2005 ANNUAL REPORT Our Shared Responsibilities

WE HAVE A RESPONSIBILITY WE HAVE A RESPONSIBILITY WE HAVE A RESPONSIBILITY TO OUR CLIENTS TO EACH OTHER TO OUR FRANCHISE

We must put our clients fi rst, We must provide outstanding We must put ’s long-term provide superior advice, products people the best opportunity to interests ahead of each unit’s short-term gains and provide supe- and services, and always act with realize their potential. We must rior results for our shareholders. the highest level of integrity. treat our teammates with respect, We must respect the local culture champion our remarkable diversity, and take an active role in the com- share the responsibility for our munities where we work and live. successes, and accept accountabil- We must honor those who came ity for our failures. before us and extend our legacy for those who will come after us. Citigroup at a Glance

Citigroup has unique strengths that set it apart from the competition.

SUMMARY OF RESULTS CAPITAL STRENGTH | Citigroup’s equity strength of 2005 2004 $118.8 billion1 is a key to our ratings. Revenue $83.6 billion $79.6 billion Income from Continuing Operations $19.8 billion $16.1 billion Net Income $24.6 billion* $17.0 billion Moody’s S&P Fitch Assets $1.5 trillion $1.5 trillion Return on Common Equity 22.3% 17.0% Stockholders’ Equity1 $118.8 billion $115.5 billion Citigroup Aa1 AA- AA+ 1 includes Trust Preferred Securities Diluted Earnings Per Share 2005 2004 Citibank Aa1 AA AA+ Income from Continuing Operations $3.82 $3.07 Net Income $4.75 $3.26 Citigroup Funding Inc. Aa1 AA- AA+ Tier 1 Capital Ratio 8.79% 8.74% Business Segment Net Income 2005 2004 Global Consumer Group $10.9 billion $12.0 billion 1 includes Trust Preferred Securities Corporate and $6.9 billion $2.0 billion Global Wealth Management $1.2 billion $1.2 billion Citigroup Alternative Investments $1.4 billion $0.8 billion

* includes the $2.1 billion gain on the Sale of the Life and Annuities business and the $2.1 billion gain on the Sale of the Asset Management business

DIVERSIFICATION OF INCOME | A highly diversified base of earnings that provides stability during difficult market conditions.

% By Product* % By Region** Global Consumer Group 53% U.S. 57% 57% 8% 53% Corporate and EMEA 8% 34% Investment Banking 34% 14% Asia 14% Global Wealth Japan 6% Management 6% Mexico 10% 6% 6% Citigroup 7% Alternative Investments 7% 5% 10% Latin America 5% *excludes Corporate/Other and discontinued operations **excludes Citigroup Alternative Investments, Corporate/Other, and discontinued operations

BROADEST DISTRIBUTION | The largest distribution capacity of any firm in the world; we serve 200 million customer accounts and do business in more than 100 countries through multiple channels:

27854.TXT.indd 1 2/24/06 4:44:12 PM Dear Shareholders,

2005 was one of Citigroup’s most important years. It was a year in which we concentrated on how we do business and how we conduct ourselves as employees of a great global institution. As a result, I fi rmly believe that we are entering a renewed period of growth that will further fulfi ll the promise on which our company was founded.

We were once again the most profi table fi nancial other, and our franchise. We met with our regula- services company in the world in 2005 and we tors throughout the year and updated them on our returned the most capital to our shareholders of actions to strengthen Citigroup’s culture. By year- any fi nancial services company, while continuing end, we were confi dent our results were favorably to invest in our businesses. received and we will continue to work together on areas of mutual interest and concern. And we Income from continuing operations was $19.8 promoted a new generation of leaders, encouraging billion; our equity base increased to $118.8 billion; the innovative thinking and fresh ideas that have and our balance sheet topped $1.49 trillion. In been hallmarks of our company. 2006, we announced an 11 percent increase to our quarterly dividend, our 21st consecutive year 2005 REVIEW of common dividend increases. In 2005 we took a number of steps to prepare for the future and lay a foundation for growth: I am proud of our achievements in 2005. In the aftermath of our problems in Japan and Europe We allocated capital to highest-return and growth in 2004, we took a long, hard look at ourselves opportunities and shifted our business mix toward and developed our Five Point Plan that focused distribution. This was refl ected, for example, in the on employee training, talent development, perfor- sale of our Life Insurance and Annuities business as mance reviews, improved communications, and well as the sale of our Asset Management business stronger controls. We committed ourselves to our for Legg Mason’s Wealth Management business. three Shared Responsibilities—to our clients, each

27854.TXT.indd 2 2/24/06 4:44:15 PM We focused on deepening client relationships. For Net Interest Revenue declined, albeit at a decreas- example, we reorganized our U.S. consumer busi- ing pace over the course of the year, as interest rates nesses to serve the full spectrum of our clients’ needs increased and global yield curves fl attened. across all product lines—rather than just a single These disappointments and challenges served only product at a time—and to respond more quickly and to strengthen our resolve to achieve good perfor- effectively to the opportunities presented in different mance in 2006 and well beyond. We fi rmly believe markets globally. that the building blocks for continued growth are We expanded our distribution around the world now in place. by adding 313 retail branches, 346 consumer WHAT MAKES CITIGROUP UNIQUE fi nance branches, and 125 Smith Barney branches. We also added 170 automated loan machines in Japan. We have fi ve key competitive advantages that allow us to recognize and pursue market opportunities more We established the National Corporate Bank and readily than any other fi nancial services company. the National Investment Bank to serve a broader range of clients in the United States. First, we have the most global presence: the best international footprint of any U.S. fi nancial services We responded to our clients’ needs for more company and the best U.S. presence of any inter- electronic trading capabilities by leveraging the national fi nancial services company. We are in 100 technology from our Knight Trading and Lava countries, many for more than 100 years. Our deep acquisitions. local roots give us greater insight into what clients We continued to focus on building product want and where the opportunities for growth reside. breadth and advisory-led capabilities in our Global Second, we have unmatched distribution: we serve Wealth Management business. more people every day than any other fi nancial We resolved several legal and regulatory matters services company. We do this through our thou- favorably. sands of bank, consumer fi nance, and Smith Barney branches, along with our ATMs, automated loan We launched the Citigroup Microfi nance machines, trading desks, online services, and more. Group—which works with leading microfi nance institutions, microfi nance networks, and investors as Our global presence and reach are made more commercial partners and clients—to expand access powerful by our third competitive advantage: the to fi nancial products and services to individuals most valuable brand in the industry. The strength, who are currently not reached or who are under- stability, and integrity of our brand not only attract served by formal fi nancial institutions. and retain the most talented employees globally, but also help us build an enviable roster of global clients. Having said this, we recognize that 2005 also brought its share of disappointments and challenges: Fourth, we have unmatched scale and effi ciency, which are refl ected in our strong margins and Financially, we didn’t perform as well as we had highest capital generation, and have enabled us to expected, and fell short of our goal for positive grow over the years while weathering different operating . economic environments. Our U.S. Cards and Fixed Income franchises Fifth, we have the broadest product offering in the faced challenging business environments. The industry—from student loans to retirement planning, implementation of the Bankruptcy Reform Act, and from to initial public offerings. competitive pricing conditions, rising interest rates, and the conforming of our accounting policy for reward points combined to cause a decline in U.S. Cards net income. Our full-year Fixed Income Markets revenue growth was affected negatively by diffi cult capital market conditions in the second quarter.

3 | Citigroup 2005

27854.TXT.indd 3 2/24/06 4:44:43 PM With these unique competitive advantages, we have continue to emphasize the long-term training and every reason to look to Citigroup’s future with opti- development of our employees, in keeping with mism. Indeed, with continued GDP growth around our Five Point Plan. We continue to be the second the world, market reforms in developing countries, most favored company among MBAs (Fortune U.S. and the rise in global trade, we are witnessing the survey), offering unparalleled opportunities for emergence of a new middle class. We estimate that rewarding careers. approximately 750 million potential new consumer customers, largely outside the United States, will Allocating Capital to Maximize Returns—We emerge over the next fi ve years—an unprecedented will continue to evaluate our use of capital rigor- opportunity for the fi nancial services industry, and ously in order to move it to higher-return and especially for Citigroup. growth opportunities. For example, late in 2005 we sold a substantial portion of our stake in Nikko While we have a full menu of products and services Cordial, a Japanese fi nancial company, and increased to offer, the real power of Citigroup comes when we our investment in Nikko Citigroup Ltd., our secu- integrate them and work as one company on behalf rities business joint venture. of our clients. I have every confi dence that we are doing what’s necessary to achieve that goal. Embracing Our Shared Responsibilities—In 2006 and beyond, we will further build on our OUR STRATEGIC PRIORITIES three Shared Responsibilities as the essential For 2006 and beyond, we have fi ve strategic priorities: foundation for the growth of our franchise.

