These excerpts taken from the C 10-Q filed May 2, 2008.
1Q08 vs. 1Q07
Revenues, net of interest expense, of $(358) million for the first quarter of 2008 decreased $920 million.
Total proprietary investment activity revenues, of $(470) million for the first quarter of 2008 were composed of revenues from private equity of $115 million, hedge funds of $(257) million and other investment activity of $(328) million. Private equity revenue decreased $246 million from the first quarter of 2007, driven by lower gains. Hedge fund revenue decreased $304 million, largely due to lower investment performance. Other investment activities revenue decreased $356 million from the first quarter of 2007, largely due to a $212 million MTM loss in the SIVs and lower investment performance. Client revenues decreased $14 million, reflecting lower performance of fixed income-oriented products, partially offset by the inclusion of Old Lane.
Operating expenses in the first quarter of 2008 of $498 million increased $318 million from the first quarter of 2007, primarily due to inclusion of Old Lane and the write down of $202 million of the intangible asset as a result of the offer to investors to redeem their investments in the Old Lane multi-strategy hedge fund.
Minority interest, net of taxes, in the first quarter of 2008 of $(43) million decreased $64 million from 2007, primarily due to lower gains related to underlying investments held by consolidated majority-owned legal entities. The impact of minority interest is reflected in fees, dividends, and interest, and net realized and net change in unrealized gains/(losses) consistent with proceeds received by minority interests.
Client capital under management of $43.4 billion at March 31, 2008 increased $0.5 billion from year-ago levels, due to the acquisition of Old Lane in 2007 and capital raised in private equity funds, offset by mark-to-market losses in fixed income-oriented products.
Corporate/Other includes treasury results, unallocated corporate expenses, offsets to certain line-item reclassifications reported in the business segments (intersegment eliminations), and unallocated taxes.
1Q08 vs. 1Q07
Revenues, net of interest expense, decreased primarily due to mark-to-market losses on Nikko Cordial equity holdings in the current quarter, including a $212 million write-down of Nikko Cordial's interest in an equity investment, as well as the absence of a prior-year gain on the sale of certain corporate-owned assets.
Operating expenses, excluding the 2007 first quarter restructuring charge of $1,377 million, increased primarily due to lower intersegment eliminations, as well as higher technology and other unallocated expenses.
Income tax benefits decreased due to a lower pretax loss in the 2008 first quarter and additional taxes held at Corporate.
Citigroup's risk management framework balances strong themed corporate oversight with well-defined independent risk management functions within each business. The Citigroup risk management framework is described in Citigroup's 2007 Annual Report on Form 10-K.