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

FORM 10-Q

Commission file number 1-9924

Citigroup Inc.
(Exact name of registrant as specified in its charter)

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

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

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

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

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

Common stock outstanding as of JuneSeptember 30, 2009: 5,507,716,97422,863,947,261

Available on the Webweb at www.citigroup.com

CITIGROUP INC.

SECONDTHIRD QUARTER OF 2009—FORM 10-Q

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THE COMPANY

        Citigroup Inc. (Citigroup and, together with its subsidiaries, the Company, Citi or Citigroup) is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup has more thanapproximately 200 million customer accounts and does business in more than 100140 countries. Citigroup was incorporated in 1988 under the laws of the State of Delaware.

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

        This Quarterly Report on Form 10-Q should be read in conjunction with Citigroup's 2008 Annual Report on Form 10-K for the year ended December 31, 2008 (2008 Annual Report on Form 10-K), Citigroup's updated 2008 historical financial statements and notes filed on Form 8-K with the Securities and Exchange Commission (SEC) on October 13, 2009 and Citigroup's Quarterly ReportReports on Form 10-Q for the quarterquarters ended June 30, 2009 and March 31, 2009. Additional financial, statistical, and business-related information for the third quarter of 2009, as well as business and segment trends, are included in a Financial Supplement that was filedfurnished as Exhibit 99.2 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission (SEC)SEC on July 17,October 15, 2009.

        The principal executive offices of the Company are located at 399 Park Avenue, New York, New York 10043, telephone number 212 559 1000. Additional information about Citigroup is available on the Company's web site atwww.citigroup.com. Citigroup's recent annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, as well as the Company's other filings with the SEC, are available free of charge through the Company's web site by clicking on the "Investors" page and selecting "All SEC Filings." The SEC web site contains reports, proxy and information statements, and other information regarding the Company atwww.sec.gov.

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        Citigroup is managed along the following segment and product lines:

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

(1)

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

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CITIGROUP INC. AND SUBSIDIARIES

SUMMARY OF SELECTED FINANCIAL DATA—Page 1

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

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SUMMARY OF SELECTED FINANCIAL DATA—Page 2

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

        Certain statements in this Form 10-Q, including, but not limited to, statements made in "Management's Discussion and Analysis," are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors including, but not limited to, those described in Citigroup's 2008 Annual Report on Form 10-K under "Risk Factors."

Within this Form 10-Q, please refer to the indices on pages 2 and 7386 for page references to the Management's Discussion and Analysis section and Notes to Consolidated Financial Statements, respectively.

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

SECOND THIRD QUARTER OF 2009 MANAGEMENT SUMMARY

        Citigroup reported net income of $4.279 billion, $0.49$101 million, and a loss of ($0.27) per diluted share, for the secondthird quarter of 2009. The results included a $6.7 billion after-tax gain on the sale of Smith Barney. The $0.49 earnings($0.27) loss per share reflected a $3.1 billion charge to retained earnings related to the closing of the exchange offers, the remaining preferred stock dividends required to be paid prior to the closing of the exchange offers and the remaining quarterly accretion of the Series H preferred stock discount (the preferred stock issued to the U.S. Treasury as part of TARP in October 2008). See "TARP and Other Regulatory Programs" below.discount.

        Revenues of $30.0$20.4 billion increased 71%25% from year-ago levels due primarily to the Smith Barney gain on sale and positive revenue marks and gains in Citi Holdings relative to the prior-year period, in Citi Holdings,and a $1.4 billion gain from the extinguishment of debt associated with the closing of the exchange offers. The increase was partially offset by credit valuation adjustments (CVA) of $1.7 billion in Securities and Banking, the impactabsence of Smith Barney revenues of $2.0 billion in the third quarter of 2009 and foreign exchange translation and declines in Regional Consumer Banking revenues, primarily in Cards. The difficult economic environment continued to have a negative impact on all businesses.currency translation.

