FINANCIAL INFORMATION THE COMPANY 30 FORWARD-LOOKING STATEMENTS 62 Global Consumer 30 MANAGING GLOBAL RISK 63 Global Corporate 30 The Credit Risk Management Process 63 Global Investment Management and Private Banking 31 Consumer Credit Risk 63 Investment Activities 31 Consumer Portfolio Review 64 Corporate/Other 31 Corporate Credit Risk 65 FIVE-YEAR SUMMARY OF Global Corporate Portfolio Review 66 SELECTED FINANCIAL DATA 32 Reinsurance Risk 67 MANAGEMENT’S DISCUSSION AND The Market Risk Management Process 67 ANALYSIS OF FINANCIAL CONDITION AND Management of Cross-Border Risk 69 RESULTS OF OPERATIONS 33 LIQUIDITY AND CAPITAL RESOURCES 70 Significant Accounting Policies 34 Off-Balance Sheet Arrangements 71 Future Application of Accounting Standards 35 Capital 73 Results of Operations 37 GLOSSARY OF TERMS 77 GLOBAL CONSUMER 38 REPORT OF MANAGEMENT 79 Banking/Lending 39 INDEPENDENT AUDITORS’ REPORT 79 Citibanking North America 39 CONSOLIDATED FINANCIAL STATEMENTS 80 Mortgage Banking 39 Consolidated Statement of Income 80 North America Cards 40 Consolidated Statement of Financial Position 81 CitiFinancial 41 Consolidated Statement of Changes in Stockholders’ Equity 82 Insurance 42 Consolidated Statement of Cash Flows 83 Primerica Financial Services 42 NOTES TO CONSOLIDATED Personal Lines 42 FINANCIAL STATEMENTS 84 International Consumer 43 FINANCIAL DATA SUPPLEMENT 116 Western Europe 43 Average Balances and Interest Rates, Japan 44 Taxable Equivalent Basis—Assets 116 Asia 44 Average Balances and Interest Rates, Latin America 45 Taxable Equivalent Basis—Liabilities and Mexico 46 Stockholders’ Equity 117 Central & Eastern Europe, Middle East & Africa 46 Analysis of Changes in Net Interest Revenue 118 e-Consumer 47 Ratios 119 Other Consumer 47 Foregone Interest Revenue on Loans 119 Global Consumer Outlook 48 Loan Maturities and Sensitivity to Changes in Interest Rates 119 GLOBAL CORPORATE 50 Loans Outstanding 119 Corporate and Investment Bank 50 Cash-Basis, Renegotiated, and Past Due Loans 120 Emerging Markets Corporate Other Real Estate Owned and Other Repossessed Assets 120 Banking and Global Transaction Services 52 Details of Credit Loss Experience 120 Commercial Lines 52 Average Deposit Liabilities in Offices Outside the U.S. 121 Global Corporate Outlook 56 Maturity Profile of Time Deposits ($100,000 or more) GLOBAL INVESTMENT MANAGEMENT in U.S. Offices 121 AND PRIVATE BANKING 58 Short-Term and Other Borrowings 121 Travelers Life and Annuity 58 10-K CROSS-REFERENCE INDEX 129 The Citigroup Private Bank 59 Exhibits, Financial Statement Schedules, Citigroup Asset Management 60 and Reports on Form 8-K 130 Global Investment Management and CITIGROUP BOARD OF DIRECTORS 132 Private Banking Outlook 61 INVESTMENT ACTIVITIES 61 CORPORATE/OTHER 62 29 THE COMPANY Citigroup Inc. (Citigroup and, together with its subsidiaries, the Company) is a maintained 2,221 loan offices in North America that offer real estate-secured diversified global financial services holding company whose businesses provide loans, unsecured and partially secured personal loans, auto loans and loans a broad range of financial services to consumer and corporate customers with to finance consumer goods purchases. In addition, CitiFinancial, through 192 million customer accounts in over 100 countries and territories. Citigroup certain subsidiaries and third parties, makes available various credit-related was incorporated in 1988 under the laws of the State of Delaware. and other insurance products to its U.S. consumer finance customers. The Company’s activities are conducted through Global Consumer, Global The business operations of Primerica Financial Services (Primerica) Corporate, Global Investment Management and Private Banking, and involve the sale in North America of life insurance and other products Investment Activities. manufactured by its affiliates, including Smith Barney mutual funds, The Company has completed certain strategic business acquisitions during CitiFinancial mortgages and personal loans and TIC annuity products. the past three years, details of which can be found in Note 2 to the The Primerica sales force is composed of over 100,000 independent Consolidated Financial Statements. representatives. A great majority of the sales force works on a part-time basis. The Company is a bank holding company within the meaning of the U.S. Through Travelers Property Casualty Corp. (TPC), Global Consumer writes Bank Holding Company Act of 1956 (BHC Act) registered with, and subject to virtually all types of property and casualty insurance covering personal risks. examination by, the Federal Reserve Board (FRB). Certain of the Company’s The Personal Lines unit of TPC had approximately 5.4 million policies in subsidiaries are subject to supervision and