Preliminary Prospectus Supplement

The information in this prospectus supplement is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. This prospectus supplement and the accompanying prospectus are not an offer to sell these securities, nor are they soliciting an offer to buy these securities in any state where the offer or sale of securities is not permitted.

The PACERS represent obligations of Citigroup Funding Inc. only. Valero Energy Corporation is not involved in any way in the offering and has no obligations relating to the PACERS or to holder of the PACERS.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the PACERS or determined that this prospectus and prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.


	Per PACERS	Total
Public Offering Price	$10.00	$
Underwriting Discount	$	$
Proceeds to Citigroup Funding Inc.	$	$

The underwriter expects to deliver the PACERS to purchasers on or about , 2006.

PACERS are callable securities. PACERS return, if any, and the maturity payment is linked to the trading price of Valero Energy common stock. We will call the PACERS, in whole, but not in part, only if the trading price of Valero Energy common stock at the close of trading on any trading day during the three-trading-day periods starting on and including October , 2006, April , 2007, October , 2007 or April , 2008 is greater than or equal to approximately 90% to 95% (to be determined on the date on which the PACERS are priced for initial sale to the public, which we refer to as the pricing date) of the initial share price of $ . The PACERS will not be called even if such trading price on any other day is greater than or equal to approximately 90% to 95% (to be determined on the pricing date) of the initial share price of $ . If we call the PACERS, you will receive for each PACERS a call price in cash equal to the sum of $10 plus a mandatory call premium. We will provide notice of a call, including the exact payment date, within one business day after the call of the PACERS and will make the payment associated with such call on the earlier of at least three business days after such call or the maturity date. If we do not call the PACERS, you will receive at maturity a payment in cash equal to your initial investment of $10 per PACERS, unless the trading price of Valero Energy common stock at the close of trading on any trading day after the pricing date up to and including the third trading day before maturity is less than or equal to $ (approximately 60% of the initial share price; to be determined on the pricing date). In this case, your maturity payment will be paid in Valero Energy common stock and the value of such payment will be directly linked to the change in price of Valero Energy common stock from its closing price on the pricing date, and will be less than the amount of your initial investment and could be zero. PACERS are not principal protected.

The PACERS are a series of unsecured senior debt securities issued by Citigroup Funding Inc. Any payments due on the PACERS are fully and unconditionally guaranteed by Citigroup Inc. The PACERS will rank equally with all other unsecured and unsubordinated debt of Citigroup Funding, and the guarantee of any payments due under the PACERS will rank equally with all other unsecured and unsubordinated debt of Citigroup. The return of the principal amount of your investment in the PACERS is not guaranteed. The PACERS mature on , 2008, are callable by us annually beginning on October , 2006 and do not provide for earlier redemption by you.

Each PACERS represents a principal amount of $10. You may transfer the PACERS only in units of $10 and integral multiples of $10. You will not have the right to receive physical certificates evidencing your ownership except under limited circumstances. Instead, we will issue the PACERS in the form of a global certificate, which will be held by The Depository Trust Company or its nominee. Direct and indirect participants in DTC will record beneficial ownership of the PACERS by individual investors. Accountholders in the Euroclear or Clearstream Banking clearance systems may hold beneficial interests in the PACERS through the accounts that these systems maintain with DTC. You should refer to the section “Description of the PACERS — Book-Entry System” in this prospectus supplement and the section “Description of Debt Securities — Book-Entry Procedures and Settlement” in the accompanying prospectus.

We will not make any periodic payments of interest on the PACERS or any other payments on the PACERS until maturity, unless we call the PACERS as described in more detail below.

We will call the PACERS, in whole, but not in part, if the trading price of Valero Energy common stock at the close of trading on any trading day during the three-trading-day periods starting on and including October , 2006, April , 2007, October , 2007 or April , 2008 is greater than or equal to approximately 90% to 95% (to be determined on the pricing date) of the initial share price of $ . We refer to the three trading days each year as a call determination period, and we refer to the trading day on which we call the PACERS, if

any, as the call date. If we call the PACERS, you will receive for each PACERS a call price in cash equal to the sum of $10 and a mandatory call premium. The mandatory call premium will equal $ if the PACERS are called during the call determination period beginning on October , 2006; $ if the PACERS are called during the call determination period beginning on April , 2007; $ if the PACERS are called during the call determination period beginning on October , 2007; and $ if the PACERS are called during the call determination period beginning on April , 2008.

If we call the PACERS during the call determination period beginning on October , 2006, April , 2007 or October , 2007, we will provide notice of a call, including the exact call payment date, within one business day after the call date, and the call payment date will be at least three business days after the call date. If we call the PACERS during the call determination period beginning on April , 2008, we will not provide notice of a call but will pay the call price to you at maturity.

The opportunity to participate in possible increases in the trading price of Valero Energy common stock through an investment in the PACERS is limited if we call the PACERS because the return you receive will be limited to the amount of the applicable mandatory call premium.

If we call the PACERS during the call determination period beginning on April , 2008, at maturity you will receive for each PACERS you hold a call price in cash equal to $ , the sum of $10 and the applicable mandatory call premium.

If we do not call the PACERS, at maturity you will receive for each PACERS you hold the maturity payment. The maturity payment for each PACERS will equal either:

As a result, if we do not call the PACERS and the trading price of Valero Energy common stock at the close of trading on any trading day after the pricing date up to and including the third trading day before maturity is less than or equal to approximately 60% (to be determined on the pricing date) of the initial share price, the value of Valero Energy common stock you receive at maturity for each PACERS will be less than the price paid for each PACERS, and could be zero.

The initial share price will equal the trading price of Valero Energy common stock at the close of trading on the date on which the PACERS are priced for initial sale to the public.

The examples of hypothetical call prices and maturity payments set forth below are intended to illustrate the effect of different closing prices of Valero Energy common stock on the amount payable on the PACERS upon a mandatory call or at maturity. All of the hypothetical examples are based on the following assumptions:

The PACERS have not been previously called and the closing price of Valero Energy common stock on the relevant call date is equal to or greater than $53.53, the share price at which a mandatory call occurs. The PACERS are consequently called at the applicable call price of $10.00 plus the applicable mandatory call premium per PACERS.

PACERS are not Mandatorily Called on any of the Call Dates and Downside Trigger Price is Not Breached

The PACERS are not called on any of the call dates, and the closing price of Valero Energy common stock is not less than or equal to 60.00% of the initial share price, or $34.72, on any trading day from the pricing date up to and including the valuation date.

PACERS are not Mandatorily Called on any of the Call Dates and Downside Trigger Price is Breached

The PACERS are not called on any of the call dates, and the closing price of Valero Energy common stock is less than 60.00% of the initial share price, or $34.72, on any trading day from the pricing date up and including the valuation date. The maturity payment per PACERS will be a number of shares of Valero Energy common stock equal to the exchange ratio, or 0.17280 shares.

Even if the closing price of Valero Energy common stock is greater than $53.53, or the level at which a maturity call would occur, at one or more times on or prior to the valuation date, the closing price of Valero Energy common stock is below $53.53 on all of the call dates. Consequently, the PACERS will not be called on any call date.

We have provided a graph showing the daily closing price of Valero Energy common stock, as reported on the New York Stock Exchange, from January 1, 2001 to March , 2006 and a table showing the high and low sale prices for Valero Energy common stock and the dividends paid on such stock for each quarter since the first quarter of 2001. You can find this graph and table in the section “Historical Data on Valero Energy Common Stock” in this prospectus supplement. We have provided this historical information to help you evaluate the behavior of Valero Energy common stock in recent years. However, past performance is not necessarily indicative of how Valero Energy common stock will perform in the future. You should also refer to the section “Risk Factors Relating to the PACERS — The Historical Performance of Valero Energy Common Stock Is Not an Indication of the Future Performance of Valero Energy Common Stock” in this prospectus supplement.

What Are the United States Federal Income Tax Consequences of Investing in the PACERS?

In purchasing a PACERS, you agree with Citigroup Funding that you and Citigroup Funding intend to treat a PACERS for U.S. federal income tax purposes as a derivative financial instrument providing for the future purchase of, or payment based on the value of, Valero Energy common stock. Under such treatment, if Citigroup Funding delivers Valero Energy common stock at maturity, a U.S. Holder generally will recognize no gain or loss on the purchase of the Valero Energy common stock by application of the monies received by Citigroup Funding in respect of the PACERS. Upon the mandatory redemption of the PACERS for cash prior to or at maturity, or the sale or other taxable disposition of a PACERS by a U.S. Holder, the U.S. Holder generally will recognize capital gain or loss equal to the difference, if any, between the amount realized as a result of such mandatory redemption, sale or other taxable disposition and the U.S. Holder’s tax basis in the PACERS. Any such gain or loss generally will be long-term capital gain or loss if the U.S. Holder has held the PACERS for more than one year at the time of disposition. Due to the absence of authority as to the proper characterization of the PACERS, no assurance can be given that the Internal Revenue Service will accept, or that a court will uphold, the characterization and tax treatment described above, and alternative treatments of the PACERS could result in less favorable U.S. federal income tax consequences to you, including a requirement to accrue income on a current basis. You should refer to the section “Certain United States Federal Income Tax Considerations” in this prospectus supplement for more information.

We will apply to list the PACERS on the American Stock Exchange under the symbol “PCV.” You should be aware that the listing of the PACERS on the American Stock Exchange will not necessarily ensure that a liquid trading market will be available for the PACERS.

Citigroup is a diversified global financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup Funding is a wholly-owned subsidiary of Citigroup whose business activities consist primarily of providing funds to Citigroup and its subsidiaries for general corporate purposes.

What Is the Role of Citigroup Funding’s and Citigroup’s Affiliate, Citigroup Global Markets Inc.?