Expanding Distribution—To penetrate new mar- We believe we must not only satisfy but even kets and deepen our presence in existing markets exceed our clients’ expectations. The Citigroup around the world, we are accelerating the pace team is working to fi nd integrated client solutions of retail and consumer fi nance branch openings; and to bridge our businesses so all of the company expanding our capital markets businesses, including is working in unison. To help ensure we reach our brokerage businesses and our electronic trading this goal, we are continuing our efforts to make capabilities; and increasing the number of private Citigroup a fast-acting, nimble organization and to bankers in the United States. shed bureaucracy.

Transferring Expertise—To manage Citigroup CORPORATE SOCIAL RESPONSIBILITY as one company, we are integrating our products This was a year of unprecedented natural disas- and services better. This enables us to improve how ters—the aftermath of the tsunami in late 2004, we serve our clients by providing insightful and the earthquake in south Asia, and the hurricanes comprehensive solutions. At the same time, trans- in the United States. In response, Citigroup, the ferring expertise can create enormous value for Citigroup Foundation, and our employees com- the company: witness the between our mitted more than $30 million for disaster relief and Banamex and U.S. Cards businesses. By combining for rebuilding communities in the affected areas—a our client targeting and pricing experience from commitment of which we can all be proud. the United States with Banamex’s product and marketing expertise, Banamex’s card business We’re also pleased that 30 of our employees were generated increases of 50 percent in both revenues chosen to take part in a disaster relief program and net income in 2005. sponsored by the American Red Cross—the fi rst of its kind. These volunteers worked for two weeks at Investing in People and Technology—One of our Citigroup’s expense to help victims of Hurricane goals is to have more common systems and stan- Katrina. I’m proud of them all and of the many thou- dards across Citigroup so clients can transact with sands of our employees who volunteer their time. us more easily, no matter what business is serving them or where they’re conducting business. We also want to attract and develop the best talent, so we

4 | Citigroup 2005

27854.TXT.indd 4 2/24/06 4:44:51 PM I am also very proud of the hard work of Sandy Others have tried to emulate what Sandy built, but and our employees on behalf of the victims of the none have come close. Sandy’s achievement will earthquake that struck south Asia last October. Along have its own chapter in the history books. with four other private sector business leaders, Sandy So now we bid farewell to our Chairman and was asked by U.S. President George W. Bush to lead former CEO. We will miss his uncanny sense of a campaign to encourage private donations for relief timing, his indomitable will to succeed, his candor, and reconstruction. In part through their efforts, the his integrity, and his concern for his colleagues and private sector has raised more than $100 million in the global community. Fortunately, Sandy will con- cash and in-kind services. tinue to assist us and for that we are all grateful. Finally, we were once again named to the Dow Jones Sustainability World Index and the WHAT WE EXPECT FTSE4Good Index, which recognize companies Looking ahead, we will measure ourselves by the that lead in setting standards for sustainable growth progress we make against our strategic initiatives, and that demonstrate superior environmental, including the long-term fi nancial goals I out- social, and economic performance. lined at our Citigroup Investor/Analyst Day on December 16, 2005. OUR PEOPLE We are a demanding organization whose employees Strong returns on equity, 18-20 percent; exceed even our own high expectations. In 2005, we Mid-to-high single-digit organic revenue growth, asked even more from them—to stay focused on understanding that this can be affected by volatility their business responsibilities while also reshaping in the capital markets; and our culture through our Five Point Plan. It required an enormous commitment of time and energy, We expect to achieve organic income growth that but our employees succeeded in building a strong exceeds organic revenue growth through expense foundation for our future growth, and moving discipline and effective credit management. us closer to our goal of being the most respected The impact of any acquisitions and share buybacks global fi nancial services company. will be incremental to these goals.

SANDY In 2005, we refocused the company on its core Let me say a few words about my mentor, my great businesses, put together a clear set of strategic friend, and a man whose vision revolutionized the initiatives, strengthened our culture, and laid the fi nancial services industry, Sandy Weill, who will foundation for future growth. retire as Chairman of Citigroup in April of this year. In 2006, we will execute on our growth plans. For the past 20 years, I have had the privilege and good fortune to work alongside Sandy, one of the 20th century’s towering business leaders.

Sandy’s vision was straightforward—to give as many Chuck Prince people as possible the opportunity to participate in the economic mainstream and, at the same time, to give shareholders the most value for their trust. Sandy achieved what he set out to do with one bold stroke after another, building Travelers, a com- pany that would one day merge with another great fi rm, Citicorp, to create the world’s most successful fi nancial institution, Citigroup.

5 | Citigroup 2005

27854.TXT.indd 5 2/24/06 4:44:51 PM “ When I think back on my career, I was fortunate to have had opportunities to make a differ- ence. I’m proud that so many employees of companies I’ve led went on to enjoy successful careers while they provided for their families and served their communities.”

SANDY WEILL Dear Shareholders,

On April 18, 2006, I will step aside as Chairman of Citigroup. Let me also say a word about my good friend and fellow Board member Arthur Zankel, who died last year. Arthur was a great These are not easy words to write. Citigroup and its legacy human being, a leader in every sense of that word, and a gener- companies have been such an important part of my life these ous man who believed in helping people through education. We past 46 years that it’s diffi cult to imagine any other reality. miss you, Arthur—but you are still with us in so many ways. Citigroup has been and always will be family. It has been a magnifi cent journey and, just as important, it has But the time is right. I take great comfort when I see the been fun. Over the years, I’ve been known as a dealmaker and direction in which Chuck and his team are taking our com- I’ve made many in my career of which I am very proud. But pany. I walk away fully confi dent that our best days are just personally, the deal of my lifetime came in June 1955, when ahead and that Citigroup’s new leadership has embarked on a Joan Mosher became Joan Weill. Joan has been my closest course that will take the company to new and greater heights. friend and confi dante and has been there for me during the The creation of Citigroup was the capstone of my career. best and worst of times, and I know that without her I would When people ask me what was the best aspect of working not be where I am today. in fi nancial services, my answer is always the same—that the Retiring from Citigroup does not mean I leave the stage. As companies I ran helped create a better standard of living for many know, I am a passionate believer in education and will millions of people around the world. We did this with integ- continue to work on behalf of those institutions that give rity, by providing access to fi nancial resources so people could young people the opportunity to develop their minds and realize their dreams, so businesses and institutions could grow, prepare them to contribute to society. And in addition to my and so communities could become stronger. consulting work for Citigroup, I will continue my philanthropic And no company has done it as well. Citigroup is in 100 activities, including leadership of the Committee to Encourage countries, many for more than a century, with more products Corporate Philanthropy, Carnegie Hall, Weill Cornell Medical and greater reach than all our competitors—a tribute to the College, and the National Academy Foundation. thousands upon thousands of employees who have made us When I think back on my career, I was fortunate to have had the global industry leader. We have the strongest balance sheet opportunities to make a difference. I’m proud that so many and earnings capability of any of our competitors. employees of companies I’ve led went on to enjoy successful I’ve been privileged to lead these talented men and women. careers while they provided for their families and served their Together we’ve witnessed some of the industry’s most dramatic communities. I’ve met so many wonderful people and made changes, but through them all, the one constant has been our lifelong friendships. Citigroup will always be an integral part employees’ hard work and dedication to our clients and share- of my family, and Chuck has my full support and confi dence holders, both of whom have been the foundation for our success. as he leads the company into a very exciting future. I’ve also been blessed to work with a Board of Directors that I My friends, remember always to strive for excellence and, as consider to be not only the fi nest in the world, but one that has you come close to accomplishing your goals, push them out a set the fi nancial industry’s standards for governance and, in so little further and see what happens. You’ll be amazed at what doing, has positioned Citigroup for a long and successful future. you really can do. My very best wishes to you all.

6 | Citigroup 2005

27854.TXT.indd 6 2/24/06 4:44:52 PM “ There are no guarantees in life, but as one of my colleagues said, there may be no financial institution in the world that has a better hand to play, and Citigroup has the leadership, the strategy, and the people to play it very well.”

