of shares issuable upon exercise or conversion of outstanding rights, options or other securities issued by the Corporation.

Section 2.  Dividends and Distributions.

(a) Subject to the prior and superior rights of the holders of any shares of any class or series of stock of the Corporation ranking prior and superior to the shares of Series R Preferred Stock with respect to dividends, the holders of shares of Series R Preferred Stock, in preference to the holders of shares of any class or series of stock of the Corporation ranking junior to the Series R Preferred Stock in respect thereof, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, regular quarterly dividends payable on such dates each year as designated by the Board of Directors (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of any share or fraction of a share of Series R Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the  greater of (i) $1.00 and (ii) the Multiplier Number times the aggregate per share amount of all cash dividends or other distributions and the Multiplier Number times the aggregate per share amount of all non-cash dividends or other distributions (other than (A) a dividend payable in shares of Common Stock, par value $0.01 per share, of the Corporation (the “Common Stock”) or (B) a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise)), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series R Preferred Stock.  As used herein, the “Multiplier Number” shall be 1,000,000; provided that if, at any time after June 9, 2009, there shall be any change in the Common Stock, whether by reason of stock dividends, stock splits, reverse stock splits, recapitalization, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations or other similar changes in capitalization, or any distribution or issuance of shares of its capital stock in a merger, share exchange, reclassification, or change of the outstanding shares of Common Stock, then in each such event the Board of Directors shall adjust the Multiplier Number to the extent appropriate such that following such adjustment each share of Series R Preferred Stock shall be in the same economic position as prior to such event.

(b) The Corporation shall declare a dividend or distribution on the Series R Preferred Stock as provided in Section 2(a) immediately after it declares a dividend or distribution on the Common Stock (other than as described in Sections 2(a)(ii)(A) and 2(a)(ii)(B)); provided that if no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date (or, with respect to the first Quarterly Dividend Payment Date, the period between the first issuance of any share or fraction of a share of Series R Preferred Stock and such first Quarterly Dividend Payment Date), a dividend of $1.00 per share on the Series R Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

Exhibit IV - 1

(c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series R Preferred Stock from the Quarterly Dividend Payment Date immediately preceding the date of issuance of such shares of Series R Preferred Stock, unless the date of issuance of such shares is on or before the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue and be cumulative from the date of issue of such shares, or unless the date of issue is a date after the record date for the determination of holders of shares of Series R Preferred Stock entitled to receive a quarterly dividend and on or before such Quarterly Dividend Payment Date, in which case dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date.  Accrued but unpaid dividends shall not bear interest.  Dividends paid on shares of Series R Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding.  The Board of Directors may fix a record date for the determination of holders of shares of Series R Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall not be more than 60 days prior to the date fixed for the payment thereof.

Section 3. Voting Rights. In addition to any other voting rights required by law, the holders of shares of Series R Preferred Stock shall have the following voting rights:

(a) Each share of Series R Preferred Stock shall entitle the holder thereof to a number of votes equal to the Multiplier Number on all matters submitted to a vote of stockholders of the Corporation.

(b) Except as otherwise provided herein or by law, the holders of shares of Series R Preferred Stock and the holders of shares of Common Stock shall vote together as a single class on all matters submitted to a vote of stockholders of the Corporation.

(c) (i) If at any time dividends on any Series R Preferred Stock shall be in arrears in an amount equal to six quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”) which shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series R Preferred Stock then outstanding shall have been declared and paid or set apart for payment.  During each default period, all holders of Series R Preferred Stock and any other series of Preferred Stock then entitled as a class to elect directors, voting together as a single class, irrespective of series, shall have the right to elect two Directors.

(ii) During any default period, such voting right of the holders of Series R Preferred Stock may be exercised initially at a special meeting called pursuant to Section 3(c)(iii) hereof or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders; provided that neither such voting right nor the right of the holders of any other series of Preferred Stock, if any, to increase, in certain cases, the authorized number of Directors shall be exercised unless the holders of 10% in number of shares of Preferred Stock outstanding shall be present in person or by proxy.  The absence of a quorum of holders of Common Stock shall not affect the exercise by holders of Preferred Stock of such voting right. At any meeting at which holders of Preferred Stock shall initially exercise such voting right, they shall have the right, voting as a class, to elect Directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two Directors or, if such right is exercised at an annual meeting, to elect two Directors.  If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the

Exhibit IV - 2

number of Directors as shall be necessary to permit the election by them of the required number.  After the holders of the Preferred Stock shall have exercised their right to elect Directors in any default period and during the continuance of such period, the number of Directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series R Preferred Stock.

(iii) Unless the holders of Preferred Stock shall have previously exercised their right to elect Directors during an existing default period, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than 10% of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of holders of Preferred Stock, which meeting shall thereupon be called by the Chief Executive Officer, a Vice President or the Secretary of the Corporation.  Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this Section 3(c)(iii) shall be given to each holder of record of Preferred Stock by mailing such notice to him at the address of such holder shown on the registry books of the Corporation.  Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than 10% of the total number of shares of Preferred Stock outstanding, irrespective of series.  Notwithstanding the provisions of this Section 3(c)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of stockholders.

(iv)  In any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of Directors until the holders of Preferred Stock shall have exercised their right to elect two Directors voting as a class, after the exercise of which right (x) the Directors so elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in Section 3(c)(ii) hereof) be filled by vote of a majority of the remaining Directors theretofore elected by the holders of the class of stock which elected the Director whose office shall have become vacant.  References in this Section 3(c) to Directors elected by the holders of a particular class of stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence.

(v) Immediately upon the expiration of a default period, (x) the right of the holders of Preferred Stock as a class to elect Directors shall cease, (y) the term of any Directors elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of Directors shall be such number as may be provided for in the certificate of incorporation or bylaws irrespective of any increase made pursuant to the provisions of Section 3(c)(ii) (such number being subject, however, to change thereafter in any manner provided by law or in the certificate of incorporation or bylaws).  Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors.

(d) The certificate of incorporation of the Corporation shall not be amended in any manner (whether by merger or otherwise) so as to adversely affect the powers, preferences or special rights of the Series R Preferred Stock without the affirmative vote of the holders of a majority of the outstanding shares of Series R Preferred Stock, voting separately as a class.

Exhibit IV - 3

(e) Except as otherwise expressly provided herein, holders of Series R Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

Section 4. Certain Restrictions.

(a) Whenever quarterly dividends or other dividends or distributions payable on the Series R Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on outstanding shares of Series R Preferred Stock shall have been paid in full, the Corporation shall not:

(i) declare or pay dividends on, or make any other distributions on, any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series R Preferred Stock;

(ii) declare or pay dividends on, or make any other distributions on, any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding-up) with the Series R Preferred Stock, except dividends paid ratably on the Series R Preferred Stock and all such other parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

(iii) redeem, purchase or otherwise acquire for value any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series R Preferred Stock; provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of stock of the Corporation ranking junior (as to dividends and upon dissolution, liquidation or winding-up) to the Series R Preferred Stock; or

(iv) redeem, purchase or otherwise acquire for value any shares of Series R Preferred Stock, or any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding-up) with the Series R Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of Series R Preferred Stock and all such other parity stock upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

(b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for value any shares of stock of the Corporation unless the Corporation could, under paragraph 4(a), purchase or otherwise acquire such shares at such time and in such manner.

Section 5. Reacquired Shares.

Any shares of Series R Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired promptly after the acquisition thereof.  All such shares shall upon their retirement become authorized but unissued shares of Preferred Stock without designation as to series and may be reissued as part of a new series of Preferred Stock to be created by the Board of

Exhibit IV - 4

Directors as permitted by the certificate of incorporation of the Corporation or as otherwise permitted under Delaware law.

Section 6. Liquidation, Dissolution and Winding-up.

Upon any liquidation, dissolution or winding-up of the Corporation, no distribution shall be made (a) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series R Preferred Stock unless, prior thereto, the holders of shares of Series R Preferred Stock shall have received $1.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment; provided that the holders of shares of Series R Preferred Stock shall be entitled to receive an aggregate amount per share equal to (x) the Multiplier Number times (y) the aggregate amount to be distributed per share to holders of Common Stock, or (b) to the holders of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding-up) with the Series R Preferred Stock, except distributions made ratably on the Series R Preferred Stock and all such other parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding-up.

Section 7. Consolidation, Merger, etc.

If the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash or any other property, then in any such case the shares of Series R Preferred Stock shall at the same time be similarly exchanged for or changed into an amount per share equal to (x) the Multiplier Number times (y) the aggregate amount of stock, securities, cash or any other property, as the case may be, into which or for which each share of Common Stock is changed or exchanged.

Section 8. No Redemption.

The Series R Preferred Stock shall not be redeemable.

Section 9. Rank.

The Series R Preferred Stock shall rank junior to all other series of the Preferred Stock as to the payment of dividends and the distribution of assets upon liquidation, dissolution and winding-up, unless the terms of such series shall specifically provide otherwise, and shall rank senior to the Common Stock as to such matters.

Section 10. Fractional Shares.

Series R Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series R Preferred Stock.

Exhibit IV - 5

Exhibit V

6.5% Non-Cumulative Convertible Preferred Stock, Series T

Section 1.  Designation.

The designation of the series of preferred stock shall be “6.5% Non-Cumulative Convertible Preferred Stock, Series T” (the “Convertible Preferred Stock”).  Each share of Convertible Preferred Stock shall be identical in all respects to every other share of Convertible Preferred Stock.  Convertible Preferred Stock will rank equally with Parity Stock, if any, will rank senior to Junior Stock and will rank junior to Senior Stock, if any, with respect to the payment of dividends and/or the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Section 2.  Number of Shares.

The number of authorized shares of Convertible Preferred Stock shall be 66,700.  That number from time to time may be increased (but not in excess of the total number of authorized shares of preferred stock) or decreased (but not below the number of shares of Convertible Preferred Stock then outstanding) by further resolution duly adopted by the Board of Directors, the Preferred Stock Committee  or any other duly authorized committee thereof and by the filing of a certificate pursuant to the provisions  of the General Corporation Law of the State of Delaware stating that such increase or reduction, as the case may be, has been so authorized.  The Company shall have the authority to issue fractional shares of Convertible Preferred Stock.

Section 3.  Definitions.  As used herein with respect to Convertible Preferred Stock:

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting  securities by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agent Members” has the meaning set forth in Section 23(c).

“Base Price” has the meaning set forth in Section 10(a).

 “Board of Directors” has the meaning set forth in the recitals in the Certificate of Designation of 6.5% Non-Cumulative Convertible Preferred Stock, Series T of Citigroup Inc. filed on January 22, 2008.

“Business Day” means any weekday that is not a legal holiday in New York, New York and is not a day on which banking institutions in New York, New York are authorized or required by law or regulation to be closed.

“Closing Price” of the Common Stock on any date of determination means the closing sale price or, if no closing sale price is reported, the last reported sale price of the shares of the Common Stock on the New York Stock Exchange on such date.  If the Common Stock is not traded on the New York Stock Exchange on any date of determination, the Closing Price of the Common Stock on such date of

Exhibit V - 1

determination means the closing sale price as reported in the composite transactions for the principal U.S.  national or regional securities exchange on which the Common Stock is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal U.S.  national or regional securities exchange on which the Common Stock is so listed or quoted, or if the Common Stock is not so listed or quoted on a U.S.  national or regional securities exchange, the last quoted bid price for the Common Stock in the over-the-counter market as reported by Pink Sheets LLC or similar organization, or, if that bid price is not available, the market price of the Common Stock on that date as determined by a nationally recognized investment banking firm (unaffiliated with the Company) retained by the Company for this purpose.

“Common Stock” means the common stock of the Company, par value $0.01 per share, or any other shares of the capital stock of the Company into which such shares of common stock shall be reclassified or changed.

“Constituent Person” has the meaning set forth in Section 13(a).

“Conversion Agent” means the Transfer Agent acting in its capacity as conversion agent for the Convertible Preferred Stock, and its successors and assigns.

“Conversion at the Option of the Company Date” has the meaning set forth in Section 11(c).

“Conversion Date” has the meaning set forth in Section 8(e).

“Conversion Price” at any time means, for each share of Convertible Preferred Stock, a dollar amount equal to $50,000 divided by the Conversion Rate (initially approximately $33.73).

“Conversion Rate” means for each share of Convertible Preferred Stock, 1,482.3503 shares of Common Stock, subject to adjustment as set forth herein.

“Convertible Preferred Stock” shall have the meaning set forth in Section 1.

“Current Market Price” per share of Common Stock on any day means the average of the VWAP per share of Common Stock on each of the 10 consecutive Trading Days ending on the earlier of the day in question and the day before the Ex-date or other specified date with respect to the issuance or distribution requiring such computation, appropriately adjusted to take into account the occurrence during such period of any event described in Section 12.

“Depositary” means DTC or its nominee or any successor depositary appointed by the Company.

“Dividend Payment Date” shall have the meaning set forth in Section 4(a).

“Dividend Period” shall have the meaning set forth in Section 4(a).

“Dividend Record Date” shall have the meaning set forth in Section 4(a).

“Dividend Threshold Amount” shall have the meaning set forth in Section 12(a)(iv).

“DTC” means The Depository Trust Company.

Exhibit V - 2

“Ex-date” when used with respect to any issuance or distribution, means the first date on which the shares of Common Stock or other securities trade without the right to receive an issuance or distribution.

“Exchange Property” has the meaning set forth in Section 13(a).

“Expiration Time” has the meaning set forth in Section 12(a)(v).

“Fundamental Change” has the meaning set forth in Section 10(a).

“Global Preferred Stock” has the meaning set forth in Section 23(a).

“Holder” means the Person in whose name the shares of the Convertible Preferred Stock are registered, which may be treated by the Company, Transfer Agent, Registrar, paying agent and Conversion Agent as the absolute owner of the shares of Convertible Preferred Stock for the purpose of making payment and settling the related conversions and for all other purposes.

“Junior Stock” means the Common Stock and any other class or series of stock of the Company now existing or hereafter authorized over which Convertible Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the Company.

“Make-Whole Acquisition” means the occurrence, prior to any Conversion Date, of one of the following:

(i) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of common equity of the Company representing more than 50% of the voting power of the outstanding Common Stock; or

(ii) consummation of any consolidation or merger of the Company or similar transaction or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the property and assets of the Company to any Person other than one of the Company’s subsidiaries, in each case pursuant to which the Common Stock will be converted into cash, securities or other property, other than pursuant to a transaction in which the Persons that “beneficially owned” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, voting shares of the Company immediately prior to such transaction beneficially own, directly or indirectly, voting shares representing a majority of the total voting power of all outstanding classes of voting shares of the continuing or surviving Person immediately after the transaction;

provided, however, that a Make-Whole Acquisition will not be deemed to have occurred if at least 90% of the consideration received by holders of the Common Stock in the transaction or transactions consists of shares of common stock or depositary receipts in respect of common stock that are traded on a U.S.  national securities exchange or securities exchange in the European Economic Area or that will be so traded when issued or exchanged in connection with a Make-Whole Acquisition.

“Make-Whole Acquisition Conversion” has the meaning set forth in Section 9(a).

“Make-Whole Acquisition Conversion Period” has the meaning set forth in Section 9(a).

Exhibit V - 3

“Make-Whole Acquisition Effective Date” has the meaning set forth in Section 9(a).

“Make-Whole Acquisition Stock Price” means the consideration paid per share of Common Stock in a Make-Whole Acquisition.  If such consideration consists only of cash, the Make-Whole Acquisition Stock Price shall equal the amount of cash paid per share of Common Stock.  If such consideration consists of any property other than cash, the Make-Whole Acquisition Stock Price shall be the average of the Closing Price per share of Common Stock on each of the 10 consecutive Trading Days up to, but not including, the Make-Whole Acquisition Effective Date.

“Make-Whole Shares” has the meaning set forth in Section 9(b).

“Market Disruption Event” means any of the following events that has occurred:

(i) any suspension of, or limitation imposed on, trading by any exchange or quotation system on which the Closing Price is determined pursuant to the definition of the Trading Day (a “Relevant Exchange”) during the one-hour period prior to the close of trading for the regular trading session on the Relevant Exchange (or for purposes of determining the VWAP per share of Common Stock any period or periods aggregating one half-hour or longer during the regular trading session on the relevant day) and whether by reason of movements in price exceeding limits permitted by the Relevant Exchange, or otherwise relating to Common Stock or in futures or options contracts relating to the Common Stock on the Relevant Exchange;

(ii) any event (other than an event described in clause (iii)) that disrupts or impairs (as determined by the Company in its reasonable discretion) the ability of market participants during the one-hour period prior to the close of trading for the regular trading session on the Relevant Exchange (or for purposes of determining the VWAP per share of Common Stock any period or periods aggregating one half-hour or longer during the regular trading session on the relevant day) in general to effect transactions in, or obtain market values for, the Common Stock on the Relevant Exchange or to effect transactions in, or obtain market values for, futures or options contracts relating to the Common Stock on the Relevant Exchange; or

(iii) the failure to open of the Relevant Exchange on which futures or options contracts relating to the Common Stock, are traded or the closure of such exchange prior to its respective scheduled closing time for the regular trading session on such day (without regard to after hours or any other trading outside of the regular trading session hours) unless such earlier closing time is announced by such exchange at least one hour prior to the earlier of the actual closing time for the regular trading session on such day, and the submission deadline for orders to be entered into such exchange for execution at the actual closing time on such day.

“‘Nonpayment” shall have the meaning set forth in Section 14(b)(i).

“‘Notice of Conversion at the Option of the Company” has the meaning set forth in Section 11(c).

“Officer” means the Chief Executive Officer, the Chairman, the Chief Administrative Officer, any Vice Chairman, the Chief Financial Officer, the Controller, the Chief Accounting Officer, the Treasurer and Head of Corporate Finance, any Assistant Treasurer, the General Counsel and Corporate Secretary and any Assistant Secretary of the Company.