Our affiliate, Citigroup Global Markets Inc., is the underwriter for the offering and sale of the PACERS and is expected to receive compensation for activities and services provided in connection with the offering. After the initial offering, Citigroup Global Markets Inc. and/or other of our broker-dealer affiliates intend to buy and sell PACERS to create a secondary market for holders of the PACERS, and may engage in other activities described in the section “Underwriting” in this prospectus supplement. However, neither Citigroup Global Markets Inc. nor any of these affiliates will be obligated to engage in any market-making activities, or continue such activities once it has started them. Citigroup Global Markets Inc. will also act as calculation agent for the PACERS. Potential conflicts of interest may exist between Citigroup Global Markets Inc. and you as holder of the PACERS.

Can You Tell Me More About the Effect of Citigroup Funding’s Hedging Activity?

We expect to hedge our obligations under the PACERS through one or more of our affiliates. This hedging activity will likely involve trading in Valero Energy common stock or in other instruments, such as options, swaps or futures, based upon Valero Energy common stock. This hedging activity could affect the market price of Valero Energy common stock and therefore the market value of the PACERS. The costs of maintaining or adjusting this hedging activity could also affect the price at which our affiliate Citigroup Global Markets Inc. may be willing to purchase your PACERS in the secondary market. Moreover, this hedging activity may result in us or our affiliates receiving a profit, even if the market value of the PACERS declines. You should refer to “Risk Factors Relating to the PACERS — Citigroup Funding’s Hedging Activity Could Result in a Conflict of Interest” and “— The Price at Which You Will Be Able to Sell Your PACERS Prior to Maturity Will Depend on a Number of Factors and May Be Substantially Less Than the Amount You Originally Invest” in this prospectus supplement and “Use of Proceeds and Hedging” in the accompanying prospectus.

Employee benefit plans and other entities the assets of which are subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974 or substantially similar federal, state or local laws (“ERISA-Type Plans”) will not be permitted to purchase or hold the PACERS. Plans that are not ERISA-Type Plans, such as individual retirement accounts, individual retirement annuities or Keogh plans, will be permitted to purchase or hold the PACERS, provided that each such plan shall by its purchase be deemed to represent and warrant that none of Citigroup Global Markets Inc, its affiliates or any employee thereof manages the plan or provides advice that serves as a primary basis for the plan’s decision to purchase, hold or dispose of the PACERS.

Yes, the PACERS are subject to a number of risks. Please refer to the section “Risk Factors Relating to the PACERS” in this prospectus supplement.

Because the terms of the PACERS differ from those of conventional debt securities in that the maturity payment will be based on the trading price of Valero Energy common stock at the close of trading on any trading day after the pricing date up to and including the third trading day before maturity, unless the PACERS are called by us, an investment in the PACERS entails significant risks not associated with similar investments in conventional debt securities, including, among other things, fluctuations in the trading price of Valero Energy common stock and other events that are difficult to predict and beyond our control.

Your Investment in the PACERS May Result in a Loss if the Trading Price of Valero Energy Common Stock Declines

If we do not call the PACERS, the amount of the maturity payment will depend on the trading price of Valero Energy common stock at the close of trading on any trading day after the pricing date up to and including the third trading day before maturity. If on any trading day after the pricing date up to and including the third trading day before maturity the trading price of Valero Energy common stock is less than or equal to $ (approximately 60% of the initial share price; to be determined on the pricing date), and we do not call the PACERS, the value of your maturity payment for each PACERS will be less than the price paid for each PACERS, and could be zero, in which case your investment in the PACERS will result in a loss. If we do not call the PACERS, this will be true even if the trading price of Valero Energy common stock exceeds the initial share price at one or more times after the pricing date up to and including the third trading day before maturity but is less than or equal to approximately 60% (to be determined on the pricing date) of the initial share price at the close of trading on any trading day during this period.

The PACERS Have a Mandatory Call Feature Which Limits the Potential Appreciation of Your Investment

We will call the PACERS if the trading price of Valero Energy common stock at the close of trading on any day during the four call determination periods beginning on October , 2006, April , 2007, October , 2007 or April , 2008 is greater than or equal to approximately 90% to 95% (to be determined on the pricing date) of the initial share price. If we call the PACERS, you will receive a call price in cash equal to $10 plus a mandatory call premium. The opportunity to participate in possible increases in the trading price of Valero Energy common stock through an investment in the PACERS is limited because the return you receive if we call the PACERS will be limited to the amount of the applicable mandatory call premium. Therefore, your return on the PACERS may be less than your return on a similar security that was directly linked to Valero Energy common stock and allowed you to participate more fully in the appreciation of the price of Valero Energy common stock.

You will not receive any periodic payments of interest or any other payments on the PACERS until maturity, unless we call the PACERS. In addition, you will not be entitled to receive dividend payments or other distributions, if any, made on Valero Energy common stock.

The Yield on the PACERS May Be Lower Than the Yield on a Standard Debt Security of Comparable Maturity

The PACERS do not pay any interest. As a result, if we do not call the PACERS, the effective yield on the PACERS will be less than that which would be payable on a conventional fixed-rate, non-callable debt security of Citigroup Funding of comparable maturity.

The Price at Which You Will Be Able to Sell Your PACERS Prior to Maturity Will Depend on a Number of Factors and May Be Substantially Less Than the Amount You Originally Invest

We believe that the value of your PACERS in the secondary market will be affected by the supply of and demand for the PACERS, the trading price of Valero Energy common stock and a number of other factors. Some of these factors are interrelated in complex ways. As a result, the effect of any one factor may be offset or magnified by the effect of another factor. The following paragraphs describe what we expect to be the impact on the market value of the PACERS of a change in a specific factor, assuming all other conditions remain constant.

Valero Energy Common Stock’s Price. We expect that the market value of the PACERS will depend substantially on the amount, if any, by which the price of Valero Energy common stock changes from the initial share price of $ . However, changes in the price of Valero Energy common stock may not always be reflected, in full or in part, in the market value of the PACERS. If you choose to sell your PACERS when the price of Valero Energy common stock exceeds the initial share price, you may receive substantially less than the amount that would be payable at maturity or if the PACERS are called based on that price because of expectations that the price of Valero Energy common stock will continue to fluctuate from that time to the time the call is exercised or to maturity. In addition, significant increases in the price of Valero Energy common stock are not likely to be reflected in the trading price of the PACERS because we will call the PACERS on the earliest of any of the four call determination periods beginning on October , 2006, April , 2007, October , 2007 or April , 2008 for a mandatory call premium of approximately 6.25% to 6.75%, approximately 12.5% to 13.5%, approximately 18.75% to 20.25%, and approximately 25% to 27% (each, to be determined on the pricing date), respectively, if the trading price of Valero Energy common stock at the close of trading on any trading day during any of the call determination periods is greater than or equal to approximately 90% to 95% (to be determined on the pricing date) of the initial share price. If you choose to sell your PACERS when the price of Valero Energy common stock is below the initial share price, you may receive less than the amount you originally invested.

The price of Valero Energy common stock will be influenced by Valero Energy Corporation’s results of operations and by the complex and interrelated political, economic, financial and other factors that can affect the capital markets generally and the market segment of which Valero Energy Corporation is a part. Citigroup Funding’s hedging activities in Valero Energy common stock, the issuance of securities similar to the PACERS and other trading activities by Citigroup Funding, its affiliates and other market participants can also affect the price of Valero Energy common stock.

Volatility of Valero Energy Common Stock. Volatility is the term used to describe the size and frequency of market fluctuations. If the expected volatility of Valero Energy common stock changes during the term of the PACERS, the market value of the PACERS may decrease.

Mandatory Call Feature. The possibility that the PACERS may be called during the call determination period each year is likely to limit their value. We believe that if the PACERS did not include a mandatory call feature, their value could be significantly different.

Events Involving Valero Energy Corporation. General economic conditions and earnings results of Valero Energy Corporation and real or anticipated changes in those conditions or results may affect the market value of the PACERS. In addition, if the dividend yields on Valero Energy common stock increase, we expect that the market value of the PACERS may decrease because the value of any shares or cash you will receive at maturity will not reflect the value of dividend payments. Conversely, if the dividend yield on Valero Energy common stock decreases, we expect that the value of the PACERS may increase.

Interest Rates. We expect that the market value of the PACERS will be affected by changes in U.S. interest rates. In general, if U.S. interest rates increase, the market value of the PACERS may decrease, and if U.S. interest rates decrease, the market value of the PACERS may increase.

Time Premium or Discount. As a result of a “time premium or discount,” the PACERS may trade at a value above or below that which would be expected based on the level of interest rates and the price of Valero Energy common stock the longer the time remaining to maturity. A “time premium or discount” results from expectations concerning the price of Valero Energy common stock during the period prior to the maturity of the PACERS. However, as the time remaining to maturity decreases, this time premium or discount may diminish, increasing or decreasing the market value of the PACERS.

Hedging Activities. Hedging activities related to the PACERS by us or one or more of our affiliates will likely involve trading in Valero Energy common stock or in other instruments, such as options, swaps or futures, based upon Valero Energy common stock. This hedging activity could affect the market price of Valero Energy common stock and therefore the market value of the PACERS. It is possible that we or our affiliates may profit from our hedging activity, even if the market value of the PACERS declines.

Citigroup Funding and Citigroup’s Credit Ratings, Financial Condition and Results. Actual or anticipated changes in our credit ratings, financial condition or results or those of Citigroup may affect the market value of the PACERS. The PACERS are subject to the credit risk of Citigroup, the guarantor of any payments due on the PACERS.

We want you to understand that the impact of one of the factors specified above, such as an increase in interest rates, may offset some or all of any change in the market value of the PACERS attributable to another factor, such as an increase in the price of Valero Energy common stock.