examination by their respective force at December 31, 2001. The primary coverages are personal automobile federal and state authorities. Additional information on the Company’s and homeowners insurance sold to individuals, and are distributed through regulation and supervision can be found within the Regulation and approximately 7,600 independent agencies located throughout the United Supervision section beginning on page 124. States. Personal Lines also uses additional distribution channels, including At December 31, 2001, the Company had approximately 145,000 full-time sponsoring organizations such as employers’ and consumer associations, and and 4,000 part-time employees in the United States and approximately joint marketing arrangements with other insurers. 123,000 employees outside of the United States. The International unit of Global Consumer provides full-service banking The periodic reports of Citicorp, Salomon Smith Barney Holdings Inc., and community-based lending, including credit and charge cards, and Travelers Insurance Group Holdings Inc., The Student Loan Corporation investment services in Western Europe, Japan, Asia (excluding Japan), (STU), The Travelers Insurance Company (TIC), and Travelers Life and CEEMEA (Central & Eastern Europe, Middle East, & Africa), Latin America Annuity Company (TLAC), subsidiaries of the Company that make filings and Mexico, which includes the results of all operations of Banamex and pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Citibank Mexico, through more than 3,000 branches and offices in 52 Act), provide additional business and financial information concerning those countries and territories. companies and their consolidated subsidiaries. e-Consumer is the business responsible for developing and implementing The principal executive offices of the Company are located at 399 Park Citigroup’s Internet financial services products and e-commerce solutions. Avenue, New York, New York 10043, telephone number 212-559-1000. e-Consumer’s mission is to build and deliver new forms of financial services Additional information is available on the Company’s web site at that meet the changing needs of customers and to facilitate all aspects of (http://www.citigroup.com). e-commerce as it grows with the new digital economy. GLOBAL CONSUMER GLOBAL CORPORATE Global Consumer delivers a wide array of banking, lending, insurance and Global Corporate provides corporations, governments, institutions and investment services through a network of local branches, offices and investors in 100 countries and territories with a broad range of financial electronic delivery systems, including ATMs, unmanned kiosks and the World products and services, including investment advice, financial planning and Wide Web. The businesses of Global Consumer serve individual consumers as retail brokerage services, banking and financial services and commercial well as small businesses. insurance products. Citibanking North America delivers banking, lending, and investment Global Corporate, through the Corporate and Investment Bank (CIB), services through 445 branches and through Citibank Online, an enhanced delivers investment banking and commercial banking services in North Internet banking site on the World Wide Web. America, Western Europe and Japan, and also includes investment banking The Mortgage Banking business originates and services mortgages and services in the emerging markets. CIB delivers a full range of global capital student loans for customers across North America. market activities, including the underwriting and distribution of fixed income The North America Cards unit combines the operations of Citi Cards and and equity securities for United States and foreign corporations and for state, Diners Club, whose products include MasterCard, VISA and private label credit local and other governmental and government-sponsored authorities. CIB and charge cards issued to customers across North America. At December 31, also provides capital raising, advisory, research and other brokerage services 2001, Citi Cards had 93 million accounts and $109 billion of managed to its customers, acts as a market-maker and executes securities and receivables, which represented approximately 20% of the U.S. credit card commodities futures brokerage transactions on all major United States and receivables market. New accounts are acquired through multiple channels international exchanges on behalf of customers and for its own account. CIB including direct marketing efforts, the Internet, and portfolio acquisitions. also offers foreign exchange, structured products, derivatives, loans, leasing, CitiFinancial provides community-based lending services through its and equipment finance products. CIB trades for its own