Exhibit V - 4

“Officers’ Certificate” means a certificate signed (i) by the Chief Executive Officer, the Chairman, the Chief Administrative Officer, any Vice Chairman, the Chief Financial Officer, the Controller or the Chief Accounting Officer, and (ii) by the Treasurer and Head of Corporate Finance, any Assistant Treasurer, the General Counsel and Corporate Secretary or any Assistant Secretary of the Company, and delivered to the Conversion Agent.

“Parity Stock” means any class or series of stock of the Company hereafter authorized that ranks equally with the Convertible Preferred Stock in the payment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Company.

“Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company or trust.

“Purchased Shares” has the meaning set forth in Section 12(a)(v).

“Record Date” has the meaning set forth in Section 12(d).

“Reference Price” means the price paid per share of Common Stock in a Fundamental Change.  If the holders of shares of Common Stock receive only cash in the Fundamental Change, the Reference Price shall be the cash amount paid per share.  Otherwise the Reference Price shall be the average of the Closing Price per share of Common Stock on each of the 10 Trading Days up to, but not including, the effective date of the Fundamental Change.

“Registrar” means the Transfer Agent acting in its capacity as registrar for the Convertible Preferred Stock, and its successors and assigns.

“Relevant Exchange” has the meaning set forth above in the definition of Market Disruption Event.

“Reorganization Event” has the meaning set forth in Section 13(a).

“Senior Stock” means any class or series of stock of the Company now existing or hereafter authorized which has preference or priority over the Convertible Preferred Stock as to the payment of dividends or in the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the Company.

“Trading Day” means, for purposes of determining a VWAP or Closing Price per share of Common Stock or a Closing Price, a Business Day on which the Relevant Exchange (as defined in the definition of Market Disruption Event) is scheduled to be open for business and on which there has not occurred or does not exist a Market Disruption Event.

“Transfer Agent” means The Bank of New York Mellon acting as Transfer Agent, Registrar, paying agent and Conversion Agent for the Convertible Preferred Stock, and its successors and assigns.

“Trust” shall have the meaning set forth in Section 6(d).

“VWAP” per share of the Common Stock on any Trading Day means the per share volume-weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg page C UN <equity> AQR (or its equivalent successor if such page is not available) in respect of the period from the open of trading on the relevant Trading Day until the close of trading on the relevant Trading Day (or if

Exhibit V - 5

such volume-weighted average price is unavailable, the market price of one share of Common Stock on such Trading Days determined, using a volume-weighted average method, by a nationally recognized investment banking firm (unaffiliated with the Company) retained for this purpose by the Company).

Section 4.  Dividends.

(a) Rate.  Holders shall be entitled to receive, if, as and when declared by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, but only out of assets legally available therefor, non-cumulative cash dividends on the liquidation preference of $50,000 per share of Convertible Preferred Stock, and no more, payable quarterly in arrears on each February 15, May 15, August 15 and November 15; provided, however, if any such day is not a Business Day, then payment of any dividend otherwise payable on that date will be made on the next succeeding day that is a Business Day, unless that day falls in the next calendar year, in which case payment of such dividend will occur on the immediately preceding Business Day (in either case, without any interest or other payment in respect of such delay) (each such day on which dividends are payable a “Dividend Payment Date”).  The period from and including the date of issuance of the Convertible Preferred Stock or any Dividend Payment Date to, but excluding, the next Dividend Payment Date is a “Dividend Period.” Dividends on each share of Convertible Preferred Stock will accrue on the liquidation preference of $50,000 per share at a rate per annum equal to 6.5%.  The record date for payment of dividends on the Convertible Preferred Stock will be the fifteenth day of the calendar month immediately preceding the month during which the Dividend Payment Date falls or such other record date fixed by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).  Any such day that is a Dividend Record Date will be a Dividend Record Date whether or not such day is a Business Day.  The amount of dividends payable will be computed on the basis of a 360-day year of twelve 30-day months.

(b) Non-Cumulative Dividends.  If the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof does not declare a dividend on the Convertible Preferred Stock for any Dividend Period prior to the related Dividend Payment Date, that dividend will not accrue, and the Company will have no obligation to pay, and Holders shall have no right to receive, a dividend for that Dividend Period on the related Dividend Payment Date or at any future time whether or not dividends on the Convertible Preferred Stock or any other series of preferred stock or common stock are declared for any subsequent Dividend Period with respect to Convertible Preferred Stock, Parity Stock, Junior Stock or any other class or series of authorized preferred stock of the Company.  References herein to the “accrual” of dividends refer only to the determination of the amount of such dividend and do not imply that any right to a dividend arises prior to the date on which a dividend is declared.

(c) Priority of Dividends.  So long as any share of Convertible Preferred Stock remains outstanding, unless as to a Dividend Payment Date full dividends on all outstanding shares of the Convertible Preferred Stock have been declared and paid or declared and a sum sufficient for the payment of those dividends has been set aside for the Dividend Period then ending, the Company will not, and will cause its subsidiaries not to, during the next succeeding Dividend Period that commences on such Dividend Payment Date, declare or pay any dividend on, make any distributions relating to, or redeem, purchase, acquire or make a liquidation payment relating to, any of Junior Stock, or make any guarantee payment with respect thereto, other than:

Exhibit V - 6

(i) purchases, redemptions or other acquisitions of shares of Junior Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants;

(ii) purchases of shares of Common Stock pursuant to a contractually binding requirement to buy stock existing prior to the commencement of the then-current dividend period, including under a contractually binding stock repurchase plan;

(iii) as a result of an exchange or conversion of any class or series of Junior Stock for any other class or series of Junior Stock;

(iv) the purchase of fractional interests in shares of Junior Stock pursuant to the conversion or exchange provisions of such Junior Stock or the security being converted or exchanged;

(v) the purchase of Junior Stock by an investment banking subsidiary of the Company in connection with the distribution thereof; or

(vi) the purchase of Junior Stock by any investment banking subsidiary of the Company in connection with market-making or other secondary market activities in the ordinary course of the business of such subsidiary.

The foregoing restriction, however, will not apply to any Junior Stock dividends paid by the Company where the dividend stock is the same stock as that on which the dividend is being paid.  Except as provided below, for so long as any share of Convertible Preferred Stock remains outstanding, if dividends are not declared and paid in full upon the shares of Convertible Preferred Stock and any Parity Stock, all dividends declared upon shares of Convertible Preferred Stock and any Parity Stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the then-current Dividend Period per share of Convertible Preferred Stock and accrued dividends for the then-current Dividend Period per share of any Parity Stock (including, in the case of any such Parity Stock that bears cumulative dividends, all accrued and unpaid dividends) bear to each other.

Subject to the foregoing, and not otherwise, such dividends payable in cash, stock or otherwise, as may be determined by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, may be declared and paid on any Junior Stock and Parity Stock from time to time out of any assets legally available for such payment, and Holders will not be entitled to participate in those dividends.

(e) Conversion Following A Record Date.  If a Conversion Date for any shares of Convertible Preferred Stock is prior to the close of business on a Dividend Record Date for any declared dividend for the then-current Dividend Period, the Holder of such shares will not be entitled to any such dividend.  If the Conversion Date for any shares of Convertible Preferred Stock is after the close of business on a Dividend Record Date for any declared dividend for the then-current Dividend Period, but prior to the corresponding Dividend Payment Date, the Holder of such shares shall be entitled to receive such dividend, notwithstanding the conversion of such shares prior to the Dividend Payment Date.  However, such shares, upon surrender for conversion, must be accompanied by funds equal to the dividend on such shares; provided that no such payment need be made (i) if the Company has issued a notice of redemption of the Convertible Preferred Stock, (ii) if the Company has issued a notice of conversion at

Exhibit V - 7

its option of the Convertible Preferred Stock, or (iii) if a conversion is made in connection with a Make-Whole Acquisition or Fundamental Change, in each case in accordance with the terms hereof.

Section 5.  Liquidation Rights.

(a) Liquidation.  In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, Holders shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Company may be made to or set aside for the holders of any Junior Stock and subject to the rights of the holders of any class or series of securities ranking senior to or on parity with Convertible Preferred Stock upon liquidation and the rights of the Company’s depositors and other creditors, to receive in full a liquidating distribution in the amount of the liquidation preference of $50,000 per share, plus any accrued dividends thereon from the last dividend payment date to, but excluding, the date of the liquidation, dissolution or winding up if and to the extent declared.  Holders shall not be entitled to any further payments in the event of any such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company other than what is expressly provided for in this Section 5.

(b) Partial Payment.  If the assets of the Company are not sufficient to pay in full the liquidation preference plus any dividends which have been declared but not yet paid to all Holders and all holders of any Parity Stock, the amounts paid to the Holders and to the holders of all Parity Stock shall be pro rata in accordance with the respective aggregate liquidating distributions to which they would otherwise be entitled.

(c) Residual Distributions.  If the respective aggregate liquidating distributions to which all Holders and all holders of any Parity Stock are entitled have been paid, the holders of Junior Stock shall be entitled to receive all remaining assets of the Company according to their respective rights and preferences.

(d) Merger, Consolidation and Sale of Assets Not Liquidation.  For purposes of this Section 5, the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Company shall not be deemed a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, nor shall the merger, consolidation or any other business combination transaction of the Company into or with any other corporation or person or the merger, consolidation or any other business combination transaction of any other corporation or person into or with the Company be deemed to be a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company.

Section 6.  Redemption.

(a) Optional Redemption.  The Company, at the option of its Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, may redeem out of funds legally available therefor, in whole or in part, the shares of Convertible Preferred Stock at the time outstanding, on any Dividend Payment Date as to which the Company has declared a dividend in full on the Convertible Preferred Stock on or after the Dividend Payment Date on February 15, 2015, upon notice given as provided in Section 6(b) below, and at a redemption price equal to $50,000 per share.

Notwithstanding the foregoing, the Company, at the option of its Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, may redeem out of funds legally available therefor, at any time, in whole but not in part, the shares of Convertible Preferred Stock

Exhibit V - 8

at the time outstanding if the aggregate liquidation preference of such shares is equal to 5% or less of the aggregate liquidation preference of the shares of Convertible Preferred Stock originally issued by the Company, upon notice as provided in Section 6(b) below, and at a redemption price equal to $50,000 per share, plus any accrued dividends thereon from the last dividend payment date to, but excluding, the date of redemption.

(b) Notice of Redemption.  Notice of every redemption of shares of Convertible Preferred Stock shall be mailed by first class mail, postage prepaid, addressed to the Holders of such shares to be redeemed at their respective last addresses appearing on the stock register of the Company.  Such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption.  Any notice mailed as provided in this Section 6(b) shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any Holder of shares of Convertible Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Convertible Preferred Stock.  Each notice shall state:

(i) the redemption date;

(ii) the number of shares of Convertible Preferred Stock to be redeemed and, if fewer than all the shares of a Holder are to be redeemed, the number of such shares to be redeemed;

(iii) the redemption price;

(iv) the place or places where the certificates for such shares are to be surrendered for payment of the redemption price; and

(v) that dividends on the shares to be redeemed will cease to accrue on the redemption date.

Notwithstanding the foregoing, if the Convertible Preferred Stock is held in book-entry form through DTC, the Company may give such notice in any manner permitted by DTC.

(c) Partial Redemption.  In case of any redemption of only part of the shares of Convertible Preferred Stock at the time outstanding, the shares of Convertible Preferred Stock to be redeemed shall be selected pro rata from the Holders in proportion to the number of shares of Convertible Preferred Stock held by such Holders, by lot or in such other manner as the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof may determine to be fair and equitable.  Subject to the provisions of this Section 6, the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which shares of Convertible Preferred Stock shall be redeemed from time to time.

(d) Effectiveness of Redemption.  If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption have been set aside by the Company, separate and apart from its other assets, in trust for the pro rata benefit of the Holders of the shares called for redemption, so as to be and continue to be available therefor, or deposited by the Company with a bank or trust company selected by the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof (the “Trust”) in trust for the pro rata benefit of the Holders of the shares called for redemption, then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption

Exhibit V - 9

date all shares so called for redemption shall cease to be outstanding, all dividends with respect to such shares shall cease to accrue on such redemption date, and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the Holders thereof to receive the amount payable on such redemption from the Trust at any time after the redemption date from the funds so deposited, without interest.  The Company shall be entitled to receive, from time to time, from the Trust any interest accrued on such funds, and the Holders of any shares called for redemption shall have no claim to any such interest.  Any funds so deposited and unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released or repaid to the Company, and in the event of such repayment to the Company, the Holders of the shares so called for redemption shall be deemed to be unsecured creditors of the Company for an amount equivalent to the amount deposited as stated above for the redemption of such shares and so repaid to the Company, but shall in no event be entitled to any interest.

(e) Conversion Prior to Redemption.  If the Convertible Preferred Stock has been called for redemption, a holder will be entitled to convert the Convertible Preferred Stock from the date of notice of the redemption until the close of business on the second Business Day immediately preceding the date of redemption.

Section 7.  Right of the Holders to Convert.

Each Holder shall have the right, at such Holder’s option, to convert all or any portion of such Holder’s Convertible Preferred Stock at any time into shares of Common Stock at the Conversion Rate per share of Convertible Preferred Stock (subject to the conversion procedures of Section 8), plus cash in lieu of fractional shares.

Section 8.  Conversion Procedures.

(a) Conversion Date.  Effective immediately prior to the close of business on any applicable Conversion Date, dividends shall no longer be declared on any such converted shares of Convertible Preferred Stock and such shares of Convertible Preferred Stock shall cease to be outstanding, in each case, subject to the right of Holders to receive any declared and unpaid dividends on such shares and any other payments to which they are otherwise entitled pursuant to the terms hereof.

(b) Rights Prior to Conversion.  No allowance or adjustment, except pursuant to Section 12, shall be made in respect of dividends payable to holders of the Common Stock of record as of any date prior to the close of business on any applicable Conversion Date.  Prior to the close of business on any applicable Conversion Date, shares of Common Stock issuable upon conversion of, or other securities issuable upon conversion of, any shares of Convertible Preferred Stock shall not be deemed outstanding for any purpose, and Holders shall have no rights with respect to the Common Stock or other securities issuable upon conversion (including voting rights, rights to respond to tender offers for the Common Stock or other securities issuable upon conversion and rights to receive any dividends or other distributions on the Common Stock or other securities issuable upon conversion) by virtue of holding shares of Convertible Preferred Stock.

(c) Reacquired Shares.  Shares of Convertible Preferred Stock duly converted in accordance with this Certificate of Designation, or otherwise reacquired by the Company, will resume the status of authorized and unissued preferred stock, undesignated as to series and available for future issuance.  The Company may from time-to-time take such appropriate action as may be necessary to reduce the authorized number of shares of Convertible Preferred Stock.

Exhibit V - 10

(d) Record Holder as of Conversion Date.  The Person or Persons entitled to receive the Common Stock and/or cash, securities or other property issuable upon conversion of Convertible Preferred Stock shall be treated for all purposes as the record holder(s) of such shares of Common Stock and/or securities as of the close of business on any applicable Conversion Date.  In the event that a Holder shall not by written notice designate the name in which shares of Common Stock and/or cash, securities or other property (including payments of cash in lieu of fractional shares) to be issued or paid upon conversion of shares of Convertible Preferred Stock should be registered or paid or the manner in which such shares should be delivered, the Company shall be entitled to register and deliver such shares, and make such payment, in the name of the Holder and in the manner shown on the records of the Company or, in the case of global certificates, through book-entry transfer through the Depositary.

(e) Conversion Procedure.  On the date of any conversion, if a Holder’s interest is in certificated form, a Holder must do each of the following in order to convert:

(i) complete and manually sign the conversion notice provided by the Conversion Agent, or a facsimile of the conversion notice, and deliver this irrevocable notice to the Conversion Agent;

(ii) surrender the shares of Convertible Preferred Stock to the Conversion Agent;

(iii) if required, furnish appropriate endorsements and transfer documents;

(iv) if required, pay any stock transfer, documentary, stamp or similar taxes not payable by the Company pursuant to Section 24; and

(v) if required, pay funds equal to any declared and unpaid dividend payable on the next Dividend Payment Date to which such Holder is entitled.

If a Holder’s interest is a beneficial interest in a global certificate representing Convertible Preferred Stock, in order to convert a Holder must comply with clauses (iii) through (v) listed above and comply with the Depositary’s procedures for converting a beneficial interest in a global security.  The date on which a Holder complies with the procedures in this clause (ii) is the “Conversion Date.”  The Conversion Agent shall, on a Holder’s behalf, convert the Convertible Preferred Stock into shares of Common Stock, in accordance with the terms of the notice delivered by such Holder described in clause (i) above.

Section 9.  Conversion Upon Make-Whole Acquisition.

(a) Make-Whole Acquisition Conversion.  In the event of a Make-Whole Acquisition, each Holder shall have the option to convert its shares of Convertible Preferred Stock (a “Make-Whole Acquisition Conversion”) during the period (the “Make-Whole Acquisition Conversion Period”) beginning on the effective date of the Make-Whole Acquisition (the “Make-Whole Acquisition Effective Date”) and ending on the date that is 30 days after the Make-Whole Acquisition Effective Date and receive an additional number of shares of Common Stock in the form of Make-Whole Shares as set forth in clause (b) below.