The Historical Performance of Valero Energy Common Stock Is Not an Indication of the Future Performance of Valero Energy Common Stock

The historical performance of Valero Energy common stock, which is included in this prospectus supplement, should not be taken as an indication of the future performance of Valero Energy common stock during the term of the PACERS. Changes in the price of Valero Energy common stock will affect the value of the PACERS, but it is impossible to predict whether the price of Valero Energy common stock will rise or fall.

The Volatility of the Price of Valero Energy Common Stock May Result in Delivery of Shares of Valero Energy Common Stock at Maturity

Historically, the price of Valero Energy common stock has been volatile. From January 1, 2001 to March 23, 2006, the closing price of Valero Energy common stock has been as low as $5.865 per share and as high as $63.200 per share. Furthermore, the price of Valero Energy common stock has appreciated significantly during the last twelve months. As a result, on more than one occasion from March 1, 2005 to March 1, 2006, the closing price of Valero Energy common stock has been less than 60% of its closing price of $54.94 on March 1, 2006. If we do not call the PACERS, whether you receive a maturity payment in cash equal to the amount of your initial investment in the PACERS or a number of shares of Valero Energy common stock with a value less than your initial investment depends upon the trading price of Valero Energy common stock at the close of trading on any trading day during the term of the PACERS. The volatility of the price of Valero Energy common stock may result in your maturity payment being a number of shares of Valero Energy common stock with a value less than your initial investment in the PACERS which will result in a loss.

You Will Have No Rights Against Valero Energy Corporation Prior to Receiving Any Shares of Valero Energy Common Stock at Maturity

You will have no rights against Valero Energy Corporation prior to receiving any shares of Valero Energy common stock at maturity, even though:

Valero Energy Corporation is not in any way involved in this offering and has no obligations relating to the PACERS or to holders of the PACERS. In addition, you will have no voting rights and will receive no dividends or other distributions with respect to Valero Energy common stock unless and until you receive shares of Valero Energy common stock at maturity.

The Maturity Payment May Be Reduced Under Some Circumstances if Valero Energy Common Stock Is Diluted Because the Maturity Payment Will Not Be Adjusted for All Events that Dilute Valero Energy Common Stock

The maturity payment is subject to adjustment for a number of events arising from stock splits and combinations, stock dividends, a number of other actions of Valero Energy Corporation that modify its capital structure and a number of other transactions involving Valero Energy Corporation as well as for the liquidation, dissolution or winding up of Valero Energy Corporation. You should refer to the section “Description of the PACERS—Dilution Adjustments” in this prospectus supplement. The maturity payment will not be adjusted for other events that may adversely affect the price of Valero Energy common stock, such as offerings of common stock for cash or in connection with acquisitions. Because of the relationship of the maturity payment to the price of Valero Energy common stock, these other events may reduce the maturity payment on the PACERS.

You May Not Be Able to Sell Your PACERS if an Active Trading Market for the PACERS Does Not Develop

There is currently no secondary market for the PACERS. Citigroup Global Markets Inc. currently intends, but is not obligated, to make a market in the PACERS. Even if a secondary market does develop, it may not be liquid and may not continue for the term of the PACERS. If the secondary market for the PACERS is limited, there may be few buyers should you choose to sell your PACERS prior to maturity.

The Market Value of the PACERS May Be Affected by Purchases and Sales of Valero Energy Common Stock or Derivative Instruments Related to Valero Energy Common Stock by Affiliates of Citigroup Funding

Citigroup Funding’s affiliates, including Citigroup Global Markets Inc., may from time to time buy or sell Valero Energy common stock or derivative instruments relating to Valero Energy common stock for their own accounts in connection with their normal business practices. These transactions could affect the price of Valero Energy common stock and therefore the market value of the PACERS.

Citigroup Global Markets Inc., an Affiliate of Citigroup Funding and Citigroup, Is the Calculation Agent, Which Could Result in a Conflict of Interest

Citigroup Global Markets Inc., which is acting as the calculation agent for the PACERS, is an affiliate of ours. As a result, Citigroup Global Markets Inc.’s duties as calculation agent, including with respect to making certain determinations and judgments that the calculation agent must make in determining amounts due to you, may conflict with its interest as an affiliate of ours.

Citigroup Funding’s Hedging Activity Could Result in a Conflict of Interest

We expect to hedge our obligations under the PACERS through one or more of our affiliates. This hedging activity will likely involve trading in Valero Energy common stock or in other instruments, such as options, swaps or futures, based upon Valero Energy common stock. This hedging activity may present a conflict between your interest in the PACERS and the interests we and our affiliates have in executing, maintaining and adjusting our hedge transactions because it could affect the price of Valero Energy common stock and therefore the market value of the PACERS. It could also be adverse to your interest if it affects the price at which our affiliate Citigroup Global Markets Inc. may be willing to purchase your PACERS in the secondary market. Since hedging our obligation under the PACERS involves risk and may be influenced by a number of factors, it is possible that we or our affiliates may profit from our hedging activity, even if the market value of the PACERS declines.

The United States Federal Income Tax Consequences of the PACERS Are Uncertain

The following description of the particular terms of the PACERS supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of the debt securities set forth in the accompanying prospectus. The following summary of the PACERS is qualified in its entirety by reference to the senior debt indenture referred to in the accompanying prospectus.

Premium mAndatory Callable Equity-linked secuRitieS (PACERS^SM) Based Upon Valero Energy Common Stock are callable securities. PACERS return, if any, and the Maturity Payment is linked to the Trading Price of Valero Energy common stock. We will call the PACERS, in whole, but not in part, only if the Trading Price of Valero Energy common stock at the close of trading on any Trading Day during the three-Trading-Day periods starting on and including October , 2006, April , 2007, October , 2007 or April , 2008 is greater than or equal to approximately 90% to 95% (to be determined on the Pricing Date) of the Initial Share Price of $ . The PACERS will not be called even if such Trading Price on any other day is greater than or equal to approximately 90% to 95% (to be determined on the Pricing Date) of the Initial Share Price of $ . If we call the PACERS, you will receive for each PACERS a Call Price in cash equal to the sum of $10 plus a Mandatory Call Premium. We will provide notice of a call, including the exact payment date, within one business day after the call of the PACERS and will make the payment associated with such call on the earlier of at least three business days after such call or the maturity date. If we do not call the PACERS, you will receive a Maturity Payment in cash equal to your initial investment of $10 per PACERS, unless the Trading Price of Valero Energy common stock at the close of trading on any Trading Day after the Pricing Date up to and including the third Trading Day before maturity is less than or equal to $ (approximately 60% of the Initial Share Price; to be determined on the Pricing Date). In this case, your Maturity Payment will be paid in Valero Energy common stock and the value of such payment will be directly linked to the change in price of Valero Energy common stock from its closing price on the Pricing Date, and will be less than the amount of your initial investment and could be zero. PACERS are not principal protected.

The PACERS are a series of debt securities issued under the senior debt indenture described in the accompanying prospectus. Any payments due on the PACERS are fully and unconditionally guaranteed by Citigroup. The aggregate principal amount of PACERS issued will be $ ( PACERS). The PACERS will mature on , 2008, unless called earlier by us. The PACERS will constitute part of the senior debt of Citigroup Funding and will rank equally with all other unsecured and unsubordinated debt of Citigroup Funding. The guarantee of any payments due under the PACERS will rank equally with all other unsecured and unsubordinated debt of Citigroup. The return of the principal amount of your investment in the PACERS is not guaranteed. The PACERS will be issued only in fully registered form and in denominations of $10 per PACERS and integral multiples thereof.

Reference is made to the accompanying prospectus for a detailed summary of additional provisions of the PACERS and of the senior debt indenture under which the PACERS will be issued.

We will not make any periodic payments of interest on the PACERS, or any other payments until maturity, unless we call the PACERS as described below.

We will call the PACERS, in whole, but not in part, if the trading price of Valero Energy common stock at the close of trading on any Trading Day during the three-Trading-Day periods starting on and including October , 2006, April , 2007, October , 2007 or April , 2008 is greater than or equal to approximately 90% to 95% (to be determined on the Pricing Date) of the Initial Share Price of $ . We refer to the three Trading Days each year as a Call Determination Period, and we refer to the Trading Day within a Call Determination

Period on which we call the PACERS, if any, as the Call Date. If we call the PACERS, you will receive for each PACERS a Call Price in cash equal to the sum of $10 and a Mandatory Call Premium. The Mandatory Call Premium will equal $ if the PACERS are called during the Call Determination Period beginning on October , 2006; $ if the PACERS are called during the Call Determination Period beginning on April , 2007; $ if the PACERS are called during the Call Determination Period beginning on October , 2007; and $ if the PACERS are called during the Call Determination Period beginning on April , 2008.

If we call the PACERS during the Call Determination Period beginning on October , 2006, April , 2007 or October , 2007, we will provide notice of a call, including the exact call payment date, within one business day after the Call Date, and the call payment date will be at least three business days after the Call Date. If we call the PACERS during the Call Determination Period beginning on April , 2008, we will not provide notice of a call but will pay the Call Price to you at maturity.

The opportunity to participate in possible increases in the Trading Price of Valero Energy common stock through an investment in the PACERS is limited if we call the PACERS because the amount you receive will be limited to the Call Price.

So long as the PACERS are represented by global securities and are held on behalf of DTC, call notices and other notices will be given by delivery to DTC. If the PACERS are no longer represented by global securities or are not held on behalf of DTC, call notices and other notices will be published in a leading daily newspaper in the City of New York, which is expected to be The Wall Street Journal.

The PACERS are not subject to redemption at the option of any holder prior to maturity and are not subject to the defeasance provisions described in the accompanying prospectus under “Description of Debt Securities — Defeasance.”

If we call the PACERS during the Call Determination Period beginning on April , 2008, at maturity you will receive for each PACERS you hold a Call Price in cash equal to $ , the sum of $10 and the applicable Mandatory Call Premium. If we do not call the PACERS, they will mature on , 2008. At maturity, you will receive for each PACERS the Maturity Payment described below.

