Citigroup Reports Record Earnings from Continuing Operations with International Earnings up 47%.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Citigroup Citigroup U.S. holding company formed in 1998 from the merger of Citicorp (itself a holding company incorporated in 1967) and Travelers Group, Inc. The $70 billion merger included one of the largest U.S. investment banks, Salomon Smith Barney Inc. Inc. (NYSE NYSE See: New York Stock Exchange :C): --Net Income of $5.64 Billion, EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $1.12 --Record EPS from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $1.11, up 13% --Record International Revenues, up 19% --Board Authorizes up to Additional $10 Billion in Share Repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. Citigroup Inc. (NYSE:C) today reported net income for the first quarter of 2006 of $5.64 billion, or $1.12 per share. Return on common equity was 20.3%. Results include $846 million of compensation expense ($520 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) related to stock grants to retirement-eligible employees required under SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123(R), and a $657 million tax benefit related to the resolution of a federal tax audit for the years 1999 through 2002. First Quarter Highlights --International earnings increased 47%, driven by record international revenues, up 19%. --Record corporate and investment banking revenues, up 21%, driven by strong franchise momentum. --Record international corporate and investment banking revenues, up 34%, and net income, up 80% --Record fixed income markets revenues of $3.15 billion, up 8%; record equity market revenues of $1.18 billion, up 67%; record investment banking revenue of $1.22 billion, up 34% --#1 rank in global debt underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. ; #1 in announced global M&A; #2 in global equity underwriting --Record transaction services revenues, up 22%, driven by double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth in customer balances --In international consumer, earnings were up 21%, cards average loans grew 14%, and consumer finance loans outside of Japan were up 8%. In retail banking, investment AUMs increased 20%. --U.S. consumer average loans grew 10%, reflecting loan growth in consumer lending Consumer lending or consumer loans refers to any type of loan product that is not a mortgage; such as a car, boat, manufactured home, home equity loan, home equity line of credit, signature loan, signature line of credit, recreational vehicle, or Certificate of Deposit loans. and retail distribution of 18% and 8% respectively, and commercial business core loans, up 23%. Card purchase sales increased 11%, while average managed receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed declined 2%. --Record Smith Barney Smith Barney is a division of Citigroup Global Capital Markets Inc., a global, full-service financial firm, that provides brokerage, investment banking and asset management services to corporations, governments and individuals around the world. revenues, up 19%, with client assets under fee-based management up 33%. --The decline in net interest margin moderated to 6 basis points versus the fourth quarter 2005, with mix-driven spread compression compression, external stress applied to an object or substance, tending to cause a decrease in volume (see pressure). Gases can be compressed easily, solids and liquids to a very small degree if at all. in U.S. consumer partially offset by international consumer spread expansion. --The credit environment remained favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. , including a significant decline in U.S. consumer bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most filings. --Operating expenses increased 17%, comprised of 7 percentage points from SFAS 123(R) charges, 9% due to organic business growth and acquisitions, and 1% due to investment spending. --238 new branches were opened, including 36 in the U.S. and 202 internationally. --Share repurchases totaled $2 billion, or approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 43 million shares.
Citigroup Segment Results
(In Millions of Dollars)
First Quarter First Quarter
Revenue Net Income
------------------ ---------------
% %
2006 2005 Change 2006 2005 Change
----------------------------------------------------------------------
Global Consumer $11,955 $12,118 (1)% $3,073 $2,843 8%
Corporate and
Investment Banking 7,279 6,037 21 1,929 1,679 15
Global Wealth
Management 2,483 2,173 14 287 319 (10)
Alternative
Investments 675 866 (22) 353 362 (2)
Corporate/Other (209) 2 NM (87) (88) 1
--------------------------------------------------
Results from
Continuing
Operations $22,183 $21,196 5% $5,555 $5,115 9%
--------------------------------------------------
Discontinued
Operations 84 326(1) NM
-----------------------
Total Citigroup $5,639 $5,441 4%
Earnings Per Share $1.12 $1.04 8%
----------------------------------------------------------------------
(1) Income from substantially all of life insurance and annuities,
which was sold on July 1, 2005, and substantially all of asset
management, which was sold on December 1, 2005.