Exhibit V - 11

(b) Number of Make-Whole Shares.  The number of “Make-Whole Shares” shall be determined for the Convertible Preferred Stock by reference to the table below for the applicable Make-Whole Acquisition Effective Date and the applicable Make-Whole Acquisition Stock Price:

	Stock Price
Effective Date	$26.35	$29.00	$31.50	$34.00	$36.50	$39.00	$41.50	$45.00	$50.00	$55.00	$60.00	$70.00	$80.00
January 17, 2008	415.0586	336.6450	280.8732	237.7517	203.8817	176.8906	155.0925	131.0448	105.8382	87.7535	74.3142	55.9120	44.0147
February 15, 2009	415.0586	335.6342	277.8014	233.2029	198.3240	170.6875	148.5209	124.2930	99.2609	81.6261	68.7560	51.5750	40.7288
February 15, 2010	407.7693	323.3739	263.5573	217.7120	182.0825	154.1127	131.9261	108.0402	83.9517	67.5097	55.8939	41.0257	32.1297
February 15, 2011	395.7941	307.9461	245.7090	198.1091	161.3901	132.8521	110.5226	86.9818	64.1080	49.3099	39.4578	27.8596	21.5687
February 15, 2012	381.2183	289.4432	223.9699	173.5976	134.6697	104.5878	81.4242	57.8404	36.6760	24.6960	17.9378	11.6860	9.0663
February 15, 2013	357.8192	261.7929	193.6996	140.8052	98.3019	63.0255	33.5871	4.8144	0.0000	0.0000	0.0000	0.0000	0.0000
February 15, 2014	332.5456	231.2139	162.2294	112.0320	74.8500	46.3888	24.1098	3.2856	0.0000	0.0000	0.0000	0.0000	0.0000
February 15, 2015	305.5186	179.3119	85.2333	2.7684	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

(i) The exact Make-Whole Acquisition Stock Prices and Make-Whole Acquisition Effective Dates may not be set forth on the table, in which case:

(A) if the Make-Whole Acquisition Stock Price is between two Make-Whole Acquisition Stock Price amounts on the table or the Make-Whole Acquisition Effective Dates are between two dates on the table, the number of Make-Whole Shares will be determined by straight-line interpolation between the number of Make-Whole Shares set forth for the higher and lower Make-Whole Acquisition Stock Price amounts and the two Make-Whole Acquisition Effective Dates, as applicable, based on a 365-day year;

(B) if the Make-Whole Acquisition Stock Price is in excess of $80.00 per share (subject to adjustment pursuant to Section 12), no Make-Whole Shares will be issued upon conversion of the Convertible Preferred Stock; and

(C) if the Make-Whole Acquisition Stock Price is less than $26.35 per share (subject to adjustment pursuant to Section 12), no Make-Whole Shares will be issued upon conversion of the Convertible Preferred Stock.

(ii) The Make-Whole Acquisition Stock Prices set forth in the table above are subject to adjustment pursuant to Section 12 and shall be adjusted as of any date the Conversion Rate is adjusted.  The adjusted Make-Whole Acquisition Stock Prices will equal the Make-Whole Acquisition Stock Prices applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Make-Whole Acquisition Stock Prices adjustment and the denominator of which is the Conversion Rate as so adjusted.  Each of the number of Make-Whole Shares in the table shall also be subject to adjustment in the same manner as the Conversion Rate pursuant to Section 12.

(c) Initial Make-Whole Acquisition Notice.  On or before the twentieth day prior to the date on which the Company anticipates consummating the Make-Whole Acquisition (or, if later, promptly after the Company discovers that the Make-Whole Acquisition will occur), a written notice shall be sent by or on behalf of the Company, by first-class mail, postage prepaid, to the Holders as they appear in the records of the Company.  Such notice shall contain:

Exhibit V - 12

(i) the date on which the Make-Whole Acquisition is anticipated to be effected, and whether such Make-Whole Acquisition is anticipated to be a Fundamental Change; and

(ii) the date, which shall be 30 days after the anticipated Make-Whole Acquisition Effective Date, by which the Make-Whole Acquisition Conversion option must be exercised.

(d) Second Make-Whole Acquisition Notice.  On the Make-Whole Acquisition Effective Date, another written notice shall be sent by or on behalf of the Company, by first-class mail, postage prepaid, to the Holders as they appear in the records of the Company.  Such notice shall contain:

(i) the date that shall be 30 days after the Make-Whole Acquisition Effective Date;

(ii) the number of Make-Whole Shares and, if such Make-Whole Acquisition is a Fundamental Change, the Base Price;

(iii) the amount of cash, securities and other consideration payable per share of Common Stock and Convertible Preferred Stock; and

(iv) the instructions a Holder must follow to exercise its conversion option in connection with such Make-Whole Acquisition, including pursuant to Section 10, if applicable.

(e) Make-Whole Acquisition Conversion Procedure.  To exercise a Make-Whole Acquisition Conversion option, a Holder must, no later than 5:00 p.m., New York City time, on or before the date by which the Make-Whole Acquisition Conversion option must be exercised as specified in the notice delivered under clause (d) above, comply with the procedures set forth in Section 8(e) and indicate that it is exercising its Make-Whole Acquisition Conversion option.

(f) Unconverted Shares Remain Outstanding.  If a Holder does not elect to exercise the Make-Whole Acquisition Conversion option pursuant to this Section 9, the shares of Convertible Preferred Stock or successor security held by it will remain outstanding (subject to such Holder electing to exercise its Fundamental Change conversion option, if any, in accordance with Section 10).

(g) Delivery Following Make-Whole Acquisition Conversion.  Upon a Make-Whole Acquisition Conversion, the Conversion Agent shall, except as otherwise provided in the instructions provided by the Holder in the written notice provided to the Company or its successor as set forth in Section 8(d) above, deliver to the Holder such cash, securities or other property as are issuable with respect to Make-Whole Shares in the Make-Whole Acquisition.

(h) Partial Make-Whole Acquisition Conversion.  In the event that a Make-Whole Acquisition Conversion is effected with respect to shares of Convertible Preferred Stock or a successor security representing less than all the shares of Convertible Preferred Stock or a successor security held by a Holder, upon such Make-Whole Acquisition Conversion the Company or its successor shall execute and the Conversion Agent shall, unless otherwise instructed in writing, countersign and deliver to such Holder, at the expense of the Company or its successors, a certificate evidencing the shares of Convertible Preferred Stock or such successor security held by the Holder as to which a Make-Whole Acquisition Conversion was not effected.

Exhibit V - 13

Section 10.  Conversion Upon Fundamental Change.

(a) Fundamental Change Conversion.  If the Reference Price in connection with a Make-Whole Acquisition is less than the Conversion Price (a “Fundamental Change”), a Holder may convert each share of Convertible Preferred Stock during the period beginning on the effective date of the Fundamental Change and ending on the date that is 30 days after the effective date of such Fundamental Change at an adjusted Conversion Price equal to the greater of (1) the Reference Price and (2) $18.45, subject to adjustment as described in clause (b) below (the “Base Price”).

(b) Base Price Adjustment.  The Base Price shall be adjusted as of any date the Conversion Rate of the Convertible Preferred Stock is adjusted pursuant to Section 12.  The adjusted Base Price shall equal the Base Price applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Base Price adjustment and the denominator of which is the Conversion Rate as so adjusted.

(c) Cash Alternative.  In lieu of issuing Common Stock upon conversion in the event of a Fundamental Change, the Company may at its option, and if it obtains any necessary regulatory approval, pay an amount in cash (computed to the nearest cent) equal to the Reference Price for each share of Common Stock otherwise issuable upon conversion.

(d) Fundamental Change Conversion Procedure.  To exercise its conversion option upon a Fundamental Change, a Holder must, no later than 5:00 p.m., New York City time, on or before the date by which the conversion option upon the Fundamental Change must be exercised as specified in the notice delivered under Section 9(d) above, comply with the procedures set forth in Section 8(e) and indicate that it is exercising its Fundamental Change conversion option.

(f) Unconverted Shares Remain Outstanding.  If a Holder does not elect to exercise its conversion option upon a Fundamental Change pursuant to this Section 10, the shares of Convertible Preferred Stock or successor security held by it will remain outstanding (subject to such Holder electing to exercise its Make-Whole Acquisition Conversion option, if any, in accordance with Section 9).

(g) Delivery Following Fundamental Change Conversion.  Upon a conversion upon a Fundamental Change, the Conversion Agent shall, except as otherwise provided in the instructions provided by the Holder in the written notice provided to the Company or its successor as set forth in Section 8(d) above, deliver to the Holder such cash, securities or other property as are issuable with respect to the adjusted Conversion Price following the Fundamental Change.

(h) Partial Fundamental Change Conversion.  In the event that a conversion upon a Fundamental Change is effected with respect to shares of Convertible Preferred Stock or a successor security representing less than all the shares of Convertible Preferred Stock or a successor security held by a Holder, upon such conversion the Company or its successor shall execute and the Conversion Agent shall, unless otherwise instructed in writing, countersign and deliver to such Holder, at the expense of the Company, a certificate evidencing the shares of Convertible Preferred Stock or such successor security held by the Holder as to which a conversion upon a Fundamental Change was not effected.

Exhibit V - 14

Section 11.  Conversion at the Option of the Company.

(a) Company Conversion Right.  On or after February 15, 2013, the Company shall have the right, at its option, at any time or from time to time to cause some or all of the Convertible Preferred Stock to be converted into shares of Common Stock at the then-applicable Conversion Rate if, for 20 Trading Days within any period of 30 consecutive Trading Days ending on the Trading Day preceding the date the Company delivers a Notice of Conversion at the Option of the Company, the Closing Price of the Common Stock exceeds 130% of the then-applicable Conversion Price of the Convertible Preferred Stock.

(b) Partial Conversion.  If the Company elects to cause less than all the shares of the Convertible Preferred Stock to be converted under clause (a) above, the Conversion Agent shall select the Convertible Preferred Stock to be converted on a pro rata basis, by lot or in such other manner as the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof determines to be fair and equitable.  If the Conversion Agent selects a portion of a Holder’s Convertible Preferred Stock for partial conversion at the option of the Company and such Holder converts a portion of its shares of Convertible Preferred Stock, the converted portion will be deemed to be from the portion selected for conversion at the option of the Company under this Section 11.

(c) Conversion Procedure.  In order to exercise the conversion right described in this Section 11, the Company shall provide notice of such conversion to each Holder (such notice, a “Notice of Conversion at the Option of the Company”) The Conversion Date shall be a date selected by the Company (the “Conversion at the Option of the Company Date”) and shall be no more than 20 days after the date on which the Company provides such Notice of Conversion at the Option of the Company.  In addition to any information required by applicable law or regulation, the Notice of Conversion at the Option of the Company shall state, as appropriate:

(i) the Conversion at the Option of the Company Date;

(ii) the number of shares of Common Stock to be issued upon conversion of each share of Convertible Preferred Stock and, if fewer than all the shares of a Holder are to be converted, the number of such shares to be converted; and

(iii) the number of shares of Convertible Preferred Stock to be converted.

Section 12.  Anti-Dilution Adjustments.

(a) Adjustments.  The Conversion Rate will be subject to adjustment, without duplication  under the following circumstances:

(i) the issuance of Common Stock as a dividend or distribution to all holders of Common Stock, or a subdivision or combination of Common Stock, in which event the Conversion Rate will be adjusted based on the following formula:

Exhibit V - 15

CR1 = CR0 x (OS1 / OS0)

where,

CR0	=	the Conversion Rate in effect at the close of business on the Record Date
CR1	=	the Conversion Rate in effect immediately after the Record Date
OS0	=	the number of shares of Common Stock outstanding at the close of business on the Record Date prior to giving effect to such event
OS1	=	the number of shares of Common Stock that would be outstanding immediately after, and solely as a result of, such event

Notwithstanding the foregoing, no adjustment will be made for the issuance of Common Stock as a dividend or distribution to all holders of Common Stock that is made in lieu of a quarterly or annual cash dividend or distribution to such holders, to the extent such dividend or distribution does not exceed the applicable Dividend Threshold Amount.  The amount of any such dividend or distribution will equal the number of such shares being issued multiplied by the average of the VWAP of the Common Stock over each of the five consecutive Trading Days prior to the Ex-date for such dividend or distribution.

(ii) the issuance to all holders of Common Stock of certain rights or warrants entitling them for a period expiring 60 days or less from the date of issuance of such rights or warrants to purchase shares of Common Stock (or securities convertible into Common Stock) at less than (or having a conversion price per share less than) the Current Market Price as of the Record Date, in which event each Conversion Rate will be adjusted based on the following formula:

CR1 = CR0 x (OS0 + X) / (OS0 + Y)

where,

CR0	=	the Conversion Rate in effect at the close of business on the Record Date
CR1	=	the Conversion Rate in effect immediately after the Record Date
OS0	=	the number of shares of Common Stock outstanding at the close of business on the Record Date
X	=	the total number of shares of Common Stock issuable pursuant to such rights (or upon conversion of such securities)
Y	=	the aggregate price payable to exercise such rights (or the conversion price for such securities paid upon conversion) divided by the average of the VWAP of the Common Stock over each of the ten consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights.

However, the Conversion Rate will be readjusted to the extent that any such rights or warrants are not exercised prior to their expiration.

Exhibit V - 16

(iii) the dividend or other distribution to all holders of Common Stock of shares of capital stock of the Company (other than common stock) or evidences of its indebtedness or its assets (excluding any dividend, distribution or issuance covered by clauses (i) or (ii) above or (iv) or (v) below) in which event the Conversion Rate will be adjusted based on the following formula:

CR1 = CR0 x SP0 / (SP0-FMV)

where,

CR0	=	the Conversion Rate in effect at the close of business on the Record Date
CR1	=	the Conversion Rate in effect immediately after the Record Date
SP0	=	the Current Market Price as of the Record Date
FMV	=	the fair market value (as determined by the Board of Directors) on the Record Date of the shares of capital stock of the Company, evidences of indebtedness or assets so distributed, expressed as an amount per share of Common Stock

However, if the transaction that gives rise to an adjustment pursuant to this clause (iii) is one pursuant to which the payment of a dividend or other distribution on Common Stock consists of shares of capital stock of the Company of, or similar equity interests in, a subsidiary or other business unit of ours, (i.e., a spin-off) that are, or, when issued, will be, traded on a U.S. securities exchange or quoted on the Nasdaq Capital Market, then the Conversion Rate will instead be adjusted based on the following formula:

CR1 = CR0 x (FMV0 + MP0) / MP0

where,

CR0	=	the Conversion Rate in effect at the close of business on the Record Date
CR1	=	the Conversion Rate in effect immediately after the Record Date
FMV0	=	the average of the VWAP of the capital stock of the Company or similar equity interests distributed to holders of Common Stock applicable to one share of Common Stock over each of the 10 consecutive Trading Days commencing on and including the third Trading Day after the date on which “ex-distribution trading” commences for such dividend or distribution on the NYSE or such other national or regional exchange or market on which Common Stock is then listed or quoted
MP0	=	the average of the VWAP of the Common Stock over each of the 10 consecutive Trading Days commencing on and including the third Trading Day after the date on which “ex-distribution trading” commences for such dividend or distribution on the NYSE or such other national or regional exchange or market on  which Common Stock is then listed or quoted

Exhibit V - 17

(iv) the Company makes a distribution consisting exclusively of cash to all holders of Common Stock, excluding (a) any cash dividend on Common Stock to the extent that the aggregate cash dividend per share of Common Stock does not exceed (i) $0.32 in any fiscal quarter in the case of a quarterly dividend or (ii) $1.28 in the prior twelve months in the case of an annual dividend (each such number, the “Dividend Threshold Amount”), (b) any cash that is distributed as part of a distribution referred to in clause (iii) above, and (c) any consideration payable in connection with a tender or exchange offer made by the Company or any of its subsidiaries referred to in clause (v) below, in which event, the Conversion Rate will be adjusted based on the following formula:

CR1 = CR0 x SP0 / (SP0 -C)

where,

CR0	=	the Conversion Rate in effect at the close of business on the Record Date
CR1	=	the Conversion Rate in effect immediately after the Record Date
SP0	=	the Current Market Price as of the Record Date
C	=	the amount in cash per share the Company distributes to holders in the event of a regular quarterly or annual dividend, less the dividend threshold amount

The dividend threshold amount is subject to adjustment on an inversely proportional basis whenever the Conversion Rate is adjusted, provided that no adjustment will be made to the dividend threshold amount for any adjustment made to the Conversion Rate pursuant to this clause (iv).

(v) the Company or one or more of its subsidiaries make purchases of Common Stock pursuant to a tender offer or exchange offer by the Company or a subsidiary of the Company for Common Stock to the extent that the cash and value of any other consideration included in the payment per share of Common Stock validly tendered or exchanged exceeds the VWAP per share of Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “expiration date”), in which event the Conversion Rate will be adjusted based on the following formula:

CR1 = CR0 x [(FMV + (SP1 x OS1)] / (SP1 x OS0)

where,

CR0	=	the Conversion Rate in effect at the close of business on the expiration date
CR1	=	the Conversion Rate in effect immediately after the expiration date
FMV	=	the fair market value (as determined by the Board of Directors), on the expiration date, of the aggregate value of all cash and any other consideration paid or payable for shares validly tendered or exchanged and not withdrawn as of the expiration date (the “Purchased Shares”)
OS1	=	the number of shares of Common Stock outstanding as of the last

Exhibit V - 18

		time tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Time”) less any Purchased Shares
OS0	=	the number of shares of Common Stock outstanding at the Expiration Time, including any Purchased Shares
SP1	=	the average of the VWAP of the Common Stock over each of the ten consecutive Trading Days commencing with the Trading Day immediately after the expiration date.

(b) Calculation of Adjustments.  All adjustments to the Conversion Rate shall be calculated by the Company to the nearest 1/10,000th of one share of Common Stock (or if there is not a nearest l/10,000th of a share, to the next lower 1/10,000th of a share).  No adjustment to the Conversion Rate will be required unless such adjustment would require an increase or decrease of at least one percent; provided, however, that any such minor adjustments that are not required to be made will be carried forward and taken into account in any subsequent adjustment, and provided further that any such adjustment of less than one percent that has not been made will be made upon (x) the end of each fiscal year of the Company, (y) the date of any notice of redemption of the Convertible Preferred Stock in accordance with the provisions hereof or any notice of a Make-Whole Acquisition and (z) any Conversion Date.

(c) When No Adjustment Required.

(i) Except as otherwise provided in this Section 12, the Conversion Rate will not be adjusted for the issuance of Common Stock or any securities convertible into or exchangeable for Common Stock or carrying the right to purchase any of the foregoing or for the repurchase of Common Stock.

