# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

# ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF

# THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	fiscal	year	ended	December	31,	2018

Commission	file	number	1-9924

# Citigroup	Inc.

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

(State	or	other	jurisdiction	of	incorporation	or	organization)

388	Greenwich	Street,	New	York,	NY

(Address	of	principal	executive	offices)

(I.R.S.	Employer	Identification	No.)

(Zip	code)

(Registrant's	telephone	number,	including	area	code)

# Securities	registered	pursuant	to	Section	12(b)	of	the	Act:	See	Exhibit	99.01

# Securities	registered	pursuant	to	Section	12(g)	of	the	Act:	none

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.	Yes o	No	x Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.	Yes	 o	No	x

Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during	the	preceding	12	months	(or for	such	shorter	period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90	days.	Yes	x				No	o

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	every	Interactive	Data	File	required	to	be	submitted	pursuant	to	Rule	405	of	Regulation	S-T	(§232.405	of	this chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	such	files).		Yes	x		No	o

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	(§229.405	of	this	chapter)	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of registrant's	knowledge,	in	definitive	proxy	or	information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to	this	Form	10-K.	x

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	smaller	reporting,	or	an	emerging	growth	company.	See	the definitions	of	"large	accelerated	filer,"	"accelerated	filer,"	"smaller	reporting	company"	and	"emerging	growth	company"	in	Rule	12b-2	of	the	Exchange	Act.

Large	accelerated	filer	x

Accelerated	filer	o

Non-accelerated	filer	o

Smaller	reporting	company	o

Emerging	growth	company	o

If	an	emerging	growth	company,	indicate	by	check	mark	if	the	registrant	has	elected	not	to	use	the	extended	transition	period	for	complying	with	any	new	or	revised	financial	accounting standards	provided	pursuant	to	Section	13(a)	of	the	Exchange	Act.	Yes	o

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).	Yes	 o				No	x

The	aggregate	market	value	of	Citigroup	Inc.	common	stock	held	by	non-affiliates	of	Citigroup	Inc.	on	June	30, 2018	was	approximately	$168.1	billion.

Documents	Incorporated	by	Reference:	Portions	of	the	registrant's	proxy	statement	for	the	annual	meeting	of	stockholders	scheduled	to	be	held	on	April	16, 2019	are	incorporated	by reference	in	this	Form	10-K	in	response	to	Items	10,	11,	12,	13	and	14	of	Part	III.

Available	on	the	web	at	www.citigroup.com

# FORM	10-K	CROSS-REFERENCE	INDEX

# 8. Financial	Statements	and

*** See	"About	the	Annual	Meeting,"	"Stock	Ownership"	and	"Equity	Compensation Plan	Information"	in	the	Proxy	Statement,	incorporated	herein	by	reference.

**** See	"Corporate	Governance—Director	Independence,"	"—Certain	Transactions and	Relationships,	Compensation	Committee	Interlocks	and	Insider	Participation" and	"—Indebtedness"	in	the	Proxy	Statement,	incorporated	herein	by	reference.

***** See	"Proposal	2:	Ratification	of	Selection	of	Independent	Registered	Public Accounting	Firm"	in	the	Proxy	Statement,	incorporated	herein	by	reference.