Management Comment "I am very pleased with our first quarter accomplishments, which included strong growth in client activity across many franchises. We are seeing the benefits from our investment spending, which helped generate record revenues in our international businesses and record revenues globally in our corporate and investment banking business. Strength in these franchises more than offset weaker results in our U.S. consumer business," said Charles Prince For other persons named Charles Prince, see Charles Prince (disambiguation). Charles O. "Chuck" Prince, III, born January_13, 1950, is the chief executive officer (CEO) and chairman of Citigroup. , Chief Executive Officer of Citigroup. "We executed on our strategic initiatives, adding a record 238 new branches in 19 countries, as well as opening our first private bank office in mainland Mainland. 1 Island (1991 pop. 14,150), 178 sq mi (461 sq km), N Scotland. The largest of the Orkney Islands, it is also called Pomona. Kirkwall, the seat of the Orkney Islands council area, is on the island. China. We also enhanced our ability to serve more customers through the launch of Citibank CITIBANK First National City Bank Direct, our full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. internet bank, and through a partnership with 7-Eleven convenience stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. , we added over 5,500 ATMs to our U.S. distribution network. We remain sharply focused on our strategic initiatives, leveraging our unique strengths to achieve long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. earnings growth and superior returns for our owners," said Prince. Expanding Distribution During the first quarter, continued investment spending led to significant consumer branch expansion.
New Branches/ALMs Opened
-------------------------------------
United States International Total
------------- -------------- --------
Retail bank branches 11 72 83
Consumer finance branches 25 130 155
Automated Loan Machines (Japan) - 60 60
------------- -------------- --------
Total 36 262 298
----------------------------------------------------------------------
Citibank international branch openings included 54 in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , 4 in Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). , and 3 in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. . CitiFinancial international branch openings included 58 in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. , 20 in Mexico and 19 in Brazil. Summary of Highlighted Items During the quarter, the following charges and benefits were recorded:
(In Millions of Dollars) After-Tax Impact Business
----------------------------------------------------------------------
SFAS 123(R) charge for January 2006
grants (see explanatory note below) ($398) All
SFAS 123(R) accrual for January 2007
grants (see explanatory note below) ($122) All
Tax benefit due to resolution of a
tax audit (1) 657 All
----------------------------------------------------------------------
(1) Resolution of a federal tax audit for the years 1999 through 2002.
The tax benefit by business is provided in Schedule A on page 8.
Adoption of SFAS 123(R) The first quarter results include compensation expense required by SFAS 123(R), Share-Based Payments, for stock award grants to retirement-eligible employees. Based upon recent interpretive in·ter·pre·tive also in·ter·pre·ta·tive adj. Relating to or marked by interpretation; explanatory. in·ter  pre·tive·ly adv. guidance,
these awards must be recognized as an expense on, or prior to, the grant
date. Previously, such awards were amortized over their vesting VestingThe process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: period. As a result, a charge of $648 million ($398 million after-tax) was recorded in the first quarter related to stock grants awarded to retirement-eligible employees in January January: see month. 2006. Prospectively, the company will accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. the estimated cost of such awards over the course of the fiscal year preceding the grant. Accordingly, the company has also recognized $198 million ($122 million after-tax) of compensation expense in the quarter representing the estimated cost of such stock awards to be granted to retirement-eligible employees in January 2007. Both of these charges are non-cash and represent accelerated recognition of costs that would have been incurred in future periods, with no incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. economic cost to the company. A schedule of the charge and the current quarter accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. for estimated stock awards to be granted in January 2007 is provided in Schedule A on page 8. APPENDIX appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. All financial results presented below include the impact of adopting SFAS 123(R) and the tax benefit due to resolution of a federal tax audit. The impact of these items by business is presented in Schedule A on page 8.
GLOBAL CONSUMER GROUP
First Quarter First Quarter
Revenues Net Income
------------------ ----------------
(In Millions of % %
Dollars) 2006 2005 Change 2006 2005 Change
----------------------------------------------------------------------
U.S. Cards $3,234 $3,455 (6)% $926 $778 19%
U.S. Retail
Distribution 2,296 2,457 (7) 515 564 (9)
U.S. Consumer
Lending 1,260 1,373 (8) 437 486 (10)
U.S. Commercial
Business 470 678 (31) 126 252 (50)
-----------------------------------------------
Total U.S.