        Net interest revenue declined 8%10% from the 2008 secondthird quarter, primarily reflecting the Company's smaller balance sheet. Net interest margin in the secondthird quarter of 2009 was 3.24%2.95%, up 7down 20 basis points from the secondthird quarter of 2008, reflecting significantly lower cost of funding, largely offset by a decrease in asset yields related to the decrease in the Federal funds rate, and the FDIC special assessment of $333 million.largely offset by significantly lower funding costs.Non-interest revenue increased $13.6$5.5 billion from a year ago, primarily reflecting the gain on saleabsence of significant losses in the Citi Holdings Special Asset Pool portfolio.

        Operating expenses decreased 16% from the year-ago quarter and were down 1% from the second quarter of 2009 primarily due to divestitures, including Smith Barney, lower write-downs and gains on exposures inthe re-sizing of the Citi Holdings.

Operating expenses decreased 21% fromHoldings businesses, the previous year, reflecting benefits from Citi's ongoing re-engineering efforts,of Citicorp processes, expense control, and the impact of foreign exchangecurrency translation. Headcount of 279,000276,000 was down 84,00076,000 from September 30, 2008 and down 3,000 from June 30, 2008 and 30,000 from March 31, 2009.

        The Company's equity capital base and trust preferred securities were $176.3total allowance for loan losses totaled $36.4 billion at September 30, 2009, a coverage ratio of 5.85% of total loans up from 5.6% at June 30, 2009. Citigroup's stockholders' equity increased2009, even though corporate loans declined by $8.4$13 billion during the second quarter of 2009 to $152.3 billion, primarily reflecting net income less dividend payouts and an improvement inAccumulated Other Comprehensive Income. The Company distributed $1.55 billion in dividends to its preferred stockholders during the quarter. Citigroup had a Tier 1 Capital ratio of 12.74% at June 30, 2009.

        On July 23, 2009 and July 29, 2009, Citigroup closed its exchange offers with the private and public holders, respectively, of preferred stock and trust preferred securities, as applicable ($32.8 billion in aggregate liquidation value). In connection with these exchanges, the U.S. Treasury (UST) also exchanged $25 billion of aggregate liquidation value of its preferred stock, for a total exchange of $57.8consumer loans decreased by $6 billion. Following an increase in Citigroup's authorized common stock, and the conversion of interim securities to common stock, the UST will own approximately 33.6% of Citigroup's outstanding common stock (not including the exercise of the warrants issued to the UST as part of TARP). See "Events of 2009—Public and Private Exchange Offers" and "TARP and Other Regulatory Programs."

        As a result of the closing of the private and public exchange offers, Citigroup will increase its Tier 1 common by approximately $64 billion from the second quarter of 2009 level of $27 billion to approximately $91 billion. In addition, Citigroup's Tangible Common Equity (TCE), which was $40 billion as of June 30, 2009, will increase by approximately $60 billion to approximately $100 billion. (TCE and Tier 1 Common are non-GAAP financial measures. See "Capital Resources and Liquidity" for additional information on these measures, including a reconciliation to the most directly comparable GAAP measures.)

During the secondthird quarter of 2009, the Company recorded a net build of $3.9 billion$802 million to its credit reserves. The build for the quarter was $3.1 billion lower than the second quarter of 2009, consisting of a net build consisted of $1.2$893 million for consumer loans and a net release of $91 million for corporate loans.

        Consumer non-accrual loans totaled $17.9 billion at September 30, 2009, compared to $15.8 billion at June 30, 2009 and $10.8 billion at September 30, 2008, primarily related to the recognition of SFAS 114 charge-offs in Citicorp ($0.6 billion in Regional Consumer Banking and $0.6 billion in ICG) and $2.7 billion in Citi Holdings (almost all in Local Consumer Lending).the quarter. The consumer loan delinquency rate was 4.70% at September 30, 2009, compared to 4.24% at June 30, 2009 compared to 3.93% at March 31, 2009 and 2.30%2.66% a year ago. Delinquencies continue to rise for the first mortgage portfolio in the U.S. due primarily to the lengthening of the foreclosure process by many states and the increasing impact of the Home Affordable Modification Program (HAMP). Loans in the HAMP trial modification period are reported as delinquent if the original contractual payments are not received on time (even if the reduced payments agreed to under the program are made by the borrower) until the loan has completed the trial period under the program (see "Loan and Credit Details—Consumer Loan Modification Programs" and "—U.S. Consumer Mortgage Lending" below).