(ii) No adjustment of the Conversion Rate need be made as a result of: (A) the issuance of the rights; (B) the distribution of separate certificates representing the rights; (C) the exercise or redemption of the rights in accordance with any rights agreement; or (D) the termination or invalidation of the rights, in each case, pursuant to the Company’s stockholder rights plan existing on the date of hereof, as amended, modified, or supplemented from time to time, or any newly adopted stockholder rights plans; provided, however, that to the extent that the Company has a stockholder rights plan in effect on a Conversion Date (including the Company’s rights plan, if any, existing on the date hereof), the Holder shall receive, in addition to the shares of Common Stock, the rights under such rights plan, unless, prior to any such Conversion Date, the rights have separated from the Common Stock, in which case the Conversion Rate will be adjusted at the time of separation as if the Company made a distribution to all holders of Common Stock of shares of capital stock of the Company or evidences of its indebtedness or its assets as described in Section 12.01(a)(iii), subject to readjustment in the event of the expiration, termination or redemption of the rights.

(iii) No adjustment to the Conversion Rate need be made:

(A) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in Common Stock under any plan;

Exhibit V - 19

(B) upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of its subsidiaries; or

(C) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security outstanding as of the date the Convertible Preferred Stock was first issued.

(iv) No adjustment to the Conversion Rate need be made for a transaction referred to in Section 12.01 (a)(i), (ii), (iii), (iv) or (v) if Holders may participate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis and notice on which holders of Common Stock participate in the transaction.

(v) No adjustment to the Conversion Rate need be made for a change in the par value or no par value of the Common Stock.

(vi) No adjustment to the Conversion Rate will be made to the extent that such adjustment would result in the Conversion Price being less than the par value of the Common Stock.

(vii) Notwithstanding any other provision herein to the contrary, in the event of an adjustment pursuant to Section 12.01(a)(iv) or (v), in no event will the conversion rate following such adjustment exceed 1,897.4084, subject to adjustment pursuant to Section 12.01 (a)(i), (ii) or (iii).

(d) Record Date.  For purposes of this Section 12, “Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of the Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).

(e) Successive Adjustments.  After an adjustment to the Conversion Rate under this Section 12, any subsequent event requiring an adjustment under this Section 12 shall cause an adjustment to such Conversion Rate as so adjusted.

(f) Multiple Adjustments.  For the avoidance of doubt, if an event occurs that would trigger an adjustment to the Conversion Rate pursuant to this Section 12 under more than one subsection hereof, such event, to the extent fully taken into account in a single adjustment, shall not result in multiple adjustments hereunder.

(g) Other Adjustments.  The Company may, but shall not be required to, make such increases in the Conversion Rate, in addition to those required by this Section, as the Board of Directors considers to be advisable in order to avoid or diminish any income tax to any holders of shares of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such for income tax purposes or for any other reason.

Exhibit V - 20

(h) Notice of Adjustments.  Whenever a Conversion Rate is adjusted as provided under Section 12, the Company shall within 10 Business Days following the occurrence of an event that requires such adjustment (or if the Company is not aware of such occurrence, as soon as reasonably practicable after becoming so aware) or the date the Company makes an adjustment pursuant to Section 12(g):

(i) compute the adjusted applicable Conversion Rate in accordance with Section 12 and prepare and transmit to the Conversion Agent an Officers’ Certificate setting forth the applicable Conversion Rate, as the case may be, the method of calculation thereof in reasonable detail, and the facts requiring such adjustment and upon which such adjustment is based; and

(ii) provide a written notice to the Holders of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the applicable Conversion Rate was determined and setting forth the adjusted applicable Conversion Rate.

(i) Conversion Agent.  The Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist that may require any adjustment of the applicable Conversion Rate or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same.  The Conversion Agent shall be fully authorized and protected in relying on any Officers’ Certificate delivered pursuant to Section 12(h) and any adjustment contained therein and the Conversion Agent shall not be deemed to have knowledge of any adjustment unless and until it has received such certificate.  The Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, that may at the time be issued or delivered with respect to any Convertible Preferred Stock; and the Conversion Agent makes no representation with respect thereto.  The Conversion Agent shall not be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock pursuant to a conversion of Convertible Preferred Stock or to comply with any of the duties, responsibilities or covenants of the Company contained in this Section 12.

(j) Fractional Shares.  No fractional shares of Common Stock will be issued to holders of the Convertible Preferred Stock upon conversion.  In lieu of fractional shares otherwise issuable, holders will be entitled to receive an amount in cash equal to the fraction of a share of Common Stock, calculated on an aggregate basis in respect of the shares of Convertible Preferred Stock being converted, multiplied by the Closing Price of the Common Stock on the Trading Day immediately preceding the applicable Conversion Date.

Section 13.  Adjustment for Reorganization Events.

(a) Reorganization Events.  In the event of:

(1) any consolidation or merger of the Company with or into another person (other than a merger or consolidation in which the Company is the continuing corporation and in which the shares of Common Stock outstanding immediately prior to the merger or consolidation are not exchanged for cash, securities other property of the Company or another corporation);

(2) any sale, transfer, lease or conveyance to another person of all or substantially all the property and assets of the Company; or

Exhibit V - 21

(3) any statutory exchange of securities of the Company with another Person (other than in connection with a merger or acquisition) or any binding share exchange which reclassifies or changes its outstanding Common Stock;

each of which is referred to as a “Reorganization Event,” each share of the Convertible Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of the holders of the Convertible Preferred Stock, become convertible into the kind and amount of securities, cash and other property (the “Exchange Property”) receivable in such Reorganization Event (without any interest thereon, and without any right to dividends or distribution thereon which have a record date that is prior to the applicable Conversion Date) per share of Common Stock by a holder of Common Stock that is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (any such Person, a “Constituent Person”), or an Affiliate of a Constituent Person to the extent such Reorganization Event provides for different treatment of Common Stock held by Affiliates of the Company and non-Affiliates; provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held immediately prior to such Reorganization Event by a Person other than a Constituent Person or an Affiliate thereof, then for the purpose of this Section 13(a), the kind and amount of securities, cash and other property receivable upon such Reorganization Event will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make an election (or of all such holders if none make an election).  On each Conversion Date following a Reorganization Event, the Conversion Rate then in effect will be applied to the value on such Conversion Date of such securities, cash or other property received per share of Common Stock, as determined in accordance with this Section 13.

(b) Exchange Property Election.  In the event that holders of the shares of Common Stock have the opportunity to elect the form of consideration to be received in such transaction, the consideration that the Holders are entitled to receive shall be deemed to be the types and amounts of consideration received by the holders of the shares of Common Stock that affirmatively make an election (or of all such holders if none make an election).  The amount of Exchange Property receivable upon conversion of any Convertible Preferred Stock in accordance with the terms hereof shall be determined based upon the Conversion Rate in effect on such Conversion Date.

(c) Successive Reorganization Events.  The above provisions of this Section 13 shall similarly apply to successive Reorganization Events and the provisions of Section 12 shall apply to any shares of capital stock of the Company (or any successor) received by the holders of the Common Stock in any such Reorganization Event.

(d) Reorganization Event Notice.  The Company (or any successor) shall, within 20 days of the occurrence of any Reorganization Event, provide written notice to the Holders of such occurrence of such event and of the kind and amount of the cash, securities or other property that constitutes the Exchange Property.  Failure to deliver such notice shall not affect the operation of this Section 13.

Exhibit V - 22

Section 14.  Voting Rights.

(a) General.  The Holders shall not be entitled to vote on any matter except as set forth in Section 14(b) below or as required by Delaware law.

(b) Special Voting Right.

(i) Voting Right.  If and whenever dividends on the Convertible Preferred Stock or any other class or series of preferred stock that ranks on parity with Convertible Preferred Stock as to payment of dividends, and upon which voting rights equivalent to those granted by this Section 14(b)(i) have been conferred and are exercisable, have not been paid in an aggregate amount equal, as to any class or series, to at least six quarterly Dividend Periods (whether consecutive or not) (a “Nonpayment”), the number of directors constituting the Board of Directors shall be increased by two, and the Holders (together with holders of any class or series of the Company’s authorized preferred stock having equivalent voting rights), shall have the right, voting separately as a single class without regard to class or series (and with voting rights allocated pro rata based on the liquidation preference of each such class or series), to the exclusion of the holders of Common Stock, to elect two directors of the Company to fill such newly created directorships (and to fill any vacancies in the terms of such directorships), provided that the Holders and the holders of any such other class or series shall not be entitled to elect such directors to the extent such election would cause the Company to violate the corporate governance requirements of the New York Stock Exchange (or other exchange on which the Company’s securities may be listed) that listed companies must have a majority of independent directors, and further provided that the Board of Directors shall at no time include more than two such directors.  Each such director elected by the Holders and any other class or series of preferred stock that ranks on parity with the Convertible Preferred Stock as to payment of dividends and having equivalent voting rights is a “Preferred Stock Director.”

(ii) Election.  The election of the Preferred Stock Directors will take place at any annual meeting of stockholders or any special meeting of the Holders and any other class or series of stock of the Company that ranks on parity with Convertible Preferred Stock as to payment of dividends and having equivalent voting rights and for which dividends have not been paid, called as provided herein.  At any time after the special voting power has vested pursuant to Section 14(b)(i) above, the secretary of the Company may, and upon the written request of the Holders of at least 20% of the Convertible Preferred Stock or the holders of at least 20% of such other series (addressed to the secretary at the Company’s principal office) must (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders, in which event such election shall be held at such next annual or special meeting of stockholders), call a special meeting of the Holders and any other class or series of preferred stock that ranks on parity with Convertible Preferred Stock as to payment of dividends and having equivalent voting rights and for which dividends have not been paid for the election of the two directors to be elected by them as provided in Section 14(b)(iii) below.  The Preferred Stock Directors shall each be entitled to one vote per director on any matter.

(iii) Notice of Special Meeting.  Notice for a special meeting will be given in a similar manner to that provided in the Company’s by-laws for a special meeting of the stockholders.  If the secretary of the Company does not call a special meeting within 20 days after receipt of any such request, then any Holder may (at the expense of the Company) call such meeting, upon notice as provided in this Section 14(b)(iii), and for that purpose will have access to the stock

Exhibit V - 23

register of the Company.  The Preferred Stock Directors elected at any such special meeting will hold office until the next annual meeting of the stockholders of the Company unless they have been previously terminated or removed pursuant to Section 14(b)(iv).  In case any vacancy in the office of a Preferred Stock Director occurs (other than prior to the initial election of the Preferred Stock Directors), the vacancy may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in office, by the vote of the Holders (together with holders of any other class of the Company’s authorized preferred stock having equivalent voting rights, whether or not the holders of such preferred stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of the stockholders.

(iv) Termination; Removal. Whenever the Company has paid full dividends for at least four consecutive quarterly dividend periods following a Nonpayment on the Convertible Preferred Stock and any other class or series of non-cumulative preferred stock ranking on parity with Convertible Preferred Stock as to payment of dividends, if any, and has paid cumulative dividends in full on any class or series of cumulative preferred stock ranking on parity with the Convertible Preferred Stock as to payment of dividends (in each case, upon which equivalent voting rights to those set forth in Section 14(b)(iii) have been conferred and are exercisable), then the right of the Holders to elect the Preferred Stock Directors will cease (but subject always to the same provisions for the vesting of the special voting rights in the case of any similar non-payment of dividends in respect of future Dividend Periods).  The terms of office of the Preferred Stock Directors will immediately terminate, and the number of directors constituting the Board of Directors will be reduced accordingly.  Any Preferred Stock Director may be removed at any time without cause by the Holders of a majority of the outstanding shares of the Convertible Preferred Stock (together with holders of any other class of the Company’s authorized preferred stock having equivalent voting rights, whether or not the holders of such preferred stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described in this Section 14(b).

(c) Senior Issuances; Adverse Changes.  So long as any shares of Convertible Preferred Stock are outstanding, the vote or consent of the Holders of at least two-thirds of the shares of Convertible Preferred Stock at the time outstanding, voting as a class with all other series of preferred stock ranking equally with the Convertible Preferred Stock and entitled to vote thereon, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary for effecting or validating any of the following actions, whether or not such approval is required by Delaware law:

(i) any amendment, alteration or repeal of any provision of the Company’s Certificate of Incorporation (including the certificate of designation creating the Convertible Preferred Stock) or the Company’s by-laws that would alter or change the voting powers, preferences or special rights of the Convertible Preferred Stock so as to affect them adversely;

(ii) any amendment or alteration of the Company’s certificate of incorporation to authorize or create, or increase the authorized amount of, any shares of, or any securities convertible into shares of, any class or series of the Company’s capital stock ranking prior to the Convertible Preferred Stock in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding-up of the Company; or

Exhibit V - 24

(iii) the consummation of a binding share exchange or reclassification involving the Convertible Preferred Stock or a merger or consolidation of the Company with another entity, except that holders of Convertible Preferred Stock will have no right to vote under this provision or otherwise under Delaware law if in each case (i) the Convertible Preferred Stock remains outstanding or, in the case of any such merger or consolidation with respect to which the Company is not the surviving or resulting entity, is converted into or exchanged for preferred securities of the surviving or resulting entity or its ultimate parent, that is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and that is a corporation for U.S. federal income tax purposes (or if such entity is not a corporation, the Company having received an opinion of nationally recognized counsel experienced in such matters to the effect that Holders will be subject to tax for U.S. federal income tax purposes with respect to such new preferred securities after such merger or consolidation in the same amount, at the same time and otherwise in the same manner as would have been the case under the Convertible Preferred Stock prior to such merger or consolidation), and (ii) such Convertible Preferred Stock remaining outstanding or such preferred securities, as the case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Convertible Preferred Stock, taken as a whole;

provided, however, that any increase in the amount of the authorized or issued Convertible Preferred Stock or authorized preferred stock or any securities convertible into preferred stock or the creation and issuance, or an increase in the authorized or issued amount, of other series of preferred stock or any securities convertible into preferred stock ranking equally with and/or junior to the Convertible Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon the Company’s liquidation, dissolution or winding up will not be deemed to adversely affect the voting powers, preferences or special rights of the Convertible Preferred Stock and Holders will have no right to vote on such an increase, creation or issuance.

If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified in this Section 14(c) would adversely affect one or more but not all series of preferred stock of the Company, then only such series of preferred stock as are adversely affected by and entitled to vote on the matter shall vote on the matter together as a single class (in lieu of all other series of preferred stock).

(d) No Vote if Redemption.  No vote or consent of the Holders shall be required pursuant to Section 14(b) or (c) if, at or prior to the time when the act with respect to such vote or consent would otherwise be required shall be effected, the Company shall have redeemed or shall have called for redemption all outstanding shares of Convertible Preferred Stock, with proper notice and sufficient funds having been set aside for such redemption, in each case pursuant to Section 6 above.

Section 15.  Preemption.

The Holders shall not have any rights of preemption.

Exhibit V - 25

Section 16.  Rank.

Notwithstanding anything set forth in the Certificate of Incorporation or this Certificate of Designation to the contrary, the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof, without the vote of the Holders, may authorize and issue additional shares of Junior Stock or Parity Stock.

Section 17.  Repurchase.

Subject to the limitations imposed herein, the Company may purchase and sell Convertible Preferred Stock from time to time to such extent, in such manner, and upon such terms as the Board of Directors, the Preferred Stock Committee or any other duly authorized committee thereof may determine; provided, however, that the Company shall not use any of its funds for any such purchase when there are reasonable grounds to believe that the Company is, or by such purchase would be rendered insolvent; provided, further, however, that in the event that the Company beneficially owns any Convertible Preferred Stock, the Company will procure that voting rights in respect of such Convertible Preferred Stock are not exercised.

Section 18.  Unissued or Reacquired Shares.

Shares of Convertible Preferred Stock not issued or which have been issued and converted, redeemed or otherwise purchased or acquired by the Company shall be restored to the status of authorized but unissued shares of preferred stock without designation as to series.

Section 19.  No Sinking Fund.

Shares of Convertible Preferred Stock are not subject to the operation of a sinking fund.

Section 20.  Reservation of Common Stock.

(a) Sufficient Shares.  The Company shall at all times reserve and keep available out of its authorized and unissued Common Stock or shares acquired by the Company, solely for issuance upon the conversion of shares of Convertible Preferred Stock as provided in this Certificate of Designation, free from any preemptive or other similar rights, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Convertible Preferred Stock then outstanding, assuming that the Conversion Price equaled the Base Price.  For purposes of this Section 20(a), the number of shares of Common Stock that shall be deliverable upon the conversion of all outstanding shares of Convertible Preferred Stock shall be computed as if at the time of computation all such outstanding shares were held by a single Holder.

(b) Use of Acquired Shares.  Notwithstanding the foregoing, the Company shall be entitled to deliver upon conversion of shares of Convertible Preferred Stock, as herein provided, shares of Common Stock acquired by the Company (in lieu of the issuance of authorized and unissued shares of Common Stock), so long as any such acquired shares are free and clear of all liens, charges, security interests or encumbrances (other than liens, charges, security interests and other encumbrances created by the Holders).

Exhibit V - 26

(c) Free and Clear Delivery.  All shares of Common Stock delivered upon conversion of the Convertible Preferred Stock shall be duly authorized, validly issued, fully paid and non-assessable, free and clear of all liens, claims, security interests and other encumbrances (other than liens, charges, security interests and other encumbrances created by the Holders).

(d) Compliance with Law.  Prior to the delivery of any securities that the Company shall be obligated to deliver upon conversion of the Convertible Preferred Stock, the Company shall use its reasonable best efforts to comply with all federal and state laws and regulations thereunder requiring the registration of such securities with, or any approval of or consent to the delivery thereof by, any governmental authority.

(e) Listing.  The Company hereby covenants and agrees that, if at any time the Common Stock shall be listed on the New York Stock Exchange or any other national securities exchange or automated quotation system, the Company will, if permitted by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all the Common Stock issuable upon conversion of the Convertible Preferred Stock; provided, however, that if the rules of such exchange or automated quotation system require the Company to defer the listing of such Common Stock until the first conversion of Convertible Preferred Stock into Common Stock in accordance with the provisions hereof,  the Company covenants to list such Common Stock issuable upon conversion of the Convertible Preferred Stock in accordance with the requirements of such exchange or automated quotation system at such time.

Section 21.  Transfer Agent, Conversion Agent, Registrar and Paying Agent.

The duly appointed Transfer Agent, Conversion Agent, Registrar and paying agent for the Convertible Preferred Stock shall be The Bank of New York Mellon.  The Company may, in its sole discretion, remove the Transfer Agent in accordance with the agreement between the Company and the Transfer Agent; provided that the Company shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal.  Upon any such removal or appointment, the Company shall send notice thereof by first-class mail, postage prepaid, to the Holders.

