Citigroup (C)

Other Investment Activities investments are primarily carried at fair value, with impairment write-downs recognized in income for “other than temporary” declines in value.  On April 1, 2004, the merger of TPC and the St. Paul Companies was completed.  Existing shares of TPC common stock were converted to 0.4334 shares of common stock of the St. Paul Travelers Companies (St. Paul).  As of December 31, 2004, the Company held approximately 39.8 million shares or approximately 6.0% of St. Paul’s outstanding equity securities.  The St. Paul common stock position is classified as available-for-sale. As of December 31, 2004, Other Investment Activities included assets of $3.009 billion, including $1.482 billion in St. Paul shares, $1.135 billion in hedge funds, $163 million in the LDC Debt/Refinancing portfolios, and $229 million in other assets.  As of December 31, 2003, total assets of Other Investment Activities were $2.909 billion, including $1.693 billion in St. Paul shares, $692 million in hedge funds, the majority of which represented money managed for TPC,  $365 million in the LDC Debt/Refinancing portfolios, and $159 million in other assets.

The major components of Other Investment Activities revenues, net of interest expense, are as follows:

(1)   Consists primarily of revenues earned by CAI as well as realized gains and other revenue earned relating to Citigroup’s ownership interest in St. Paul.  The pretax profit (revenues less operating expenses) of the CAI business are reflected in the respective Citigroup distributor’s (Smith Barney, and Private Bank) income statement as revenues.

Revenues, net of interest expense, of $379 million in 2004 increased $6 million from 2003, primarily relating to higher other revenues of $80 million, partially offset by lower hedge fund results of $68 million. The higher other revenues reflected higher revenues of $47 million from investment activity relating to Citigroup’s ownership interest in St. Paul, a $16 million increase in CAI revenues and higher revenues of $17 million from real estate investments.  Revenues, net of interest expense, of $373 million in 2003 decreased $377 million from the prior year due to the absence of a $527 million gain in 2002 from the sale of 399 Park Avenue, partially offset by a $96 million increase in CAI revenues due to improved investment performance and business growth and a $50 million increase in revenue from TPC shares, including dividends and net realized gains.

Alternative Investments results may fluctuate in the future as a result of market and asset-specific factors.

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Other Investment Activities investments are primarily carried at fair value, with impairment write-downs recognized in income for “other than temporary” declines in value.  On April 1, 2004, the merger of TPC and the St. Paul Companies was completed.  Existing shares of TPC common stock were converted to 0.4334 shares of common stock of the St. Paul Travelers Companies (St. Paul).  As of December 31, 2004, the Company held approximately 39.8 million shares or approximately 6.0% of St. Paul’s outstanding equity securities.  The St. Paul common stock position is classified as available-for-sale. As of December 31, 2004, Other Investment Activities included assets of $3.009 billion, including $1.482 billion in St. Paul shares, $1.135 billion in hedge funds, $163 million in the LDC Debt/Refinancing portfolios, and $229 million in other assets.  As of December 31, 2003, total assets of Other Investment Activities were $2.909 billion, including $1.693 billion in St. Paul shares, $692 million in hedge funds, the majority of which represented money managed for TPC,  $365 million in the LDC Debt/Refinancing portfolios, and $159 million in other assets.

The major components of Other Investment Activities revenues, net of interest expense, are as follows:

(1)          Consists primarily of revenues earned by CAI as well as realized gains and other revenue earned relating to Citigroup’s ownership interest in St. Paul.  The pretax profit (revenues less operating expenses) of the CAI business are reflected in the respective Citigroup distributor’s (Asset Management, Smith Barney, and Private Bank) income statement as revenues.

Revenues, net of interest expense, of $339 million in 2004 increased $23 million from 2003, primarily relating to higher other revenues of $97 million, partially offset by lower hedge fund results of $68 million. The higher other revenues reflected higher revenues of $47 million from investment activity relating to Citigroup’s ownership interest in St. Paul, a $33 million increase in CAI revenues and higher revenues of $17 million from real estate investments.  Revenues, net of interest expense, of $316 million in 2003 decreased $387 million from the prior year due to the absence of a $527 million gain in 2002 from the sale of 399 Park Avenue, partially offset by a $96 million increase in CAI revenues due to improved investment performance and business growth and a $50 million increase in revenue from TPC shares, including dividends and net realized gains.

Alternative Investments results may fluctuate in the future as a result of market and asset-specific factors.

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