# CITIGROUP'S	2018	ANNUAL	REPORT	ON	FORM	10-K

| OVERVIEW | 4 |
| :--- | :--- |
| MANAGEMENT'S\tDISCUSSION\tAND |  |
| \t\tANALYSIS\tOF\tFINANCIAL\tCONDITION\tAND |  |
| \t\tRESULTS\tOF\tOPERATIONS | 6 |
| Executive\tSummary | 6 |
| Summary\tof\tSelected\tFinancial\tData | 9 |
| SEGMENT\tAND\tBUSINESS—INCOME\t(LOSS)\n\t\tAND\tREVENUES | 11 |
| SEGMENT\tBALANCE\tSHEET | 13 |
| Global\tConsumer\tBanking | 14 |
| North\tAmerica\tGCB | 16 |
| Latin\tAmerica\tGCB | 18 |
| Asia\tGCB | 20 |
| Institutional\tClients\tGroup | 22 |
| Corporate/Other | 27 |
| OFF-BALANCE\tSHEET\n\t\tARRANGEMENTS | 29 |
| CONTRACTUAL\tOBLIGATIONS | 30 |
| CAPITAL\tRESOURCES | 31 |
| RISK\tFACTORS | 48 |
| Managing\tGlobal\tRisk\tTable\tof\tContents | 58 |
| MANAGING\tGLOBAL\tRISK | 59 |
| SIGNIFICANT\tACCOUNTING\tPOLICIES\tAND\n\t\tSIGNIFICANT\tESTIMATES | 113 |
| FUTURE\tAPPLICATION\tOF\tACCOUNTING\n\t\tSTANDARDS | 117 |
| DISCLOSURE\tCONTROLS\tAND\n\t\tPROCEDURES | 118 |
| MANAGEMENT'S\tANNUAL\tREPORT\tON |  |
| \t\tINTERNAL\tCONTROL\tOVER\tFINANCIAL |  |
| \t\tREPORTING | 119 |
| FORWARD-LOOKING\tSTATEMENTS | 120 |
| REPORT\tOF\tINDEPENDENT\tREGISTERED |  |
| \t\tPUBLIC\tACCOUNTING\tFIRM—INTERNAL |  |
| \t\tCONTROL\tOVER\tFINANCIAL\tREPORTING | 121 |
| REPORT\tOF\tINDEPENDENT\tREGISTERED |  |
| \t\tPUBLIC\tACCOUNTING\tFIRM— |  |
| \t\tCONSOLIDATED\tFINANCIAL\tSTATEMENTS | 122 |
| FINANCIAL\tSTATEMENTS\tAND\tNOTES\n\t\tTABLE\tOF\tCONTENTS | 123 |
| CONSOLIDATED\tFINANCIAL\tSTATEMENTS | 124 |
| NOTES\tTO\tCONSOLIDATED\tFINANCIAL\n\t\tSTATEMENTS | 132 |
| FINANCIAL\tDATA\tSUPPLEMENT | 293 |
| SUPERVISION,\tREGULATION\tAND\tOTHER | 294 |
| CORPORATE\tINFORMATION | 298 |
| Citigroup\tExecutive\tOfficers | 298 |
| Citigroup\tBoard\tof\tDirectors | 299 |

# OVERVIEW

Citigroup's	history	dates	back	to	the	founding	of	the	City Bank	of	New	York	in	1812.

Citigroup	is	a	global	diversified	financial	services	holding	company	whose businesses	provide	consumers,	corporations,	governments	and	institutions	with	a broad,	yet	focused,	range	of	financial	products	and	services,	including	consumer banking	and	credit,	corporate	and	investment	banking,	securities	brokerage,	trade and	securities	services	and	wealth	management.	Citi	has	approximately	200 million	customer	accounts	and	does	business	in	more	than	160	countries	and jurisdictions.

At	December	31,	2018,	Citi	had	approximately	204,000	full-time employees,	compared	to	approximately	209,000	full-time	employees	at December	31,	2017.

Citigroup	currently	operates,	for	management	reporting	purposes,	via	two primary	business	segments:	Global	Consumer	Banking	and	Institutional	Clients

Group,	with	the	remaining	operations	in	Corporate/Other.	For	a	further description	of	the	business	segments	and	the	products	and	services	they	provide, see	"Citigroup	Segments"	below,	"Management's	Discussion	and	Analysis	of Financial	Condition	and	Results	of	Operations"	and	Note	3	to	the	Consolidated Financial	Statements.

Throughout	this	report,	"Citigroup,"	"Citi"	and	"the	Company"	refer	to Citigroup	Inc.	and	its	consolidated	subsidiaries.

Additional	information	about	Citigroup	is	available	on	Citi's	website	at www.citigroup.com.	Citigroup's	recent	annual	reports	on	Form	10-K,	quarterly reports	on	Form	10-Q	and	proxy	statements,	as	well	as	other	filings	with	the	U.S. Securities	and	Exchange	Commission	(SEC),	are	available	free	of	charge through	Citi's	website	by	clicking	on	the	"Investors"	page	and	selecting	"All SEC	Filings."	The	SEC's	website	also	contains	current	reports	on	Form	8-K	and other	information	regarding	Citi	at	www.sec.gov.

Certain	reclassifications,	including	a	realignment	of	certain	businesses,	have been	made	to	the	prior	periods'	financial	statements	to	conform	to	the	current period's	presentation.	For	information	on	certain	recent	such	reclassifications, see	Note	3	to	the	Consolidated	Financial	Statements.

Please	see	"Risk	Factors"	below	for	a	discussion	of	the	most	significant risks	and	uncertainties	that	could	impact	Citigroup's	businesses,	financial condition	and	results	of	operations.

# As	described	above,	Citigroup	is	managed	pursuant	to	two	business	segments:	Global	Consumer	Banking	and	Institutional	Clients	Group,	with	the	remaining operations	in	Corporate/Other.

# acitisegmentsq418chart.jpg

# The	following	are	the	four	regions	in	which	Citigroup	operates.	The	regional	results	are	fully	reflected	in	the	segment	results	above.