ROBERT RUBIN Dear Shareholders,

I believe that we are in a period of change in the global Because this is the world’s largest fi nancial institution, and a economy of historic proportions, driven by powerful tech- truly international institution in 100 countries, the people of nological development and its rapid and pervasive adoption Citigroup wrestle with all of this daily. For example: what are across geographies, global integration as to trade and capital the implications of enormous fl ows of petrodollars generated markets, and an almost universal movement towards market- by today’s oil prices; what effects might global trade imbal- based economics around the globe. The consequence is great ances and U.S. intermediate and longer-term fi scal imbalances opportunities for the global economy, but there are also have over the longer run for interest rates and foreign commensurately great challenges. exchange rates around the world; where is growth likely to be greatest in the global economy and where is it likely to be Whether this potential is realized, or instead we experience slowest; and much more. serious diffi culty, will be greatly affected by how well or how badly the political systems of the major regions of the global Our retiring chairman, Sandy Weill, combined Citicorp and economy address these challenges. This juncture of opportunities Travelers, both companies with long and distinguished histories, and challenges, and the many factors that underlie both, poses to form an institution of very special capacities and strengths. exceptional complexity and uncertainty for the decision-making These strengths include an enormous balance sheet, a vast of business, investors, and policymakers. global presence, a wide array of products that can be brought together to meet the multiple needs of clients, and, most And there are no clear answers—only possible scenarios and importantly, a highly talented professional work force that can judgments about the probabilities. Moreover, this complexity is draw on all of these capacities to develop solutions for clients. heightened because timing on possible scenarios is unpredictable. Our CEO, Chuck Prince, has laid out a strategy to engage One likely consequence of all this change is a continued shift- energetically both in the developed regions of the world that ing of relative regional economic importance toward China, despite their relative maturity still offer great opportunities India, and many of the other emerging-market nations of for Citigroup—Europe, Japan, and the United States—and to Asia. These countries clearly have their own great challenges, continue building on our long involvement in a broad array of including, very importantly, reduction of government involve- promising emerging-market countries. Citigroup’s strengths can ment in economic decision-making, but their political systems bring great value added to its clients, to its talented people in have made great progress in meeting those challenges, and that realizing their potential, and to its owners. should augur well for the future. There are no guarantees in life, but as one of my colleagues said, The developed nations of the globe, and the other emerging- there may be no fi nancial institution in the world that has a market nations, face their own challenges. These challenges better hand to play, and Citigroup has the leadership, the strategy, include reducing structural rigidities and trade barriers, effec- and the people to play it very well. tively accomplishing broad-based sharing in economic growth rather than the too-frequent relatively narrow participation that undermines support for market-based economics and trade liberalization, protecting the environment as an eco- nomic imperative, and addressing fi nancial imbalances and an aging workforce.

7 | Citigroup 2005

27854.TXT.indd 7 2/24/06 4:45:31 PM Broadest Distribution “ I do a lot of traveling in the U.S. and abroad and one of the best things I like about Citi is that I can do my banking almost anywhere, no matter what I need to do and when I need to do it. They’re in so many places. And I also think the staff is terrific.”

LONDEL DAVIS, U.S. CITIBANK CLIENT FOR 30 YEARS

27854.TXT.indd 8 2/24/06 4:45:50 PM Global Consumer Group

Homeowners...Small Businesses...College Students...Retirees

Despite some challenges in 2005, the Global Consumer Group remains a leader in the financial services industry. With its unmatched size and geographic reach, innovative products and services, and the industry’s most valuable brand, our consumer business is poised for growth in North America and around the world.

Among some of the issues that our FOCUS ON OUR CLIENTS Among our many initiatives in 2005, business faced last year were bankruptcy 2005 was a year of transition, as we we launched the SimplicitySM Card in spikes from the new U.S. law, and the made major structural and managerial the United States in response to our impact of Hurricane Katrina, both changes. We reorganized our businesses clients’ aversion to late fees and their of which affected our bottom line. along client lines to capitalize on the desire for swift, live, one-on-one service; Nonetheless, we produced net income different opportunities that the retail a Platinum Card in that of $10.9 billion on revenues of consumer markets offer. offers card holders extensive insurance $48.2 billion. options; and the Citi Ultima Card in Our U.S. Consumer business is Russia, aimed at meeting the needs of ® Whether helping a CitiGold client organized as follows: U.S. Retail the growing number of affl uent people make investments in Moscow, a small Distribution, composed of our in that country. business obtain a loan in Hong Kong, branch-based consumer businesses a fi rst-time borrower use CitiFinancial and Primerica Financial Services; U.S. We also extended the reach of existing for a scooter loan in India, or new Consumer Lending, which includes our products. We expanded our CitiGold immigrants open their fi rst checking mortgage, auto, and student loan busi- offerings for affl uent individuals by accounts in , our businesses nesses; U.S. Cards; and U.S. Commercial launching the product in Spain, open- offer more to the world’s consumers Business. This new structure allows us ing a CitiGold Center in Hong Kong, than any other fi nancial institution. to better integrate products and services and introducing CitiGold Member to meet the needs of our clients and Rewards in . In the United Among other innovations in 2005, we deepen our relationships with them. States, CitiGold is adding clients at the introduced the PayPass debit product fastest rate in many years. in the United States, the fi rst Cards PRODUCT BREADTH rewards program in Egypt, mobile In our Cards business, U.S. Cards offers Also in 2005, U.S. Cards announced that phone banking in , and innovative products and services that for the fi rst time it will issue Citi prod- CitiFinancial transaction windows make us the world’s leading cards issuer. ucts on the American Express Network. in post offi ces throughout Romania. The Citi American Express Cards will be accepted at millions of locations and at more than 1,700 American Express Travel Services locations.

9 | Citigroup 2005

27854.TXT.indd 9 2/24/06 4:46:03 PM Small Businesses...College Students...Retirees...Homeowners...Small Bu

Our consumer business is focused A FOUNDATION FOR GROWTH not only on the affl uent, but across a One of the most valuable legacies of broad economic spectrum. In 2005, our almost 200 years of banking is the CitiFinancial introduced a real estate- foundation we’ve built for growth for secured loan product in several markets, the next 200: a worldwide network including Hong Kong and Poland, of 7,919 retail branches and consumer where such loans historically have not fi nance offi ces (includes automated been available. The loan gives bor- loan machines in Japan) serving mil- rowers who have been shut out of the lions of clients in 50 countries. housing market the opportunity to own a home. One of our priorities for 2006 and beyond is to leverage this unique plat- EXPANDING OUR REACH form to attract new clients and deepen Likewise, the growing branch networks our relationships with existing clients. of CitiFinancial and Citibank are help- We have the reach, products, and ser- ing millions of consumers reach their vices to succeed at both. What’s more, fi nancial goals and fulfi ll their dreams. we have the insight to fi nd innovative ways to serve clients and to deliver these Consider South America: in Brazil services well—witness such unique in 2005, our retail bank grew to 60 offerings as Citi Identity Theft Solutions, branches and 230,000 clients. In the ThankYou Network, and Citibank® Colombia, we increased the number of Global Transfers. branches and ATMs by 50 percent. And in Peru, we added nine branches and SHARING EXPERTISE GLOBALLY launched several key products, includ- Citigroup is one of the world’s most ing personal loans, retail accounts, and experienced fi nancial services compa- online capabilities. nies, and our global footprint allows us to share knowledge across borders. In the United States, we also completed Through our unrivaled risk and deci- the acquisition of First American Bank sion management expertise, we have in Texas, adding 106 branches in one of the ability to make loans to and open our key U.S. markets. accounts for consumers in any market. Few companies have the advantages of We expect to expand our Citibank Citigroup when entering developing and CitiFinancial presence signifi cantly markets such as India, Poland, or Brazil in 2006, adding hundreds of branches and extending credit, opening checking globally. We are working to grow our accounts, or issuing cards. retail bank branch network substantially in Brazil, Turkey, and Russia, among other countries. We also plan to expand our consumer fi nance branch presence in Mexico, Poland, India, Spain, Korea, and elsewhere.

10 | Citigroup 2005

27854.TXT.indd 10 2/24/06 4:46:05 PM sinesses...College Students...Retirees...Homeowners...Small Businesses

“ I enjoy excellent service from my personal CitiGold Executive, who helped me create a well-balanced, high-return portfolio of three currencies placed in term deposits, market-linked deposits, and mutual funds. I use CitiPhone and Citibank Online as well as CitiGold’s free access to airport lounges on my frequent travels. Overall, CitiGold is the best proposition in the Russian market right now.”

TAMARA SHOKAREVA, CITIGOLD CLIENT, RUSSIA

In China, we completed a joint venture In addition, Citibank Community with Shanghai Pudong Development Development closed nearly $2.5 bil- Bank last year to launch a new credit lion in loans last year, helping to create card. By exporting our U.S. Cards tech- more than 10,000 new affordable hous- nology to China, we were able to issue ing units for low- to moderate-income the fi rst dual-currency card there. families.

MAKING COMMUNITIES BETTER Citigroup’s consumer business is a Making communities better is one of world-class franchise built to deliver our core goals and responsibilities. In earnings in any economic environment. 2005—the second year of our 10-year, If we continue to focus on our clients, $200 million Financial Education bring our vast experience to new mar- commitment—our efforts in Financial kets, and offer innovative solutions for Education and community investment our clients’ needs, we will continue to once again made an impact. grow now and in the long term.

From our Financial Education Summit in to the “My Finances” Economic Education Program in Poland, we devoted our time and resources to improving fi nancial literacy globally.

11 | Citigroup 2005

27854.TXT.indd 11 2/24/06 4:46:11 PM Most Valuable Brand

“We trust Citigroup to do the right thing for us, whether to win a deal, commit its balance sheet and assets, or alert us when they think we’re not doing the right thing. When we go into battle to win a deal, we’re happy to have Citigroup on our side.”