Consumer $7,260 $7,963 (9)% $2,004 $2,080 (4)%
International Cards $1,280 $1,105 16% $291 $302 (4)%
International
Consumer Finance 962 948 1 168 139 21
International
Retail Banking 2,467 2,305 7 677 498 36
-----------------------------------------------
Total
International
Consumer $4,709 $4,358 8% $1,136 $939 21%
Other (14) (203) 93 (67) (176) 62
-----------------------------------------------
Global Consumer $11,955 $12,118 (1)% $3,073 $2,843 8%
----------------------------------------------------------------------
U.S. Cards --Net income increased 19%, partially reflecting sharply lower credit costs. Credit costs declined, as lower bankruptcy filings and a continued favorable credit environment combined to drive the managed net credit loss ratio down by 168 bps to 3.90%. --Revenues declined, reflecting lower average managed receivables and continued net interest margin compression. Receivables growth in reward and private label cards was more than offset by declines in traditional card products. The benefit of 11% growth in purchase sales was offset by increased payment rates. U.S. Retail Distribution --Revenues and net income declined primarily due to the absence of a $114 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain in the prior- year quarter relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the resolution of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Growth in deposits and loans, up 6% and 8% respectively, and a 26% increase in investment product sales, were more than offset by lower net interest margin. Lower net interest margin was driven in part by a shift in customer liabilities from demand deposits to certificates of deposit. --Expenses increased 13%, reflecting higher business volumes and investment in new branches, new product development and technology. During the quarter, 36 new branches were opened. --Credit costs declined 70 basis points to an NCL NCL Norwegian Cruise Line NCL New Caledonia (ISO Country code) NCL National Consumers League (Washington, DC) NCL Neuronal Ceroid Lipofuscinosis (adult type) rate of 2.66%, reflecting lower bankruptcy filings. U.S. Consumer Lending --Revenues declined as 18% growth in average loans was offset by net interest margin compression across the loan portfolios. The revenue decrease also reflected lower net mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. revenues and lower gains on the sale of real estate loans. --Expenses increased 10% due to increased business volumes. Credit conditions remained favorable, leading to a decline in net credit loss ratios. U.S. Commercial Business --Revenues and net income declined primarily due to the absence of a $161 million pre-tax gain on portfolio divestitures in the prior-year quarter. Results also reflect growth in core loan and deposit balances, up 23% and 25% respectively, which was more than offset by net interest margin compression. --Credit costs declined, reflecting the continued favorable credit environment. International Cards --Revenue growth was driven by higher average loans, up 14%, and higher net interest margins. Loan growth was led by Mexico, Asia, and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . --Expense growth reflected continued investment in organic growth and costs associated with a labor settlement in Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. . --Net income declined as higher credit costs were driven by a charge to increase loan loss reserves related to industry-wide credit deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan cards market, portfolio growth, and target market expansion. International Consumer Finance --In Japan, 11% net income growth was primarily driven by reduced credit costs and lower expenses. Average loans were even with the fourth quarter 2005, as a strong increase in new loan originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. offset the continued decline in legacy portfolios. During the quarter, 60 new automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. loan machines (ALMs) were added. --Outside of Japan, revenues and net income increased 16% and 94%, respectively, driven by growth in loans, up 8%, higher net interest margins, and lower expenses. During the quarter, 130 new branches were opened. International Retail Banking --Revenue and net income growth reflected a 6% increase in deposits, 37% growth in investment product sales, and higher net interest margins. Loan balances declined slightly from the prior-year period, as growth in Mexico, Japan, and Latin America was offset by a decline in EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. , due to loan write-offs in the third quarter 2005, and the impact of labor actions in Korea. --Expenses included continued investment spending, with 72 new branch openings during the quarter, and costs associated with a labor settlement in Korea.
CORPORATE AND INVESTMENT BANKING
First Quarter First Quarter
Revenues Net Income
---------------- % ---------------- %
(In Millions of Dollars) 2006 2005 Change 2006 2005 Change
----------------------------------------------------------------------
Capital Markets and
Banking $5,896 $4,899 20% $1,618 $1,439 12%
Transaction Services 1,382 1,137 22 323 245 32
Other 1 1 -- (12) (5) NM
---------------------------------------------
Corporate and
Investment Banking $7,279 $6,037 21% $1,929 $1,679 15%
---------------------------------------------
International
results $4,356 $3,258 34% $1,414 $786 80%
----------------------------------------------------------------------
Capital Markets and Banking --Record fixed income markets revenues of $3.15 billion, up 8%, reflected broad-based broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased performance across products and regions, including record results in emerging markets trading, municipals, and credit products. Compared to the fourth quarter 2005, fixed income market revenues increased 51%. --Record equity markets revenues of $1.18 billion, up 67%, were driven by strong growth globally, including cash trading, derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. , and convertibles. --Record investment banking revenues increased 34%, driven by higher debt underwriting and advisory fees. --Lending revenues declined 19%, as improved credit conditions led to lower hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. results. --Expense growth was primarily driven by higher compensation expense, which included SFAS 123(R) charges. Transaction Services --Record revenues, up 22%, were driven by higher customer volumes, reflecting increased liability balances, up 14%; assets under custody, up 10%; and the positive impact of higher short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. . --Expenses increased 18%, primarily driven by increased business volumes, investment in growth initiatives, and acquisitions.