# citiregionsq4.jpg

(1) Latin	America	GCB	consists	of	Citi's	consumer	banking	business	in	Mexico.

(2) Asia	GCB	includes	the	results	of	operations	of	GCB	activities	in	certain	EMEA	countries	for	all	periods	presented.

(3) North	America	includes	the	U.S.,	Canada	and	Puerto	Rico,	 Latin	America	includes	Mexico	and	Asia	includes	Japan.

# MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION

# AND	RESULTS	OF	OPERATIONS

# EXECUTIVE	SUMMARY

As	described	further	throughout	this	Executive	Summary,	Citi	made	steady progress	in	2018	toward	improving	its	profitability	and	returns,	despite	a	more challenging	revenue	environment,	particularly	in	certain	market-sensitive businesses	and	given	macroeconomic	uncertainties.	During	2018,	Citi	reported 3%	underlying	revenue	growth	in	Global	Consumer	Banking	(GCB)	and Institutional	Clients	Group	(ICG),	excluding	the	impact	of	gains	on	sale	in	2018 and	2017	(see	"Citigroup"	below).	Citi	had	solid	revenue	growth	across	treasury and	trade	solutions,	private	bank,	securities	services,	equity	markets	and corporate	lending	in	ICG,	partially	offset	by	weakness	in	fixed	income	as	well	as softness	in	equity	and	debt	underwriting.	Citi	reported	revenue	growth	in	all regions	in	GCB,	reflecting	continued	loan	and	overall	deposit	growth,	partially offset	by	the	near-term	impact	of	weak	market	sentiment	on	Asia	wealth management	revenues,	as	well	as	the	impact	from	partnership	renewal	terms	that went	into	effect	in	2018	in	Citi-branded	cards	in	North	America	GCB. Citi	demonstrated	strong	expense	discipline,	resulting	in	a	1%	decrease	in expenses,	as	well	as	positive	operating	leverage,	even	as	Citi	continued	to	make ongoing	investments.	Citi's	positive	operating	leverage,	combined	with continued	credit	discipline,	resulted	in	an	improvement	in	pretax	earnings.	Citi also	generated	continued	loan	and	deposit	growth	during	the	year.

Moreover,	Citi	continued	to	return	capital	to	its	shareholders.	In	2018,	Citi returned	$18.4	billion	in	the	form	of	common	stock	repurchases	and	dividends. Citi	repurchased	over	200	million	shares	during	the	last	year,	resulting	in	an	8% reduction	in	outstanding	common	shares.	While	Citi	made	continued	progress	in returning	capital	to	shareholders,	each	of	Citi's	key	regulatory	capital	metrics remained	strong	(see	"Capital"	below).

Going	into	2019,	while	global	economic	growth	has	continued	and	the underlying	macroeconomic	environment	remains	largely	positive,	there	continue to	be	various	economic,	political	and	other	risks	and	uncertainties	that	could create	a	more	volatile	operating	environment	and	impact	Citi's	businesses	and future	results.	For	a	more	detailed	discussion	of	the	risks	and	uncertainties	that could	impact	Citi's	businesses,	results	of	operations	and	financial	condition during	2019,	see	each	respective	business's	results	of	operations,	"Risk	Factors" and	"Managing	Global	Risk"	below.	Despite	these	risks	and	uncertainties,	Citi intends	to	continue	to	build	on	the	progress	made	during	2018	with	a	focus	on further	optimizing	its	performance	to	benefit	shareholders,	while	remaining flexible	and	adapting	to	market	and	economic	conditions	as	they	develop.

# 2018	Summary	Results

# Citigroup

Citigroup	reported	net	income	of	$18.0	billion,	or	$6.68	per	share,	compared	to	a net	loss	of	$6.8	billion,	or	$2.98	per	share,	in	the	prior	year.	Results	in	2017 included	a	one-time,

non-cash	charge	of	$22.6	billion,	related	to	the	enactment	of	the	Tax	Cuts	and Jobs	Act	(Tax	Reform),	which	impacted	the	tax	line	within	Corporate/Other,	as well	as	the	tax	lines	in	North	America	GCB	and	ICG.	Results	in	2018	included	a one-time	benefit	of	$94	million,	due	to	the	finalization	of	the	provisional component	of	the	impact	based	on	Citi's	analysis	as	well	as	additional	guidance received	from	the	U.S.	Treasury	Department	related	to	Tax	Reform,	which impacted	the	tax	line	within	Corporate/Other	(for	additional	information,	see "Significant	Accounting	Policies	and	Estimates—Income	Taxes"	below).

