Citigroup (C)

Life Insurance and Annuities Business

        On July 1, 2005, the Company completed the sale of Citigroup's Travelers Life & Annuity and substantially all of Citigroup's international insurance businesses to MetLife, Inc. (MetLife). The businesses sold were the primary vehicles through which Citigroup engaged in the Life Insurance and Annuities business.

        Citigroup received $1.0 billion in MetLife equity securities and $10.830 billion in cash, which resulted in an after-tax gain of approximately $2.120 billion. This gain remains subject to final closing adjustments.

        The transaction encompassed Travelers Life & Annuity's U.S. businesses and its international operations other than Citigroup's life business in Mexico (which is now included within Retail Banking). International operations included wholly owned insurance companies in the United Kingdom, Belgium, Australia, Brazil, Argentina, and Poland; joint ventures in Japan and Hong Kong; and offices in China. The transaction also included Citigroup's Argentine pension business. (The transaction described in the preceding three paragraphs is referred to herein as the Sale of the Life Insurance and Annuities Business).

        In connection with the Sale of the Life Insurance and Annuities Business, Citigroup and MetLife have entered into ten-year agreements under which Travelers Life & Annuity products will be made available through certain Citigroup distribution channels, subject to appropriate suitability and other standards. In addition, MetLife products will be added to these distribution channels. For the three and nine months ended September 30, 2005, the commission fees related to this distribution service totaled approximately $100 million and $330 million, respectively. The commission fees for the three months ended September 30, 2005, which were paid by MetLife, are included in Citigroup's Consolidated Statement of Income. The corresponding fees for the six months ended June 30, 2005, were intercompany fee payments by Travelers Life and Annuity to other Citigroup affiliates and were eliminated in consolidation. For the three and nine months ended September 30, 2004, these intercompany commission fees were approximately $114 million and $318 million, respectively.

        Also included in the sales agreement between Citigroup and MetLife are provisions related to transitional services that will be provided for a period of 24 to 30 months. These transitional service provisions may be terminated or extended. The costs associated with these provisions are not considered to be significant.

        Results for all of the businesses included in the Sale of the Life Insurance and Annuities Business, including the gain that was recorded this quarter, are reported as Discontinued Operations for all periods presented.

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        Summarized financial information for Discontinued Operations related to the Sale of the Life Insurance and Annuities Business was as follows:

        Summarized financial information for all of the Company's Discontinued Operations:

        Summarized financial information for the Company's total Discontinued Operations was as follows:

Life Insurance and Annuities Business

On July 1, 2005, the Company completed the sale of Citigroup’s Travelers Life & Annuity, and substantially all of Citigroup’s international insurance businesses, to MetLife, Inc.  The businesses sold were the primary vehicles through which Citigroup engaged in the Life Insurance and Annuities business.  The transaction encompasses Travelers Life & Annuity’s U.S. businesses and its international operations other than Citigroup’s life business in Mexico (which is now included within Retail Banking).  International operations include wholly owned insurance companies in the United Kingdom, Belgium, Australia, Brazil, Argentina, and Poland; joint ventures in Japan and Hong Kong; and offices in China.  The sale transaction also includes Citigroup’s Argentine pension business.  (The transaction described in this paragraph is referred to herein as the Sale of the Life Insurance and Annuities Business).

Results for all of the businesses included in the Sale of the Life Insurance and Annuities Business are reported separately as Discontinued Operations for all period’s presented.

As required by Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144), the results for all of the businesses included in the Sale of the Asset Management Business and the Sale of the Life Insurance and Annuities Business were reported in the June 2005 10-Q’s Unaudited Statements of Income and Cash Flows as discontinued operations for all periods presented.  The assets and liabilities of the businesses being sold were included in the Consolidated Balance Sheet as Assets of discontinued operations held for sale and Liabilities of discontinued operations held for sale for the June 30, 2005 period only.

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