GLOBAL WEALTH MANAGEMENT
First Quarter First Quarter
Revenues Net Income
----------------- % -------------- %
(In Millions of Dollars) 2006 2005 Change 2006 2005 Change
----------------------------------------------------------------------
Smith Barney $1,987 $1,669 19% $168 $197 (15)%
Private Bank 496 504 (2) 119 122 (2)
--------------------------------------------
Global Wealth Management $2,483 $2,173 14% $287 $319 (10)%
--------------------------------------------
International results $329 $301 9% $59 $46 28%
----------------------------------------------------------------------
Smith Barney --Record revenues were driven by a 32% increase in fee-based revenues and a 4% increase in transactional revenues, reflecting increased customer volumes and the acquisition of the Legg Mason Founded in 1899, Legg Mason, Inc. (NYSE: LM) is a leading Global Asset Management Firm that serves the institutional, mutual fund and wealth management markets. The firm is headquartered in Baltimore, Maryland, and is located on Lombard and Charles Streets in the Legg Mason retail brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. business. --Assets under fee-based management increased 33% to $319 billion, reflecting both organic growth and the addition of Legg Mason client assets. --The pre-tax margin of 13% reflected higher compensation expense, including the impact of SFAS 123(R) charges, and integration costs of the Legg Mason retail brokerage business. The Private Bank --Revenues declined, primarily due to the absence of the Japan business, which ceased business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets at the end of September September: see month. 2005. --Excluding Japan, revenues increased 3%, driven by increased customer business volumes, up 8% to $222 billion. Income declined 9%, reflecting higher compensation expense and increased credit costs.
ALTERNATIVE INVESTMENTS
First Quarter First Quarter
Revenues Net Income
-------------- % --------------- %
(In Millions of Dollars) 2006 2005 Change 2006 2005 Change
----------------------------------------------------------------------
Alternative Investments $675 $866 (22)% $353 $362 (2)%
----------------------------------------------------------------------
Alternative Investments --Revenues and net income declined due to lower results in private equity, which were partially offset by higher mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. and realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. in other asset classes. CORPORATE/OTHER Corporate/Other results were even with the prior year, as lower treasury results were offset by a tax benefit due to resolution of a federal tax audit.
INTERNATIONAL OPERATIONS (1)
First Quarter First Quarter
Revenues Net Income
--------------- ---------------
(In Millions of % %
Dollars) 2006 2005 Change 2006 2005 Change
----------------------------------------------------------------------
Global Consumer $1,149 $960 20% $358 $277 29%
Corporate and
Investment
Banking 186 159 17 78 83 (6)
Global Wealth
Management 31 31 -- 8 13 (38)
-------------------------------------------------
Mexico $1,366 $1,150 19% $444 $373 19%
Global Consumer $1,270 $1,248 2% $185 $122 52%
Corporate and
Investment
Banking 2,296 1,694 36 635 188 NM
Global Wealth
Management 75 71 6 3 (1) NM
-------------------------------------------------
Europe, Middle East
and Africa (EMEA) $3,641 $3,013 21% $823 $309 NM
Global Consumer $775 $821 (6%) $188 $175 7%
Corporate and
Investment
Banking 296 180 64 85 48 77
Global Wealth
Management - 22 (100) - (8) 100
-------------------------------------------------
Japan $1,071 $1,023 5% $273 $215 27%
Global Consumer $1,189 $1,072 11% $347 $311 12%
Corporate and
Investment
Banking 1,132 915 24 414 322 29
Global Wealth
Management 180 119 51 45 35 29
-------------------------------------------------
Asia (excluding
Japan) $2,501 $2,106 19% $806 $668 21%
Global Consumer $326 $257 27% $58 $54 7%
Corporate and
Investment
Banking 446 310 44 202 145 39
Global Wealth
Management 43 58 (26) 3 7 (57)
-------------------------------------------------
Latin America $815 $625 30% $263 $206 28%
-------------------------------------------------
Total International $9,394 $7,917 19% $2,609 $1,771 47%
----------------------------------------------------------------------
(1) International results for the quarter are fully reflected in the
product disclosures.