Excluding	the	one-time	impact	of	Tax	Reform	in	both	the	current	and	prior year,	Citigroup	net	income	of	$18.0	billion	increased	14%	compared	to	the	prior year,	reflecting	a	lower	effective	tax	rate,	higher	revenues	and	lower	expenses, partially	offset	by	higher	cost	of	credit.	On	this	basis,	earnings	per	share increased	25%,	due	to	growth	in	net	income	and	the	8%	reduction	in	average shares	outstanding,	driven	by	the	common	stock	repurchases.	(Citi's	results	of operations	excluding	the	impact	of	Tax	Reform	are	non-GAAP	financial measures.	Citi	believes	the	presentation	of	its	results	of	operations	excluding	the one-time	impact	of	Tax	Reform	in	both	the	current	and	prior	year	provides	a meaningful	depiction	for	investors	of	the	underlying	fundamentals	of	its businesses.)

Citigroup	revenues	of	$72.9	billion	in	2018	increased	1%,	as	3%	growth	in GCB	and	1%	growth	in	ICG	were	largely	offset	by	a	33%	decrease	in Corporate/Other,	primarily	due	to	the	continued	wind-down	of	legacy	assets. Results	in	2017	included	a	one-time	gain	(approximately	$580	million)	on	the sale	of	a	fixed	income	analytics	business	in	ICG,	and	results	in	2018	included	a one-time	gain	(approximately	$250	million)	on	the	sale	of	an	asset	management business	in	Latin	America	GCB.	Excluding	the	gains	on	sale	in	both	periods, aggregate	revenues	in	ICG	and	GCB	grew	3%	from	the	prior	year.

Citigroup's	end-of-period	loans	increased	3%	to	$684	billion	versus	the prior	year.	Excluding	the	impact	of	foreign	currency	translation	into	U.S.	dollars for	reporting	purposes	(FX	translation),	Citigroup's	end-of-period	loans	grew 4%,	as	8%	growth	in	ICG	and	3%	growth	in	GCB	were	partially	offset	by	the continued	wind-down	of	legacy	assets	in	Corporate/Other.	(Citi's	results	of operations	excluding	the	impact	of	gains	on	sales	and	FX	translation	are	non- GAAP	financial	measures.	Citi	believes	the	presentation	of	its	results	of operations	excluding	the	impact	of	gains	on	sales	and	FX	translation	provides	a meaningful	depiction	for	investors	of	the	underlying	fundamentals	of	its businesses.)

Citigroup's	end-of-period	deposits	increased	6%	to	$1.0	trillion	versus	the prior	year.	Excluding	the	impact	of	FX	translation,	Citigroup's	deposits	were	up 7%,	primarily	reflecting	a	10%	increase	in	ICG	and	a	1%	increase	in	GCB.

# Expenses

Citigroup	operating	expenses	of	$41.8	billion	decreased	1%	versus	the	prior year,	as	efficiency	savings	and	the	wind-down	of	legacy	assets	more	than	offset the	impact	of	higher	volume-

related	expenses	and	ongoing	investments.	Operating	expenses	in	both	ICG	and GCB	were	up	3%,	while	Corporate/Other	operating	expenses	declined	40%,	all versus	the	prior	year.

# Cost	of	Credit

Citi's	total	provisions	for	credit	losses	and	for	benefits	and	claims	of	$7.6	billion increased	2%	from	the	prior	year,	driven	by	higher	net	loan	loss	reserve	builds and	higher	net	credit	losses.	The	net	loan	loss	reserve	build	of	$354	million compared	to	a	net	loan	loss	reserve	build	of	$266	million	in	the	prior	year.	The increase	largely	reflected	a	modest	net	loan	loss	reserve	build	in	ICG,	compared to	a	net	loan	loss	reserve	release	in	the	prior	year,	partially	offset	by	lower	net loan	loss	reserve	builds	in	North	America	GCB.

Net	credit	losses	of	$7.1	billion	increased	1%	versus	the	prior	year. Consumer	net	credit	losses	increased	4%	to $6.9	billion,	largely	reflecting	volume	growth	and	seasoning	in	the	North America	cards	portfolios,	partially	offset	by	the	continued	wind-down	of	legacy assets	in	Corporate/Other.	Corporate	net	credit	losses	decreased	55%	to	$169 million,	primarily	reflecting	the	impact	of	an	episodic	charge-off	incurred	in	the prior	year.

For	additional	information	on	Citi's	consumer	and	corporate	credit	costs	and allowance	for	loan	losses,	see	each	respective	business's	results	of	operations and	"Credit	Risk"	below.

