20. REGULATORY CAPITAL AND CITIGROUP INC. PARENT COMPANY INFORMATION

Citigroup is subject to risk-based capital and leverage guidelines issued by the Federal Reserve System (FRB). Citi’s U.S. insured depository institution subsidiaries, including Citibank, N.A., are subject to similar guidelines issued by their respective primary federal bank regulatory agencies. These guidelines are used to evaluate capital adequacy and include the required minimums shown in the following table. The regulatory agencies are required by law to take specific prompt actions with respect to institutions that do not meet minimum capital standards.
The following table sets forth Citigroup’s and Citibank, N.A.’s regulatory capital ratios as of December 31, 2012:

Well-

Required

capitalized

In millions of dollars

minimum

Citigroup

Citibank, N.A.

Tier 1 Common

123,095

116,633

Tier 1 Capital

136,532

117,367

Total Capital ⁽¹⁾

167,686

135,513

Tier 1 Common ratio

N/A

12.67

14.12

Tier 1 Capital ratio

4.0

6.0

14.06

14.21

Total Capital ratio

8.0

10.0

17.26

16.41

Leverage ratio

3.0

5.0

⁽²⁾

7.48

8.97

(1)		Total Capital includes Tier 1 Capital and Tier 2 Capital.
(2)		Applicable only to depository institutions.
N/A		Not Applicable

As indicated in the table above, Citigroup and Citibank, N.A. were well capitalized under the current federal bank regulatory definitions as of December 31, 2012.

Banking Subsidiaries—Constraints on Dividends
There are various legal limitations on the ability of Citigroup’s subsidiary depository institutions to extend credit, pay dividends or otherwise supply funds to Citigroup and its non-bank subsidiaries. The approval of the Office of the Comptroller of the Currency is required if total dividends declared in any calendar year exceed amounts specified by the applicable agency’s regulations. State-chartered depository institutions are subject to dividend limitations imposed by applicable state law.
In determining the dividends, each depository institution must also consider its effect on applicable risk-based capital and leverage ratio requirements, as well as policy statements of the federal regulatory agencies that indicate that banking organizations should generally pay dividends out of current operating earnings. Citigroup received $19.1 billion in dividends from Citibank, N.A. in 2012.

Non-Banking Subsidiaries
Citigroup also receives dividends from its non-bank subsidiaries. These non-bank subsidiaries are generally not subject to regulatory restrictions on dividends.
The ability of CGMHI to declare dividends can be restricted by capital considerations of its broker-dealer subsidiaries.

In millions of dollars
		Net		Excess over
		capital or		minimum
Subsidiary	Jurisdiction	equivalent		requirement
Citigroup Global Markets Inc.	U.S. Securities and
	Exchange
	Commission
	Uniform Net
	Capital Rule
	(Rule 15c3-1)	$	6,250	$	5,659

Citigroup Global Markets Limited	United Kingdom’s
	Financial
	Services
	Authority	$	6,212	$	3,594

Citigroup Inc. Parent Company Only⁽¹⁾ Income Statement and Statement of Comprehensive Income

	Years Ended December 31,
In millions of dollars	2012			2011			2010
Revenues
Interest revenue	$	3,384		$	3,684		$	3,237
Interest expense		6,573			7,618			7,728
Net interest revenue	$	(3,189	)	$	(3,934	)	$	(4,491	)
Dividends from subsidiaries		20,780			13,046			14,448
Non-interest revenue		613			939			30
Total revenues, net of interest expense	$	18,204		$	10,051		$	9,987
Total operating expenses	$	1,497		$	1,503		$	878
Income before taxes and equity in undistributed income of subsidiaries	$	16,707		$	8,548		$	9,109
Benefit for income taxes		(2,062	)		(1,821	)		(2,480	)
Equity in undistributed income of subsidiaries		(11,228	)		698			(987	)
Parent company’s net income	$	7,541		$	11,067		$	10,602
Comprehensive income
Parent company’s net income	$	7,541		$	11,067		$	10,602
Other comprehensive income (loss)		892			(1,511	)		2,660
Parent company’s comprehensive income	$	8,433		$	9,556		$	13,262

Citigroup Inc. Parent Company Only⁽¹⁾ Balance Sheet

	Years Ended December 31,
In millions of dollars	2012		2011
Assets
Cash and deposits from banks	$	153	$	3
Trading account assets		150		99
Investments		1,676		37,477
Advances to subsidiaries		107,074		108,644
Investments in subsidiaries		184,615		194,979
Other assets		102,335		65,711
Total assets	$	396,003	$	406,913
Liabilities
Federal funds purchased and securities loaned or sold under agreements to repurchase	$	185	$	185
Trading account liabilities		170		96
Short-term borrowings		725		13
Long-term debt		176,553		181,702
Advances from subsidiaries other than banks		12,759		17,046
Other liabilities		16,562		30,065
Total liabilities	$	206,954	$	229,107
Total equity		189,049		177,806
Total liabilities and equity	$	396,003	$	406,913

Citigroup Inc. Parent Company Only⁽¹⁾ Cash Flows Statement

	Years Ended December 31,
In millions of dollars	2012			2011			2010
Net cash provided by operating activities of continuing operations	$	1,598		$	1,710		$	8,756
Cash flows from investing activities of continuing operations
Purchases of investments	$	(5,701	)	$	(47,190	)	$	(31,346	)
Proceeds from sales of investments		37,056			9,524			6,029
Proceeds from maturities of investments		4,286			22,386			16,834
Changes in investments and advances—intercompany		(397	)		32,419			13,363
Other investing activities		994			(10	)		(20	)
Net cash provided by investing activities of continuing operations	$	36,238		$	17,129		$	4,860
Cash flows from financing activities of continuing operations
Dividends paid	$	(143	)	$	(113	)	$	(9	)
Issuance of preferred stock		2,250			—			—
Proceeds/(repayments) from issuance of long-term debt—third-party, net		(33,434	)		(16,481	)		(8,339	)
Net change in short-term borrowings and other advances—intercompany		(6,160	)		(5,772	)		(8,211	)
Other financing activities		(199	)		3,519			2,949
Net cash used in financing activities of continuing operations	$	(37,686	)	$	(18,847	)	$	(13,610	)
Net increase (decrease) in cash and due from banks	$	150		$	(8	)	$	6
Cash and due from banks at beginning of period		3			11			5
Cash and due from banks at end of period	$	153		$	3		$	11
Supplemental disclosure of cash flow information for continuing operations
Cash paid (received) during the year for
Income taxes	$	78		$	(458	)	$	(507	)
Interest		7,883			9,271			9,317

(1)

“Citigroup Inc. parent company only” refers to the parent holding company Citigroup Inc., excluding consolidated subsidiaries. Note that Citigroup Funding Inc. (CFI) was previously a first-tier subsidiary of Citigroup Inc., issuing commercial paper, medium-term notes and structured equity-linked and credit-linked notes. The debt of CFI was guaranteed by Citigroup Inc. On December 31, 2012, CFI was merged into Citigroup Inc., the parent holding company.