STEPHEN SCHWARZMAN, CHAIRMAN & CEO, , U.S.

27854.TXT.indd 12 2/24/06 4:46:25 PM Corporate and Investment Banking

Corporations...Institutional Investors...Governments...Corporations

The most distinguishing attributes of Corporate and Investment Banking are the depth and duration of our client relationships and our ability to use our embedded local presence in 100 countries to deliver innovative solutions for our clients globally.

In 2005, we provided clients with stra- Having executed deals for more clients named an industry leader. It’s a power- tegic advice, new ideas, and the kinds in more countries and in more curren- ful indication of our expertise, the of solutions and unique capabilities cies than any of our competitors, our value we deliver, and the quality of that once again demonstrated that we Fixed Income business maintained its our people—and it’s a claim no other can accomplish diffi cult transactions position as the leading underwriter of fi nancial services fi rm can make. anywhere in the world. bonds globally. Our Equities team had an outstanding year, with improved TRANSFERRING EXPERTISE For the year, we earned $6.9 billion market shares and client rankings in Key to meeting client demands is our in net income on revenues of nearly virtually all business segments. providing integrated solutions by lever- $24 billion. aging teams from across the fi rm and Indeed, our Emerging Markets Sales around the world. We demonstrated FRANCHISE STRENGTH and Trading business, with trading this strength in our role as advisor, In 2005, we achieved strong momentum fl oors on the ground in some 70 fi nancier, and investor on Deutsche in Capital Markets and Banking. For emerging markets countries, had Annington Immobilien GmbH’s $12.8 the fi rst time, we earned the #1 ranking another strong year, with 23 percent billion acquisition of Viterra AG. This as the leading Global Underwriter of volume growth in Client Foreign was the largest-ever real estate transac- Equity and Equity-Linked Securities, Exchange and Derivatives. tion and investment in underscoring our commitment to lever- Germany, a deal that brought together We were the #1 Global Underwriter of aging our advisory expertise and global teams from Fixed Income, Investment Debt and Equity for the 17th consecu- equity distribution capabilities. And we Banking, and Citigroup Alternative tive quarter, and our clients continued ended the year as the #2 advisor on Investments. completed M&A transactions globally. to rely on our willingness and ability to commit capital and provide liquidity. In “Citigroup’s ability to work with us at Our Global Transaction Services team addition, we signifi cantly expanded our all levels of the , and fi nished the year as one of Citigroup’s U.S. electronic trading capabilities and, with a transaction of this scale, enabled fastest-growing businesses.We were by leveraging the technology from our us to complete this transformational named Best Bank for Cash Management Knight Trading and Lava acquisitions, we deal against fi erce competition,” said by Euromoney for the seventh consecu- nearly tripled the number of clients who Guy Hands, CEO of Terra Firma tive year and launched several products, trade through our electronic platform. Capital Partners. including TreasuryVisionSM and Asset Manager Solutions for Separately We are also proud of our inclusion at When PepsiCo required a banking sys- Managed Accounts—which The Banker or near the top of practically every tem with global visibility to optimize its recognized as its “Back Offi ce Solution ranking of fi nancial services fi rms. In investments, the company teamed with of the Year.” fact, because of the advice and service Citigroup to develop TreasuryVisionSM, we provided, we ranked #1 in 14 of 25 a powerful Web-based tool that pro- League Table categories—more than vides views of real-time balances, cash any other fi rm. Regardless of product, positions, investments, and borrowings and whether measured against local or worldwide. global competitors, we are consistently

13 | Citigroup 2005

27854.TXT.indd 13 2/24/06 4:46:37 PM Institutional Investors...Governments...Corporations...Institutional Inve

“ We expect a lot from Citigroup because of its global presence. We rely upon the expertise and advice Citigroup provides to us, and I would like to see this relationship, which stretches back 100 years, last another 100.”

WOLFGANG H. REICHENBERGER EXECUTIVE VICE PRESIDENT, FINANCE NESTLÉ S.A.,

“TreasuryVisionSM is groundbreaking,” GLOBAL REACH said Lionel L. Nowell III, PepsiCo’s When it required a bookrunner with SVP and Treasurer. “It allows us to ini- leadership positions and local talent in tiate new services, not just choose from markets across Latin America, Ternium, what’s available, and that gives us a real a global steel production and manu- competitive advantage.” facturing company, selected Citigroup to fi nance its tender offer for 99.3 In August, China National Petroleum percent of the shares of Hylsamex S.A. Company (CNPC) announced the de C.V. The $1.38 billion deal was the largest-ever cross-border M&A transac- largest corporate debt fi nancing ever tion by a Chinese company with its structured in Argentina, and allowed for acquisition of PetroKazakhstan. The fi nancing at the level, company faced a complex set of chal- diversifying the facility risk across three lenges from rising oil prices, strong countries, providing investors with competition, and recent unsuccessful sound investment opportunities. attempts by other Chinese companies to acquire abroad. Working with teams “Citigroup’s global reach made it from M&A, Energy, and Fixed Income, the ideal partner in this transaction,” and with coverage bankers from Hong said Daniel Novegil, Ternium’s Chief Kong, China, London, New York, and Executive Offi cer. Canada, CNPC achieved its goal and completed the $4.18 billion transaction in just four months.

14 | Citigroup 2005

27854.TXT.indd 14 2/24/06 4:46:38 PM stors...Governments...Corporations...Institutional Investors...Governments

Following major storms, the roads Asset Management. Our commitment leading to Port Fourchon, Louisiana, a to quality management was evident in major oil and gas port supplying up to Malaysia, where our Trade Services busi- 18 percent of U.S. demand, are often ness enabled Citigroup to become the impassable. Hurricanes Katrina and fi rst fi nancial institution to win the pres- Rita caused massive damage to the tigious Prime Minister’s Quality Award. port and connecting roads, creating a profound impact on the U.S. economy To better serve our clients, we made as energy prices soared. Citigroup’s strategic investments of minority own- industry-leading U.S. Municipals team ership stakes in the Philadelphia and worked with local governments and Boston Stock Exchanges. We enhanced agencies, energy companies, rating our equity market technology capa- agencies, municipal bond insurers, and bilities, purchasing an electronic investors to fi nance the port’s $240 communications network to increase million project to replace and repair execution fl exibility, provide alterna- key infrastructure. tive liquidity pools, and contribute to overall market effi ciency. And with the “Partnering with Citigroup gave us a evolution of fi xed income products, comfort level that wasn’t present with we repositioned Structured Corporate any other fi rm,” said Port Director Finance and integrated our Loans and Ted Falgout. Leveraged Finance teams.

During 2005, we created a partnership Our new commodities trading hub in with the World Food Program (WFP), Houston, Texas—working with teams the United Nations disaster relief arm, in London, New York, and Singapore— to leverage our global footprint, local offers creative solutions to clients trading relationships, and ability to respond natural gas, crude oil, metals, and power. quickly in emergencies to help the And in India, we enjoyed signifi cant WFP on an ongoing basis. This part- growth in our equities business. nership builds on the assistance we provided the WFP during 2004’s OUR PEOPLE tsunami, when we helped it establish Throughout 2005, we continued to a base of operations in Bangkok. focus on people, hiring a number of very experienced bankers and thought EXPANDING DISTRIBUTION leaders and providing additional career In the United States, we established development for our existing teams. We the National Corporate Bank and the are immensely proud of our people and National Investment Bank to serve their commitment to developing the a broader range of corporate clients. best ideas, delivering the highest-quality We acquired Unisen to build our fund work, and always acting in our clients’ services and transfer agency business, best interests. and we were awarded the Separately Managed Account industry’s largest out- sourcing assignment to date from

15 | Citigroup 2005

27854.TXT.indd 15 2/24/06 4:46:44 PM Unmatched Scale & Efficiency “ As an entrepreneur, I have a passion for growing high-tech start-ups and taking new technologies to market. Those are risks I like to take. But when it comes to managing my money, I’m much more risk-averse, so I feel comforted knowing that my portfolio is being managed by some of the best talent in the industry at Smith Barney and in an institution the size and scale of Citigroup.”

STEVEN MOORE, SMITH BARNEY CLIENT, U.S.

27854.TXT.indd 16 2/24/06 4:46:45 PM Global Wealth Management

Individuals...I nstitutions...Corporations...Governments...Foundations

Global Wealth Management proved that by combining the unique strengths, scale, and expertise of our businesses, we can provide the intellectual lead- ership our clients demand as we address their wealth management and investment research needs.