# Capital

Citigroup's	Common	Equity	Tier	1	Capital	and	Tier	1	Capital	ratios	were	11.9% and	13.5%	as	of	December	31,	2018,	respectively,	compared	to	12.4%	and 14.1%	as	of	December	31,	2017,	both	based	on	the	Basel	III	Standardized Approach	for	determining	risk-weighted	assets.	The	decline	in	regulatory	capital largely	reflected	the	return	of	capital	to	common	shareholders,	partially	offset	by earnings	growth.	Citigroup's	Supplementary	Leverage	ratio	as	of	December	31, 2018	was	6.4%,	compared	to	6.7%	as	of	December	31,	2017.	For	additional information	on	Citi's	capital	ratios	and	related	components,	see	"Capital Resources"	below.

# Global	Consumer	Banking

GCB	net	income	of	$5.8	billion	increased	49%.	Excluding	the	one-time	impact of	Tax	Reform	in	the	prior	year,	GCB	net	income	increased	25%,	driven primarily	by	a	lower	effective	tax	rate	and	higher	revenues,	partially	offset	by higher	expenses.	Operating	expenses	were	$18.6	billion,	up	3%,	as	higher volume-related	expenses	and	continued	investments	were	partially	offset	by efficiency	savings.

GCB	revenues	of	$33.8	billion	increased	3%	versus	the	prior	year,	driven	by growth	across	all	regions.	North	America	GCB	revenues	increased	1%	to	$20.5 billion,	driven	by	higher	revenues	across	all	businesses.	Citi-branded	cards revenues	of	$8.6	billion	were	up	1%	versus	the	prior	year,	as	growth	in	interest- earning	balances	was	largely	offset	by	the	previously	disclosed	impact	of partnership	renewal	terms.	Citi	retail	services	revenues	of	$6.6	billion	increased 3%	versus	the	prior	year,	primarily	reflecting	organic	loan	growth	and	the benefit	of	the	L.L.Bean	portfolio	acquisition,	partially	offset	by	higher	partner payments.	Retail	banking	revenues	increased	1%	from

the	prior	year	to	$5.3	billion.	Excluding	mortgage	revenues,	retail	banking revenues	of	$4.8	billion	were	up	6%	from	the	prior	year,	driven	by	continued growth	in	deposit	margins,	partially	offset	by	lower	deposit	volumes.

North	America	GCB	average	deposits	of	$180	billion	decreased	a	net	2% year-over-year,	primarily	driven	by	a	reduction	in	money	market	balances,	as clients	transferred	money	to	investments.	North	America	GCB	average	retail loans	of	$56	billion	grew	1%	from	the	prior	year.	Assets	under	management	of $60	billion	were	largely	unchanged	from	the	prior	year,	as	5%	underlying growth	was	offset	by	the	impact	of	market	movements,	due	to	the	equity	market sell-off	at	the	end	of	2018.	Average	Citi-branded	card	loans	of	$88	billion increased	4%,	while	Citi-branded	card	purchase	sales	of	$344	billion	increased 8%	versus	the	prior	year.	Average	Citi	retail	services	loans	of	$48	billion increased	6%	versus	the	prior	year,	while	Citi	retail	services	purchase	sales	of $87	billion	were	up	7%.	For	additional	information	on	the	results	of	operations of	North	America	GCB	for	2018,	see	"Global	Consumer	Banking—North America	GCB"	below.

International	GCB	revenues	(consisting	of	Latin	America	GCB	and	Asia GCB	(which	includes	the	results	of	operations	in	certain	EMEA	countries)) increased	5%	versus	the	prior	year	to	$13.2	billion.	Excluding	the	impact	of	FX translation,	international	GCB	revenues	increased	6%	versus	the	prior	year.	Latin America	GCB	revenues	increased	13%	versus	the	prior	year,	including	the	gain on	sale	in	2018.	Excluding	the	gain	on	sale,	Latin	America	GCB	revenues increased	8%,	driven	by	growth	in	loans	and	deposits	as	well	as	improved deposit	spreads.	Asia	GCB	revenues	increased	2%	versus	the	prior	year,	as continued	growth	in	deposit,	cards	and	insurance	revenues	was	largely	offset	by lower	investment	revenues	due	to	weak	market	sentiment.	For	additional information	on	the	results	of	operations	of	Latin	America	GCB	and	Asia	GCB	for 2018,	including	the	impact	of	FX	translation,	see	"Global	Consumer Banking—Latin	America	GCB"	and	"Global	Consumer	Banking—Asia	GCB" below.

Year-over-year,	international	GCB	average	deposits	of	$127	billion increased	4%,	average	retail	loans	of	$90	billion	increased	3%,	assets	under management	of	$98	billion	decreased	1%,	average	card	loans	of	$24	billion increased	2%	and	card	purchase	sales	of	$104	billion	increased	7%,	all	excluding the	impact	of	FX	translation.