If not previously called, the Maturity Payment for each $10 principal amount of PACERS will equal either:

As a result, if we do not call the PACERS and the Trading Price of Valero Energy common stock at the close of trading on any Trading Day after the Pricing Date up to and including the third Trading Day before maturity is less than or equal to the Downside Trigger Price, the value of Valero Energy common stock you receive at maturity for each PACERS will be less than the price paid for each PACERS, and could be zero.

In lieu of any fractional share of Valero Energy common stock otherwise payable in respect of any PACERS, at maturity you will receive an amount in cash equal to the value of such fractional share. The number of full shares of Valero Energy common stock, and any cash in lieu of a fractional share, to be delivered at maturity to each holder will be calculated based on the aggregate number of PACERS held by each holder.

The “Initial Share Price” will equal the Trading Price of Valero Energy common stock at the close of trading on the Pricing Date.

The “Pricing Date” means the date on which the PACERS are priced for initial sale to the public.

A “Market Disruption Event” means the occurrence or existence of any suspension of or limitation imposed on trading (by reason of movements in price exceeding limits permitted by any exchange or market or otherwise) of, or the unavailability, through a recognized system of public dissemination of transaction information, of accurate price, volume or related information in respect of (1) the shares of Valero Energy common stock (or any other security for which a Trading Price or Closing Price must be determined) on any exchange or market, or (2) any options contracts or futures contracts relating to the shares of Valero Energy common stock (or other security), or any options on such futures contracts, on any exchange or market if, in each case, in the determination of the calculation agent, any such suspension, limitation or unavailability is material.

A “Trading Day” means a day, as determined by the calculation agent, on which trading is generally conducted (or was scheduled to have been generally conducted, but for the occurrence of a Market Disruption Event) on the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market, the Chicago Mercantile Exchange and the Chicago Board Options Exchange, and in the over-the-counter market for equity securities in the United States.

The “Trading Price” of Valero Energy common stock or any other capital stock on any date of determination will be (1) if the common stock or capital stock is listed on a national securities exchange on that date of determination, any reported sale price, regular way, of the principal trading session on that date on the principal U.S. exchange on which the common stock or capital stock is listed or admitted to trading, (2) if the common stock or capital stock is not listed on a national securities exchange on that date of determination, or if the reported sale price on such exchange is not obtainable (even if the common stock or capital stock is listed or admitted to trading on such exchange), and the common stock or capital stock is quoted on the Nasdaq National Market, any reported sale price of the principal trading session on that date as reported on the Nasdaq, and (3) if the common stock or capital stock is not quoted on the Nasdaq on that date of determination, or if the reported sale price on the Nasdaq is not obtainable (even if the common stock or capital stock is quoted on the Nasdaq), any reported sale price of the principal trading session on the over-the-counter market on that date as reported on the OTC Bulletin Board, the National Quotation Bureau or a similar organization. The determination of the Trading Price by the calculation agent in the event of a Market Disruption Event may be deferred by the calculation agent for up to five consecutive Trading Days on which a Market Disruption Event is occurring, but not past the Trading Day prior to maturity. If no reported sale price of the principal trading session is available pursuant to clauses (1), (2) or (3) above or if there is a Market Disruption Event, the Trading Price on any date of determination, unless deferred by the calculation agent as described in the preceding sentence, will be the arithmetic mean, as determined by the calculation agent, of the bid prices of the common stock or capital stock obtained from as many dealers in such stock (which may include Citigroup Global Markets Inc. or any of our other affiliates or subsidiaries), but not exceeding three such dealers, as will make such bid prices available to the calculation agent. A security “quoted on the Nasdaq National Market” will include a security included for listing or quotation in any successor to such system and the term “OTC Bulletin Board” will include any successor to such service.

The Exchange Ratio will be subject to adjustment from time to time in certain situations. Any of these adjustments could have an impact on the Maturity Payment to be paid by Citigroup Funding to you. Citigroup Global Markets Inc., as calculation agent, will be responsible for the effectuation and calculation of any adjustment described herein and will furnish the trustee with notice of any adjustment.

(1) pays a stock dividend or makes a distribution with respect to its common stock in shares of the stock,

(2) subdivides or splits the outstanding shares of its common stock into a greater number of shares,

(3) combines the outstanding shares of the common stock into a smaller number of shares, or

(4) issues by reclassification of shares of its common stock any shares of other common stock of Valero Energy Corporation,

then, in each of these cases, the Exchange Ratio will be multiplied by a dilution adjustment equal to a fraction, the numerator of which will be the number of shares of common stock outstanding immediately after the event, plus, in the case of a reclassification referred to in (4) above, the number of shares of other common stock of Valero Energy Corporation, and the denominator of which will be the number of shares of common stock outstanding immediately before the event. The Initial Share Price and the Downside Trigger Price will also be adjusted in that case in the manner described below.

If Valero Energy Corporation, after the Pricing Date, issues, or declares a record date in respect of an issuance of, rights or warrants to all holders of its common stock entitling them to subscribe for or purchase shares of its common stock at a price per share less than the Then-Current Market Price of the common stock, other than rights to purchase common stock pursuant to a plan for the reinvestment of dividends or interest, then, in each case, the Exchange Ratio will be multiplied by a dilution adjustment equal to a fraction, the numerator of which will be the number of shares of common stock outstanding immediately before the adjustment is effected, plus the number of additional shares of common stock offered for subscription or purchase pursuant to the rights or warrants, and the denominator of which will be the number of shares of common stock outstanding immediately before the adjustment is effected by reason of the issuance of the rights or warrants, plus the number of additional shares of common stock which the aggregate offering price of the total number of shares of common stock offered for subscription or purchase pursuant to the rights or warrants would purchase at the Then-Current Market Price of the common stock, which will be determined by multiplying the total number of shares so offered for subscription or purchase by the exercise price of the rights or warrants and dividing the product obtained by the Then-Current Market Price. To the extent that, after the expiration of the rights or warrants, the shares of common stock offered thereby have not been delivered, the Exchange Ratio will be further adjusted to equal the Exchange Ratio which would have been in effect had the adjustment for the issuance of the rights or warrants been made upon the basis of delivery of only the number of shares of common stock actually delivered. The Initial Share Price and the Downside Trigger Price will also be adjusted in that case in the manner described below.

If Valero Energy Corporation, after the Pricing Date, declares or pays a dividend or makes a distribution to all holders of the common stock of any class of its capital stock, the capital stock of one or more of its subsidiaries, evidences of its indebtedness or other non-cash assets, excluding any dividends or distributions referred to in the above paragraph and excluding any issuance or distribution to all holders of its common stock, in the form of Marketable Securities, of capital stock of one or more of its subsidiaries, or issues to all holders of its common stock rights or warrants to subscribe for or purchase any of its or one or more of its subsidiaries’ securities, other than rights or warrants referred to in the above paragraph, then, in each of these cases, the Exchange Ratio will be multiplied by a dilution adjustment equal to a fraction, the numerator of which will be the Then-Current Market Price of one share of the common stock, and the denominator of which will be the Then-Current Market Price of one share of the common stock, less the fair market value as of the time the adjustment is effected of the portion of the capital stock, assets, evidences of indebtedness, rights or warrants so distributed or issued applicable to one share of common stock. The Initial Share Price and the Downside Trigger Price will also be adjusted in that case in the manner described below. If any capital stock declared or paid as a dividend or otherwise distributed or issued to all holders of Valero Energy common stock consists, in whole or in part, of Marketable Securities, then the fair market value of such Marketable Securities will be determined by the

calculation agent by reference to the Trading Price of such capital stock. The fair market value of any other distribution or issuance referred to in this paragraph will be determined by a nationally recognized independent investment banking firm retained for this purpose by Citigroup Funding, whose determination will be final.

Notwithstanding the foregoing, in the event that, with respect to any dividend or distribution to which the above paragraph would otherwise apply, the denominator in the fraction referred to in the above formula is less than $1.00 or is a negative number, then Citigroup Funding may, at its option, elect to have the adjustment provided by the above paragraph not be made and in lieu of this adjustment, the Trading Price of Valero Energy common stock on any Trading Day thereafter up to and including the third Trading Day before maturity will be deemed to be equal to the fair market value of the capital stock, evidences of indebtedness, assets, rights or warrants (determined, as of the date this dividend or distribution is made, by a nationally recognized independent investment banking firm retained for this purpose by Citigroup Funding, whose determination will be final) so distributed or issued applicable to one share of Valero Energy common stock and, if the Trading Price of Valero Energy common stock on any Trading Day thereafter, up to and including the third Trading Day before maturity, is less than or equal to the Downside Trigger Price, each holder of the PACERS will have the right to receive at maturity cash in an amount per PACERS equal to the Exchange Ratio multiplied by such fair market value.

If Valero Energy Corporation, after the Pricing Date, declares a record date in respect of a distribution of cash, other than any Permitted Dividends described below, any cash distributed in consideration of fractional shares of common stock and any cash distributed in a Reorganization Event referred to below, by dividend or otherwise, to all holders of its common stock, or makes an Excess Purchase Payment, then the Exchange Ratio will be multiplied by a dilution adjustment equal to a fraction, the numerator of which will be the Then-Current Market Price of the common stock, and the denominator of which will be the Then-Current Market Price of the common stock on the record date less the amount of the distribution applicable to one share of common stock which would not be a Permitted Dividend, or, in the case of an Excess Purchase Payment, less the aggregate amount of the Excess Purchase Payment for which adjustment is being made at the time divided by the number of shares of common stock outstanding on the record date. The Initial Share Price and the Downside Trigger Price will also be adjusted in that case in the manner described below.

A “Permitted Dividend” is any cash dividend in respect of Valero Energy common stock, other than a cash dividend that exceeds the immediately preceding cash dividend, and then only to the extent that the per share amount of this dividend results in an annualized dividend yield on the common stock in excess of 10%.