Mexico --Consumer results were driven by increased retail banking deposits and loans, up 13% and 12% respectively, and growth in cards average receivables of 53%. Credit conditions remained stable. During the quarter, 54 new retail bank branches and 20 new consumer finance branches were opened. --Corporate and Investment Banking revenues increased due to strong growth in fixed income and equity markets. Net income declined due to the absence of a loan loss recovery recorded in the prior year period. Credit conditions remained stable. Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Middle East and Africa
--Consumer results reflected strong growth in customer deposits and investment product sales, as well as a slight improvement in net interest margin, which was partially offset by lower loan balances. During the quarter, 22 new consumer finance branches and 10 new retail bank branches were opened. --Corporate and Investment Banking results were driven by record revenues, up 36%, reflecting broad-based revenue growth across products and regions. Japan --Consumer income increased primarily due to reduced credit costs and lower expenses in consumer finance. Retail banking income declined as increased revenues from investment product sales were offset by the impact of lower foreign currency deposit balances. --Corporate and Investment Banking revenues and net income increased strongly due to growth in fixed income markets, distressed debt distressed debt Debt with low junk status and a market price substantially below par value, often pennies on the dollar. Investors sometimes buy distressed debt on the possibility that management can renegotiate loan agreements and keep the issuer out of , and transaction services. Asia --Consumer results reflected the benefit of increased customer volumes, which were partially offset by increased expenses related to branch openings. Results include costs related to a labor settlement in Korea and an increase to loan loss reserves related to industry-wide credit deterioration in the Taiwan cards market. Excluding Taiwan, credit conditions remained favorable. During the quarter, 68 new consumer finance branches and 3 retail bank branches were opened. --Corporate and Investment Banking generated record revenues and net income, driven by double-digit revenue growth in equity markets, lending, and transaction services. Credit conditions remained favorable. Latin America --Consumer results reflected double-digit revenue growth in cards, consumer finance, and retail banking, driven by increased customer activity. During the quarter, 20 new consumer finance and 5 retail bank branches were opened. --Corporate and Investment Banking results reflected strong revenue growth in fixed income and equity markets and transaction services, partially offset by expense growth and the absence of prior year loan loss reserve releases. Credit conditions remained favorable. Citigroup (NYSE: C), the leading global financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Major brand names under Citigroup's trademark red umbrella umbrella, a small canopy used as a protection against the sun in China, Egypt, and elsewhere in remote antiquity. It was often an emblem of rank. During the Middle Ages the umbrella became almost extinct in Europe; its usefulness was not rediscovered until the late include Citibank, CitiFinancial, Primerica, Smith Barney and Banamex. Additional information may be found at www.citigroup.com Additional financial, statistical and business-related information, as well as business and segment trends, is included in a Financial Supplement. Both the earnings release and the Financial Supplement are available on Citigroup's website at www.citigroup.com. Certain statements in this document are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and . These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in Citigroup's filings with the Securities and Exchange Commission.
SCHEDULE A
Summary of SFAS 123(R) Charges
Impact on 1Q 2006 pre-tax
compensation expense
------------------------------
Accrual of
estimated cost
of stock
Charge for awards for
stock awards retirement-
granted to eligible Tax benefit
retirement- employees to due to
eligible be granted in resolution
employees in the first of a tax
(In Millions of Dollars) January 2006 quarter 2007 audit
------------------------- ------------------------------ -------------
U.S. Cards $16 $4 $89
U.S. Retail Distribution 29 7 51
U.S. Consumer Lending 6 2 31
U.S. Commercial Business 10 2 4
------------------------------ -------------
Total U.S. Consumer $61 $15 $175
International Cards $7 $2 $20
International Consumer
Finance 3 1 --
International Retail
Banking 29 7 55
------------------------------ -------------
Total International
Consumer $39 $10 $75
Consumer Other 21 6 40
------------------------------ -------------
Global Consumer $121 $31 $290
Capital Markets and
Banking $346 $93 $151
Transaction Services 8 2 25
------------------------------ -------------
Corporate & Investment
Banking $354 $95 $176
Smith Barney $129 $48 --
Private Bank 16 3 $13
------------------------------ -------------
Global Wealth Management $145 $51 $13
Alternative Investments $7 $2 $58
Corporate/Other $21 $19 $61
Discontinued Operations -- -- $59
------------------------------ -------------
Total $648 $198 $657
------------------------- ------------------------------ -------------
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