# Institutional	Clients	Group

ICG	net	income	of	$12.2	billion	increased	35%.	Excluding	the	one-time	impact of	Tax	Reform	in	the	prior	year,	ICG	net	income	increased	11%,	driven	by	a lower	effective	tax	rate	and	higher	revenues,	partially	offset	by	higher	operating expenses	and	higher	cost	of	credit.	ICG	operating	expenses	increased	3%	to $21.0	billion,	as	higher	compensation	costs,	volume-related	expenses	and continued	investments	were	partially	offset	by	efficiency	savings.

ICG	revenues	were	$37.0	billion	in	2018,	up	1%	from	the	prior	year,	as	a 6%	increase	in	Banking	revenues	was	largely	offset	by	a	3%	decrease	in	Markets and	securities	services,	including	the	impact	of	the	gain	on	sale	in	the	prior	year. Excluding	the	gain	on	sale	in	the	prior	year,	revenues	increased	3%,	primarily driven	by	a	6%	increase	in	Banking

revenues,	as	Markets	and	securities	services	revenues	were	largely	unchanged versus	the	prior	year.	The	increase	in	Banking	revenues	included	the	impact	of $45	million	of	gains	on	loan	hedges	within	corporate	lending,	compared	to	losses of	$133	million	in	the	prior	year.

Banking	revenues	of	$19.9	billion	(excluding	the	impact	of	gains	(losses)	on loan	hedges	within	corporate	lending)	increased	5%,	driven	by	solid	growth	in treasury	and	trade	solutions,	private	bank	and	corporate	lending,	partially	offset by	lower	revenues	in	investment	banking.	Investment	banking	revenues	of	$5.0 billion	decreased	7%	versus	the	prior	year,	as	growth	in	advisory	was	more	than offset	by	a	decline	in	both	debt	and	equity	underwriting,	largely	reflecting	lower market	activity.	Advisory	revenues	increased	16%	to	$1.3	billion,	equity underwriting	revenues	decreased	12%	to	$991	million	and	debt	underwriting revenues	decreased	13%	to	$2.7	billion,	all	versus	the	prior	year. Treasury	and	trade	solutions	revenues	of	$9.3	billion	increased	8%	versus the	prior	year,	reflecting	volume	growth	and	improved	deposit	spreads,	with solid	growth	across	net	interest	and	fee	income.	Private	bank	revenues	increased 9%	to	$3.4	billion	from	the	prior	year,	driven	by	growth	in	investments,	as	well as	improved	deposit	spreads.	Corporate	lending	revenues	increased	26%	to	$2.3 billion.	Excluding	the	impact	of	gains	(losses)	on	loan	hedges,	corporate	lending revenues	increased	15%	versus	the	prior	year,	primarily	driven	by	loan	growth and	lower	hedging	costs.

Markets	and	securities	services	revenues	of	$17.0	billion	decreased	3% from	the	prior	year.	Excluding	the	gain	on	sale	in	the	prior	year,	Markets	and securities	services	revenues	were	largely	unchanged	from	the	prior	year,	as	a decline	in	fixed	income	markets	revenues	was	offset	by	an	increase	in	both equity	markets	and	securities	services	revenues.	Fixed	income	markets	revenues of	$11.6	billion	decreased	6%	from	the	prior	year,	driven	by	lower	revenues	in both	rates	and	currencies	and	spread	products,	reflecting	the	more	challenging environment.	Equity	markets	revenues	of	$3.4	billion	increased	19%	from	the prior	year	(14%	excluding	an	episodic	loss	in	derivatives	in	the	prior	year), driven	by	growth	in	derivatives	and	prime	finance	as	well	as	higher	investor client	revenue,	partially	offset	by	a	modest	decline	in	cash	equities.	Securities services	revenues	of	$2.6	billion	increased	11%,	driven	by	growth	in	client volumes	and	higher	interest	revenue.	For	additional	information	on	the	results	of operations	of	ICG	for	2018,	see	"Institutional	Clients	Group"	below.

# Corporate/Other

Corporate/Other	net	income	was	$107	million	in	2018,	compared	to	a	net	loss	of $19.7	billion	in	the	prior	year.	Excluding	the	one-time	impact	of	Tax	Reform	in both	periods,	Corporate/Other	net	income	declined	92%	to	$13	million,	largely reflecting	lower	revenues,	partially	offset	by	lower	operating	expenses	and	lower cost	of	credit.	Operating	expenses	of	$2.3	billion	declined	40%	from	the	prior year,	largely	reflecting	the	wind-down	of	legacy	assets,	lower	infrastructure costs	and	lower	legal	expenses.	Corporate/Other	revenues	were	$2.1	billion, down	33%	from	the	prior	year,	primarily	reflecting	the	continued	wind-down	of legacy	assets.	For	additional	information	on	the	results	of	operations	of Corporate/Other	for	2018,	see	"Corporate/Other"	below.