An “Excess Purchase Payment” is the excess, if any, of (x) the cash and the value (as determined by a nationally recognized independent investment banking firm retained for this purpose by Citigroup Funding, whose determination will be final) of all other consideration paid by Valero Energy Corporation with respect to one share of common stock acquired in a tender offer or exchange offer by Valero Energy Corporation, over (y) the Then-Current Market Price of the common stock.

Notwithstanding the foregoing, in the event that, with respect to any dividend, distribution or Excess Purchase Payment to which the sixth paragraph in this section would otherwise apply, the denominator in the fraction referred to in the formula in that paragraph is less than $1.00 or is a negative number, then Citigroup Funding may, at its option, elect to have the adjustment provided by the sixth paragraph in this section not be made and in lieu of this adjustment, the Trading Price of Valero Energy common stock on any Trading Day thereafter up to and including the third Trading Day before maturity will be deemed to be equal to the sum of the amount of cash and the fair market value of other consideration (determined, as of the date this dividend or distribution is made, by a nationally recognized independent investment banking firm retained for this purpose by Citigroup Funding, whose determination will be final) so distributed or applied to the acquisition of the common stock in the tender offer or exchange offer applicable to one share of Valero Energy common stock and, if the Trading Price of Valero Energy common stock on any Trading Day thereafter, up to and including the third

Trading Day before maturity, is less than or equal to the Downside Trigger Price, each holder of the PACERS will have the right to receive at maturity cash in an amount per PACERS equal to the Exchange Ratio multiplied by such sum.

If any adjustment is made to the Exchange Ratio as set forth above, an adjustment will also be made to the Initial Share Price and the Downside Trigger Price. The required adjustment will be made by dividing the Initial Share Price and the Downside Trigger Price by the relevant dilution adjustment. In this case, the PACERS will be called if the Trading Price of Valero Energy common stock is greater than or equal to approximately 90% to 95% (to be determined on the Pricing Date) of the adjusted Initial Share Price.

If Valero Energy Corporation, after the Pricing Date, issues or makes a distribution to all holders of its common stock of the capital stock of one or more of its subsidiaries, in each case in the form of Marketable Securities, and if the Trading Price at any time after the Pricing Date up to and including the third Trading Day before maturity (whether intra-day or at the close of trading on any day) is less than or equal to $ (the Downside Trigger Price), then, in each of these cases, each holder of the PACERS will receive at maturity for each PACERS a combination of shares of Valero Energy common stock equal to the Exchange Ratio and a number of shares of such Valero Energy subsidiaries’ capital stock equal to the Exchange Ratio times the number of shares of such subsidiaries’ capital stock distributed per share of Valero Energy common stock. Following the record date for an event described in this paragraph, the “Trading Price” will equal the Trading Price of Valero Energy common stock, plus the Trading Price of such subsidiaries’ capital stock times the number of shares of such subsidiaries’ capital stock distributed per share of Valero Energy common stock. In the event a distribution pursuant to this paragraph occurs, following the record date for such distribution, the adjustments described in “—Dilution Adjustments” will also apply to such subsidiaries’ capital stock if any of the events described in “—Dilution Adjustments” occurs with respect to such capital stock.

All dilution adjustments will be rounded upward or downward to the nearest 1/10,000th or, if there is not a nearest 1/10,000th, to the next lower 1/10,000th. No adjustment in the Exchange Ratio will be required unless the adjustment would require an increase or decrease of at least one percent therein, provided, however, that any adjustments which by reason of this sentence are not required to be made will be carried forward (on a percentage basis) and taken into account in any subsequent adjustment. If any announcement or declaration of a record date in respect of a dividend, distribution, issuance or repurchase requiring an adjustment as described herein is subsequently canceled by Valero Energy Corporation, or this dividend, distribution, issuance or repurchase fails to receive requisite approvals or fails to occur for any other reason, then, upon the cancellation, failure of approval or failure to occur, the Exchange Ratio, the Initial Share Price and the Downside Trigger Price will be further adjusted to the Exchange Ratio, the Initial Share Price and the Downside Trigger Price which

would then have been in effect had adjustment for the event not been made. If a Reorganization Event described below occurs after the occurrence of one or more events requiring an adjustment as described herein, the dilution adjustments previously applied to the Exchange Ratio will not be rescinded but will be applied to the Reorganization Event as provided for below.

The “Then-Current Market Price” of the common stock, for the purpose of applying any dilution adjustment, means the average Closing Price per share of common stock for the ten Trading Days immediately before this adjustment is effected or, in the case of an adjustment effected at the opening of business on the Business Day next following a record date, immediately before the earlier of the date the adjustment is effected and the related Ex-Date. For purposes of determining the Then-Current Market Price, the determination of the Closing Price by the calculation agent in the event of a Market Disruption Event, as described in the definition of Closing Price, may be deferred by the calculation agent for up to five consecutive Trading Days on which a Market Disruption Event is occurring, but not past the Trading Day prior to maturity.

The “Closing Price” of Valero Energy common stock (or any other security for which a Closing Price must be determined) on any date of determination will be (1) if the common stock or other security is listed on a national securities exchange on that date of determination, the closing sale price or, if no closing sale price is reported, the last reported sale price on that date on the principal U.S. exchange on which the common stock or other security is listed or admitted to trading, (2) if the common stock or other security is not listed on a national securities exchange on that date of determination, or if the closing sale price or last reported sale price is not obtainable (even if the common stock or other security is listed or admitted to trading on such exchange), and the common stock or other security is quoted on the Nasdaq National Market, the closing sale price or, if no closing sale price is reported, the last reported sale price on that date as reported on the Nasdaq, and (3) if the common stock or other security is not quoted on the Nasdaq on that date of determination or, if the closing sale price or last reported sale price is not obtainable (even if the common stock or other security is quoted on the Nasdaq), the last quoted bid price for the common stock or other security in the over-the-counter market on that date as reported by the OTC Bulletin Board, the National Quotation Bureau or a similar organization. The determination of the Closing Price by the calculation agent in the event of a Market Disruption Event may be deferred by the calculation agent for up to five consecutive Trading Days on which a Market Disruption Event is occurring, but not past the Trading Day prior to maturity. If no closing sale price or last reported sale price is available pursuant to clauses (1), (2) or (3) above or if there is a Market Disruption Event, the Closing Price on any date of determination, unless deferred by the calculation agent as described in the preceding sentence, will be the arithmetic mean, as determined by the calculation agent, of the bid prices of the common stock or other security obtained from as many dealers in such security (which may include Citigroup Global Markets Inc. or any of our other subsidiaries or affiliates), but not exceeding three such dealers, as will make such bid prices available to the calculation agent. A security “quoted on the Nasdaq National Market” will include a security included for listing or quotation in any successor to such system and the term “OTC Bulletin Board” will include any successor to such service. If, during any period of ten Trading Days used to calculate the Then-Current Market Price, there occurs any event requiring an adjustment to be effected as described herein, then the Closing Price for each Trading Day in such period of ten Trading Days occurring prior to the day on which such adjustment is effected will be adjusted by being divided by the relevant dilution adjustment.

The “Ex-Date” relating to any dividend, distribution or issuance is the first date on which the shares of the common stock trade in the regular way on their principal market without the right to receive this dividend, distribution or issuance.

the Trading Price of Valero Energy common stock on any Trading Day thereafter up to and including the third Trading Day before maturity will be deemed to be equal to the Transaction Value.

(1) for any cash received in a Reorganization Event, the amount of cash received per share of common stock,

(2) for any property other than cash or Marketable Securities received in a Reorganization Event, an amount equal to the market value on the date the Reorganization Event is consummated of that property received per share of common stock, as determined by a nationally recognized independent investment banking firm retained for this purpose by Citigroup Funding, whose determination will be final, and

(3) for any Marketable Securities received in a Reorganization Event, an amount equal to the Closing Price per share of these Marketable Securities on the applicable Trading Day multiplied by the number of these Marketable Securities received for each share of common stock.

“Marketable Securities” are any perpetual equity securities or debt securities with a stated maturity after the maturity date, in each case that are listed on a U.S. national securities exchange or reported by the Nasdaq National Market. The number of shares of any equity securities constituting Marketable Securities included in the calculation of Transaction Value pursuant to clause (3) above will be adjusted if any event occurs with respect to the Marketable Securities or the issuer of the Marketable Securities between the time of the Reorganization Event and maturity that would have required an adjustment as described above, had it occurred with respect to Valero Energy common stock or Valero Energy Corporation. Adjustment for these subsequent events will be as nearly equivalent as practicable to the adjustments described above.

If Valero Energy common stock has been subject to a Reorganization Event and the Trading Price of Valero Energy common stock on any Trading Day thereafter, up to and including the third Trading Day before maturity, is less than or equal to the Downside Trigger Price, then each holder of the PACERS will have the right to receive per $10 principal amount of PACERS (i) cash in an amount equal to the Exchange Ratio multiplied by the sum of clauses (1) and (2) in the definition of “Transaction Value” above and (ii) the number of Marketable Securities received for each share of stock in the Reorganization Event multiplied by the Exchange Ratio.

Citigroup Funding will be responsible for the calculation and effectuation of any adjustment described herein and will furnish the indenture trustee with notice of any such adjustment.

In case an Event of Default (as defined in the accompanying prospectus) with respect to any PACERS shall have occurred and be continuing, the amount declared due and payable upon any acceleration of the PACERS will be determined by the calculation agent and will equal, for each PACERS, the Call Price or Maturity Payment, as applicable, calculated as though the Call Date or maturity of the PACERS were the date of early repayment. See “— Mandatory Call Feature” and “— Determination of the Maturity Payment” above. If a bankruptcy proceeding is commenced in respect of Citigroup Funding or Citigroup, the claim of a beneficial owner of a PACERS against the entity that becomes subject to a bankruptcy proceeding, and therefore, under Section 502(b)(2) of Title II of the United States Code, the claim of a beneficial owner will be capped at the Call Price, the Maturity Payment or cash equivalent of the Maturity Payment, as applicable, calculated as though the Call Date or maturity of the PACERS were the date of the commencement of the proceeding.