In the year since the formation of CLIENT ADVOCACY Our clients have responded over- Global Wealth Management—com- At the core of the Global Wealth whelmingly. In just seven months, prising Citigroup Smith Barney, The Management strategy is client advocacy. client assets in Smith Barney Advisor Citigroup Private Bank, and Citigroup Our goal is not simply to sell investment grew to more than $3.5 billion. We Investment Research—the value of products to our clients; rather, our goal continued to see strong investor prefer- bringing these businesses together has is to help clients navigate the complex ence for other fee-based services, with become even more evident. and ever-changing array of options and fee-based revenues hitting an historic successfully manage their fi nancial lives. high in 2005, accounting for nearly 50 The combination of Smith Barney and percent of total revenues. The Private Bank created one of the The 2005 sale of the Asset Management largest wealth management businesses business to Legg Mason in exchange The Citigroup Private Bank (CPB) is in the world, with more than 14,000 for Legg Mason’s Wealth Management also focused on client advocacy—pro- fi nancial advisors and private bank- business is a dramatic illustration of our viding intellectual and fi nancial capital ers and $1.4 trillion in client assets. commitment to this principle. This deal to some of the world’s most infl uential Citigroup Investment Research is one was a watershed event in the wealth entrepreneurs and families. To help of the leading research fi rms on Wall management industry: by selling our these clients accomplish their fi nancial Street, with more than 300 research in-house asset management business, we and business goals, the CPB created analysts providing objective and eliminated potential or perceived con- teams of fi nancial specialists—led by innovative research for institutional fl icts and reaffi rmed our commitment to private bankers who work with other and individual clients globally. bringing the best wealth management experts from across Citigroup—to solutions to clients. focus on the unique requirements of In 2005, we earned $1.2 billion on various wealth sectors, such as law revenues of $8.7 billion. Building on our commitment to client fi rms, real estate developers, fi nancial advocacy, we introduced Smith Barney sponsors, and entrepreneurs. Neither size nor research capabil- Advisor in 2005. The program helps ity alone defi nes Global Wealth clients manage their accounts against Management. It’s the combination of asset-allocation guidelines developed in the two that sets us apart; together, they consultation with their Smith Barney are uniquely equipped to provide the Financial Advisor. In this model, the insight, advice, and solutions our clients fi nancial advisor’s sole task is to pro- need to achieve their fi nancial goals. vide the client with sound investment advice and, importantly, clients are charged a fee based on the size of the account, not transaction volumes.

17 | Citigroup 2005

27854.TXT.indd 17 2/24/06 4:46:57 PM High-Net-Worth Individuals and Families...Individuals...Institutions...

For example, the CPB has developed One example of this is the continued a specialized approach to serve clients buildup of our global investment whose wealth is associated with real research capability. Already one of the estate holdings. These clients ben- most robust in the industry, this business efi t from our expertise in real estate now has more than 300 analysts and fi nancing, cutting-edge asset allocation strategists covering some 2,800 stocks techniques, and risk management globally that collectively represent about strategies geared specifi cally for real 90 percent of the estate-rich portfolios. A similar specialty of the major global indices. for attorneys and their unique needs has existed at the CPB for more than The year also brought about a name 30 years. change—Smith Barney Global Equity Research changed to Citigroup While the CPB’s approach to client Investment Research (CIR). The change service is differentiated among various leverages the reputation and strong sources of wealth, high-net-worth cli- global brand name of Citigroup and ents across Global Wealth Management refl ects the team’s growing portfolio may benefi t from a suite of innovative of business—similar to the addition of and exclusive services and opportuni- Corporate Bond Research, which came ties. These include the Tailored Group, from its prior home at our Corporate which provides highly customized and and Investment Banking business. optimized portfolio-management ser- vices; Global Hedge Strategies, a joint We established a sector-wide invest- venture with Pacifi c Alternative Asset ments function in 2005, which Management Company that offers develops a consolidated outlook on customized portfolios of hedge funds; the economy, the markets, and asset and our robust global custody platform, allocation and then works with our which leverages Citigroup’s worldwide professionals in the fi eld to translate footprint and provides integrated that view into effective client solutions. custody and reporting services in 30 This outlook is driven by thought lead- countries and 20 different currencies. ers within Citigroup and around Wall Street, and is a fundamental element of INTELLECTUAL LEADERSHIP our client advocacy service model. In 2005, Global Wealth Management also continued to build on its intel- lectual capital base. By leveraging scale and resources across Citigroup and across our sector, we have been able to invest more in the businesses and improve our performance for clients and shareholders.

18 | Citigroup 2005

27854.TXT.indd 18 2/24/06 4:46:59 PM .Corporations...Governments...Foundations...High-Net-Worth Individuals

“ Holistic private banking with an investment banking touch is what I look for in a wealth management provider. One’s personal wealth is inextricably linked to his business interests. Citigroup understands this well.”

RAYMOND SOONG, CHAIRMAN, LITE-ON GROUP, ASIA

We introduced Whole Net Worth, As we build on this expanded global our asset-allocation framework that coverage, we will continue bringing incorporates all asset classes—including Citigroup’s unmatched capabilities, alternative assets such as hedge funds, insight, and access to bear on behalf private equity, and real estate—to many of our clients. By pairing our open- clients in the United States in 2005. architecture, advocacy-driven client The model was enhanced over the relationship model with the world- course of the year to make it more class intellectual capital residing in useful to clients around the world. CIR—and elsewhere within Global Wealth Management—we believe we’re We’ve also made a signifi cant invest- in a unique position to forge deep and ment in fostering intellectual leadership lasting relationships with clients of all among our people by expanding our wealth levels and become the wealth professional development and accredita- management fi rm of choice worldwide. tion programs in all our businesses.

EXPANDING OUR REACH, DEEPENING OUR RELATIONSHIPS In addition to further developing these initiatives, we will step up our focus on non-U.S. markets in 2006. In particular, we will expand Citigroup Wealth Advisors (Smith Barney’s operations outside the United States), and develop the Citigroup Private Bank’s onshore presence in three key countries: India, Brazil, and the United Kingdom.

19 | Citigroup 2005

27854.TXT.indd 19 2/24/06 4:47:02 PM Product Breadth “ Every client interaction is based in education. Our clients need to understand both the benefits and risks that an investment in alternatives may contribute to their portfolios prior to making a decision. To assist them, we are able to offer the product array, the quantitative insights of our asset allocation research team, and the qualitative insights of our investment center professionals.”

MAUREEN O’TOOLE, CITIGROUP ALTERNATIVE INVESTMENTS, MANAGING DIRECTOR, HEAD OF HIGH-NET-WORTH SALES, AMERICAS

27854.TXT.indd 20 2/24/06 4:47:09 PM Citigroup Alternative Investments

High-Net-Worth Individuals...I nstitutions...Pensions...High-Net-Worth

Today, Citigroup Alternative Investments (CAI) manages a wide range of products across five alternative asset classes: private equity, hedge funds, real estate, structured products, and managed futures.

As one of the world’s largest alternative focused on fi nding the most attractive Strong global distribution Our third- asset managers, Citigroup Alternative investment opportunities, and then we party investors include institutions Investments (CAI) has $37.6 billion of develop products so clients around the and high-net-worth individuals. Our capital under management and more world can invest with us. For example, 50-person sales and marketing team than $100 billion on a levered basis. in 2005 our real estate group acquired located throughout the world assist CAI manages the company’s proprietary an interest in Deutsche Annington clients as diverse as pension funds, capital as well as capital from third-party Immobilien Gruppe, the largest real endowments, insurance companies, institutional and high-net-worth clients. estate company in Germany. Clients , and individuals with planning In 2005, we had strong performance, then invested alongside us in this land- to help them understand the role earning a record $1.4 billion in net mark deal. of CAI products in their portfolios. income, an increase of 87 percent over What’s more, we work in close part- 2004, on revenues of $3.4 billion. In 2005, our investment products nership with our businesses in Global attracted $6.2 billion of new third- Wealth Management, Corporate CAI is one of the broadest, most party capital, more than half from and Investment Banking, and Global highly integrated alternative invest- outside the United States. Consumer to harness the power of ment platforms in the fi nancial services Citigroup’s distribution. industry. We manage a wide range of History of innovative products products across fi ve asset classes: private Identifying themes before others is a World-class service and controls equity, hedge funds, real estate, struc- critical component to earning out- Building a world-class investment busi- tured products, and managed futures. standing returns. Citigroup has a long ness requires a commitment to strong Comprising 12 investment centers, history of leadership and innovation in legal, tax, information technology, and our goal is to enable our investment alternative investing. In the 1960s, we accounting capabilities that allow the teams to draw on their entrepreneurial were early participants in private equity. investment teams to do what they do skills to capitalize on opportunities, A decade later, we pioneered one of best—focus on investing. In addition while benefi ting from the power of the fi rst managed futures programs. In to Citigroup’s own risk management, Citigroup’s unparalleled intellectual, the late 1980s, we were among the fi rst compliance, and audit functions, our operational, and fi nancial resources. to introduce structured credit products, investment centers are monitored by while in the early 1990s, we launched numerous regulatory agencies. STRATEGY AND OBJECTIVES our fi rst platform. Our goal is to be the world’s premier Focus on investment performance alternative investment platform and we Integrated, diversifi ed platform The The judgment of investment profes- have a unique business model designed breadth of our alternative investment sionals is, ultimately, most important to accomplish that objective. Six char- platform allows us to pursue timely to investment performance. Access acteristics defi ne that business model: investment themes while maintaining to capital, distribution strength, and our objectivity. Unlike more narrowly information allow CAI to attract and Proprietary investment capital co- defi ned alternative investment platforms, retain top-caliber talent. In 2005 alone, invested with clients CAI manages our breadth helps us remain objective. we recruited more than 150 talented $12.2 billion of the company’s proprie- We can compare the relative attractive- investment professionals to our team. tary investments. This aligns Citigroup’s ness of different asset classes and better interests with those of investors. We determine the most attractive opportu- think fi rst and foremost like a principal, nities at any given point in time.