# RESULTS	OF	OPERATIONS

# SUMMARY	OF	SELECTED	FINANCIAL	DATA—PAGE	1

| In	millions	of	dollars,	except	per	share	amounts	and	ratios | 2018 | 2017 | 2016 | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tinterest\trevenue | $46,562 | $45,061 | $45,476 | $47,093 | $48,445 |
| Non-interest\trevenue | 26,292 | 27,383 | 25,321 | 30,184 | 29,731 |
| Revenues,\tnet\tof\tinterest\texpense | $72,854 | $72,444 | $70,797 | $77,277 | $78,176 |
| Operating\texpenses | 41,841 | 42,232 | 42,338 | 44,538 | 56,008 |
| Provisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\tclaims | 7,568 | 7,451 | 6,982 | 7,913 | 7,467 |
| Income\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | $23,445 | $22,761 | $21,477 | $24,826 | $14,701 |
| Income\ttaxes(1) | 5,357 | 29,388 | 6,444 | 7,440 | 7,197 |
| Income\t(loss)\tfrom\tcontinuing\toperations | $18,088 | $(6,627) | $15,033 | $17,386 | $7,504 |
| Income\t(loss)\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes(2) | (8) | (111) | (58) | (54) | (2) |
| Net\tincome\t(loss)\tbefore\tattribution\tof\tnoncontrolling\tinterests | $18,080 | $(6,738) | $14,975 | $17,332 | $7,502 |
| Net\tincome\tattributable\tto\tnoncontrolling\tinterests | 35 | 60 | 63 | 90 | 192 |
| Citigroup's\tnet\tincome\t(loss)(1) | $18,045 | $(6,798) | $14,912 | $17,242 | $7,310 |
| Less: |  |  |  |  |  |
| Preferred\tdividends—Basic | $1,173 | $1,213 | $1,077 | $769 | $511 |
| Dividends\tand\tundistributed\tearnings\tallocated\tto\temployee\trestricted\tand |  |  |  |  |  |
| deferred\tshares\tthat\tcontain\tnonforfeitable\trights\tto\tdividends,\tapplicable\tto |  |  |  |  |  |
| basic\tEPS | 200 | 37 | 195 | 224 | 110 |
| Income\t(loss)\tallocated\tto\tunrestricted\tcommon\tshareholders\tfor\tbasic\tand\ndiluted\tEPS | $16,672 | $(8,048) | $13,640 | $16,249 | $6,689 |
| Earnings\tper\tshare |  |  |  |  |  |
| Basic |  |  |  |  |  |
| Income\t(loss)\tfrom\tcontinuing\toperations | $6.69 | $(2.94) | $4.74 | $5.43 | $2.21 |
| Net\tincome\t(loss) | 6.69 | (2.98) | 4.72 | 5.41 | 2.21 |
| Diluted |  |  |  |  |  |
| Income\t(loss)\tfrom\tcontinuing\toperations | $6.69 | $(2.94) | $4.74 | $5.42 | $2.20 |
| Net\tincome\t(loss) | 6.68 | (2.98) | 4.72 | 5.40 | 2.20 |
| Dividends\tdeclared\tper\tcommon\tshare | 1.54 | 0.96 | 0.42 | 0.16 | 0.04 |

Table	continues	on	the	next	page,	including	footnotes.