Corporate non-accrual loans were $14.8 billion at September 30, 2009, compared to $12.4 billion at June 30, 2009 compared to $11.2 billion at March 31, 2009 and $2.2$2.7 billion a year-ago.year ago. The increase from the prior quarter is mainly due to the Company's continued policy of actively moving loans into non-accrual at earlier stages of anticipated distress. Over two-thirds of the non-accrual corporate loans are current and continue to make their contractual payments. The increase from prior-year levels is primarilyalso attributable to the transfer of non-accrual loans from the held-for-sale portfolio (which are carried at lower-of-cost-or-fair value and excluded from non-accrual loans) to the held-for-investment portfolio during the fourth quarter of 2008. The total allowance for loan losses totaled $35.9loss reserve balance for funded corporate loans remained stable at $8 billion at June 30, 2009, a coverage ratiothe end of 5.60%the quarter, or 4.4% of total loans.corporate loans, up from 4.1% in the second quarter of 2009.

        The Company's effective tax rate was 17.1%on continuing operations in the secondthird quarter of 2009 whichwas 212% versus 48% in the prior-year period. The tax provision reflected a higher proportion of income earned and indefinitely reinvested in countries with relatively lower tax rates as well as a higher proportion of income from tax advantaged sources. The current quarter also includes a tax benefit of $129$103 million in continuing operations relating to the conclusiona release of an audit of certain issuestax reserves on interchange fees, which was supported by a favorable Tax Court decision in the Company's 2003-2005 U.S. Federal tax audit.a case litigated by another financial institution.

        Total deposits were approximately $804.7$833 billion at September 30, 2009, up 3% from June 30, 2009 and up 6%7% from March 31, 2009 and flat with prior-yearyear-ago levels. At JuneSeptember 30, 2009, the Company hashad increased its structural liquidity (equity, long-term debt and deposits) as a percentage of assets from 68%66% at MarchDecember 31, 20092008 to approximately 71%72% at JuneSeptember 30, 2009. Over the past six months, Citigroup and its subsidiaries have issued $20 billion of non-guaranteed debt outside of the FDIC's TLGP.

        Citigroup has continued its deleveraging, reducing total assets from $2,100$2,050 billion a year ago to $1,849$1,889 billion at JuneSeptember 30, 2009. Asset reductions in Citi Holdings made up approximately 98% of the decline, reflecting the Company's continued strategy of reducing its assets and exposures in this business segment, which are down by almost one-third since the peak levels of early 2008.

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

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

        The closing of the Company recently announced several senior management appointments, including John Gerspach as Chief Financial Officer, replacing Ned Kelly, who was appointed Vice Chairmanexchange offers also resulted in a reconstitution of Citigroup,the Company's equity base. Common Equity increased 98% from December 31, 2008 to $140.5 billion. Citigroup's total stockholders' equity decreased by $11.5 billion during the third quarter of 2009 to $140.8 billion, primarily reflecting the impact of the exchange offers, partially offset by a $4.0 billion improvement inAccumulated Other Comprehensive Income. Citigroup's total equity capital base and Eugene McQuade as Chief Executive Officer for Citibank, N.A.trust preferred securities were $175.4 billion at September 30, 2009. The Tier 1 Capital ratio and Tier 1 Common ratio were 12.76% and 9.12%, respectively, at September 30, 2009.

