91925-AR-no10K-nospread 3/13/02 10:25 AM Page 1 fg63786 DISK1:Desktop Folder: 2001 ANNUAL REPORT This is Citigroup 91925-AR-no10K-nospread 3/13/02 10:25 AM Page 2 fg63786 DISK1:Desktop Folder: WE ARE AN ECONOMIC WE VALUE A WORKPLACE WE VALUE PEOPLE WHO… WE ASPIRE TO BE ENTERPRISE WITH… WHERE… KNOWN AS… take the company personally. a relentless focus on growth, bureaucracy is discouraged, They care about each other, the a company with the highest aiming to increase earnings by entrepreneurial thinking is fos- quality of our products and serv- standards of moral and ethical double digits on average. tered and decision-making is ices, and above all, their value to conduct—working to earn streamlined by an “open-door” our customers and shareholders. client trust, day in and day a global orientation, but with management style. out. Our word is our bond. deep local roots in every market are committed to a strong work where we operate. diversity is embraced, particularly ethic and are constantly striving to the leader in global financial in light of our globality. excel in serving their customers. services, with market leadership a highly diversified base of in every one of our major activi- earnings that enables us to employees think and act like are more interested in teamwork ties, and one of the great prosper under difficult market owners because they ARE owners. than in internal politics. companies in the world. conditions. mistakes are tolerated, admitted lead by example, giving credit to a company where the best capital employed in higher- and addressed before they become others for success and assuming people want to work, and the margin businesses, each one of real problems. personal responsibility for failure. first choice of where customers which is capable of profitable want to do business. growth on a stand-alone basis. people are promoted on their have a sense of urgency and merits rather than on their tenure, excitement, who demonstrate customer centered, providing financial strength protected by and rewarded for their perform- candor, insight and creativity, unparalleled levels of service as a financial discipline, enabling ance within the context of what and thrive in an environment means of protecting and building us to take risks commensurate they can personally control or of change, challenge and our business franchise over time. with rewards to capture attrac- influence. competition. tive opportunities. an organization with credibility people treat each other with are top performers and are com- —doing what we say and report- a close watch on our overhead mutual respect and dignity. mitted to excellence in whatever ing results with accuracy and costs, but a willingness to they do. objectivity. invest prudently in our infra- people truly feel that, no matter structure—we spend money how large we grow, each and a company dedicated to like it’s our own. every one of us can make a community service, taking a difference. leadership role in every local a focus on technological community around the world in innovation, seamlessly deliv- which we operate, and making ering value to our customers each community a better place across multiple platforms. because we are there. 91925-AR-no10K-nospread 3/13/02 10:25 AM Page 1 fg63786 DISK1:Desktop Folder: CITIGROUP In Millions of Dollars % Change ADJUSTED REVENUE $83,625 $77,694 8 SEGMENT INCOME GLOBAL CONSUMER Banking/Lending , , Insurance ⁽⁾ Western Europe Japan Emerging Markets , e-Consumer/Consumer Other ⁽⁾⁽⁾ TOTAL GLOBAL CONSUMER , , GLOBAL CORPORATE Corporate & Investment Bank , , ⁽⁾ Emerging Markets Corporate Banking and Global Transaction Services , , Commercial Lines Insurance , ⁽⁾ TOTAL GLOBAL CORPORATE , , ⁽⁾ GLOBAL INVESTMENT MANAGEMENT & PRIVATE BANKING Travelers Life & Annuity The Citigroup Private Bank Citigroup Asset Management ⁽⁾ TOTAL GLOBAL INVESTMENT MANAGEMENT & PRIVATE BANKING , , INVESTMENT ACTIVITIES (A) , ⁽⁾ CORPORATE/OTHER ⁽⁾⁽⁾ CORE INCOME , , Restructuring and Merger-Related Items—After Tax ⁽⁾⁽⁾ Income Before Cumulative Effect of Accounting Changes , , Cumulative Effect of Accounting Changes (B) ⁽⁾ - - NET INCOME , , RETURN ON COMMON EQUITY (CORE INCOME) .% .% - (A) Includes the Company’s venture capital activities, the realized investment gains and losses related to certain corporate- and insurance-related investments, and the results of certain investments in countries that refinanced debt under the 1989 Brady Plan or plans of a similar nature. (B) Accounting Changes refer to the adoption of Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended and the adoption of EITF issue 99-20 Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets.” Financial Highlights 1 CITIGROUP 2001 FINANCIAL HIGHLIGHTS 91925-AR-no10K-nospread 3/13/02 10:25 AM Page 2 fg63786 DISK1:Desktop Folder: DEAR FELLOW SHAREHOLDERS, IN 2001, CITIGROUP SOLIDIFIED ITS POSITION AS ONE OF THE MOST SUCCESSFUL FINANCIAL SERVICES COMPANIES IN THE WORLD, OUTPERFORMING AND LEADING THE FIELD IN