Citigroup (C)

Future dilution of our equity will adversely affect the market price of our common stock.

Except as may be required by the underwriters for the offering of our common stock, we are not restricted from issuing additional common stock or preferred stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock or preferred stock or similar securities in the market after this offering, or the perception that such sales could occur. The issuance of additional common stock will dilute the ownership interest of our existing common stockholders.

As a result of agreements entered into with the private purchasers of $12.5 billion of Citigroup’s convertible preferred stock in January 2008, the conversion price of the privately placed convertible preferred stock will be reduced as a result of the proposed issuance of common stock, but in no event will the shares issuable upon conversion be greater than 474.4 million shares in the aggregate.  For example, if Citigroup issues $10 billion of common stock at a purchase price of $17.75 per share (the closing price of our common stock on September 29, 2008), the conversion price on the convertible preferred stock would be reduced from $31.62 per share to $26.3517 per share and an aggregate of 474.4 million shares of common stock would be issuable upon conversion.