Section 22.  Replacement Certificates.

(a) Mutilated, Destroyed, Stolen and Lost Certificates.  If physical certificates are issued, the Company shall replace any mutilated certificate at the Holder’s expense upon surrender of that certificate to the Transfer Agent.  The Company shall replace certificates that become destroyed, stolen or lost at the Holder’s expense upon delivery to the Company and the Transfer Agent of satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Transfer Agent and the Company.

(b) Certificates Following Conversion.  If physical certificates are issued, the Company shall not be required to issue any certificates representing the Convertible Preferred Stock on or after the applicable Conversion Date.  In place of the delivery of a replacement certificate following the applicable Conversion Date, the Transfer Agent, upon delivery of the evidence and indemnity described in clause (a) above, shall deliver the shares of Common Stock pursuant to the terms of the Convertible Preferred Stock formerly evidenced by the certificate.

Exhibit V - 27

Section 23.  Form.

(a) Global Preferred Stock.  Convertible Preferred Stock may be issued in the form of one or more permanent global shares of Convertible Preferred Stock in definitive, fully registered form with a global legend in substantially the form attached hereto as Exhibit A (each, a “Global Preferred Stock”), which is hereby incorporated in and expressly made a part of this Certificate of Designation.  The Global Preferred Stock may have notations, legends or endorsements required by law, stock exchange rules, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  The aggregate number of shares represented by each Global Preferred Stock may from time to time be increased or decreased by adjustments made on the records of the Registrar and the Depositary or its nominee as hereinafter provided.  This Section 23(a) shall apply only to a Global Preferred Stock deposited with or on behalf of the Depositary.

(b) Delivery to Depositary.  If Global Preferred Stock is issued, the Company shall execute and the Registrar shall, in accordance with this Section, countersign and deliver initially one or more Global Preferred Stock that (i) shall be registered in the name of Cede & Co. or other nominee of the Depositary and (ii) shall be delivered by the Registrar to the Depositary or pursuant to instructions received from the Depositary or held by the Registrar as custodian for the Depositary pursuant to an agreement between the Depositary and the Registrar.

(c) Agent Members.  If Global Preferred Stock is issued, members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Certificate of Designation with respect to any Global Preferred Stock held on their behalf by the Depositary or by the Registrar as the custodian of the Depositary or under such Global Preferred Stock, and the Depositary may be treated by the Company, the Registrar and any agent of the Company or the Registrar as the absolute owner of such Global Preferred Stock for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Registrar or any agent of the Company or the Registrar from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of the Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Preferred Stock.  If Global Preferred Stock is issued, the Depositary may grant proxies or otherwise authorize any Person to take any action that a Holder is entitled to take pursuant to the Convertible Preferred Stock, this Certificate of Designation or the Certificate of Incorporation.

(d) Physical Certificates.  Owners of beneficial interests in any Global Preferred Stock shall not be entitled to receive physical delivery of certificated shares of Convertible Preferred Stock, unless (x) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for the Global Preferred Stock and the Company does not appoint a qualified replacement for the Depositary within 90 days, (y) the Depositary ceases to be a “clearing agency” registered under the Exchange Act and the Company does not appoint a qualified replacement for the Depositary within 90 days or (z) the Company decides to discontinue the use of book-entry transfer through the Depositary.  In any such case, the Global Preferred Stock shall be exchanged in whole for definitive shares of Convertible Preferred Stock in registered form, with the same terms and of an equal aggregate Liquidation Preference.  Such definitive shares of Convertible Preferred Stock shall be registered in the name or names of the Person or Persons specified by the Depositary in a written instrument to the Registrar.

(e) Signature.  An Officer shall sign any Global Preferred Stock for the Company, in accordance with the Company’s by-laws and applicable law, by manual or facsimile signature.  If an Officer whose signature is on a Global Preferred Stock no longer holds that office at the time the Transfer Agent

Exhibit V - 28

countersigned the Global Preferred Stock, the Global Preferred Stock shall be valid nevertheless.  A Global Preferred Stock shall not be valid until an authorized signatory of the Transfer Agent manually countersigns Global Preferred Stock.  Each Global Preferred Stock shall be dated the date of its countersignature.

Section 24.  Taxes.

(a) Transfer Taxes.  The Company shall pay any and all stock transfer, documentary, stamp and similar taxes that may be payable in respect of any issuance or delivery of shares of Convertible Preferred Stock or shares of Common Stock or other securities issued on account of Convertible Preferred Stock pursuant hereto or certificates representing such shares or securities.  The Company shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Convertible Preferred Stock, shares of Common Stock or other securities in a name other than that in which the shares of Convertible Preferred Stock with respect to which such shares or other securities are issued or delivered were registered, or in respect of any payment to any Person other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment unless and until the Person otherwise entitled to such issuance, delivery or payment has paid to the Company the amount of any such tax or has established, to the satisfaction of the Company, that such tax has been paid or is not payable.

(b) Withholding.  All payments and distributions (or deemed distributions) on the shares of Convertible Preferred Stock (and on the shares of Common Stock received upon their conversion) shall be subject to withholding and backup withholding of tax to the extent required by law, subject to applicable exemptions, and amounts withheld, if any, shall be treated as received by Holders.

Section 25.  Notices.

All notices referred to herein shall be in writing, and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three Business Days after the mailing thereof if sent by registered or certified mail (unless first class mail shall be specifically permitted for such notice under the terms of this Certificate of Designation) with postage prepaid, addressed: (i) if to the Company, to its office at 399 Park Avenue, New York, New York 10043 (Attention: Corporate Secretary) or to the Transfer Agent at its office at 101 Barclay Street, New York, NY 10286 (Attention: Corporate Trust Office), or other agent of the Company designated as permitted by this Certificate of Designation, or (ii) if to any Holder, to such Holder at the address of such Holder as listed in the stock record books of the Company (which may include the records of the Transfer Agent) or (iii) to such other address as the Company or any such Holder, as the case may be, shall have designated by notice similarly given.

Exhibit V - 29

Exhibit A

FORM OF

6.5% NON-CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES T

FACE OF SECURITY

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT.  BY ITS ACQUISITION HEREOF, THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE DATE THAT IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH CITIGROUP INC.  (THE “COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS SHARES OF THE CONVERTIBLE PREFERRED STOCK ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRANSFER AGENT’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

[IF GLOBAL PREFERRED STOCK IS ISSUED: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF DESIGNATION REFERRED TO BELOW.]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND TRANSFER AGENT MAY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

Exhibit V - 30

Certificate Number Number of Shares of Convertible Preferred Stock      

CUSIP NO.:

CITIGROUP INC.

6.5% Non-Cumulative Convertible Preferred Stock, Series T

(par value $1.00 per share)

(liquidation preference $50,000 per share)

Citigroup Inc., a Delaware corporation (the “Company”), hereby certifies that [   ] (the “Holder”) is the registered owner of [      ](1) [          , or such number as is indicated in the records of the Registrar and the Depository,](2)  fully paid and non-assessable shares of the Company’s designated 6.5% Non-Cumulative Convertible Preferred Stock, Series T, with a par value of $1.00 per share and a liquidation preference of $50,000 per share (the “Convertible Preferred Stock”).  The shares of Convertible Preferred Stock are transferable on the books and records of the Registrar, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer.  The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Convertible Preferred Stock represented hereby are and shall in all respects be subject to the provisions of the Certificate of Designation dated January 18, 2008 as the same may be amended from time to time (the “Certificate of Designation”).  Capitalized terms used herein but not defined shall have the meaning given them in the certificate of Designation.  The Company will provide a copy of the Certificate of Designation to a Holder without charge upon written request to the Company at its principal place of business.

Reference is hereby made to select provisions of the Convertible Preferred Stock set forth on the reverse hereof, and to the Certificate of Designation, which select provisions and the Certificate of Designation shall for all purposes have the same effect as if set forth at this place.

Upon receipt of this certificate, the Holder is bound by the Certificate of Designation and is entitled to the benefits thereunder.

Unless the Registrar has properly countersigned, these shares of Convertible Preferred Stock shall not be entitled to any benefit under the Certificate of Designation or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, this certificate has been executed on behalf of the Company by its [Title] this              day of                                ,                     .

CITIGROUP INC.

By:

Name:

Title:

(1)This phrase should be included only if the share certificate evidences certificated shares of Convertible Preferred Stock.

(2)This phrase should be included only if the share certificate evidences Global Preferred Stock.

Exhibit V - 31

REGISTRAR’S COUNTERSIGNATURE

These are shares of Convertible Preferred Stock referred to in the within-mentioned Certificate of Designation.

Dated:

THE BANK OF NEW YORK MELLON, as Registrar

By:

Name:

Title:

Exhibit V - 32

REVERSE OF CERTIFICATE

Dividends on each share of Convertible Preferred Stock shall be payable at the rate provided in the Certificate of Designation.

The shares of Convertible Preferred Stock shall be convertible in the manner and accordance with the terms set forth in the Certificate of Designation.

The shares of Convertible Preferred Stock shall be redeemable at the option of the Company in the manner and in accordance with the terms set forth in the Certificate of Designation.

The Company shall furnish without charge to each holder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class or series of share capital issued by the Company and the qualifications, limitations or restrictions of such preferences and/or rights.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of Convertible Preferred Stock evidenced hereby to:

(Insert assignee’s social security or taxpayer identification number, if any)

(Insert address and zip code of assignee)

and irrevocably appoints:

as agent to transfer the shares of Convertible Preferred Stock evidenced hereby on the books of the Transfer Agent.  The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Certificate)

Signature Guarantee:

(Signature must be guaranteed by an “eligible guarantor institution” that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Transfer Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Transfer Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)

Exhibit V - 33

EX-10.01

Exhibit 10.01

FORM OF CITIGROUP EQUITY OR DEFERRED CASH AWARD AGREEMENT (EFFECTIVE 11/01/09)

Citigroup Inc.

[Equity][Deferred Cash] Award Agreement

1.Award Agreement.  Citigroup Inc. (“Citigroup”) hereby grants to {NAME} (the “Participant”), the award(s) summarized below, pursuant to the terms of the [EQUITY/DEFERRED CASH AWARD PROGRAM NAME] (the “Program”).  The terms, conditions and restrictions of your award are contained in this Equity/Deferred Cash Award Agreement, including the attached Appendix (together, the “Agreement”), and are summarized, along with additional information, in the [EQUITY/Deferred Cash AWARD PROGRAM NAME] [prospectus/brochure] dated [MONTH] [DAY], [YEAR], and any applicable [prospectus] supplements (together, a “[Prospectus/Brochure]”).  Your award is also governed by the Citigroup [2009 Stock Incentive Plan, as it may be amended from time to time][DEFERRED CASH PLAN] (the “Plan”) [IF APPLICABLE: , and the Letter Agreement (as defined in the Appendix)].  For the award to be effective, you must [accept][sign] below[ and return this page of the Agreement], acknowledging that you have received and read the [Prospectus/Brochure] and this Agreement, including the Appendix.

2. [EQUITY][DEFERRED CASH] AWARD PROGRAM NAME] Award Summary*

[{Restricted/Deferred} Stock] [Deferred Cash] Award Summary
Award Date:	{AWARD DATE}
Number of Shares [Award Amount(1)]	{# SHARES} [{US$ or local currency value}]
[Interest Rate or Notional Return	{RATE, INVESTMENT VEHICLE OR MARKET INDEX}](2)
Vesting Dates (     % each vesting date):(3)	{VEST DATE 1}(4)
	{VEST DATE 2}
	{VEST DATE 3}
	{VEST DATE 4}
[Stock Option Grant Summary
Grant Date:	{GRANT DATE}
Grant Price:	{$ Grant Price per share}(5)
Number of Shares:	{#OPTION SHARES}
Vesting Dates (    % each vesting date):(6)	{VEST DATE 1}(7)
	{VEST DATE 2}
	{VEST DATE 3}
	{VEST DATE 4}
Option Expiration Date:	{EXPIRATION DATE}(8)]

3. Acceptance and Agreement by Participant. I hereby accept the award described above, and agree to be bound by the terms, conditions, and restrictions of such award as set forth in this Agreement, including the Appendix, and in the [Prospectus/Brochure] (acknowledging hereby that I have read and that I understand such documents), the Plan and Citigroup’s policies, as in effect from time to time, relating to the administration of the Program and the Plan.  I understand that vesting is conditioned upon continuous employment with the Company, and that an Award may be cancelled if there is a break in or termination of my employment with the Company.

CITIGROUP INC.		PARTICIPANT’S [SIGNATURE][ACCEPTANCE]:
By:
	[Name]	Name:
	[Title]	GEID:

*The terms, conditions and restrictions applicable to your award, including what happens in the event of a termination or suspension of your employment, and including restrictions or a potential waiver of your rights that may apply pursuant to provisions of the Emergency Economic Stabilization Act of 2008, are contained in this Agreement, which includes the Appendix hereto, and are also summarized in the [Prospectus/Brochure].

(1) Initial deferral amount.

(2) Basis for notional return (may be subject to election) to be added to (or subtracted from) initial deferral amount.

(3) Generally, no more rapidly than 25% each vesting date.

(4) Generally, at least one year after award date.  Awards of long-term restricted stock to “covered employees”—i.e., “senior executive officers” and “most highly compensated employees” (as defined in the Emergency Economic Stabilization Act of 2008, as amended, and the regulations promulgated thereunder (“EESA”))—will vest on a schedule determined by the Office of the Special Master for TARP Executive Compensation (the “Special Master”); vested shares from such awards are subject to a restriction on sale or other transfer.

(5) No less than prior day NYSE closing price (or no less than the NYSE closing price on the grant date for participants who are subject to the reporting requirements of Section 16(a) of the Securities and Exchange Act of 1934, as amended).

(6) Generally, no more rapidly than 25% each vesting date.

(7) Generally, at least one year after award date.

(8) Generally, no later than sixth anniversary of grant date.

CITIGROUP INC.

[EQUITY/DEFERRED CASH] AWARD AGREEMENT

APPENDIX

This Appendix constitutes part of the [Equity/Deferred Cash] Award Agreement (the “Agreement”) and is applicable to the [EQUITY/DEFERRED CASH AWARD PROGRAM NAME] award(s) summarized on the first page of this Agreement.This Appendix is part of the Agreement and sets forth the terms and conditions and other information applicable to the [restricted or deferred stock award, and/or non-qualified stock option grant (an “Option”)][deferred cash award (the “Award”)], made to Participant under the Program, as described in the Award Summary on page 1.  [FOR EQUITY AWARDS ONLY: Restricted or deferred stock awards and Option grants are hereinafter referred to as “Awards”.  All Awards are denominated in shares of Citigroup common stock, par value $.01 per share (referred to herein as “shares” or “Citigroup stock”).]  The “Company”, for purposes of this Agreement, shall mean Citigroup and its subsidiaries that participate in the Program, except where provided otherwise herein.

1. Terms and Conditions.  The terms, conditions, and restrictions of the Award are set forth below [IF APPLICABLE: , subject to the letter agreement between the Company and Participant dated [MONTH] [DAY], [YEAR] (the “Letter Agreement”)].  Certain of these provisions [IF APPLICABLE: , except as they are deemed modified by the terms of the Letter Agreement], along with other important information, are summarized in the [EQUITY/DEFERRED CASH PROGRAM NAME] [prospectus/brochure] dated [MONTH] [DAY], [YEAR], and any applicable [prospectus] supplement (together, the “[Prospectus/Brochure]”).  The terms, conditions, and restrictions of the Award include, but are not limited to, provisions relating to amendment, vesting, and cancellation of Awards, restrictions on the transfer of Awards, [sale restrictions on shares acquired upon the exercise of an Option], and additional restrictions or a potential waiver of Participant’s rights to an Award, if required by the applicable provisions of the Emergency Economic Stabilization Act of 2008, which will regulate Citigroup’s policies and practices with respect to corporate governance and executive compensation, as further described below.

By accepting an Award, Participant acknowledges that he or she has read and understands the [Prospectus/Brochure] and the terms and conditions set forth in this Appendix.  Participant understands that this Award and all other incentive awards are entirely discretionary and that no right to receive the Award, or any incentive award, exists absent a prior written agreement to the contrary.

[Participant understands that the value that may be realized from an Award, if any, is contingent and depends on the future market price of Citigroup stock, among other factors, and that because equity awards are discretionary, and intended to promote employee retention and stock ownership and to align employees’ interests with those of stockholders, equity awards are subject to vesting conditions and will be canceled if vesting conditions are not satisfied.]

Any monetary value assigned to an Award in any communication regarding the Award is contingent, hypothetical, and for illustrative purposes only and does not express or imply any promise or intent by the Company to deliver, directly or indirectly, any certain [or determinable] cash value to Participant.  Receipt of an Award covered by this Agreement, or any other incentive award, is neither an indication nor a guarantee that an incentive award of any type or amount will be made in the future, and absent a written agreement to the contrary, the Company is free to change its practices and policies regarding incentive awards at any time in its sole discretion.

Any actual, anticipated, or estimated financial benefit to Participant from an Award is not and shall not be deemed to be a normal or an integral part of Participant’s regular or expected salary or compensation from employment for any purposes, including, but not limited to, calculating any statutory, common law or other employment-related payment to Participant, including any severance, resignation, termination, redundancy, end-of-service , bonus, long-service awards, pension, superannuation or retirement or welfare or similar payments, benefits or entitlements, and in no event should be considered as compensation for, or relating in any way to, past services for the Company.

2. Vesting.  If conditions to vesting are satisfied, [the initial deferral amount, as adjusted to reflect interest accrued/notional gain (or loss) to the vesting date][shares underlying an Award of [restricted][deferred] stock will vest and become distributable to Participant on the vesting date(s) set forth in the [Restricted

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Stock][DeferredStock][Deferred Cash] Award Summary, or on other specified dates as provided for upon the occurrence of events described in Section 6 of this Agreement]; [Option shares shall vest and become exercisable in the installment amounts (subject to rounding, in Citigroup’s discretion) on the vesting dates set forth in the Stock Option Grant Summary, or on other specified dates as provided for upon the occurrence of events described in Section 6 of this Agreement].  Vesting in each case is subject to receipt of the information necessary to make required tax payments and confirmation by Citigroup that all conditions to vesting have been satisfied.