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SIGNIFICANT EVENTS IN THE THIRD QUARTER OF 2009

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

PUBLIC AND PRIVATE EXCHANGE OFFERS

Private Exchange Offers

        On July 23, 2009, Citigroup closed its exchange offers with the private holders of $12.5 billion aggregate liquidation value of preferred stock. As previously disclosed, theThe U.S. Treasury (UST) matched these exchange offers by exchanging $12.5 billion aggregate liquidation value of its preferred stock, for a total closing of $25 billion. The preferredFollowing the approval, on September 2, 2009, by Citi shareholders of an increase in Citi's authorized common stock, held byon September 10, 2009, the private holders and the UST was exchanged forreceived an aggregate of approximately 7,692 shares of interim securities and warrants. The warrants will terminate and the interim securities will automatically convert into Citigroup common stock upon the increase, subject to shareholder approval, in Citigroup's authorized common stock at a ratio of one million shares of common stock for each interim security. Following the authorized share increase, the interim securities issued to the private holders and the UST in this closing will convert into approximately 7.7 billion shares of Citigroup common stock.

        The shareholder approval on the proposed increase in Citigroup's authorized common stock is scheduled to occur on September 2, 2009. In addition, see "Public Exchange Offers" below.

Public Exchange Offers

        On July 29, 2009, Citigroup closed its exchange offers with certainthe holders of its publicly-held preferred stock and trust preferred securities. Approximately $20.3approximately $20.4 billion in aggregate liquidation value of publicly-held preferred stock and trust preferred securities, were validly tendered and not withdrawn in the public exchange offers. This representsrepresenting 99% of the total liquidation value of securities that Citigroup was offering to exchange.

Upon closing of the public exchange offers, Citi issued approximately 5.8 billion shares of common stock to the public exchange offer participants. In accordance with the instructions given by the participants in the public exchange offers, these shares of common stock are subject to an irrevocable proxy to vote in favor of the proposal to increase Citigroup's authorized common stock, among other matters, which will result in the termination of the warrants and the automatic conversion of the interim securities issued to the UST and the private holders in the private exchange offers into common stock (see "Private Exchange Offers" above).

        In addition, as previously disclosed, on July 30, 2009, the UST matched the public exchange offers by exchanging an additional $12.5 billion aggregate liquidation value of its preferred stock. Following the increase in Citigroup's authorized common stock, resulting in Citi's issuing approximately 3,846 additional shares of interim securities toon September 10, 2009, the UST and increasing the number of shares of common stock the UST may acquire upon exercise of the warrant issued to it in connection with the private exchange offers closing. The warrant will terminate and these interim securities will convert intoreceived an additional approximately 3.8 billion shares of Citigroup common stock following the authorized share increase.stock.

        In total, approximately $58 billion in aggregate liquidation value of preferred stock and trust preferred securities were exchanged tofor common stock and interim securities asupon completion of all stages of the exchange offers. As a result of the completion of the private and public exchange offers, and the associated exchange by the UST. Upon the increase in Citigroup's authorized common stock, and the conversion of the interim securities to common stock, the UST will ownowned approximately 33.6% of Citigroup's outstanding common stock, not including the exercise of the warrants issued to the UST as part of TARP and pursuant to the loss-sharing agreement. See "TARP and Other Regulatory"Government Programs" below.

Capital Impact

        As a result of the closing of the private and public exchange offers and the associated exchange by the UST on a proforma basis, Citigroup increased its Tier 1 Common by approximately $64 billion from the second quarter of 2009 level of approximately $27 billion to approximately $91 billion. In addition, Citigroup's tangible common equity (TCE), which was approximately $40 billion as of June 30, 2009, increased by approximately $60 billion to approximately $100 billion on a proforma basis. (TCE and Tier 1 Common are non-GAAP financial measures. See "Capital Resources and Liquidity" below for additional information on these measures, including a reconciliation to the most directly comparable GAAP measures.)

8% Trust Preferred Securities

        On July 30, 2009, all remaining preferred stock of Citigroup held by the UST and FDIC (the UST and FDIC are collectively referred to as the "USG")FDIC that was not exchanged into Citigroup common stock in connection with the private or public exchange offers, in an aggregate liquidation amount of approximately $27.1 billion, was exchanged into newly issued 8% trust preferred securities. An aggregate liquidation amount of approximately $27.1 billion in trust preferred securities was issued to the USG in exchange for an aggregate of $27.059 billion liquidation value of preferred stock.

Accounting Impact

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

        For USGthe U.S. Government (USG) preferred stock that was converted to 8% trust preferred securities, the newly issued trust preferred securities will bewere initially recorded at fair value asLong-term debt. The difference between the carrying amount of the preferred stock and the fair value of the trust preferred securities will be

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was recorded inRetained earnings after adjusting for the appropriate deferred tax liability (impacting net income available to common shareholders and EPS). For trust preferred securities exchanged for common stock, the carrying amount currently recorded as long-term debt will bewas de-recognized and the common stock issued will bewas recorded at fair value in theCommon Stock and theAdditional Paid-in Capital accounts in equity. The difference between the carrying amount of the trust preferred securities and the fair value of the common stock will bewas recorded in Other revenue in the current earningsthird quarter of the period in which the transaction will occur.2009.

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

*

Preliminary and subject to change

Note: Table may not foot due to roundings.

Summary of Impact of Exchange Offers

        The additional estimatedDuring the third quarter of 2009, TCE increased by $60 billion of TCE is primarily theas a result of the exchange of approximately $74 billion carrying amount of preferred shares and $6 billion carrying value of trust preferred securities for 17,372 million shares of common stock and approximately $27.1 billion liquidation amount of trust preferred securities (recorded asLong-term Debtdebt at its fair value of $16.2 billion). This resulted in an increase to common stock and APIC of $62 billion and a reduction inRetained earnings of approximately $2 billion, for a total increase in TCE of approximately $60 billion.

The additional $64 billion of Tier 1 Common includes the impact of the above plus a reduction in the disallowed Deferred tax asset (which increases Tier 1 Common) that arises from the accounting for the transactions. TCE and Tier 1 Common are non-GAAP financial measures. See "Capital Resources and Liquidity" below for additional information on these measures, including a reconciliation to the most directly comparable GAAP measures.

(1)

Upon shareholder approval of the increase in Citigroup's authorized common stock, the interim securities will be automatically converted into common stock (anticipated in early September 2009).

(2)

TheRetained earnings impact primarily reflects:

a)

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

b)

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

c)

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

(3)(2)

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

(4)(3)

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

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

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DEFERRED TAX BENEFITS PRESERVATION PLANASSET

        Deferred taxes are recorded for the future consequences of events that have been recognized in the financial statements or tax returns, based upon enacted tax laws and rates. Deferred tax assets (DTAs) are recognized subject to management's judgment that realization is more likely than not.

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

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

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

        Citi's ability to utilize its deferred tax assets to offset future taxable income may be significantly limited if Citi experiences an "ownership change",change," as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). In general, an ownership change will occur if there is a cumulative change in Citi's ownership by "5% shareholders" (as defined in the Code) that exceeds 50 percentage points over a rolling three-year period. As such, if the Company experiences an ownership change, its TCE may be reduced.

        While theThe common stock issued pursuant to the private and public exchange offers (described above) did not result in an ownership change under the Code, the common stock issued did increase the cumulative change percentage for Section 382 purposes.Code. On June 9, 2009, the board of directors of Citigroup adopted a tax benefits preservation plan (the "Plan"). The purpose of the Plan is to minimize the likelihood of an ownership change occurring for Section 382 purposes and thus protect Citigroup's ability to utilize certain of its deferred tax assets, such as net operating loss and tax credit carry forwards, to offset future income.