In case of default in payment at maturity of the PACERS, the PACERS shall bear interest, payable upon demand of the beneficial owners of the PACERS in accordance with the terms of the PACERS, from and after the maturity date through the date when payment of the unpaid amount has been made or duly provided for, at the rate of % per annum on the unpaid amount (or the cash equivalent of such unpaid amount) due.

Upon issuance, all PACERS will be represented by one or more fully registered global securities (the “Global Securities”). Each such Global Security will be deposited with, or on behalf of, DTC and registered in the name of DTC or a nominee thereof. Unless and until it is exchanged in whole or in part for PACERS in definitive form, no Global Security may be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such nominee to a successor of DTC or a nominee of such successor. Accountholders in the Euroclear or Clearstream Banking clearance systems may hold beneficial interests in the PACERS through the accounts that each of these systems maintains as a participant in DTC.

A description of DTC’s procedures with respect to the Global Securities is set forth in the section “Description of Debt Securities — Book-Entry Procedures and Settlement” in the accompanying prospectus. DTC has confirmed that it intends to follow such procedures.

The calculation agent for the PACERS will be Citigroup Global Markets Inc. All determinations made by the calculation agent will be at the sole discretion of the calculation agent and will, in the absence of manifest error, be conclusive for all purposes and binding on Citigroup Funding, Citigroup and the holders of the PACERS. Because the calculation agent is an affiliate of Citigroup Funding and Citigroup, potential conflicts of interest may exist between the calculation agent and the holders of the PACERS, including with respect to certain determinations and judgments that the calculation agent must make in determining amounts due to holders of the PACERS. Citigroup Global Markets Inc. is obligated to carry out its duties and functions as calculation agent in good faith and using its reasonable judgment.

According to publicly available documents, Valero Energy Corporation owns and operates refineries in the United States, Canada and Aruba that produce refined products such as reformulated gasoline, gasoline meeting the specifications of the California Air Resources Board (CARB), CARB diesel fuel, low-sulfur diesel fuel and oxygenates (liquid hydrocarbon compounds containing oxygen). Valero Energy Corporation also produces conventional gasolines, distillates, jet fuel, asphalt, petrochemicals, lubricants and other refined products. Valero Energy Corporation is currently subject to the informational requirements of the Securities Exchange Act. Accordingly, Valero Energy Corporation files reports (including its Annual Report on Form 10-K for the fiscal year ended December 31, 2005), proxy statements and other information with the SEC. Valero Energy Corporation’s registration statements, reports and other information are available to the public from the SEC’s website at http://www.sec.gov or may be inspected and copied at the SEC’s Public Reference Room at the location listed in the section “Prospectus Summary—Where You Can Find More Information” in the accompanying prospectus.

Neither Citigroup Funding nor Citigroup has participated in the preparation of Valero Energy Corporation’s publicly available documents and neither has made any due diligence investigation or inquiry of Valero Energy Corporation in connection with the offering of the PACERS. We make no representation that the publicly available information about Valero Energy Corporation is accurate or complete.

The PACERS represents obligations of Citigroup Funding and Citigroup only. Valero Energy Corporation is not involved in any way in this offering and has no obligation relating to the PACERS or to holders of the PACERS.

The common stock is listed on the New York Stock Exchange under the symbol “VLO.” The following table sets forth, for each of the quarterly periods indicated, the high and the low sales prices for Valero Energy common stock, as reported on the New York Stock Exchange, as well as the cash dividends paid per share of Valero Energy common stock.

Holders of PACERS will not be entitled to any rights with respect to Valero Energy common stock (including, without limitation, voting rights or rights to receive dividends or other distributions in respect thereof) prior to receiving shares of Valero Energy common stock at maturity, if applicable.

According to Valero Energy Corporation’s Annual Report on Form 10-K for the annual period ended December 31, 2005, as of January 31, 2006, there were 621,838,191 shares of common stock outstanding. During the period reflected in the above table, Valero Energy Corporation split its common stock 2 for 1 on October 7, 2004 and on December 15, 2004.

The following graph sets forth the daily closing price of Valero Energy common stock, as reported on the New York Stock Exchange, from January 1, 2001 to March 9, 2006. The data reflected in the graph below was obtained from Bloomberg L.P. Past performance of Valero Energy common stock is not necessarily indicative of future closing prices.

The following is a summary of U.S. federal income tax consequences material to the purchase, ownership and disposition of the PACERS. This summary does not purport to be a comprehensive description of all of the tax consequences that may be relevant to the decision to purchase the PACERS by any particular investor, including tax consequences that arise from rules of general application to all taxpayers or to certain classes of taxpayers or that are generally assumed to be known by investors. Unless otherwise specifically indicated herein, this summary addresses the tax consequences only to a person that is (i) an individual citizen or resident of the United States, (ii) a corporation organized in or under the laws of the United States or any state thereof or the District of Columbia or (iii) otherwise subject to U.S. federal income taxation on a net income basis in respect of the PACERS (a “U.S. Holder”). This summary also does not address the tax consequences to (i) persons that may be subject to special treatment under U.S. federal income tax law, such as banks, insurance companies, thrift institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations, traders in securities that elect to mark to market and dealers in securities or currencies, (ii) persons that will hold the PACERS as part of a position in a “straddle” or as part of a “hedging,” “conversion” or other integrated investment transaction for federal income tax purposes, (iii) persons whose functional currency is not the U.S. dollar, (iv) persons that do not hold the PACERS as capital assets or (v) persons that did not purchase the PACERS in the initial offering.

This summary is based on U.S. federal income tax laws, regulations, rulings and decisions in effect as of the date of this prospectus supplement, all of which are subject to change at any time (possibly with retroactive effect). As the law is technical and complex, the discussion below necessarily represents only a general summary. Moreover, this summary does not address the effects of any applicable state, local or foreign tax laws.

No statutory, judicial or administrative authority directly addresses the characterization of the PACERS or instruments similar to the PACERS for U.S. federal income tax purposes. As a result, significant aspects of the U.S. federal income tax consequences of an investment in the PACERS are not certain. No ruling is being requested from the Internal Revenue Service (the “IRS”) with respect to the PACERS and no assurance can be given that the IRS will agree with the conclusions expressed herein. It is possible that the IRS could seek to characterize the PACERS in a manner that results in tax consequences different from those described below. ACCORDINGLY, A PROSPECTIVE INVESTOR IN THE PACERS SHOULD CONSULT ITS OWN TAX ADVISORS IN DETERMINING THE TAX CONSEQUENCES OF AN INVESTMENT IN THE PACERS, INCLUDING THE APPLICATION OF STATE, LOCAL OR OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.

In purchasing a PACERS, each holder agrees with Citigroup Funding that Citigroup Funding and such holder intend to treat a PACERS for U.S. federal income tax purposes as a derivative financial instrument providing for the future purchase of, or payment based on the value of Valero Energy common stock under which an amount equal to the purchase price of the PACERS is treated as a non-interest-bearing cash deposit to be applied at maturity in full satisfaction of the holder’s payment obligation under the derivative financial instrument. Prospective investors should note that cash proceeds of this offering will not be segregated by Citigroup Funding during the term of the PACERS, but instead will be commingled with Citigroup Funding’s other assets and applied in a manner consistent with the “Use of Proceeds and Hedging” in the accompanying prospectus. As discussed below, there is no assurance that the IRS will agree with this treatment, and alternative treatments of the PACERS could result in less favorable U.S. federal income tax consequences to a holder, including a requirement to accrue income on a current basis.

Under the above characterization of the PACERS, if Citigroup Funding delivers Valero Energy common stock at maturity, a U.S. Holder will recognize no gain or loss on the purchase of the Valero Energy common stock by application of the monies received by Citigroup Funding in respect of the PACERS. A U.S. Holder will

have a tax basis in such stock equal to the U.S. Holder’s tax basis in the PACERS (less the portion of the tax basis of the PACERS allocable to any fractional share, as described in the next paragraph). A U.S. Holder’s tax basis in a PACERS generally will equal such Holder’s cost for that PACERS. A U.S. Holder’s holding period for Valero Energy common stock received at maturity will begin on the day following the receipt of such stock.

A U.S. Holder will recognize gain or loss (which may be treated as short-term capital gain or loss without regard to such Holder’s holding period for the PACERS) with respect to cash received in lieu of fractional shares, in an amount equal to the difference between the cash received and the portion of the basis of the PACERS allocable to fractional shares (based on the relative number of fractional shares and full shares delivered to the holder). If, as a result of one or more dilution adjustments, at maturity Citigroup Funding delivers any combination of cash and Marketable Securities, pursuant to the U.S. Holder’s purchase obligation under the PACERS, although not free from doubt, the U.S. Holder should allocate its cash deposit pro rata to the cash and Marketable Securities received. Under this treatment, the U.S. Holder generally would be taxed as described in the preceding paragraph, except that the U.S. Holder’s basis in any Marketable Securities received would equal the pro rata portion of its deposit allocated thereto and the U.S. Holder would recognize short-term capital gain or loss equal to the difference between the cash received and the amount allocated thereto.

Under the above characterization of the PACERS, upon the mandatory redemption of the PACERS for cash prior to or at maturity, or the sale or other taxable disposition of a PACERS by a U.S. Holder, the U.S. Holder generally will recognize capital gain or loss equal to the difference, if any, between the amount realized as a result of such mandatory redemption, sale or other taxable disposition and the U.S. Holder’s tax basis in the PACERS. Any such gain or loss generally will be long-term capital gain or loss if the U.S. Holder has held the PACERS for more than one year at the time of disposition.

