Citigroup 2002 GAAP Net Income a Record $15.28 Billion, Increasing 8% GAAP Net Income Per Share of $2.94, Increasing 8% Core Income $13.65 Billion, or $2.63 Per Share

Business Wire, Jan 21, 2003

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 21, 2003

Citigroup Inc.(NYSE:C):

Revenues up 7% in 2002 to $75.76 Billion

Fourth Quarter GAAP Net Income of $2.43 Billion, Decreasing 37%,

Including a $1.55 Billion Charge for Settlement in Principle with

Regulators and Additional Legal and Credit Reserves GAAP Net Income

Per Share of $0.47, Down 36% Core Income $2.44 Billion,

or $0.47 Per Share

Citigroup Inc. (NYSE: C) today reported record net income of $15.28 billion for the twelve months ended December 31, 2002, an 8% increase over 2001. Net income per share for 2002, also up 8%, was $2.94. Core income for the year was also a record, at $13.65 billion, or $2.63 per share, and excluded realized insurance losses of $215 million as well as net restructuring reserve releases of $10 million, a $47 million charge related to the cumulative effect of adopting SFAS 142 related to goodwill and other intangible assets, and $1.88 billion in income from discontinued operations to reflect the spin off of Travelers Property Casualty.

For the fourth quarter of 2002, the company reported GAAP net income of $2.43 billion, a 37% decline from the fourth quarter of 2001. Core income was $2.44 billion, a 32% drop from the prior year period. Core income per diluted share was $0.47 for the quarter.

Results for the fourth quarter and full year included a previously-announced $1.3 billion after tax charge related to the establishment of reserves for the previously announced proposed settlement with regulators and related civil litigation, as well as regulatory inquiries and private litigation related to Enron. Fourth quarter results also included a $254 million after tax increase to the company's reserve for loan losses.

"During 2002, our company faced several significant challenges: continued weakness in global markets, record bankruptcies in the developed world, political and economic upheaval in a number of countries in which we operate, and intense scrutiny of its business practices. That we delivered record results for our shareholders during this period - expecting to achieve greater profitability than any other company - is a testament to the strength of Citigroup, the power of our business model and the value of recurring and predictable earnings. That we did so while establishing reforms to maintain confidence in our company and the financial markets demonstrated the dedication and commitment of all 250,000 employees," said Sanford I. Weill, Chairman and Chief Executive Officer of Citigroup.

"Our Global Consumer businesses were again the greatest contributor to our performance, with 26% income growth for the fourth quarter, capping a year of 21% growth. While our fourth quarter charge resulted in a loss for the Global Corporate and Investment Bank, this segment continued to lead the industry in market share and fees, ranking number one in Global Underwriting and in Disclosed Fees, and number two in Global M&A. Private Client Services maintained its leadership position even as that unit defined itself as a model for the industry in assuring the independence and objectivity of research. Global Investment Management again outperformed the industry in a difficult market, generating record income in its Private Bank and Asset Management businesses. The diversity of our income, by product and by region, was a major driver of our growth in each of our businesses.

"We begin 2003 with tremendous confidence in the future," continued Weill. "The many reforms we've instituted in areas such as research, IPO allocations, structured finance, and corporate governance only serve to strengthen our company. We've welcomed tremendous new talent into our company. We enter the new year in a better position than ever, with the strongest competitive position, largest capital base and reserves in the industry, and the greatest earnings potential this company has ever had. We will continue to provide our customers with the highest quality of financial services, and to deliver double digit income growth and industry-leading returns for our shareholders in 2003."

During 2002, Citigroup:

-- Generated record income in six of the company's nine business lines

-- Produced revenue growth of 7%, while holding expense growth to 3%

-- Increased its reserves for credit losses by $1.53 billion, including $452 million related to Golden State Bancorp

-- Increased total equity, including trust preferred securities, by more than $4.5 billion, to $92.9 billion

-- Strengthened regulatory capital ratios

-- Completed the IPO and subsequent spin-off to shareholders of Travelers Property Casualty, realizing a gain of $1.27 billion

-- Maintained its strong ratings position including parent company senior debt ratings of Aa1 and AA- from Moody's and Standard & Poor's, respectively, as well as receiving an upgrade from Fitch to AA 

-- Repurchased 151.1 million shares and reduced common shares outstanding, after issuing 79.5 million shares in connection with the acquisition of GSB

Highlights of the quarter included: