Components of Capital Under Regulatory Guidelines for Citigroup (C)

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C » Topics » Components of Capital Under Regulatory Guidelines

This excerpt taken from the C 10-Q filed Nov 6, 2009.

Components of Capital Under Regulatory Guidelines

*In millions of dollars*		Sept. 30, 2009			Dec. 31, 2008(1)

Tier 1 Common
Citigroup common stockholders' equity		$	140,530		$	70,966
Less: Net unrealized losses on securities available-for-sale, net of tax(2)			(4,242	)		(9,647	)
Less: Accumulated net losses on cash flow hedges, net of tax			(4,177	)		(5,189	)
Less: Pension liability adjustment, net of tax(3)			(2,619	)		(2,615	)
Less: Cumulative effect included in fair value of financial liabilities attributable to the change in own credit worthiness, net of tax(4)			1,862			3,391
Less: Disallowed deferred tax assets(5)			21,917			23,520
Less: Intangible assets:
	Goodwill(6)		26,436			27,132
	Other disallowed intangible assets(6)		10,179			10,607
Other			(892	)		(840	)

Total Tier 1 Common		$	90,282		$	22,927

Qualifying perpetual preferred stock		$	312		$	70,664
Qualifying mandatorily redeemable securities of subsidiary trusts			34,403			23,899
Qualifying noncontrolling interests			1,288			1,268

Total Tier 1 Capital		$	126,285		$	118,758

Tier 2 Capital
Allowance for credit losses(7)		$	12,701		$	12,806
Qualifying subordinated debt(8)			24,355			24,791
Net unrealized pretax gains on available-for- sale equity securities(2)			753			43

Total Tier 2 Capital		$	37,809		$	37,640

Total Capital (Tier 1 and Tier 2)		$	164,094		$	156,398

Risk-Weighted Assets(9)		$	989,711		$	996,247

(1): Reclassified to conform to the current period presentation.
(2): Tier 1 Capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values, in accordance with risk-based capital guidelines. In arriving at Tier 1 Capital, banking organizations are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax. Banking organizations are permitted to include in Tier 2 Capital up to 45% of pretax net unrealized gains on available-for-sale equity securities with readily determinable fair values.
(3): The FRB granted interim capital relief for the impact of adopting ASC 715-20-65 (SFAS 158).
(4): The impact of including Citigroup's own credit rating in valuing liabilities for which the fair value option has been elected is excluded from Tier 1 Capital, in accordance with risk-based capital guidelines.
(5): Of the Company's approximately $38 billion of net deferred tax assets at September 30, 2009, approximately $13 billion of such assets were includable without limitation in regulatory capital pursuant to risk-based capital guidelines, while approximately $22 billion of such assets exceeded the limitation imposed by these guidelines and, as "disallowed deferred tax assets," were deducted in arriving at Tier 1 Capital. The Company's other approximately $3 billion of net deferred tax assets at September 30, 2009 primarily represented the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines. The Company had approximately $24 billion of disallowed deferred tax assets at December 31, 2008.
(6): Includes goodwill/intangible assets of related to assets of discontinued operations held for sale and assets held for sale.
(7): Includable up to 1.25% of risk-weighted assets. Any excess allowance is deducted in arriving at risk-weighted assets.
(8): Includes qualifying subordinated debt in an amount not exceeding 50% of Tier 1 Capital.
(9): Includes risk-weighted credit equivalent amounts, net of applicable bilateral netting agreements, of $70.3 billion for interest rate, commodity, and equity derivative contracts, foreign-exchange contracts, and credit derivatives as of September 30, 2009, compared with $102.9 billion as of December 31, 2008. Market-risk-equivalent assets included in risk-weighted assets amounted to $91.1 billion at September 30, 2009 and $101.8 billion at December 31, 2008. Risk-weighted assets also include the effect of certain other off-balance sheet exposures, such as unused lending commitments and letters of credit, and reflect deductions for certain intangible assets and any excess allowance for credit losses.

This excerpt taken from the C 10-Q filed Aug 7, 2009.

Components of Capital Under Regulatory Guidelines

*In millions of dollars*		Jun. 30, 2009			Dec. 31, 2008(1)

Tier 1 Common
Citigroup common stockholders' equity		$	78,001		$	70,966
Less: Net unrealized losses on securities available-for-sale, net of tax(2)			(7,055	)		(9,647	)
Less: Accumulated net losses on cash flow hedges, net of tax			(3,665	)		(5,189	)
Less: Pension liability adjustment, net of tax(3)			(2,611	)		(2,615	)
Less: Cumulative effect included in fair value of financial liabilities attributable to the change in own credit worthiness, net of tax(4)			2,496			3,391
Less: Disallowed deferred tax assets(5)			24,448			23,520
Less: Intangible assets:
	Goodwill(6)		26,111			27,132
	Other disallowed intangible assets(6)		10,023			10,607
Other			(893	)		(840	)

Total Tier 1 Common		$	27,361		$	22,927

Qualifying perpetual preferred stock		$	74,301		$	70,664
Qualifying mandatorily redeemable securities of subsidiary trusts			24,034			23,899
Qualifying noncontrolling interests			1,082			1,268

Total Tier 1 Capital		$	126,778		$	118,758

Tier 2 Capital
Allowance for credit losses(7)		$	12,769		$	12,806
Qualifying subordinated debt(8)			25,208			24,791
Net unrealized pretax gains on available-for- sale equity securities(2)			669			43

Total Tier 2 Capital		$	38,646		$	37,640

Total Capital (Tier 1 and Tier 2)		$	165,424		$	156,398

Risk-Weighted Assets(9)		$	995,414		$	996,247

(1): Reclassified to conform to the current period presentation.
(2): Tier 1 Capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values, in accordance with risk-based capital guidelines. In arriving at Tier 1 Capital, banking organizations are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax. Banking organizations are permitted to include in Tier 2 Capital up to 45% of pretax net unrealized gains on available-for-sale equity securities with readily determinable fair values.
(3): The FRB granted interim capital relief for the impact of adopting SFAS 158 (ASC 715-20-65).
(4): The impact of including Citigroup's own credit rating in valuing liabilities for which the fair value option has been elected is excluded from Tier 1 Capital, in accordance with risk-based capital guidelines.
(5): Of the Company's approximately $42 billion of net deferred tax assets at June 30, 2009, approximately $13 billion of such assets were includable without limitation in regulatory capital pursuant to risk-based capital guidelines, while approximately $24 billion of such assets exceeded the limitation imposed by these guidelines and, as "disallowed deferred tax assets," were deducted in arriving at Tier 1 Capital. The Company's other approximately $5 billion of net deferred tax assets at June 30, 2009 primarily represented the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines. The Company had approximately $24 billion of disallowed deferred tax assets at December 31, 2008.
(6): Includes goodwill/intangible assets of discontinued operations held for sale.
(7): Includable up to 1.25% of risk-weighted assets. Any excess allowance is deducted in arriving at risk-weighted assets.
(8): Includes qualifying subordinated debt in an amount not exceeding 50% of Tier 1 Capital.
(9): Includes risk-weighted credit equivalent amounts, net of applicable bilateral netting agreements, of $76.9 billion for interest rate, commodity, and equity derivative contracts, foreign-exchange contracts, and credit derivatives as of June 30, 2009, compared with $102.9 billion as of December 31, 2008. Market-risk-equivalent assets included in risk-weighted assets amounted to $78.2 billion at June 30, 2009 and $101.8 billion at December 31, 2008. Risk-weighted assets also include the effect of certain other off-balance sheet exposures, such as unused lending commitments and letters of credit, and reflect deductions for certain intangible assets and any excess allowance for credit losses.

This excerpt taken from the C 10-Q filed May 11, 2009.

Components of Capital Under Regulatory Guidelines

*In millions of dollars*		Mar. 31, 2009			Dec. 31, 2008(1)

Tier 1 Common
Citigroup common stockholders' equity		$	69,688		$	70,966
Less: Net unrealized gains (losses) on securities available-for-sale, net of tax(2)			(10,040	)		(9,647	)
Less: Accumulated net losses on cash flow hedges, net of tax			(3,706	)		(5,189	)
Less: Pension liability adjustment, net of tax(3)			(2,549	)		(2,615	)
Less: Cumulative effect included in fair value of financial liabilities attributable to credit worthiness, net of tax(4)			3,487			3,391
Less: Disallowed deferred tax assets(5)			22,920			23,520
Less: Intangible assets:
	Goodwill		26,410			27,132
	Other disallowed intangible assets		10,205			10,607
Other			(870	)		(840	)

Total Tier 1 Common		$	22,091		$	22,927

Qualifying perpetual preferred stock		$	74,246		$	70,664
Qualifying mandatorily redeemable securities of subsidiary trusts			24,532			23,899
Minority interest			1,056			1,268

Total Tier 1 Capital		$	121,925		$	118,758

Tier 2 Capital
Allowance for credit losses(6)		$	13,200		$	12,806
Qualifying debt(7)			24,379			24,791
Unrealized marketable equity securities gains(2)			157			43

Total Tier 2 Capital		$	37,736		$	37,640

Total Capital (Tier 1 and Tier 2)		$	159,661		$	156,398

Risk-Weighted Assets(8)		$	1,023,038		$	996,247

(1): Reclassified to conform to the current period presentation.
(2): Tier 1 Capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values, in accordance with regulatory risk-based capital guidelines. In arriving at Tier 1 Capital, institutions are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax. Institutions are permitted to include in Tier 2 Capital up to 45% of pretax net unrealized gains on available-for-sale equity securities with readily determinable fair values.
(3): The FRB granted interim capital relief for the impact of adopting SFAS 158.
(4): The impact of including Citigroup's own credit rating in valuing liabilities for which the fair value option has been elected is excluded from Tier 1 Capital, in accordance with regulatory risk-based capital guidelines.
(5): Of the Company's approximately $43 billion of net deferred tax assets at March 31, 2009, approximately $15 billion of such assets were includable without limitation in regulatory capital pursuant to the risk-based capital guidelines, while approximately $23 billion of such assets exceeded the limitation imposed by these guidelines and, as "disallowed deferred tax assets," were deducted in arriving at Tier 1 Capital. The Company's other approximately $5 billion of net deferred tax assets at March 31, 2009 primarily represented the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines. The Company had approximately $24 billion of disallowed deferred tax assets at December 31, 2008.
(6): Includable up to 1.25% of risk-weighted assets. Any excess allowance is deducted from risk-weighted assets.
(7): Includes qualifying subordinated debt in an amount not exceeding 50% of Tier 1 Capital.
(8): Includes risk-weighted credit equivalent amounts, net of applicable bilateral netting agreements, of $91.9 billion for interest rate, commodity and equity derivative contracts, foreign-exchange contracts and credit derivatives as of March 31, 2009, compared with $102.9 billion as of December 31, 2008. Market-risk-equivalent assets included in risk-weighted assets amounted to $96.2 billion at March 31, 2009 and $101.8 billion at December 31, 2008. Risk-weighted assets also include the effect of certain other off-balance sheet exposures, such as unused lending commitments and letters of credit, and reflect deductions for certain intangible assets and any excess allowance for credit losses.

All three of Citigroup's primary credit card securitization trusts—Master Trust, Omni Trust, and Broadway Trust—have had bonds placed on ratings watch by rating agencies. The Master Trust and Broadway Trust had bonds placed on ratings watch with negative implications during the first quarter of 2009. As a result of the ratings watch status, certain actions were taken or announced with respect to the Master Trust. The actions subordinated certain senior interests in the trust assets that were retained by Citigroup, which effectively placed these interests below investor interests in terms of priority of payment. While the Omni Trust bonds had not been placed on ratings watch status until April 2009, the Omni Trust had nonetheless previously issued a subordinated note with a face amount of $265 million in October 2008 to Citibank (South Dakota) N.A., in order to avert a downgrade of its outstanding AAA and A securities. The Federal Reserve has concluded that as a result of these actions commencing with the first quarter of 2009, Citigroup is also required to include the sold assets of the Master and Omni trusts in its risk-weighted assets for purposes of calculating its risk-based capital ratios. The effect of this decision increased Citigroup's risk-weighted assets by approximately $82 billion at March 31, 2009, and decreased Citigroup's Tier 1 Capital ratio by approximately 100 bps, as of March 31, 2009. See Note 15 to the Consolidated Financial Statements.

Table of Contents

These excerpts taken from the C 10-K filed Feb 27, 2009.

Components of Capital Under Regulatory Guidelines


In millions of dollars at year end	2008			2007⁽¹⁾
Tier 1 Capital
Common stockholders’ equity⁽²⁾	$	70,966		$	113,447
Qualifying perpetual preferred stock		70,664			—
Qualifying mandatorily redeemable securities of subsidiary trusts		23,899			23,594
Minority interest		1,268			4,077
Less: Net unrealized gains (losses) on securities available-for-sale, net of tax ⁽³⁾		(9,647	)		471
Less: Accumulated net losses on cash flow hedges, net of tax		(5,189	)		(3,163	)
Less: Pension liability adjustment, net of tax ⁽⁴⁾		(2,615	)		(1,196	)
Less: Cumulative effect included in fair value of financial liabilities attributable to credit worthiness, net of tax ⁽⁵⁾		3,391			1,352
Less: Restricted core capital elements ⁽⁶⁾		—			1,364
Less: Disallowed deferred tax assets⁽⁷⁾		23,520			—
Less: Intangible assets:
Goodwill		27,132			41,053
Other disallowed intangible assets		10,607			10,511
Other		(840	)		(1,500	)
Total Tier 1 Capital	$	118,758		$	89,226
Tier 2 Capital
Allowance for credit losses ⁽⁸⁾	$	12,806		$	15,778
Qualifying debt ⁽⁹⁾		24,791			26,690
Unrealized marketable equity securities gains ⁽³⁾		43			1,063
Restricted core capital elements ⁽⁶⁾		—			1,364
Total Tier 2 Capital	$	37,640		$	44,895
Total Capital (Tier 1 and Tier 2)	$	156,398		$	134,121
Risk-weighted assets ⁽¹⁰⁾	$	996,247		$	1,253,321

(1)	Reclassified to conform to the current period’s presentation.

(2)	Reflects prior period adjustment to opening retained earnings as presented in the Consolidated Statement of Changes in Stockholders’ Equity on page 117.

(3)

Tier 1 Capital excludes unrealized gains and losses on debt securities available-for-sale in accordance with regulatory risk-based capital guidelines. Institutions are required to deduct from Tier 1 Capital net unrealized holding gains on available-for-sale equity securities with readily determinable fair values, net of tax. The federal bank regulatory agencies permit institutions to include in Tier 2 Capital up to 45% of pretax net unrealized holding gains on available-for-sale equity securities with readily determinable fair values, net of tax.

(4)	The FRB granted interim capital relief for the impact of adopting SFAS 158.

(5)	The impact of including Citigroup’s own credit rating in valuing liabilities for which the fair value option has been selected is excluded from Tier 1 Capital, in accordance with regulatory risk-based capital guidelines.

(6)	Represents the excess of allowable restricted core capital in Tier 1 Capital. Restricted core capital is limited to 25% of all core capital elements, net of goodwill.

(7)

Of the Company’s $44 billion of net deferred tax assets at December 31, 2008, $14 billion were includable without limitation in regulatory capital pursuant to the risk-based capital guidelines, while $24 billion exceeds the limitation imposed by these guidelines and as “disallowed deferred tax assets” were deducted in arriving at Tier 1 Capital. The Company’s other $6 billion of net deferred tax assets at December 31, 2008, primarily represented the deferred tax effects of unrealized gains and losses on available-for-sale debt securities, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines. The Company had no disallowed deferred tax assets at December 31, 2007.