21 | Citigroup 2005

27854.TXT.indd 21 2/24/06 4:47:20 PM Most Global Presence “ Given the long history of Citigroup and Banamex in Mexico, the partnership with Saber Cuenta is a natural alliance that is helping strengthen sustainable economic development in com- munities across Mexico. By providing low-income youth and adults with financial education, job skills, entrepreneurial training, and access to financial products and services, we are empowering people to create a brighter future for themselves, their families, and their communities.”

ARTURO ZAPATA, CHAIRMAN, JA/IMPULSA, MEXICO

27854.TXT.indd 22 2/24/06 4:47:22 PM Global Community

Non-Governmental/Non-Profit Organizations...MFIs...Individuals

With Citigroup’s extensive global presence comes the responsibility to make a difference where we live and work.

Citigroup’s total philanthropic giving from our Foundation and our busi- “ Through the Citigroup Foundation’s nesses combined reached more than support of some $2.6 million since our $126 million in 2005. inception in 1997, Grameen Foundation During the year, Citigroup’s businesses USA has provided hundreds of thou- also provided fi nancing and made other sands of impoverished families with investments totaling nearly $35 billion access to microfinance and innovative to support low- and moderate-income technologies that accelerate their (LMI) families and communities in ability to move out of poverty.” the United States. To help ensure that money is available to LMI families that wish to purchase a home, Citigroup has ALEX COUNTS, PRESIDENT & CEO, GRAMEEN FOUNDATION USA committed $200 billion for affordable mortgage lending in the United States through 2010. By the end of 2005, we governmental agencies that benefi ts PHILANTHROPY & VOLUNTEERISM lent nearly $110 billion of the total. broad segments of the Mexican popu- As a leading private sector supporter of In 2005, Citigroup was again reaf- lation through employment programs, microfi nance, the Citigroup Foundation fi rmed as a component of the Dow entrepreneurship training, and fi nancial has provided nearly $27 million in fund- Jones Sustainability World Index, which education. ing to microfi nance institutions (MFIs) and MFI networks globally over the past recognizes companies in the top 10 SUSTAINABLE DEVELOPMENT fi ve years. percent of environmental, social, and As one of the founding members economic performance. We also were of the Equator Principles, Citigroup In 2005, we continued to support our reaffi rmed on the FTSE4Good Index strengthened its efforts to implement employees’ community volunteer efforts, for having met specifi c criteria relating the Principles uniformly by revis- with many of them coming to help to environmental sustainability, corpo- ing our risk policies and enhancing communities hit by natural disasters—in rate citizenship, shareholder returns, and our Environmental and Social Risk Pakistan, south Asia, the United States, support of human rights. Management training. The Equator and Latin America. We committed more FINANCIAL EDUCATION Principles are voluntary guidelines than $30 million to disaster relief and to rebuilding affected areas. Building on the commitment we made based on World Bank and International Finance policies to evaluate in 2004 to invest $200 million over 10 Our Chairman, Sandy Weill, was environmental and social risks related to years in support of fi nancial education, among fi ve U.S. private sector leaders fi nancing development projects. in 2005 Citigroup awarded close to asked to lead a massive effort to raise $30 million in grants and sponsor- Also in 2005, Citigroup’s Sustainable resources to help those affected by ships around the world. Some of the Development Investment Private the earthquake that struck south Asia. programs included “The Adventures of Equity Program invested in Balrampur Citigroup, the Citigroup Foundation, Agent Penny and Will Power,” a new Chini Mills, Ltd., to expand its manu- and our employees pledged up to campaign that reached nearly 50,000 facturing of ethanol as a fuel additive. $7 million toward relief efforts and children in Asia. In addition, our busi- Citigroup also commited to reducing provided volunteer support. nesses funded such initiatives as Saber its greenhouse gas emissions 10 percent Cuenta: Knowledge Counts, a national globally by 2011. collaborative project in Mexico among Banamex, local government, and non-

23 | Citigroup 2005

27854.TXT.indd 23 2/24/06 4:47:32 PM Recognition

In 2005, Citigroup was again recognized by independent organizations, the media, and investors as the best in the industry. The following is a sample of this recognition:

ALTERNATIVE INVESTMENT NEWS FINANCE ASIA INSTO Institutional Manager of the Year Bank of the Year Deal of the Year, BHP Billiton’s US$7.3 ASIAMONEY Best Loan House billion acquisition of WMC Resources Best Private Bank, Asia-Pacific Best Cash Management Bank INVESTMENT DEALERS’ DIGEST: DEALS OF THE YEAR THE ASSET Best Secondary Deal Overall Deal/Private Equity Deal: Bank of the Year Best IPO Sungard LBO Best Bond House Best Foreign , FIG Deal of the Year: Citigroup Swap Best Loan House Australia with Legg Mason THE BANKER GLOBAL CUSTODIAN HEDGE FUND Healthcare Deal: Emory University Best FX House, the Americas ADMINISTRATION SURVEY LATIN FINANCE Best in Class for Mutual Funds and Americas Securitization House Best Syndicated Loan Hedge Funds THE BANKER TECHNOLOGY AWARDS Best Cross-Border M&A Winner, Back-Office Technology: GLOBAL FINANCE Best Syndicated Loan—Techint Citigroup Asset Manager Best Internet Bank $1.38B loan Solutions for Separately Managed Best Corporate & Investment Internet Best Project Finance—Mexico City Accounts Bank International Airport BOND BUYER Best Investment Bank, Middle East/ STARMINE BROKER RANKINGS Deal of the Year—San Jose Africa Best Stock Picking (Citigroup Redevelopment Agency Bond Best Bank for North American Equity Investment Research), France, Derivatives EUROMONEY The Netherlands Best Bank, Latin America Best Emerging Market Bank, Most Award-Winning Broker in U.S.— Latin America Best Debt House, Australia Citigroup Investment Research Best M&A Advisor in Russia Best Bank, Mexico THOMSON DEAL WATCH Best Private Bank, Latin America Best Global Debt Bank Best Equity Deal, Japan (Bank of Best Private Bank, The Philippines IFR Yokohama) Best Emerging Market Loan House, Best Private Bank, Taiwan Best Equity-Linked Bond, Domestic EMEA Deal, Japan (Sankyo Tateyama Best Private Bank, Thailand Best Loan House, Latin America Holdings) Best Private Bank, Middle East Best Loan, Latin America Best Asset-Backed Securities Deal, Best Private Bank, Bahrain Best Asia Pacific Loan House Japan (Chuo Mitsui Trust & Banking) World’s Best Cash Management Bank Loan House of the Year, China TRADE AND FORFEITING REVIEW (7th consecutive year) Best Provider of Plain Vanilla Trade Loan House of the Year, Hong Kong EUROMONEY ISLAMIC FINANCE Finance Equity House of the Year, India AWARDS TRADE FINANCE Best International Bank—Sukuk House Bond House of the Year, Singapore Best Trade Bank, Asia EUROMONEY AWARDS FOR Equity House of the Year, South Korea Best Structured Trade Bank, Asia EXCELLENCE Best AP Domestic Bond, & Best Debt House, CEEMEA TREASURY AND RISK MANAGEMENT Company’s A$2 billion fixed/float rate Best International Cash Management Best Investor Services, CEEMEA IFR ASIA Bank Best at Risk and Cash Management, Best Loan House CEEMEA WORTH Top 100 Wealth Advisors (Citigroup Best Debt House, Middle East Global Wealth Management had five wealth advisors on the list)

24 | Citigroup 2005

27854.TXT.indd 24 2/24/06 4:47:34 PM 2 7 8 5 4 . T Printed on recycled paper. Design: Citigroup Graphic Communications X T . i n d Amin Manekia Bulgaria Glen R. Rase Brunei Gustavo Marin Brazil ElewautFederico Bolivia de Franchimont José dePeñaranda Belgium See Trinidad Barbados Mamun Rashid Bangladesh Al-Shroogi Mohammed E. Bahrain Margaret A.Butler Bahamas Helmut Gottlieb Austria Les Matheson Australia See Venezuela Aruba Juan Bruchou Argentina Kamel B. Driss Algeria franchise around theworld. the publicandregulators intheircountries andfunctioningastheleaders inbuildingandprotecting theCitigroup significant andourCitigroup Country Officers play acritical role inourgrowth strategy, representing Citigroup to for financialservices isgrowing rapidly, muchof itoutside theUnited States. The opportunities for growth are Citigroup’s legacy dates back nearly 200 years andtoday we dobusiness inmore than100countries. The market the above list. Note: Countries and territories where Citigroup does business butha CITIGROUP COUNTRY OFFICERS d