        In connection with the Despite adoption of the Plan, Citigroup's boardfuture stock issuance or transactions in our stock that may not be in our control, including sales by the USG, may cause Citi to experience an ownership change and thus limit the Company's ability to utilize its deferred tax asset and reduce its TCE and stockholders' equity.

DIVESTITURES

Sale of directors declared a dividend of one preferred stock purchase right (a "Right") for each outstanding (i) share of common and (ii) 1-millionth of a share of the interim securities. The dividend was paid to holders of record of Citigroup's common stock on June 22, 2009. Shares of Citigroup's common stock and interim securities issued after June 22, 2009 will be issued with the Right attached. The terms and conditions of the Rights are set forth in the Tax Benefits Preservation Plan attached as Exhibit 4.1 to Citigroup's Form 8-K filed with the SEC on June 10, 2009.

THE SUPERVISORY CAPITAL ASSESSMENT PROGRAMNikko Cordial Securities

        On May 7,October 1, 2009, Citigroup completed the USG released the resultssale of its Supervisory Capital Assessment Program (SCAP)domestic Japanese domestic securities business, conducted principally through Nikko Cordial Securities Inc. (NCS) to Sumitomo Mitsui Banking Corporation in a transaction with a total cash value of approximately $8.7 billion (¥776 billion). The SCAP constituted a comprehensive capital assessmenttransaction will be recorded in the fourth quarter of 2009. After considering the impact of foreign exchange hedges of the 19 largest U.S. financial institutions, including Citi. Based on the resultsproceeds of the USG's assessment undertransaction (most of which has been recorded in the SCAP, Citi was requiredsecond and third quarters of 2009), the sale will result in an immaterial after-tax gain to increase its previously announced plan to increase Tier 1 Common by an additional $5.5 billion. See "Events in 2009—Public and Private Exchange Offers" above. In addition, Citi was required to develop and submit a capital plan to the FRB and FDIC. The Company submitted its capital plan to the regulators on June 8, 2009, as required. For additional information on the requirements of the capital plan, as well as other information on SCAP, see the "Events in 2009" section of the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2009.

LOSS-SHARING AGREEMENTCitigroup.

        On January 15, 2009, Citigroup issued preferred shares to the UST and the FDIC, and a warrant to the UST, in exchange for $301 billion of loss protection on a specified pool of Citigroup assets. The Company is required to absorb the first $39.5 billion of qualifying losses under the agreement, plus 10% of the remaining losses incurred.

        As a result of receipt of principal repayments and charge-offs, the total asset pool has declined by approximately $35 billion from the original $301 billion to approximately $266.4 billion. Approximately $2.5 billion of GAAP losses on the asset pool were recordedBeginning in the second quarter of 2009, bringing the GAAP losses to date to approximately $5.3 billion. See "TARPresults of NCS and Other Regulatory Programs—U.S. Government Loss-Sharing Agreement" below.its related companies are reflected as Discontinued Operations in the Company's Consolidated Financial Statements. At September 30, 2009, assets of $23.6 billion and liabilities of $16.0 billion are reflected on the Consolidated Balance Sheet as "Assets/ Liabilities of discontinued operations held for sale", respectively, including $3.8 billion of identifiable goodwill and intangibles.

SUBSEQUENT EVENTS

        The shares of preferred stock issuedAs required by SFAS 165, Subsequent Events, the Company has evaluated subsequent events through November 6, 2009, which is the date its Consolidated Financial Statements were issued.

ACCOUNTING CHANGES AND FUTURE APPLICATION OF ACCOUNTING STANDARDS

        See Note 1 to the USTConsolidated Financial Statements for a discussion of "Accounting Changes" and FDIC in consideration for the loss-sharing agreement were subsequently exchanged into newly issued 8% trust preferred securities pursuant to the exchange offers, as described under "Public and Private Exchange Offers" above. For additional information"Future Application of the warrant issued to the UST as part of this transaction, see "TARP and Other Regulatory Programs" below.Accounting Standards."