(8)	Can include up to 1.25% of risk-weighted assets. Any excess allowance is deducted from risk-weighted assets.

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

(10)

Includes risk-weighted credit equivalent amounts, net of applicable bilateral netting agreements, of $102.9 billion for interest rate, commodity and equity derivative contracts, foreign-exchange contracts and credit derivatives as of December 31, 2008, compared with $91.3 billion as of December 31, 2007. Market-risk-equivalent assets included in risk-weighted assets amounted to $101.8 billion at December 31, 2008 and $109.0 billion at December 31, 2007. Risk-weighted assets also include the effect of other off-balance-sheet exposures, such as unused loan commitments and letters of credit, and reflect deductions for certain intangible assets and any excess allowance for credit losses.

Common stockholders’ equity decreased approximately $42.4 billion to $71.0 billion, representing 3.7% of total assets as of December 31, 2008 from $113.4 billion and 5.2% at December 31, 2007.

Components of Capital Under Regulatory Guidelines


In millions of dollars at year end	2008			2007⁽¹⁾
Tier 1 Capital
Common stockholders’ equity⁽²⁾	$	70,966		$	113,447
Qualifying perpetual preferred stock		70,664			—
Qualifying mandatorily redeemable securities of subsidiary trusts		23,899			23,594
Minority interest		1,268			4,077
Less: Net unrealized gains (losses) on securities available-for-sale, net of tax ⁽³⁾		(9,647	)		471
Less: Accumulated net losses on cash flow hedges, net of tax		(5,189	)		(3,163	)
Less: Pension liability adjustment, net of tax ⁽⁴⁾		(2,615	)		(1,196	)
Less: Cumulative effect included in fair value of financial liabilities attributable to credit worthiness, net of tax ⁽⁵⁾		3,391			1,352
Less: Restricted core capital elements ⁽⁶⁾		—			1,364
Less: Disallowed deferred tax assets⁽⁷⁾		23,520			—
Less: Intangible assets:
Goodwill		27,132			41,053
Other disallowed intangible assets		10,607			10,511
Other		(840	)		(1,500	)
Total Tier 1 Capital	$	118,758		$	89,226
Tier 2 Capital
Allowance for credit losses ⁽⁸⁾	$	12,806		$	15,778
Qualifying debt ⁽⁹⁾		24,791			26,690
Unrealized marketable equity securities gains ⁽³⁾		43			1,063
Restricted core capital elements ⁽⁶⁾		—			1,364
Total Tier 2 Capital	$	37,640		$	44,895
Total Capital (Tier 1 and Tier 2)	$	156,398		$	134,121
Risk-weighted assets ⁽¹⁰⁾	$	996,247		$	1,253,321

(1)	Reclassified to conform to the current period’s presentation.

(2)	Reflects prior period adjustment to opening retained earnings as presented in the Consolidated Statement of Changes in Stockholders’ Equity on page 117.

(3)

(4)	The FRB granted interim capital relief for the impact of adopting SFAS 158.

(5)	The impact of including Citigroup’s own credit rating in valuing liabilities for which the fair value option has been selected is excluded from Tier 1 Capital, in accordance with regulatory risk-based capital guidelines.

(6)	Represents the excess of allowable restricted core capital in Tier 1 Capital. Restricted core capital is limited to 25% of all core capital elements, net of goodwill.

(7)

(8)	Can include up to 1.25% of risk-weighted assets. Any excess allowance is deducted from risk-weighted assets.

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

(10)

Common stockholders’ equity decreased approximately $42.4 billion to $71.0 billion, representing 3.7% of total assets as of December 31, 2008 from $113.4 billion and 5.2% at December 31, 2007.

EXCERPTS ON THIS PAGE:

10-Q	Nov 6, 2009

10-Q	Aug 7, 2009

10-Q	May 11, 2009

10-K (2 sections)	Feb 27, 2009

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