B A C K 1 Bernado J.Bernado Chacin Ecuador Máximo R. Vidal Republic Dominican Mark Luscombe Denmark Javed Kureishi Czech Republic Jorge Mora Costa Rica Michel Losembe Congo Franco Moccia Colombia Richard D. Stanley China Jo Chile Clive S. Jones (Jersey) Channel Islands See Bahamas Cayman Islands Kenneth E. Quinn Canada Asif Zaidi Cameroon ~ ao Miranda to benamed Hungary T.C. Chan Hong Kong José LuisCortés Honduras Gladys M. Coupet Haiti Juan A.Miro Guatemala Ajay Kashyap Guam Sorotos Christos Greece Joseph Carasso Ghana Susan S. Harnett Germany Funmi Ade-Ajayi Gabon Jean-Claude Gruffat France Laukkanen Kari Finland Gjis Bert Veltman El Salvador Michel Accad Egypt Marc Pecquet Luxembourg Walter Siouffi Lebanon Yung-Ku Ha Korea (South) Ade Ayeyemi Kenya Daniel J. Connelly Kazakhstan Ziyad A. Akrouk Jordan Douglas L. Peterson Japan Peter Moses Jamaica to benamed (Côte D’Ivoire) Ivory Coast Giuliano Malacarne Italy Gus Felix Israel Aidan M. Brady Ireland Peter B. Eliot Indonesia Sanjay Nayar India ve nodesignated Citigroup Country Officer are notreflecte Slawomir S. Sikora Poland Sanjiv Vohra Philippines Constantino Gotsis Peru Ignacio Morello Paraguay Francisco Conto Panama Zubyr Soomro Pakistan P˚ Norway Emeka Emuwa Nigeria Mark A.Fitzgerald Devries Chris Netherlands Nuhad K. Saliba Morocco Mora Manuel Medina- Mexico Piyush Gupta Malaysia See HongKong Macau al Rokke (Bahrain), andSlawomir Sikora (Poland). Stephen Long, MohammedAl-Shroogi [Korea (South)], Susan Harnett (Germany), Emeka Emuwa (Nigeria), Yung-KuHa right). International Operations (third from Stephen Long, President of Citigroup’s held recently inNew York, hosted by who attended theAnnualCCO Forum Six Citigroup Country Officers (CCOs) (l to r): Gladys Coupet (Haiti), Mayank Malik Tanzania Li Morris Taiwan Per Etholm Switzerland Jan Belfrage Sweden Kapila Sri Lanka de Horna Sergio Spain Zdenek Turek South Africa Igor Tham Slovakia WeirCatherine Singapore Charles Kie Senegal Mark T.Robinson Russia Shahmir Khaliq Romania Alvaro Jaramillo Puerto Rico Paulo Gray Portugal Jayawardena Venkatraman Rajaram Zambia Rico See Puerto Virgin Islands Charly Madan Vietnam Aristeguieta Francisco Venezuela Daniel Varese Uruguay Michael J. Kirkwood United Kingdom Sajjad Razvi UAE Nadir Shaikh Ukraine Bhide Shirish Uganda Steve Bideshi Turkey David Garner Tunisia Dennis Evans Trinidad/Tobago Newman Gary Thailand d in 2 / 2 4 / 0 6

4 : 4 7 : 3 5

P M Leadership

BOARD OF DIRECTORS Cindy Armine Augusto Escalante Juanes * Peter Knitzer * Chief Compliance Officer Corporate Director, Payment Head, Customer Franchise C. Michael Armstrong Global Wealth Management Instruments & Marketing, Banamex, Management, NA Chairman, Board of Trustees Global Consumer Group Global Consumer Group Johns Hopkins Medicine, Health William A. Arnold Systems & Hospital CFO, Citigroup Alternative James A. Forese † Damian M. Kozlowski • Investments Head, Global Equities, Corporate CEO, The Citigroup Private Bank Alain J.P. Belda and Investment Banking Global Wealth Management Chairman & CEO, Alcoa Inc. Vikram A. Atal * Chairman & CEO, Citi Cards Steven J. Freiberg *+ Sallie L. Krawcheck + George David Global Consumer Group Chairman & CEO, Global CFO, Citigroup Inc. Chairman & CEO, United Consumer Group-North America Technologies Corporation Suneel Bakhshi † Maria Louise (Marisa) Lago † Head, Emerging Markets Corporate Richard Garside * Chief Compliance Officer Kenneth T. Derr Bank, Corporate and Investment COO, North America Corporate and Investment Banking Chairman, Retired, Chevron Banking Operations & Technology Corporation Global Consumer Group Robin Leopold • Ajay Banga *+ Senior Human Resources Officer John M. Deutch Chairman & CEO, Global John Gerspach Global Wealth Management Institute Professor, Massachusetts Consumer Group-International Controller, Chief Accounting Institute of Technology Officer, Citigroup Inc. Carl E. Levinson * Randolph H. Barker † President & CEO Roberto Hernández Ramírez Co-Head, Global Fixed Income Edith Ginsberg Consumer Lending Group Chairman, Banco Nacional de Corporate and Investment Banking Senior Human Resources Officer Global Consumer Group Mexico Corporate Center Dean Barr Stephen H. Long + Ann Dibble Jordan Head of Liquid Investments Edward F. Greene † President, International Operations Consultant Citigroup Alternative Investments General Counsel Citigroup Inc. Corporate and Investment Banking Klaus Kleinfeld Vicky Bindra * David Lowman * President & CEO, Siemens AG EVP, International Customer Paul C. Guidone • President & CEO Andrew N. Liveris Franchise & CitiBusiness Chief Investment Officer CitiFinancial International President, CEO, and Chairman-Elect Global Consumer Group Global Wealth Management Global Consumer Group The Dow Chemical Company Stephen Bird * Yung-Ku Ha Alan MacDonald +† Dudley C. Mecum CEO, Consumer Finance CEO, Citibank Korea Inc. COO, Global Banking, Corporate Managing Director, Capricorn and Credit Cards, Japan and Investment Banking; Global Consumer Group Marianne Laing Hay • Vice-Chairman, Citibank N.A. Holdings, LLC CEO Europe Anne Mulcahy Sir Win Bischoff Global Wealth Management Thomas G. Maheras † Chairman & CEO, Xerox Chairman, Citigroup Europe CEO, Global Capital Markets Michael S. Helfer Corporate and Investment Banking Corporation David C. Bushnell + General Counsel Richard D. Parsons Senior Risk Officer Corporate Secretary Gustavo Marin † Chairman & CEO, Time Warner Inc. Citigroup Inc. Citigroup Inc. CEO, Citigroup Brazil Charles Prince Nicholas E. Calio Bonnie Howard Maura Markus * CEO, Citigroup Inc. SVP, Global Government Affairs Chief Auditor President, Citibank North America Citigroup Inc. Citigroup Inc. Global Consumer Group Judith Rodin President, Rockefeller Foundation Michael A. Carpenter Leah C. Johnson Faith L. Massingale * Chairman & CEO Director, Public Affairs Head, International Cards Robert E. Rubin Citigroup Alternative Investments Citigroup Inc. Global Consumer Group Director & Chairman Executive Committee; Member, Office of the Geoffrey O. Coley † Charles D. Johnston • Raymond J. McGuire † Chairman, Citigroup Inc. Co-Head, Global Fixed Income President & CEO Co-Head, Global Investment Corporate and Investment Banking Global Private Client Group Banking, Corporate and Franklin A. Thomas Global Wealth Management Investment Banking Consultant, The Study Group Michael L. Corbat † Head, Global Relationship Bank Mark Joiner • Manuel Medina-Mora Sanford I. Weill Corporate and Investment Banking CFO, Head, Strategy and M&A Chairman & CEO, Latin America Chairman, Citigroup Inc. Global Wealth Management & Mexico; CEO, Banamex Julio A. de Quesada HONORARY DIRECTOR Head, Corporate and Investment Lewis B. Kaden William J. Mills † The Honorable Gerald R. Ford Banking, Mexico Vice Chairman, Chief Administrative CEO, Europe, Middle East, and Former President of the United States Officer, Citigroup Inc. Africa, Corporate and Investment John L. Donnelly † Banking Head, Human Resources & William Kennedy • MANAGEMENT COMMITTEE Corporate Affairs, Corporate and Managing Director Hans Morris † Investment Banking Director, Citigroup CFO, Head of Technology and Ellen Alemany † Investment Research Operations, Corporate and CEO, Global Transaction Services Robert Druskin † Global Wealth Management Investment Banking Corporate & Investment Banking President & CEO, Corporate and Investment Banking Kevin M. Kessinger + Robert Morse † Raul Anaya * Chief Operations & Technology CEO, Asia Pacific, Corporate and Head, Global Consumer Group James Duffy * Officer, Citigroup Inc. Investment Banking Latin America Senior Human Resources Officer Global Consumer Group Michael Klein † R. Russell Morton Shirish Apte CEO, Global Banking, Corporate Director, Global Private Client CEO, Central Eastern Europe, Michael R. Dunn * and Investment Banking; Branches, Global Wealth Management Middle East & Africa, Corporate CFO & COO Vice Chairman, Citibank & Investment Banking Global Consumer Group International plc