THE MOST PROFITABLE AND ATTRACTIVE GROWTH AREAS. WE REGISTERED DOUBLE-DIGIT INCREASES ACROSS MANY LINES OF BUSINESS, AND A 20 PERCENT RETURN ON EQUITY. While these results are a testament to the intelligence, creativity and commitment of our 268,000 employees across more than 100 countries, they also say something about our coming of age as a company. Over the past three years, we have described Citigroup as a work in progress, a new model of financial services organization that we were building to serve our clients’ financial needs and deliver value for our shareholders. Today, we can say without hesitation that the model is working. We are now completely focused on our strategic aspiration—to establish trusted relation- ships with consumers, corporations, institutions and governments as we continue to deliver the full spectrum of financial services across our multiple distribution channels. 91925-AR-no10K-nospread 3/13/02 10:26 AM Page 3 fg63786 DISK1:Desktop Folder: 2001: A YEAR OF UNPRECEDENTED “CITIGROUP HAS PROVEN THE BENEFITS OF ITS CHALLENGES 2001 was an extraordinary year. We EXTRAORDINARY DIVERSIFICATION IN A DIFFICULT saw a world transformed from pros- perity and peace to economic turmoil OPERATING ENVIRONMENT.” and war. We experienced the first —STANDARD & POOR’S, SEPTEMBER 2001 synchronized global economic slow- down in decades. We saw the There is one other important reason Salomon Smith Barney and Citigroup economy of Argentina collapse and for our success: more than two-thirds Asset Management. In total, we had to witnessed the largest corporate bank- of our employees are owners of evacuate 16,000 people from a dozen ruptcy in history. And in the U.S., Citigroup, which offers them an addi- sites in lower Manhattan. Nevertheless, amid an environment of weakening tional opportunity to participate in our company continued to function corporate credit and falling stock our company’s success. When employ- with minimal disruption. markets, the September 11 attack took ees think and act like owners, their We were conducting business imme- thousands of lives even as it struck interests are aligned with those of their diately—resuming trading when the hard at the financial markets, causing fellow shareholders and our clients are bond market reopened and again more than $30 billion of damage to served well. when the bell sounded at the New the insurance industry alone. Our achievements received important York Stock Exchange. Our Travelers Despite these considerable challenges, recognition when Citigroup, for the catastrophe-response vans arrived Citigroup continued to grow in 2001. first time, was named one of America’s just a few blocks from Ground Zero We achieved record core income of 10 Most Admired Companies by on September 12, processing claims $14.6 billion, making us once again Fortune magazine and ranked number and approving overdraft limits for one of the world’s most profitable one in our industry category. I’m people hit hard by the tragedy. companies. Our revenues rose eight especially proud that, of the top 10 Many of our own people were also percent, while expenses increased companies, not only did Citigroup hit hard by the tragedy, having lost only four percent, and our core diluted bring the fourth-highest return to family and friends, yet they contin- earnings per share were up three shareholders over the past five years, ued to perform their duties under percent. We also completed multiple but we were also rated the very best very difficult circumstances. acquisitions in key markets. At the long-term investment value. same time, we received credit rating My heartfelt thanks and admiration While we have experienced success, upgrades from Standard & Poor’s go to them and to our Disaster a great deal of work lies ahead. What and Moody’s. Recovery team, under the leadership we can say, however, is that our brand of Bob Druskin and Frank Bisignano. What allowed us to operate success- is becoming synonymous with growth, They were called into action within fully in this difficult environment was stability, innovation and shareholder minutes of the disaster and made it our unique business model—the first value, and that we have been recog- possible for us to continue working of its kind in our industry. Citigroup nized as a safe haven for millions of on behalf of our clients, our share- brings together an incredible diversity new customers around the world in holders and our markets. of products and services…multiple these uncertain times. distribution channels…a powerful With the human side of this tragedy SEPTEMBER 11 brand…the largest global footprint uppermost in our minds, we created We will never forget the terrorist of any financial services firm…capital the Citigroup Relief Fund on Sep- attack that took thousands of lives strength that enables us not only to tember 14 with an initial grant of on September 11, including six of ride out economic storms but also $15 million to provide college schol- our own people.