Due to the absence of authority as to the proper characterization of the PACERS and the absence of any comparable instruments for which there is a widely accepted tax treatment, no assurance can be given that the IRS will accept, or that a court will uphold, the characterization of the PACERS as derivative financial instruments and the tax treatment described above. In particular, because a holder will be entitled to cash (or, in certain limited cases, Valero Energy common stock with a trading value) equal to or greater than the amount of the initial purchase price paid for PACERS unless (i) the closing value of Valero Energy common stock at the close of trading on any Trading Day after the Pricing Date up to and including the third Trading Day before maturity is less than or equal to approximately 60% (to be determined on the Pricing Date) of the initial share price and (ii) the closing value of Valero Energy common stock at the close of trading on each Trading Day within each Call Determination Period, and on the maturity date, is less than 90% to 95% of the initial share price; (to be determined on the Pricing Date) the IRS could seek to analyze the federal income tax consequences of owning PACERS under Treasury regulations governing contingent payment debt instruments (the “Contingent Payment Regulations”). The Contingent Payment Regulations are complex, but very generally apply the original issue discount rules of the Internal Revenue Code to a contingent payment debt instrument by requiring that original issue discount be accrued every year at a “comparable yield” for the issuer of the instrument, determined at the time of issuance of the obligation. In addition, the Contingent Payment Regulations require that a projected payment schedule, which results in such a “comparable yield,” be determined, and that adjustments to income accruals be made to account for differences between actual payments and projected amounts. To the extent that the comparable yield as so determined exceeds the projected payments on a contingent debt instrument in any taxable year, the owner of that instrument will recognize ordinary interest income for that taxable year in excess of the cash the owner receives and such excess would increase the U.S. Holder’s tax basis in the debt instrument. In addition, any gain realized on the sale, exchange or redemption of a contingent payment debt instrument will be treated as ordinary income. Any loss realized on such sale, exchange or redemption will be treated as an ordinary loss to the extent that the holder’s original issue discount inclusions with respect to the obligation exceed prior reversals of such inclusions required by the adjustment mechanism described above. Any loss realized in excess of such amount generally will be treated as a capital loss.

The Contingent Payment Regulations apply only to debt instruments that provide for contingent payments. The PACERS are expected to provide economic returns that are linked to the performance of Valero Energy common stock, and offer no assurance that a holder’s investment will be returned to the holder. The PACERS also are payable in certain circumstances by the delivery of Valero Energy common stock. Further, based on the historical performance of Valero Energy common stock, a holder may receive economic returns on the PACERS that are substantially lower or higher than the holder’s investment therein and the amounts payable if the PACERS are called substantially exceed a conventional interest rate return. Accordingly, Citigroup Funding believes that it is reasonable to treat the PACERS for U.S. federal income tax purposes, not as debt instruments, but as derivative financial instruments in respect of which holders have deposited a fixed amount of cash with Citigroup Funding. If, however, the IRS were successfully to maintain that the Contingent Payment Regulations apply to the PACERS, then, among other matters, a U.S. Holder would be required to include in income each year an accrual of interest at a comparable yield for a comparable non-contingent PACERS issued by Citigroup Funding even though the holder will be entitled to no payments until the maturity of the PACERS. In addition, gain realized by a holder upon the mandatory redemption, sale or other taxable disposition of a PACERS (including as a result of payments made at maturity) generally would be characterized as ordinary income, rather than as short- or long-term capital gain (depending on whether the PACERS has been held for more than one year).

Even if the Contingent Payment Regulations do not apply to the PACERS, it is possible that the IRS could seek to characterize the PACERS in a manner that results in tax consequences different from those described above. Under alternative characterizations of the PACERS, it is possible, for example, that a PACERS could be treated as including a debt instrument and a derivative financial instrument or two or more options.

It is also possible that future regulations or other IRS guidance would require you to accrue income on the PACERS on a current basis. The IRS and U.S. Treasury Department recently issued proposed regulations that require current accrual of income with respect to contingent nonperiodic payments made under certain notional principal contracts. The preamble to the regulations states that the “wait and see” method of tax accounting does not properly reflect the economic accrual of income on such contracts, and requires current accrual of income with respect to some contracts already in existence at the time the proposed regulations were released. While the proposed regulations do not apply to derivative financial instruments other than notional principal contracts, the preamble to the proposed regulations expresses the view that similar timing issues exist in the case of prepaid forward contracts. If the IRS published future guidance requiring current accrual of income with respect to contingent payments on prepaid forward contracts, it is possible that you could be required to accrue income over the term of the PACERS.

Some or all of the net long-term capital gain arising from certain “constructive ownership” transactions may be characterized as ordinary income, in which case an interest charge would be imposed on any such ordinary income. These rules have no immediate application to derivative financial instruments in respect of the stock of most corporations, including the PACERS. The rules, however, grant discretionary authority to the U.S. Treasury Department to expand the scope of “constructive ownership” transactions to include derivative financial instruments in respect of the stock of all corporations. The rules separately also direct the Treasury to promulgate regulations excluding a forward contract that does not convey “substantially all” of the economic return on an underlying asset from the scope of “constructive ownership” transactions. This category may include the PACERS. It is not possible to predict whether such regulations will be promulgated by the U.S. Treasury Department, or the form or effective date that any regulations that may be promulgated might take.

The following is a summary of certain United States federal income tax consequences that will apply to Non-U.S. Holders of the PACERS other than Non-U.S. Holders that hold more than 5% in value of either the outstanding PACERS or the outstanding Valero Energy common stock at any time throughout their entire holding period for the PACERS. The term “Non-U.S. Holder” means a holder of the PACERS that is a non-resident alien individual or a foreign corporation.

In the case of a Non-U.S. Holder of the PACERS, any payments made with respect to the PACERS will not be subject to U.S. withholding tax, provided that such holder complies with applicable certification requirements. Any capital gain realized upon the mandatory redemption, sale or other disposition of the PACERS by a Non- U.S. Holder generally will not be subject to U.S. federal income tax if (i) such gain is not effectively connected with a U.S. trade or business of such holder and (ii) in the case of an individual, such individual is not present in the United States for 183 days or more in the taxable year of the sale or other disposition.

A Non-U.S. Holder that is subject to U.S. federal income taxation on a net income basis with respect to its investment in the PACERS should see the discussion relating to U.S. Holders of the PACERS, above.

If you are an individual who will be subject to U.S. federal estate tax only with respect to U.S. situs property (generally an individual who at death is neither a citizen nor a domiciliary of the United States) or an entity the property of which is potentially includible in such an individual’s gross estate for U.S. federal estate tax purposes (for example, a trust funded by such an individual and with respect to which the individual has retained certain interests or powers), you should note that, absent an applicable treaty benefit, the PACERS may be treated as U.S. situs property for U.S. federal estate tax purposes. You are urged to consult your own tax advisors regarding the U.S. federal estate tax consequences of investing in the PACERS.

A holder of the PACERS may be subject to information reporting and to backup withholding with respect to certain amounts paid to the holder unless such holder provides proof of an applicable exemption or a correct taxpayer identification number, and otherwise complies with applicable requirements of the backup withholding rules. Backup withholding is not an additional tax. Rather, any amounts withheld under the backup withholding rules may be refunded or credited against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.

The terms and conditions set forth in the terms agreement dated on the Pricing Date, which incorporates by reference the underwriting agreement basic provisions dated March 10, 2006, govern the sale and purchase of the PACERS. The terms agreement and the underwriting agreement basic provisions are referred to together as the underwriting agreement. Citigroup Global Markets Inc., as underwriter, has agreed to purchase from Citigroup Funding, and Citigroup Funding has agreed to sell to Citigroup Global Markets Inc., $ principal amount of PACERS ( PACERS), the payments on which are fully and unconditionally guaranteed by Citigroup.

The underwriting agreement provides that the obligation of Citigroup Global Markets Inc. to purchase the PACERS included in this offering is subject to approval of certain legal matters by counsel and to other conditions. Citigroup Global Markets Inc. is obligated to purchase all of the PACERS if it purchases any of the PACERS.

Citigroup Global Markets Inc. proposes to offer some of the PACERS directly to the public at the public offering price set forth on the cover page of this prospectus supplement and some of the PACERS to certain dealers at the public offering price less a concession not to exceed $ per PACERS. Citigroup Global Markets Inc. may allow, and these dealers may reallow, a concession not to exceed $ per PACERS on sales to certain other dealers. Sales may also be made through Citicorp Investment Services and Citicorp Financial Services Corp., broker-dealers affiliated with Citigroup Global Markets Inc., acting as agents. Citicorp Investment Services and Citicorp Financial Services Corp. will receive as remuneration a portion of the underwriting discount set forth on the cover of this prospectus supplement equal to $ per PACERS for the PACERS they sell. If all of the PACERS are not sold at the initial offering price, Citigroup Global Markets Inc. may change the public offering price and other selling terms.

Citigroup Funding has agreed that, for the period beginning on the date of the underwriting agreement and continuing to and including the closing date for the purchase of the PACERS, it will not, without the prior written consent of Citigroup Global Markets Inc., offer, sell, contract to offer or sell or otherwise dispose of any securities, including any backup undertakings for such securities, of Citigroup Funding, in each case that are substantially similar to the PACERS or any security convertible into or exchangeable for the PACERS or substantially similar securities. Citigroup Global Markets Inc. may release any of the securities subject to this lock-up at any time without notice.

Prior to this offering, there has been no public market for the PACERS. Consequently, the initial public offering price for the PACERS was determined by negotiations between Citigroup Funding and Citigroup Global Markets Inc. There can be no assurance, however, that the prices at which the PACERS will sell in the public market after this offering will not be lower than the price at which they are sold by Citigroup Global Markets Inc. or that an active trading market in the PACERS will develop and continue after this offering.