Vesting is conditioned on Participant’s continuous employment with the Company up to and including the scheduled vesting date, unless otherwise provided below.

[3. Exercise of Option.  Vested Option shares may be exercised in whole or in part by Participant upon notice to the Company, together with provision for payment of the grant price (set forth in the Stock Option Grant Summary) and applicable withholding taxes.  Such notice shall be given in the manner prescribed by Citigroup and shall specify the date and method of exercise and the number of Option shares that are being exercised. The currently available option exercise methods, which are subject to change at any time, are described in the Prospectus.  All stock option exercises will be processed in accordance with the Citigroup Equity Compensation administrative procedures and deadlines then in effect.  If Participant uses a broker-assisted exercise method that may be available from time to time, Participant acknowledges and agrees that option proceeds from any broker-assisted exercises will be net of applicable commissions and fees associated with these transactions.  The applicable commissions and fees will be disclosed to Participant at or prior to the time of exercise or will be available to Participant upon request.  The laws of the country in which Participant is working at the time of grant, vesting, and/or exercise of the Option (including any rules or regulations governing securities, foreign exchange, tax or labor matters), and Citigroup accounting or other policies, whether dictated by such country’s political or regulatory climate or otherwise, may restrict or prohibit any one or more of the stock option exercise methods described in the Prospectus; such restrictions may apply differently if Participant is a resident or expatriate employee, and are subject to change at any time.  If the last day on which an Option may be exercised pursuant to any provision of this Agreement is not a trading day on the New York Stock Exchange, then the immediately preceding New York Stock Exchange trading day shall be the last day on which an Option may be exercised.  An Option may not be exercised after the Option Expiration Date set forth in the Stock Option Grant Summary (the “Option expiration date”).  The Company is not obligated to notify a Participant that an Option is nearing expiration.]

[IF APPLICABLE: 4. Sale Restriction on Option Shares.  Except in the case of Participant’s termination of employment pursuant to Section [6][(b) and (e)] [(b), (e), (j), (k) or (l)], Participant acknowledges that shares acquired upon an Option exercise during the term of Participant’s employment may not be sold or otherwise transferred until two years from the date of exercise.]

[5. Fractional Shares.  Participant acknowledges that only whole shares of Citigroup stock may be delivered [upon the exercise of an Option for shares and] upon the vesting of a restricted or deferred stock award, and that while Citigroup will endeavor to compensate Participant in cash for any fractional shares Participant would otherwise be entitled to receive pursuant to the terms of an Award, due to foreign exchange controls that may be in effect from time to time in certain countries, there is no guarantee that such payments can be made to Participants residing outside of the United States, and the Company shall not be liable if for such reason payment is not made to a Participant.]

6. Termination and Interruption of Employment.  Participation in the Program, including but not limited to Participant’s right to vest in an Award [or exercise an Option], is conditioned upon Participant’s continuous employment with the Company, except as otherwise provided below.

For all purposes related to an Award, Participant’s employment shall be deemed terminated on the date of [FOR AWARDS SUBJECT TO SECTION 409A: Participant’s “separation from service” from Citigroup,][FOR AWARDS NOT SUBJECT TO SECTION 409A, THE FOLLOWING MAY BE USED: Participant’s termination of employment by Citigroup,] [except where specifically provided otherwise in this Agreement,][.  Whether a “separation from service” has occurred will be determined in accordance with the definition of such term in Treas. Reg. § 1.409A-1(h), which, unless provided otherwise by such definition (or elsewhere in this Agreement in a manner that

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does not conflict with such definition) shall be as of Participant’s last day of active service with the Company,] regardless of any entitlement to notice, payment in lieu of notice, severance pay, termination pay, pension payment, or the equivalent that may be provided by any other plan, contract, or law.

If Participant’s continuous employment with the Company terminates or is interrupted for any reason stated below, Participant’s rights with respect to the Award will be affected as described below.  [FOR AWARDS SUBJECT TO SECTION 409A: With respect to any provision herein that provides for the distribution of a deferred [stock][cash] award upon the termination of Participant’s employment, such distribution may be delayed for a period of six months, if Citigroup determines that Participant is a “specified employee” within the meaning of Treas. Reg. § 1.409A-1(i)(1) (generally, one who is among the Company’s top 50 most highly compensated employees).  Interest will not accrue during the period of any such delay and there will not be any compensation for loss in market value that occurs during such time or otherwise.] [INCLUDE SUB-SECTIONS (a) — (q) AS APPLICABLE](9)

(a) Voluntary Resignation.  If Participant voluntarily terminates his or her employment with the Company, vesting of [restricted stock awards, deferred stock awards and Option shares][deferred cash awards] will cease[, as will the right to exercise any vested Option shares,] on the date Participant’s employment is so terminated[; all unvested shares and unexercised Option shares subject to the Award will be canceled] and Participant shall have no further rights of any kind with respect to the Award.  [Different treatment may apply to Option shares if Participant is subject to a garden leave or other notice policy.]

(b) Disability.

[(i) A restricted stock award will continue to vest during a Participant’s approved disability leave pursuant to a Company disability policy.  If Participant’s approved disability leave results in a termination of employment, any unvested portion of the Award will vest immediately and shares of Citigroup stock will be delivered to Participant following such termination.]

[(ii) A deferred [stock][cash] award will continue to vest during a Participant’s approved disability leave pursuant to a Company disability policy.  If Participant’s approved disability leave results in a [“separation from service,”][termination of employment,] any unvested portion of the Award will vest immediately and be [distributable][distributed] to Participant [on the 90th day following the “separation from service”][as soon as practicable after the termination] date.  [The provisions of this Section 6(b)(ii) shall not apply if prior to the commencement or during the period of any disability leave referred to above, Participant meets the conditions of Section 6(j), (k) or (l) below, in which case the Award will be administered in accordance with the applicable provisions of those Sections of this Agreement.]

[(iii) Notwithstanding the foregoing, if a Participant with a deferred [stock][cash] award provides proof satisfactory to the Company that Participant has been determined by the United States Social Security Administration to be totally disabled, any unvested portion of a deferred [stock][cash] award will vest and be distributed to Participant immediately.]

[(iv) An Option will continue to vest on schedule and may be exercised during a Participant’s approved disability leave (but not later than the Option expiration date).  If Participant’s approved disability leave results in a termination of employment, any unvested Option shares will vest immediately, and the Option may be exercised [until the Option expiration date][for up to [XX DAYS/MONTHS/YEARS] thereafter (but not later than the Option expiration date)][IF APPLICABLE:; the two year sale restriction imposed on Option shares will cease to apply and will not be imposed on any shares that may be acquired from a future exercise of the Option].]

(9) The terms and conditions of awards of long-term restricted stock to covered employees will be as prescribed by the Special Master, and may include, to the extent permitted by EESA or as modified to comply with EESA as determined by the Special Master, all or some of the provisions in sub-paragraphs (a) – (q) below.

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[(v) Notwithstanding the foregoing, if before the end of a period of approved disability leave (or determination of total disability by the United States Social Security Administration) Participant’s employment is terminated for any of the reasons described in Sections 6(a), (e), (f), (h) or (i), such applicable provisions shall apply instead of the provisions of this Section 6(b).]

(c) Approved Personal Leave of Absence (Non-Statutory Leave).

(i) A [restricted or deferred stock award][deferred cash award] will continue to vest on schedule during the first six months of Participant’s personal leave of absence, provided that Participant’s leave of absence was approved by management of Participant’s business unit in accordance with the leave of absence policies applicable to Participant (an “approved personal leave of absence”).  Any unvested [restricted or deferred stock][deferred cash award] will be canceled as soon as the approved personal leave of absence has exceeded six months.

[(ii) An Option will continue to vest on schedule during the first six months of an approved personal leave of absence.  Vested Option shares may be exercised during the first six months of an approved personal leave of absence (but not later than the Option expiration date).  All [unvested][unexercised] Option shares will be canceled as soon as the approved personal leave of absence has exceeded six months.]

(iii) If Participant terminates employment for any reason during the first six months of an approved personal leave of absence[, or if on or prior to such time Participant satisfies the conditions of Section 6(j), (k) or (l)], then such applicable provisions of this Section 6 will apply.  [For purposes of Section 6(j), (k) and (l), Participant’s employment will be deemed to have terminated as of the date that an approved personal leave of absence exceeds six months.]

(d) Statutory Leave of Absence.  The Award will continue to vest [and Participant may continue to exercise vested Option shares (but not later than the Option expiration date)] during a leave of absence that is approved by management of Participant’s business unit, is provided by applicable law and taken in accordance with such law and applicable Company policy (a “statutory leave of absence”).  If a statutory leave of absence is followed without interruption by an approved personal leave of absence, any unvested [restricted or deferred stock [and [unvested][unexercised] Option shares]][deferred cash award] will be canceled as of the date that the combined leaves, if continuous, have exceeded six months.  If Participant terminates employment for any reason during an approved statutory leave of absence[, or if on or prior to such time Participant satisfies the conditions of Section 6(j), (k), or (l)], then such applicable provisions of this Section 6 will apply.  [For purposes of Section 6(j), (k) and (l), if a statutory leave of absence is followed without interruption by an approved personal leave of absence, Participant’s employment will be deemed to have terminated as of the date that the combined leaves exceed six months.]

(e) Death.  If Participant’s employment terminates by reason of Participant’s death, (i) any unvested [restricted or deferred stock][deferred cash award] will vest and be distributed to Participant’s estate[; (ii) any unvested Option shares will vest and vested Option shares may be exercised by Participant’s estate [until the Option expiration date][for up to [XX DAYS/MONTHS/YEARS] from the date of Participant’s death (but not later than the Option expiration date)] [IF APPLICABLE: and (iii) the two-year sale restriction imposed on Option shares will cease to apply and will not be imposed on any shares that may be acquired by Participant’s estate in a future exercise of the Option].

(f) Involuntary Termination for Gross Misconduct.  Notwithstanding any provisions of this Agreement to the contrary, if the Company terminates Participant’s employment because of Participant’s “gross misconduct” (as defined below), vesting of the Award[, and the right to exercise vested Option shares,] will cease on the date Participant’s employment is so terminated; all unvested [restricted or deferred stock][deferred cash awards][and all unexercised Option shares] will be canceled as of the termination date of Participant’s employment and Participant shall have no further rights of any kind with respect to the Award.  For purposes of this Agreement, “gross misconduct” means any conduct that (i) is in competition with the Company’s business operations, (ii) that breaches any obligation that Participant

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owes to the Company or Participant’s duty of loyalty to the Company, (iii) is materially injurious to the Company, monetarily or otherwise, or (iv) is otherwise determined by the Personnel and Compensation Committee of the Citigroup Board of Directors (the “Committee), in its sole discretion, to constitute gross misconduct.  For purposes of this Section 6(f), “Company” shall mean Citigroup and any of its subsidiaries.

(g) Transfer to Non-Participating Subsidiary.

(i) If Participant transfers to a subsidiary that is a member of the “controlled group” of Citigroup (as defined below), the Award will continue to vest on schedule [and vested Option shares may continue to be exercised (but not later than the Option expiration date)].

(ii) If Participant transfers to a subsidiary that is not a member of the “controlled group” of Citigroup (as defined below), the provisions of Section 6(h) will apply to the Award.

For purposes of this Agreement, “controlled group” has the meaning set forth in Treas. Reg. § 1.409A-1(h)(3).

(h) Involuntary Termination Other than for Gross Misconduct. Except as provided in Section 6(n) below, if Participant’s employment is terminated by the Company for any reason other than gross misconduct [and Participant has not met the conditions specified in Section 6(j), (k) or (l)], (i) any unvested [restricted or deferred stock][deferred cash award] will vest and be distributed to Participant [on the 90th day following the “separation from service” date][as soon as practicable after the termination date] [;and (ii) vesting of an Option will cease and any vested Option shares may continue to be exercised [until the expiration date][for up to [XX DAYS/MONTHS/YEARS] after Participant’s [“separation from service”][termination] date (but not later than the Option expiration date)].

(i) Voluntary Resignation to Pursue Alternative Career.  If [Participant has not met the conditions of Section 6(j), (k) or (l), and], with the prior written approval of the Senior Human Resources Officer for Participant’s business, in his or her sole discretion, Participant voluntarily resigns from his or her employment with the Company to work in a full-time career in either government service, for a bona fide charitable institution, or as a teacher at a bona fide educational institution, and/or otherwise satisfies the alternative or additional requirements that may be imposed by then applicable guidelines adopted for the purposes of administering this provision, (i) any unvested [restricted stock] [deferred stock][deferred cash award] will vest and be [distributable][distributed] to Participant [as soon as practicable after the termination date][on the 90th day following the “separation from service” date][;and (ii) vesting of an Option will cease and [vested options may continue to be exercised for up to [XX DAYS/MONTHS/YEARS] after Participant’s [“separation from service”][termination] date (but not later than the Option expiration date), provided that Participant is not, at any time up to and including any exercise date, employed by a “significant competitor” of the Company (as defined in Section 6(p) below)][all unexercised Option shares will be canceled as of Participant’s [“separation from service”[termination] date and Participant shall have no further rights of any kind with respect to the Option].

(j) Satisfying the “Rule of 75.”  If Participant has completed a number of full years of service with the Company that, when added to his or her age, equals at least 75, (i) any unvested [restricted or deferred stock][deferred cash award] will continue to vest on schedule, provided that Participant is not, at any time up to and including any vesting date, employed by a “significant competitor” of the Company (as defined in Section 6(p) below)[; and (ii) an Option will continue to vest on schedule and may be exercised (but not later than the Option expiration date) while Participant is employed by the Company; unvested Option shares will vest on Participant’s [“separation from service”][termination] date if employment with the Company is terminated for any reason other than gross misconduct and may be exercised [until the Option expiration date][for up to [XX DAYS/MONTHS/YEARS] after Participant’s [“separation from service”][termination] date (but not later than the Option expiration date)][, provided that Participant is not, at any time up to and including any exercise date, employed by a “significant competitor” of the Company (as defined in Section 6(p) below)].

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(k) Satisfying the “Rule of 60.”  If Participant [does not satisfy the conditions of Section 6(j) above, but] (i) is at least age 50 and has completed at least five full years of service with the Company and Participant’s age plus the number of full years of service with the Company equals at least 60, or (ii) Participant is under age 50, but has completed at least 20 full years of service with the Company and Participant’s age plus the number of full years of service with the Company equals at least 60, then (1) any unvested [restricted or deferred stock][deferred cash award] will continue to vest on schedule, provided that Participant is not, at any time up to and including any vesting date, employed by a “significant competitor” of the Company (as defined in Section 6(p) below); [(2) an Option will continue to vest on schedule and may be exercised (but not later than the Option expiration date) while Participant is employed by the Company; if Participant is no longer employed by the Company, vesting of the Option will cease on the Participant’s [“separation from service”][termination] date if employment with the Company is terminated for any reason other than gross misconduct and any vested Option shares may be exercised for up to [XX DAYS/MONTHS/YEARS] after Participant’s [“separation from service”][termination] date (but not later than the Option expiration date), provided that Participant is not, at any time up to and including any exercise date, employed by a “significant competitor” of the Company (as defined in Section 6(p) below)].

(l) Reaching Age 55 by Certain Legacy Citibank Employees.  If Participant is at least age 55 and is a legacy Citibank employee who participates in (i) the grandfathered Citibank formula of the U.S. Citigroup Pension Plan or (ii) the grandfathered Citibank formula of the Head Office Guarantee (HOG) Plan, then [(1)] any unvested [restricted or deferred stock][deferred cash award] will continue to vest on schedule, provided that Participant is not, at any time up to and including any vesting date, employed by a “significant competitor” of the Company (as defined in Section 6(q) below); [(2) vested options may continue to be exercised for up to [XX DAYS/MONTHS/YEARS] after Participant’s [“separation from service”][termination] date (but not later than the Option expiration date) if employment with the Company is terminated for any reason other than gross misconduct, provided that Participant is not, at any time up to and including any exercise date, employed by a “significant competitor” of the Company (as defined in Section 6(p) below)][all unexercised Option shares will be canceled as of Participant’s [“separation from service”][termination] date and Participant shall have no further rights of any kind with respect to the Option]

(m) Termination of Employment other than for Gross Misconduct or Transfer to Non-Participating Subsidiary, when Also Eligible under Section 6(j), (k) or (l).  If Participant is terminated other than for gross misconduct or is transferred to a subsidiary described in Section 6(g)(ii) above and on the date Participant’s employment is so terminated or transferred, Participant has satisfied the conditions of Section 6(j), (k) or (l) above, then the provisions of such sub-section will apply; provided, however, that continued vesting of the Award [and the right to exercise vested Option shares] will not be subject to the condition that Participant not be employed by a “significant competitor” of the Company (as defined in Section 6(p) below).