27854.TXT.indd BACK2 2/24/06 4:47:42 PM Stephanie B. Mudick * Zion Shohet CITIGROUP INTERNATIONAL James M. Kilts General Counsel Head, Strategy and M&A ADVISORY BOARD Vice Chairman of the Board, Global Consumer Group Citigroup Inc. 1 Gillette, The Procter & Gamble CHAIRMAN Company Jessica A. Palmer † Slawomir S. Sikora Head, Risk Management CEO, Poland James D. Wolfensohn KBE AO Göran Lindahl Corporate and Investment Banking CEO, Bank Handlowy w Chairman of Wolfensohn & Member of the Board, Warszawie S.A. Company, L.L.C. Corporation and Steffen Parratt Citigroup Senior Advisor Sony Ericsson Mobile Company Head, Planning & Analysis and Richard D. Stanley Capital Allocation, Citigroup Inc. CEO, China MEMBERS Henry A. McKinnell, Jr., Ph.D. Citigroup Inc. Mukesh D. Ambani Chairman & CEO Douglas L. Peterson Pfizer Inc CEO, Citigroup Japan; Chairman Sheree Stomberg • Chairman & Managing Director & CEO, Citibank Japan Managing Director Reliance Industries Limited Robert L. Nardelli Head, Operations & Technology Senator Howard H. Baker, Jr. Chairman, President & CEO Joyce A. Phillips * Global Wealth Management The Home Depot Head, International Retail Bank Former United States Ambassador, Global Consumer Group Todd S. Thomson •+ Japan; Former United States Senate Charles Prince Chairman & CEO Majority Leader CEO, Citigroup Inc. Charles Prince Global Wealth Management CEO, Citigroup Inc. Cathleen Black Hans W. Reich Arthur H. Tildesley President, Hearst Magazines Chairman of the Board of Raymond J. Quinlan * Director, Investor Relations Sir Peter Bonfield CBE FREng Managing Directors President & CEO Citigroup Inc. KfW Bankengruppe North American Retail Distribution Senior Non-Executive Director Global Consumer Group Alexander G. van Tienhoven • AstraZeneca PLC Dr.-Ing. Wolfgang Reitzle President, Latin America Region Former Chief Executive CEO, Linde AG Fernando Quiroz Robles † The Citigroup Private Bank British Telecommunications plc Head, Latin America, Corporate and Global Wealth Management William R. Rhodes + Investment Banking Michael A. Carpenter Chairman, President & CEO Ashok Vaswani * Chairman & CEO Citibank, N.A.; Senior Vice Amy J. Radin * CEO, Asia Pacific Citigroup Alternative Investments Chairman, Citigroup Inc. Chief Innovation Officer Global Consumer Group Global Consumer Group John L. Clendenin Robert E. Rubin Alberto J. Verme † Former Chairman & CEO Director & Chairman, Executive William R. Rhodes + Co-Head, Global Investment BellSouth Corporation Committee; Member, Office of the Chairman, President & CEO Banking, Corporate and Investment Bertrand P. Collomb Chairman, Citigroup Inc. Citibank N.A.; Senior Vice Banking Chairman, Citigroup Inc. Chairman, Lafarge S.A. Dr. H. Onno Ruding Stephen Volk † Luca Cordero di Montezemolo Retired Vice Chairman, Citibank, N.A. Saul M. Rosen Vice Chairman, Citigroup Inc. Former Minister of Finance, Chief Tax Officer Chairman, Fiat S.p.A The Netherlands Citigroup Inc. Michael D. Weitzman * Chairman and CEO, Ferrari S.p.A. Head, International Operations Chairman, Confindustria Ekkehard D. Schulz Robert E. Rubin & Technology, Global Consumer Valentín Díez Chairman of the Executive Board Director & Chairman, Executive Group ThyssenKrupp AG Committee; Member, Office of the Chairman, Mexican Businessmen Chairman, Citigroup Inc. Simon Williams * Council for Foreign Trade, Morris Tabaksblat KBE Chief Risk Officer Investment and Technology; Former Chairman & CEO Michael Schlein Global Consumer Group Former Vice Chairman, CEO, Sales Unilever NV SVP, Global Corporate Affairs, and Marketing, Grupo Modelo, Human Resources and Business Martin J. Wong S.A. de C.V. Sanford I. Weill Practices, Citigroup Inc. Chief Compliance Officer Chairman, Citigroup Inc. Citigroup Inc. Robert Druskin † Tom Schwartz • President & CEO Lorenzo H. Zambrano Head, Risk Management Paco Ybarra † Citigroup Corporate and Chairman & CEO Global Wealth Management Head, Global Emerging Markets Investment Banking CEMEX, S. A. de C. V. Sales & Trading, Corporate and Frits Seegers * Investment Banking John V. Faraci CEO, Europe, Middle East, and Chairman & CEO Africa, Global Consumer Group Shengman Zhang International Paper Chairman, Public Sector Group Deepak Sharma • Corporate and Investment Banking Dr. Victor K. Fung CEO, Asia Pacific & Middle Chairman, Li & Fung Group East Region, Global Wealth Enrique Zorrilla Fullaondo * Management Head, Commercial Markets, Richard J. Harrington Banamex, Global Consumer Group President & CEO Michael J. Sharp • The Thomson Corporation General Counsel Global Wealth Management Jane C. Sherburne Senior Deputy General Counsel Citigroup Inc.

* Member of Global Consumer Planning Group † Member of Corporate and Investment Banking Planning Group • Member of Global Wealth Management Planning Group Member of Citigroup Operating Committee + Member of Citicorp Holdings Inc./Citibank, N.A. Board of Directors

1James D. Wolfensohn will become Chairman of the International Advisory Board on April 18, 2006, replacing Sanford I. Weill, who will remain on the board.

27854.TXT.indd BACK3 2/24/06 4:47:43 PM Financial Highlights

CITIGROUP NET INCOME——PRODUCT VIEW In millions of dollars 1 2005 2004 % CHANGE

SEGMENT INCOME GLOBAL CONSUMER U.S. Cards $2,754 $3,562 (23)% U.S. Retail Distribution 1,752 2,019 (13) U.S. Consumer Lending 1,938 1,664 16 U.S. Commercial Business 729 765 (5) Total U.S. Consumer2 $7,173 $8,010 (10)%

International Cards $1,373 $1,137 21% International Consumer Finance 642 586 10 International Retail Banking 2,083 2,157 (3) Total International Consumer $4,098 $3,880 6%

Other 3 $(374) $97 NM Total Global Consumer $10,897 $11,987 (9)%

CORPORATE AND INVESTMENT BANKING Capital Markets and Banking $5,327 $5,395 (1)% Transaction Services 1,135 1,045 9 Other4, 5 433 (4,398) NM Total Corporate and Investment Banking $6,895 $2,042 NM

GLOBAL WEALTH MANAGEMENT Smith Barney $871 $891 (2)% Private Bank6 373 318 17 Total Global Wealth Management $1,244 $1,209 3%

CITIGROUP ALTERNATIVE INVESTMENTS $1,437 $768 87%

CORPORATE OTHER $(667) $48 NM

INCOME FROM CONTINUING OPERATIONS $19,806 $16,054 23% INCOME FROM DISCONTINUED OPERATIONS7 $4,832 992 NM CUMULATIVE EFFECT OF ACCOUNTING CHANGE8 $(49) - -

TOTAL NET INCOME $24,589 $17,046 44%

1 Reclassified to conform to the current period’s presentation. 2 U.S. disclosure includes Canada and Puerto Rico. 3 2004 includes a $378 million after-tax gain related to the sale of The Samba Financial Group (Samba). 4 2004 includes a $378 million after-tax gain related to the sale of Samba and a $4.95 billion after-tax charge related to the WorldCom settlement and increase in Litigation Reserves. 5 2005 includes a $375 million after-tax release of WorldCom Settlement and Litigation Reserve. 6 2004 includes a $244 million after-tax charge related to closing the company’s Private Bank operations in Japan. 7 Includes $2.1 billion gain on the sale of the Travelers Life and Annuities business and $2.1 billion gain on the sale of the Asset Management business. 8 Accounting change in 2005 of ($49) million reflects the adoption of FIN 47. NM——Not Meaningful

27854.TXT.indd BACK4 2/24/06 4:47:44 PM citigroup.com ©2006 Citigroup Inc. 181932 3/06 CIT2073