Citigroup Funding will apply to list the PACERS on the American Stock Exchange under the symbol “PCV.”

In connection with the offering, Citigroup Global Markets Inc., as the underwriter, may purchase and sell PACERS or the underlying stocks of Valero Energy common stock in the open market. These transactions may include covering transactions and stabilizing transactions. Covering transactions involve purchases of PACERS in the open market after the distribution has been completed to cover short positions. Stabilizing transactions consist of bids or purchases of PACERS or Valero Energy common stock made for the purpose of preventing a decline in the market price of the PACERS, or Valero Energy common stock while the offering is in progress.

Any of these activities may have the effect of preventing or retarding a decline in the market price of the PACERS. They may also cause the price of the PACERS to be higher than the price that otherwise would exist in

the open market in the absence of these transactions. Citigroup Global Markets Inc. may conduct these transactions in the over-the-counter market or otherwise. If Citigroup Global Markets Inc. commences any of these transactions, it may discontinue them at any time.

In order to hedge its obligations under the PACERS, Citigroup Funding expects to enter into one or more swaps or other derivatives transactions with one or more of its affiliates. You should refer to the section “Risk Factors Relating to the PACERS — The Market Value of the PACERS May Be Affected by Purchases and Sales of Valero Energy Common Stock or Derivative Instruments Related to Valero Energy Common Stock by Affiliates of Citigroup Funding” and “— Citigroup Funding’s Hedging Activity Could Result in a Conflict of Interest” in this prospectus supplement and the section “Use of Proceeds and Hedging” in the accompanying prospectus.

Citigroup Global Markets Inc. is an affiliate of Citigroup Funding. Accordingly, the offering will conform with the requirements set forth in Rule 2720 of the Conduct Rules of the National Association of Securities Dealers. Citigroup Global Markets Inc. may not confirm sales to any discretionary account without the prior specific written approval of a customer.

This prospectus supplement, together with the accompanying prospectus, may also be used by Citigroup Fundings’ broker-dealer affiliates in connection with offers and sales of the PACERS (subject to obtaining any necessary approval of the American Stock Exchange for any of these offers and sales) in market-making transactions at negotiated prices related to prevailing market prices at the time of sale. Any of these affiliates may act as principal or agent in these transactions. None of these affiliates is obligated to make a market in the PACERS and any may discontinue any market making at any time without notice, at its sole discretion.

This prospectus supplement and the accompanying prospectus in electronic format may be made available on the website maintained by the underwriter.

We have agreed to indemnify Citigroup Global Markets Inc. against certain liabilities under the Securities Act of 1933, or to contribute to payments Citigroup Global Markets Inc. may be required to make because of any of those liabilities.

Each purchaser of the PACERS or any interest therein will be deemed to have represented and warranted on each day from and including the date of its purchase or other acquisition of the PACERS through and including the date of disposition of such PACERS that (a) it is not (i) an employee benefit plan subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) an entity with respect to which part or all of its assets constitute assets of any such employee benefit plan by reason of 29 C.F.R. 2510.3-101 or otherwise, or (iii) a government or other plan subject to federal, state or local law substantially similar to the fiduciary responsibility provisions of ERISA ((i), (ii) and (iii) collectively, “ERISA-Type Plans”); and (b) if it is a plan described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, that is not an ERISA-Type Plan (for example, individual retirement accounts, individual retirement annuities or Keogh plans), none of Citigroup Global Markets Inc., its affiliates or any employee thereof manages the plan or provides advice that serves as a primary basis for the plan’s decision to purchase, hold or dispose of the PACERS.

The validity of the PACERS and certain matters relating thereto will be passed upon for Citigroup Funding and Citigroup by Michael S. Zuckert, Esq. Mr. Zuckert, General Counsel, Finance and Capital Markets of Citigroup and legal counsel to Citigroup Funding, beneficially owns, or has rights to acquire under Citigroup employee benefit plans, an aggregate of less than one percent of the common stock of Citigroup. Certain legal matters will be passed upon for the underwriters by Cleary Gottlieb Steen & Hamilton LLP, New York, New York. Cleary Gottlieb Steen & Hamilton LLP has also acted as special tax counsel to Citigroup Funding and Citigroup in connection with the PACERS and the guarantee. Cleary Gottlieb Steen & Hamilton LLP has from time to time acted as counsel for Citigroup and certain of its subsidiaries, including Citigroup Funding, and may do so in the future.

You should rely only on the information incorporated by reference or provided in this prospectus supplement or the accompanying prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus supplement is accurate as of any date other than the date on the front of the document.


Investment Products		Not FDIC Insured		May Lose Value		No Bank Guarantee


Date on which the PACERS are called	Any Call Date in Oct 2006		Any Call Date in Apr 2007		Any Call Date in Oct 2007		Any Call Date in Apr 2008		Any Call Date in Apr 2008
Hypothetical initial share price	$57.87		$57.87		$57.87		$57.87		$57.87

Hypothetical lowest closing price on or prior to the valuation date	$52.08		$41.67		$43.40		$41.09		$31.83

Is the hypothetical lowest closing price less than or equal to 60.00% of the initial share price, or $34.72	No		No		No		No		Yes

Hypothetical minimum share price at which a mandatory call would occur	$53.53		$53.53		$53.53		$53.53		$53.53

Hypothetical closing price of Valero Energy common stock on the call dates	$54.98		$59.03		$68.80		$78.12		$60.76

Call price per PACERS	$10.650		$11.300		$11.950		$12.600		$12.600

Return on Valero Energy common stock (excluding any cash dividend payments)	-5.000	%	2.000	%	18.885	%	35.000	%	5.000	%

Return on the PACERS	6.500	%	13.000	%	19.500	%	26.000	%	26.000	%

Return on Valero Energy common stock (including all cash dividend payments)	-4.795	%	2.410	%	19.500	%	35.820	%	5.820	%


PACERS are not Mandatorily Called

	Downside Trigger Price Not Breached		Downside Trigger Price Breached

Hypothetical initial share price	$57.87		$57.87

Hypothetical lowest closing price on or prior to the valuation date	$43.40		$28.94

Is the hypothetical lowest closing price less than or equal to 60.00% of the initial share price, or $34.72?	No		Yes

Will 0.17280 (the hypothetical exchange ratio) shares of Valero Energy common stock be delivered at maturity?	No		Yes

Hypothetical closing price of Valero Energy common stock at maturity	$43.40		$30.09

Maturity payment (cash or value of Valero Energy common stock per PACERS)	$10.000		$5.200

Return on Valero Energy common stock (excluding any cash dividend payments)	-25.000	%	-48.000	%

Return on the PACERS	0.000	%	-48.000	%

Return on Valero Energy common stock (including all cash dividend payments)	-24.180	%	-47.180	%


	High	Low	Dividend
2001
Quarter
First	9.7750	7.8750	0.0200
Second	13.1275	8.7475	0.0200
Third	11.0150	8.0300	0.0200
Fourth	10.1100	8.5250	0.0250
2002
Quarter
First	12.4600	9.2500	0.0250
Second	12.3675	8.9750	0.0250
Third	9.5450	6.5250	0.0250
Fourth	9.6250	5.7875	0.0250


	High	Low	Dividend
2003
Quarter
First	10.5875	8.0500	0.0250
Second	10.5375	8.7900	0.0250
Third	10.0250	8.7975	0.0250
Fourth	11.7700	9.4250	0.0300
2004
Quarter
First	15.3750	11.4250	0.0300
Second	18.7250	13.9725	0.0375
Third	20.2975	15.8950	0.0375
Fourth	23.9000	19.4250	0.0400
2005
Quarter
First	38.5750	21.0050	0.0400
Second	41.1250	28.9550	0.0500
Third	58.6250	39.3800	0.0500
Fourth	58.1450	45.8550	0.0500
2006
Quarter
First (through March 27, 2006)	63.6100	48.000	0.0600

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a. If called on any call date in October 2006, the call price will equal $10.000 plus a mandatory call premium of $0.650. Call Price = $10.000 + $0.650 = $10.650 per PACERS

b. If called on any call date in April 2007, the call price will equal $10.000 plus a mandatory call premium of $1.300. Call Price = $10.000 + $1.300 = $11.300 per PACERS

c. If called on any call date in October 2007, the call price will equal $10.000 plus a mandatory call premium of $1.950 Call Price = $10.000 + $1.950 = $11.950 per PACERS


d. If called on any call date in April 2008, the call price will equal $10.000 plus a mandatory call premium of $2.600 Call Price = $10.000 + $2.600 = $12.600 per PACERS

e. Even if the the downside trigger price has been breached, the PACERS will be called on any call date if the closing price of Valero Energy common stock on such date is equal to or greater than $53.53, the level at which a mandatory call would occur. If called on any call date in April 2008, the call price will equal $10.000 plus a mandatory call premium of $2.600. Call Price = $10.000 + $2.600 = $12.600 per PACERS


		Page
Prospectus Supplement
Summary Information - Q&A		S-2
Risk Factors Relating to the PACERS		S-9
Description of the PACERS		S-14
Description of Valero Energy Corporation		S-23
Historical Data on the Common Stock of Valero Energy Corporation		S-23
Certain United States Federal Income Tax Considerations		S-25
Underwriting		S-29
ERISA Matters		S-30
Legal Matters		S-31

Prospectus
Prospectus Summary		1
Forward-Looking Statements		6
Citigroup Inc.		6
Citigroup Funding Inc.		6
Use of Proceeds and Hedging		7
European Monetary Union		8
Description of Debt Securities		8
Description of Index Warrants		21
Description of Debt Security and Index Warrant Unit		24
Limitations on Issuances in Bearer Form		25
Plan of Distribution		26
ERISA Matters		29
Legal Matters		29
Experts		29