(n) Employing Company is Acquired by Another Entity (Change in Control).  If Participant is employed by a company or other legal entity that is the subject of a transaction that [is described in Section 409A(a)(2)(A)(v) of the United States Internal Revenue Code of 1986, as amended and the regulations thereunder (the “Code”)] [is the subject of a transaction that constitutes [either] [a “change in the ownership of a substantial portion of a corporation’s assets” as described in Treas. Reg. § 1.409A-3(i)(5)(vii)] [a “change in ownership of a corporation” as described in Treas. Reg. § 1.409A-3(i)(5)(v)] [, or] [a “change in the effective control of a corporation” as described in Treas. Reg. § 1.409A-3(i)(5)(vi) [but excluding an event in sub-paragraph (2) thereof]], without substituting any higher percentage thresholds than the minimum that may be specified therein (except as necessary to satisfy the first of the two additional conditions described below in the case of a change in control of Citigroup) (hereinafter, a “change in control”), [all][ANY AMOUNT UP TO 99.9%] unvested [restricted stock][deferred stock][deferred cash] shall vest and become distributable on the effective date of the change in control[[all][ANY AMOUNT UP TO 99.9%] unvested Option shares shall become exercisable and may be exercised for a period of [XX YEARS/MONTHS] following the effective date of such change in control (but not later than the Option expiration date)].  [The Committee, in its discretion, may accelerate the vesting of additional [shares of restricted or deferred stock or Option shares][deferred cash] in the event of a

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change in control.  [Notwithstanding anything in this Agreement to the contrary, in the event of a change in control of Citigroup, the accelerated vesting [and distribution of [restricted stock][deferred stock]][Option shares] provided in this section shall apply only if (1) the transaction also constitutes a “Change of Control” as defined in the Plan, and (2) not until Participant also experiences a [“separation from service”][termination of employment] as a result of the change in control[; provided, however, if Participant has satisfied the conditions specified in Section 6(j), (k) or (l) at any time prior to experiencing a “separation from service” as a result of a change in control of Citigroup, the distribution to Participant of [deferred stock] that vests under this Section 6(n) upon such “separation from service” will not occur until the originally scheduled vesting dates]].  For these purposes only, a [“separation from service”][termination of employment] for any reason other than Participant’s “gross misconduct” (as defined elsewhere herein) that occurs within the period commencing on the date of the change in control and ending on the first anniversary of the change in control shall be deemed to have been as a result of the change in control.  Participant acknowledges that in the event of a Change of Control (as defined in the Plan) of Citigroup, the Plan authorizes the Committee, in its sole discretion, to take other action with respect to Awards, including, but not limited to, making adjustments to awards that it deems necessary or appropriate to reflect the transaction, or causing Awards to be assumed, or new rights substituted therefore, by the surviving entity in such change.  Further, pursuant to its authority under the Plan and subject to any limitations thereon, the Committee reserves its right to take any similar action that it deems necessary or appropriate with respect to Awards in the event of a change in control of any entity that employed Participant on the date of the Award or at any time thereafter.  Any such action taken by the Committee with respect to the Award shall override the treatment otherwise provided by this Section 6(n).

(o) Additional Conditions Applicable to Post-Employment Participation.  Except as otherwise provided herein, [in any instance in which, if, in the determination of the Committee, Participant engages in conduct that is in competition with the Company’s business operations, breaches his or her duty of loyalty or any obligation Participant owes to the Company, or is materially injurious to the Company, monetarily or otherwise, while holding any shares of Citigroup common stock subject to a sale restriction, such shares may be canceled, in the sole discretion of the Committee.  If any such shares are canceled pursuant to this Section 6(o), Participant will receive a cash payment (without interest) equal to the grant price of the Option under which the shares were issued (as adjusted, if applicable) multiplied by the number of shares canceled.  Additionally,] [t]he Committee may cancel any unvested [restricted or deferred stock][deferred cash award] if it determines that Participant has, since the termination of Participant’s employment with the Company, engaged in conduct that breaches any obligation or duty of loyalty to the Company or that is materially injurious to the Company, monetarily or otherwise.  For purposes of this Section 6(o), “Company” shall mean Citigroup and any of its subsidiaries.

(p) Definition of “Significant Competitor.”  For purposes of this Agreement, a “significant competitor” of the Company shall mean any company or other entity designated by the Committee as such and included on a list of “significant competitors” that will be made available to Participant and which may be updated from time to time.  If Participant has terminated employment with the Company, a “significant competitor” shall mean a company or other entity included on the list in effect at the time Participant’s employment with the Company was terminated.  For purposes of this Section 5(q), “Company” shall mean Citigroup and any of its subsidiaries.

(q) Non-Solicitation Covenant.

(i)            Participant agrees that during Participant’s employment with the Company (inclusive of any notice period or garden leave policy to which Participant is otherwise subject) and for twelve (12) months following any termination of Participant’s employment, he or she will not, without the prior written consent of the Company, directly or indirectly solicit or induce away from the Company or cause to be solicited or induced away from the Company any of its employees.

(ii)           Notwithstanding anything to the contrary in this Agreement, and without limiting any remedies at law or in equity that may be available to the Company, Participant acknowledges and agrees that a remedy at law for any breach or threatened breach of the covenant contained in this Section 6(q) would be inadequate and monetary damages would be difficult to calculate and that for any such breach

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or threatened breach, a court of law may award an injunction, restraining order or other equitable relief, restraining Participant from committing or continuing to commit such breach.

(iii)          It is expressly understood and agreed that if a final determination is made by a court of law that the time or any other restriction contained in this Section 6(q) is an unenforceable restriction against Participant, the provisions of Section 6(q) shall not be rendered void but shall be deemed amended to apply to such maximum time and to such other maximum extent as such court may determine or indicate to be enforceable.  Alternatively, if such court finds that any restriction contained in this Section 6(q) is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any other provision of this Agreement.

(iv)          The restrictive covenant set forth in this Section 6(q) shall continue and survive any cancellation, forfeiture or payment of any amounts due under the Award.

(v)           The covenant contained in this Section 6(q) is not intended to shorten, reduce or otherwise limit any non-solicitation obligation Participant may have (including but not limited the non-solicitation obligation contained in the Employment Termination Notice and Non-Solicitation Policy for the Citigroup Management Committee or any successor policy) pursuant to contract, collective agreement or applicable policy, local law, rule or regulation (“Independent Obligation”), nor is it intended to limit or reduce any other obligation that Participant may have to the Company pursuant to an Independent Obligation.  For purposes of this Section 6(q), “Company” shall mean Citigroup and any of its subsidiaries.

7. Non-Transferability.  Neither the Award, nor any component of the Award, may be sold, pledged, hypothecated, assigned, margined or otherwise transferred, other than by will or the laws of descent and distribution, and no Award or interest or right therein shall be subject to the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law, by judgment, lien, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy or divorce), and any attempted disposition thereof shall be null and void, of no effect, and not binding on the Company in any way.  Participant agrees that any purported transfer shall be null and void, and shall constitute a breach of this Agreement causing damage to the Company for which the remedy shall be a cancellation of the Award.  During Participant’s lifetime, all rights with respect to the Award shall be exercisable only by Participant, and any and all payments in respect of the Award shall be to Participant only.  The Company shall be under no obligation to entertain, investigate, respect, preserve, protect or enforce any actual or purported rights or interests asserted by any creditor of Participant or any other third party in the Award, and Participant agrees to take all reasonable measures to protect the Company against any such claims being asserted in respect of Participant’s Award and to reimburse the Company for any and all reasonable expenses it incurs defending against or complying with any such third-party claims if Participant could have reasonably acted to prevent such claims from being asserted against the Company.

[8. Stockholder Rights.  Participant shall have no rights as a stockholder of Citigroup over any shares covered by an Award, except to the limited extent provided in the Prospectus for an Award of restricted stock, unless and until shares are distributed to Participant in connection with the vesting of a restricted or deferred stock award or an Option exercise.  During the vesting period, Participant may receive dividend or dividend equivalent payments in respect of shares subject to a restricted or deferred stock award, to the extent provided in the Prospectus.]

9. Right of Set Off.  Participant agrees that the Company may, to the extent permitted by applicable law, retain for itself funds or securities otherwise payable to Participant pursuant to this Award or any award under any equity award program administered by Citigroup to offset any amounts paid by the Company to a third party pursuant to any award, judgment, or settlement of a complaint, arbitration, or lawsuit of which Participant was the subject; to satisfy any obligation or debt that Participant owes the Company or its affiliates; or in the event any equity award is canceled pursuant to its terms.  The Company may not retain

9

such funds or securities and set off such obligations or liabilities, as described above, until such time as they would otherwise be distributable to Participant in accordance with the applicable award terms.

10. Consent to Electronic Delivery.  In lieu of receiving documents in paper format, Participant hereby agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that Citigroup may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms or communications) in connection with the Award(s) covered by this Agreement and any other prior or future incentive award or program made or offered by Citigroup or its predecessors or successors.  Electronic delivery of a document to Participant may be via a Company e-mail system or by reference to a location on a Company intranet site to which Participant has access.

[11. Plan Administration.  The Award described in this Agreement has been granted subject to the terms of the Plan, and the shares deliverable to Participant in connection with an Award, whether upon the exercise of an Option or vesting of a restricted or deferred stock award, will be from the shares available for grant pursuant to the terms of the Plan].

12. Adjustments.  In the event of any change in Citigroup’s capital structure on account of (i) any extraordinary dividend, stock dividend, stock split, reverse stock split or any similar equity restructuring; or (ii) any combination or exchange of equity securities, merger, consolidation, recapitalization, reorganization, divestiture or other distribution (other than ordinary cash dividends) of assets to stockholders, or any other similar event affecting Citigroup’s capital structure, to the extent necessary to prevent the enlargement or diminution of the rights of Participants, the Committee shall make such appropriate equitable adjustments as may be permitted by the terms of the Plan and applicable law, to the number or kind of shares subject to an Award and/or the grant price applicable to an Award.  All such adjustments shall conform to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), to the extent applicable, and with respect to Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code, such adjustments or substitutions shall be made only to the extent that the Committee determines that such adjustments or substitutions may be made without causing the Company to be denied a tax deduction on account of Section 162(m) of the Code.  Citigroup shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.  Notwithstanding the foregoing, the Committee may, in its discretion, decline to adjust any Award made to a Participant, if it determines that such adjustment would violate applicable law or result in adverse tax consequences to the Participant or the Company, and neither the Committee nor Citigroup shall be bound to compensate any Participant for any such adjustment not made, nor shall they be liable to Participant for any additional personal tax or other consequences of any adjustments that are made to an Award.

13. Taxes and Tax Residency Status.  By accepting the Award, Participant agrees to pay all applicable income and/or social taxes and file all required tax returns in all jurisdictions where Participant is subject to tax and/or an income tax filing requirement.  If Participant is an employee in one of Citigroup’s expatriate programs, he or she agrees to pay all applicable income and/or social taxes and file all tax returns in accordance with the applicable expatriate policy.  To assist Citigroup in achieving full compliance with its obligations under the laws of all relevant taxing jurisdictions, Participant agrees to keep complete and accurate records of his or her income tax residency status and the number and location of workdays outside his or her country of income tax residency from the date of an Award until the later of the vesting of an Award, the exercise of an Option, or the subsequent sale of any shares received in connection with an Award.  By signing this Agreement, Participant also agrees to provide, upon request, information about his or her tax residency status to Citigroup during such period. Participant will be responsible for any income tax due, including penalties and interest, arising from any misstatement by Participant regarding such information.

14. Entire Agreement; No Right to Employment.  [IF APPLICABLE: The Letter Agreement,] [T]he Prospectus [Brochure] and the Agreement constitute the entire understanding between the Company and Participant regarding the Award and supersede all previous written, oral, or implied understandings between the parties hereto about the subject matter hereof, including any written or electronic agreement, election form or other communication to, from or between Participant and the Company.  Nothing contained herein, in the Plan, or in any Prospectus [Brochure] shall confer upon Participant any rights to continued employment or employment in any particular position, at any specific rate of compensation, or for any particular period of time.

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15. Amendment.  The Committee may in, its sole discretion, modify, amend, terminate or suspend the Award or the Program at any time, except that no termination, suspension, modification or amendment of the Award or the Program shall (i) cause the Award or the Program to become subject to, or violate, Section 409A of the Code, or (ii) except as provided in Section 16(a), adversely affect Participant’s rights with respect to the Award, as determined by the Committee, without Participant’s written consent.

16. Section 409A [and Section 457A] Compliance.

(a) Participant understands that as a result of Section 409A to the Code, if Participant is a U.S. taxpayer he or she could be subject to adverse tax consequences if the Award, the Program and/or the Plan are not administered in accordance with the requirements of Section 409A.  [Participant further understands that if Participant is a U.S. taxpayer, and a deferred cash award or other award type covered by this Agreement is considered to be a “nonqualified deferred compensation plan” and Participant’s employer is considered to be a “nonqualified entity” (as such terms are defined in Section 457A of the Code), Participant could be subject to adverse tax consequences if the Award or the Program are not administered in accordance with the requirements of Section 457A.] Citigroup may modify the provisions of the Award, the Program and/or the Plan, as necessary, to conform them to the requirements of Section 409A[, Section 457A,] or other changes in applicable law.  To the extent Citigroup amends the Award, the Program or the Plan, Participant will receive a supplement to the Prospectus describing any such changes.

(b) Notwithstanding any provision of this Agreement to the contrary, (i) Citigroup may modify the provisions of the Award, the Program and/or the Plan, as necessary, to conform them to the requirements of Section 409A[, Section 457A,] or other changes in applicable law and (ii) any distribution of [shares subject to a deferred stock award][a deferred cash award] otherwise provided by the terms of this Agreement to occur upon any event that would constitute a “separation from service” (within the meaning of Section 409A of the Code) to a Participant who is a “specified employee” (within the meaning of Treas. Reg. § 1.409A-1(i)(1)) at the time of such Participant’s “separation from service,” shall not be made until the date which is six months from such “separation from service,” or, if earlier, the date of Participant’s death and during such six-month deferral period, Participant shall not be entitled to interest, dividends, dividend equivalents, or any compensation for any loss in market value or otherwise which occurs with respect to the Award during such deferral period.

(c) BY ACCEPTING THIS AWARD, PARTICIPANT HEREBY CONSENTS TO THE AMENDMENT OR MODIFICATION OF ANY OUTSTANDING AWARD(S) HERETOFORE GRANTED TO OR ENTERED INTO WITH PARTICIPANT, IN LIKE MANNER AND PURPOSE AS PROVIDED BY SECTION 16(b) OF THIS AGREEMENT, TO THE EXTENT ANY SUCH AWARDS MAY VIOLATE SECTION 409A [OR SECTION 457A] OF THE CODE; PROVIDED, HOWEVER, THAT (i) NO SUCH AMENDMENT OR MODIFICATION SHALL BE MADE IF IT WOULD VIOLATE THE TERMS AND CONDITIONS OF PARTICIPANT’S OFFER LETTER OR EMPLOYMENT AGREMENT, AND (ii) UNLESS THE COMMITTEE DETERMINES OTHERWISE, ANY AMENDMENT OR MODIFICATION TO OUTSTANDING AWARD(S) PURSUANT TO THIS SECTION 16(c) SHALL MAINTAIN, TO THE MAXIMUM EXTENT PRACTICABLE, THE ORIGINAL INTENT OF THE APPLICABLE PROVISION WITHOUT CONTRAVENING THE PROVISIONS OF SECTION 409A [OR SECTION 457A] OF THE CODE.  THE AMENDMENT OR MODIFICATION OF ANY AWARD(S) PURSUANT TO THIS PROVISION SHALL BE AT THE COMPANY’S SOLE DISCRETION AND THE COMPANY SHALL NOT BE OBLIGATED TO AMEND OR MODIFY ANY SUCH AWARD(S) OR THIS AWARD, THE PROGRAM OR THE PLAN, NOR SHALL THE COMPANY BE LIABLE FOR ANY ADVERSE TAX OR OTHER CONSEQUENCES TO PARTICIPANT RESULTING FROM SUCH AMENDMENTS OR MODIFICATIONS OR THE COMPANY’S FAILURE TO MAKE ANY SUCH AMENDMENTS OR MODIFICATIONS FOR PURPOSES OF COMPLYING WITH SECTION 409A [OR SECTION 457A] OF THE CODE OR FOR ANY OTHER PURPOSE.  TO THE EXTENT CITIGROUP AMENDS OR MODIFIES ANY OUTSTANDING AWARD(S) OR THIS AWARD PURUSANT TO SECTIONS 15 OR 16 OF THIS AGREMENT, PARTICIPANT SHALL RECEIVE A SUPPLEMENT TO THE PROSPECTUS [BROCHURE] DESCRIBING ANY SUCH CHANGES AND, UNLESS THE COMMITTEE DETERMINES OTHERWISE,

11

THE CHANGES DESCRIBED IN THE SUPPLEMENT SHALL BE DEEMED TO AMEND THE TERMS AND CONDITIONS OF THE APPLICABLE AWARD AGREEMENTS.

17. Compliance with Emergency Economic Stabilization Act of 2008.  Participant acknowledges that if Participant and any Award or payment governed by this Agreement are subject to Section 111 of the Emergency Economic Stabilization Act of 2008, as amended, and any regulations or interpretations that may from time to time be promulgated thereunder (“EESA”), then any Award or payment of any kind provided for by this Agreement must comply with EESA, and that this Agreement shall be interpreted or reformed as determined by the Committee to so comply.  Participant hereby agrees that if the Award or any payment pursuant to this Agreement would violate EESA, or may in the judgment of the Company limit or adversely impact the ability of the Company to participate in, or the terms of the Company’s participation in, the Troubled Asset Relief Program or the Capital Purchase Program, or to qualify for any other relief under EESA, Participant shall be deemed to have waived his or her right to the Award and any such payment.  In addition, if applicable, Participant acknowledges and agrees that any Award or payment governed by this Agreement is subject to forfeiture or repayment (i) if the Award or payment is based on materially inaccurate financial statements (including, but not limited to, statements of earnings, revenues, or gains) or any other materially inaccurate performance metric criteria; (ii) if Participant materially violates any risk limits established or revised by [senior management, a business head and/or a risk management department, or any balance sheet or working or regulatory capital guidance provided by a business head][a “senior risk officer” (as defined under EESA)]; or (iii) if Participant is terminated for misconduct that occurred during the period in which the award was earned.  Participant agrees that a financial statement or performance metric shall be treated as materially inaccurate for these purposes if Participant knowingly engaged in providing inaccurate information (including knowingly failing to timely correct inaccurate information) relating to those financial statements or performance metrics.  If applicable, Participant also hereby grants to the U.S. Treasury and the Company a waiver releasing the U.S. Treasury and the Company from any claims that Participant may have as a result of the issuance of any regulations which modify, or cause the modification of, the terms of any award that would not otherwise comply with the executive compensation and corporate governance requirements of EESA or any securities purchase agreement or other agreement entered into between the Company and the U.S. Treasury pursuant to EESA. [In accordance with but not limited to the foregoing, Participant agrees that the Committee, pursuant to its authority under the Plan, may change the terms of any award as it deems necessary, in its sole discretion, to comply with or satisfy any legal, regulatory or governmental requirements or directives or to qualify for any government loan, investment, subsidy or program.]

18. Arbitration; Conflict; Governing Law.  Any disputes related to the Award shall be resolved by arbitration in accordance with the Company’s arbitration policies.  In the absence of an effective arbitration policy, Participant understands and agrees that any dispute related to an Award shall be submitted to arbitration in accordance with the rules of the American Arbitration Association, if so elected by the Company in its sole discretion.  In the event of a conflict between the Prospectus and this Agreement [IF APPLICABLE: the Letter Agreement and this Agreement], this Agreement [IF APPLICABLE: the Letter Agreement] shall control.  In the event of a conflict between this Agreement and the Plan, the Plan shall control.  This Agreement shall be governed by the laws of the State of New York (regardless of conflict of laws principles) as to all matters, including, but not limited to, the construction, application, validity and administration of the Program.

19. Disclosure Regarding Use of Personal Information and Participant’s Consent.

(a) Definition and Use of “Personal Information.”  In connection with the grant of this Award, and any other award under the Program or any other equity award program, and the implementation and administration of any such program, including, without limitation, Participant’s actual participation, or consideration by the Company for potential future participation, in any program at any time, it is or may become necessary for the Company to collect, transfer, use, and hold certain personal information regarding Participant in and/or outside of Participant’s home country.

The “personal information” that Citigroup may collect, process, store and transfer for the purposes outlined above may include Participant’s name, nationality, citizenship, tax or other residency status, work authorization, date of birth, age, government/tax identification number, passport number, brokerage account information, GEID or other internal identifying information, home address, work address, job and location history, compensation and equity award information and history, business unit, employing entity,

12

and Participant’s beneficiaries and contact information.  Participant may obtain more details regarding the access and use of his/her personal information, and may correct or update such information, by contacting his/her human resources representative or local equity coordinator.

Use, transfer, storage and processing of personal information, electronically or otherwise, may be in connection with the Company’s internal administration of its equity award programs, or in connection with tax or other governmental and regulatory compliance activities directly or indirectly related to an equity award program.  For such purposes only, personal information may be used by third parties retained by the Company to assist with the administration and compliance activities of its equity award programs, and may be transferred by the company that employs (or any company that has employed) Participant from Participant’s home country to other Citigroup entities and third parties located in the United States and in other countries.  Specifically, those parties that may have access to Participant’s information for the purposes described herein include, but are not limited to, (i) human resources personnel responsible for administering the equity award programs, including local and regional equity award coordinators, and global coordinators located in the United States; (ii) Participant’s U.S. broker and equity account administrator and trade facilitator; (iii) Participant’s U.S., regional and local employing entity and business unit management, including Participant’s supervisor and his/her superiors; (iv) the Committee or its designee, which is responsible for administering the Plan; (v) Citigroup’s technology systems support team (but only to the extent necessary to maintain the proper operation of electronic information systems that support the equity award programs); and (vi) internal and external legal, tax and accounting advisors (but only to the extent necessary for them to advise the Company on compliance and other issues affecting the equity award programs in their respective fields of expertise).  At all times, Company personnel and third parties will be obligated to maintain the confidentiality of Participant’s personal information except to the extent the Company is required to provide such information to governmental agencies or other parties.  Such action will always be undertaken only in accordance with applicable law.

(b) Participant’s Consent.BY ACCEPTING THIS AWARD, PARTICIPANT EXPLICITLY CONSENTS (I) TO THE USE OF PARTICIPANT’S PERSONAL INFORMATION FOR THE PURPOSE OF BEING CONSIDERED FOR PARTICIPATION IN FUTURE EQUITY OR OTHER AWARD PROGRAMS (TO THE EXTENT HE/SHE IS ELIGIBLE UNDER APPLICABLE PROGRAM GUIDELINES, AND WITHOUT ANY GUARANTEE THAT ANY AWARD WILL BE MADE); AND (II) TO THE USE, TRANSFER, PROCESSING AND STORAGE, ELECTRONICALLY OR OTHERWISE, OF HIS/HER PERSONAL INFORMATION, AS SUCH USE HAS OCCURRED TO DATE, AND AS SUCH USE MAY OCCUR IN THE FUTURE, IN CONNECTION WITH THIS OR ANY OTHER EQUITY OR OTHER AWARD, AS DESCRIBED ABOVE.

***

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EX-12.01

Exhibit 12.01

CITIGROUP INC.

CALCULATION OF RATIO OF INCOME TO FIXED CHARGES

	Year ended December 31,											Nine Months Ended September 30,
In millions of dollars, except for ratios	2008 (1)(2)(3)			2007 (1)(2)(3)		2006 (2)(3)(4)(5)		2005 (2)(3)(4)(5)		2004 (2)(3)(4)(5)		2009(1)(2)(3)(4)		2008(1)(2)(3)
EXCLUDING INTEREST ON DEPOSITS:
Fixed Charges
Interest expense (other than interest on deposits)	$	33,027		$	48,387	$	34,743	$	22,298	$	12,507	$	13,190	$	26,008
Interest factor in rent expense	734			623		556		502		474		525		669
Total fixed charges	$	33,761		$	49,010	$	35,299	$	22,800	$	12,981	$	13,715	$	26,677
Income
Income from continuing operations before taxes, minority interest and cumulative effect of accounting changes	$	(52,355	)	$	646	$	28,489	$	28,557	$	21,416	$	7,294	$	(20,664	)
Fixed charges (excluding preferred stock dividends)	33,761			49,010		35,299		22,800		12,981		13,715		26,677
Total income	$	(18,594	)	$	49,656	$	63,788	$	51,357	$	34,397	$	21,009	$	6,013
Ratio of income to fixed charges excluding interest on deposits	NM			1.01		1.81		2.25		2.65		1.53		NM
INCLUDING INTEREST ON DEPOSITS:
Fixed Charges
Interest expense	$	52,750		$	75,958	$	55,683	$	35,631	$	21,029	$	21,179	$	42,150
Interest factor in rent expense	734			623		556		502		474		525		669
Total fixed charges	$	53,484		$	76,581	$	56,239	$	36,133	$	21,503	$	21,704	$	42,819
Income
Income from continuing operations before taxes, minority interestand cumulative effect of accounting changes	$	(52,355	)	$	646	$	28,489	$	28,557	$	21,416	$	7,294	$	(20,664	)
Fixed charges (excluding preferred stock dividends)	53,484			76,581		56,239		36,133		21,503		21,704		42,819
Total income	$	1,129		$	77,227	$	84,728	$	64,690	$	42,919	$	28,998	$	22,155
Ratio of income to fixed charges including interest on deposits	NM			1.01		1.51		1.79		2.00		1.34		NM

(1)  On May 1, 2009, Citigroup announced an agreement to sell its Nikko Cordial Securities to Sumitomo Mitsui Banking Corporation (hereafter SMBC). Citigroup reports these businesses separately as discontinued operations in the Company’s Consolidated Statement of Income. The calculation of the ratio of income to fixed charges excludes discontinued operations. Prior periods have been restated on a comparable basis.

(2)  On July 11, 2008, the Company announced an agreement to sell its German retail banking operations to Credit Mutuel. Citigroup reports these businesses separately as discontinued operations in the Company’s Consolidated Statement of Income. The calculation of the ratio of income to fixed charges excludes discontinued operations. Prior periods have been restated on a comparable basis.

(3)  On April 17, 2008, Citigroup announced an agreement to sell most of Citigroup’s CitiCapital business unit to GE Capital. Citigroup reports these businesses separately as discontinued operations in the Company’s Consolidated Statement of Income. The calculation of the ratio of income to fixed charges excludes discontinued operations. Prior periods have been restated on a comparable basis.

(4)  On December 1, 2005, Citigroup completed the sale of substantially all of Citigroup’s Asset Management Business to Legg Mason, Inc. Citigroup reports these businesses separately as discontinued operations in the Company’s Consolidated Statement of Income.

(5)  On July 1, 2005, Citigroup completed the sale of Citigroup’s Travelers Life & Annuity and substantially all of Citigroup’s international insurance businesses to MetLife, Inc. Citigroup reports these businesses separately as discontinued operations in the Company’s Consolidated Statement of Income.

EX-12.02

Exhibit 12.02

CITIGROUP INC.

CALCULATION OF RATIO OF INCOME TO FIXED CHARGES

INCLUDING PREFERRED STOCK DIVIDENDS

	Year ended December 31,											Nine Months Ended September 30,
In millions of dollars, except for ratios	2008 (1)(2)(3)			2007 (1)(2)(3)		2006 (2)(3)(4)(5)		2005 (2)(3)(4)(5)		2004 (2)(3)(4)(5)		2009(1)(2)(3)(4)		2008(1)(2)(3)
EXCLUDING INTEREST ON DEPOSITS:
Fixed Charges
Interest expense (other than interest on deposits)	$	33,027		$	48,387	$	34,743	$	22,298	$	12,507	$	13,190	$	26,008
Interest factor in rent expense	734			623		556		502		474		525		669
Dividends—Preferred Stock	2,770			51		93		98		95		3,400		1,560
Total fixed charges	$	36,531		$	49,061	$	35,392	$	22,898	$	13,076	$	17,115	$	28,237
Income
Income from continuing operations before taxes, minority interest and cumulative effect of accounting changes	$	(52,355	)	$	646	$	28,489	$	28,557	$	21,416	$	7,294	$	(20,664	)
Fixed charges (excluding preferred stock dividends)	33,761			49,010		35,299		22,800		12,981		13,715		26,677
Total income	$	(18,594	)	$	49,656	$	63,788	$	51,357	$	34,397	$	21,009	$	6,013
Ratio of income to fixed charges excluding interest on deposits	NM			1.01		1.80		2.24		2.63		1.23		NM
INCLUDING INTEREST ON DEPOSITS:
Fixed Charges
Interest expense	$	52,750		$	75,958	$	55,683	$	35,631	$	21,029	$	21,179	$	42,150
Interest factor in rent expense	734			623		556		502		474		525		669
Dividends—Preferred Stock	2,770			51		93		98		95		3,400		1,560
Total fixed charges	$	56,254		$	76,632	$	56,332	$	36,231	$	21,598	$	25,104	$	44,379
Income
Income from continuing operations before taxes, minority interest and cumulative effect of accounting changes	$	(52,355	)	$	646	$	28,489	$	28,557	$	21,416	$	7,294	$	(20,664	)
Fixed charges (excluding preferred stock dividends)	53,484			76,581		56,239		36,133		21,503		21,704		42,819
Total income	$	1,129		$	77,227	$	84,728	$	64,690	$	42,919	$	28,998	$	22,155
Ratio of income to fixed charges including interest on deposits	NM			1.01		1.50		1.79		1.99		1.16		NM

(1) On May 1, 2009, Citigroup announced an agreement to sell its Nikko Cordial Securities to Sumitomo Mitsui Banking Corporation (hereafter SMBC). Citigroup reports these businesses separately as discontinued operations in the Company’s Consolidated Statement of Income. The calculation of the ratio of income to fixed charges excludes discontinued operations.Prior periods have been restated on a comparable basis.

(2) On July 11, 2008, the Company announced an agreement to sell its German retail banking operations to Credit Mutuel. Citigroup reports these businesses separately as discontinuedoperations in the Company’s Consolidated Statement of Income. The calculation of the ratio of income to fixed charges excludes discontinued operations.  Prior periods have beenrestated on a comparable basis.

(3) On April 17, 2008, Citigroup announced an agreement to sell most of Citigroup’s CitiCapital business unit to GE Capital. Citigroup reports these businesses separately as discontinuedoperations in the Company’s Consolidated Statement of Income.  The calculation of the ratio of income to fixed charges excludes discontinued operations. Prior periods have beenrestated on a comparable basis.

(4) On December 1, 2005, Citigroup completed the sale of substantially all of Citigroup’s Asset Management Business to Legg Mason, Inc.  Citigroup reports these businesses separately as discontinued operations in the Company’s Consolidated Statement of Income.

(5) On July 1, 2005, Citigroup completed the sale of Citigroup’s Travelers Life & Annuity and substantially all of Citigroup’s international insurance businesses to MetLife, Inc.  Citigroupreports these businesses separately as discontinued operations in the Company’s Consolidated Statement of Income.

EX-31.01

Exhibit 31.01

CERTIFICATION

I, Vikram S. Pandit, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Citigroup Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2009

/s/ Vikram S. Pandit

Vikram S. Pandit

Chief Executive Officer

EX-31.02

Exhibit 31.02

CERTIFICATION

I, John C. Gerspach, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Citigroup Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2009

/s/ John C. Gerspach

John C. Gerspach

Chief Financial Officer

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Citigroup Inc. (the “Company”) for the quarter ended September 30, 2009 (the “Report”), Vikram Pandit, as Chief Executive Officer of the Company, and John C. Gerspach, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Vikram S. Pandit

Vikram S. Pandit

Chief Executive Officer

November 6, 2009

/s/ John C. Gerspach

John C. Gerspach

Chief Financial Officer

November 6, 2009

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.01

Exhibit 99.01

Residual Value Obligation

Quarterly certificate for the quarter ended September 30, 2009

The information below is being disclosed pursuant to the Residual Value Obligation Agreement dated as of April 3, 2000 between Associates First Capital Corporation and the Chase Manhattan Bank, as Trustee. Terms used and not otherwise defined herein have the meaning assigned to them in the Residual Value Agreement.

Securitization Distribution Dates during quarter:		July 15, 2009	August 17, 2009	September 15, 2009
Allocation Dates during quarter:		July 16, 2009	August 18, 2009	September 16, 2009
Payment Date during quarter:				NA
AFCC Amount at beginning of quarter:				$	1,090,677,448
AFCC Amount at end of quarter:				$	1,132,001,716
On the Payment Date during the quarter:
Accrued RVO Payment Amount as of the immediately preceding Allocation Date:				$	—
Interest accrued on Accrued RVO Payment Amount since immediately preceding Allocation Date:				$	—
Accrued RVO Payment Amount as of such Payment Date:				$	—
Number of RVO’s outstanding as of the applicable record date				N/A
Payment per RVO:				$	—
As of the first Allocation Date during the quarter:
Residual Cash Flow:
Residual Cash Flow Allocated for current period				$	29,207
Cumulative Residual Cash Flow not covered by allocation (to be carried forward)				$	—
Excess Litigation Reserve allocated:				$	—
RVO Expenses:
Residual Cash Flow allocated to RVO Expenses:				$	(0	)
Cumulative RVO Expenses not covered by allocation (to be carried forward):				$	(0	)
Litigation Expenses:
Residual Cash Flow allocated to Litigation Expenses:				$	—
Cumulative Litigation Expenses not covered by allocation (to be carried forward):				$	—
AFCC Amount:
AFCC Amount at end of immediately preceding Allocation Date:				$	1,090,677,448
plus:	AFCC Interest added on immediately preceding Securitization Distribution Date:			$	13,633,468
less:	Residual Cash Flow allocated to AFCC Amount:			$	(29,207	)
AFCC Amount after allocation:				$	1,104,281,709
Accrued RVO Payment Amount:
Residual Cash Flow allocated to Accrued RVO Payment Amount on such Allocation Date:				$	—
plus:	cumulative Residual Cash Flow allocated to, and cumulative interest accrued on, Accrued RVO Payment Amount since most recent Payment Date on which RVO Payments were made:			$	—
Accrued RVO Payment Amount on such Allocation Date:				$	—

As of the second Allocation Date during the quarter:
Residual Cash Flow:
Residual Cash Flow allocated for current period		$	31,393
Cumulative Residual Cash Flow not covered by allocation (to be carried forward)		$	—
Excess Litigation Reserve allocated:		$	—
RVO Expenses:
Residual Cash Flow allocated to RVO Expenses:		$	(0	)
Cumulative RVO Expenses not covered by allocation (to be carried forward):		$	(0	)
Litigation Expenses:
Residual Cash Flow allocated to Litigation Expenses:		$	—
Cumulative Litigation Expenses not covered by allocation (to be carried forward):		$	—
AFCC Amount:
AFCC Amount at end of immediately preceding Allocation Date:		$	1,104,281,709
plus:	AFCC Interest added on immediately preceding Securitization Distribution Date:	$	13,803,521
less:	Residual Cash Flow allocated to AFCC Amount:	$	(31,393	)
AFCC Amount after allocation:		$	1,118,053,837
Accrued RVO Payment Amount:
Residual Cash Flow allocated to Accrued RVO Payment Amount on such Allocation Date:		$	—
plus:	cumulative Residual Cash Flow allocated to, and cumulative interest accrued on, Accrued RVO Payment Amount since most recent Payment Date on which RVO Payments were made:	$	—
Accrued RVO Payment Amount on such Allocation Date:		$	—

As of the third Allocation Date during the quarter:
Residual Cash Flow:
Residual Cash Flow allocated for current period		$	27,794
Cumulative Residual Cash Flow not covered by allocation (to be carried forward)		$	—
Excess Litigation Reserve allocated:		$	—
RVO Expenses:
Residual Cash Flow allocated to RVO Expenses:		$	(0	)
Cumulative RVO Expenses not covered by allocation (to be carried forward):		$	(0	)
Litigation Expenses:
Residual Cash Flow allocated to Litigation Expenses:		$	—
Cumulative Litigation Expenses not covered by allocation (to be carried forward):		$	—
AFCC Amount:
AFCC Amount at end of immediately preceding Allocation Date:		$	1,118,053,837
plus:	AFCC Interest added on immediately preceding Securitization Distribution Date:	$	13,975,673
less:	Residual Cash Flow allocated to AFCC Amount:	$	(27,794	)
AFCC Amount after allocation:		$	1,132,001,716
Accrued RVO Payment Amount:
Residual Cash Flow allocated to Accrued RVO Payment Amount on such Allocation Date:		$	—
plus:	cumulative Residual Cash Flow allocated to, and cumulative interest accrued on, Accrued RVO Payment Amount since most recent Payment Date on which RVO Payments were made:	$	—
Accrued RVO Payment Amount on such Allocation Date:		$	—