| In	millions	of	dollars,	except	per	share	amounts,	ratios	and	direct	staff | 2018 | 2017 | 2016 | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| At\tDecember\t31: |  |  |  |  |  |
| Total\tassets | $1,917,383 | $1,842,465 | $1,792,077 | $1,731,210 | $1,842,181 |
| Total\tdeposits | 1,013,170 | 959,822 | 929,406 | 907,887 | 899,332 |
| Long-term\tdebt | 231,999 | 236,709 | 206,178 | 201,275 | 223,080 |
| Citigroup\tcommon\tstockholders'\tequity(1) | 177,760 | 181,487 | 205,867 | 205,139 | 199,717 |
| Total\tCitigroup\tstockholders'\tequity(1) | 196,220 | 200,740 | 225,120 | 221,857 | 210,185 |
| Direct\tstaff\t(in\tthousands) | 204 | 209 | 219 | 231 | 241 |
| Performance\tmetrics |  |  |  |  |  |
| Return\ton\taverage\tassets | 0.94% | (0.36)% | 0.82% | 0.95% | 0.39% |
| Return\ton\taverage\tcommon\tstockholders'\tequity(1)(3) | 9.4 | (3.9) | 6.6 | 8.1 | 3.4 |
| Return\ton\taverage\ttotal\tstockholders'\tequity(1)(3) | 9.1 | (3.0) | 6.5 | 7.9 | 3.5 |
| Efficiency\tratio\t(total\toperating\texpenses/total\trevenues) | 57.4 | 58.3 | 59.8 | 57.6 | 71.6 |
| Basel\tIII\tratios—full\timplementation(1)(4) |  |  |  |  |  |
| Common\tEquity\tTier\t1\tCapital(5) | 11.86% | 12.36\t% | 12.57% | 12.07% | 10.57% |
| Tier\t1\tCapital(5) | 13.46 | 14.06 | 14.24 | 13.49 | 11.45 |
| Total\tCapital(5) | 16.18 | 16.30 | 16.24 | 15.30 | 12.80 |
| Supplementary\tLeverage\tratio | 6.41 | 6.68 | 7.22 | 7.08 | 5.94 |
| Citigroup\tcommon\tstockholders'\tequity\tto\tassets(1) | 9.27% | 9.85\t% | 11.49% | 11.85% | 10.84% |
| Total\tCitigroup\tstockholders'\tequity\tto\tassets(1) | 10.23 | 10.90 | 12.56 | 12.82 | 11.41 |
| Dividend\tpayout\tratio(6) | 23.1 | \t\t\t\t\t\t\t\t\tNM | 8.9 | 3.0 | 1.8 |
| Total\tpayout\tratio(7) | 109.1 | \t\t\t\t\t\t\t\t\tNM | 77.1 | 36.0 | 19.9 |
| Book\tvalue\tper\tcommon\tshare(1) | $75.05 | $70.62 | $74.26 | $69.46 | $66.05 |
| Tangible\tbook\tvalue\t(TBV)\tper\tshare(1)(8) | 63.79 | 60.16 | 64.57 | 60.61 | 56.71 |

(1) 2017	includes	the	one-time	impact	related	to	the	enactment	of	Tax	Reform.	2018	reflects	the	tax	rate	structure	under	Tax	Reform.	For	additional	information,	see	"Significant	Accounting Policies	and	Estimates—Income	Taxes"	below.

(2) See	Note	2	to	the	Consolidated	Financial	Statements	for	additional	information	on	Citi's	discontinued	operations.

(3) The	return	on	average	common	stockholders'	equity	is	calculated	using	net	income	less	preferred	stock	dividends	divided	by	average	common	stockholders'	equity.	The	return	on	average	total Citigroup	stockholders'	equity	is	calculated	using	net	income	divided	by	average	Citigroup	stockholders'	equity.

(4) Citi's	risk-based	capital	and	leverage	ratios	for	2017	and	prior	years	are	non-GAAP	financial	measures,	which	reflect	full	implementation	of	regulatory	capital	adjustments	and	deductions	prior to	the	effective	date	of	January	1,	2018.

(5) As	of	December	31,	2018	and	2017,	Citi's	reportable	Common	Equity	Tier	1	Capital	and	Tier	1	Capital	ratios	were	the	lower	derived	under	the	Basel	III	Standardized	Approach,	whereas	the reportable	Total	Capital	ratio	was	the	lower	derived	under	the	Basel	III	Advanced	Approaches	framework.	For	all	prior	periods	presented,	Citi's	Common	Equity	Tier	1	Capital,	Tier	1	Capital and	Total	Capital	ratios	were	the	lower	derived	under	the	Basel	III	Advanced	Approaches	framework.

(6) Dividends	declared	per	common	share	as	a	percentage	of	net	income	per	diluted	share.

(7) Total	common	dividends	declared	plus	common	stock	repurchases	as	a	percentage	of	net	income	available	to	common	shareholders.	See	"Consolidated	Statement	of	Changes	in	Stockholders'

Equity,"	Note	10	to	the	Consolidated	Financial	Statements	and	"Equity	Security	Repurchases"	below	for	the	component	details.

(8) For	information	on	TBV,	see	"Capital	Resources—Tangible	Common	Equity,	Book	Value	Per	Share,	Tangible	Book	Value	Per	Share	and	Returns	on	Equity"	below.

NM	Not	meaningful

# SEGMENT	AND	BUSINESS—INCOME	(LOSS)	AND	REVENUES

# CITIGROUP	INCOME

|  |  |  |  | %	Change | %	Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017(1) | 2016 | \t2018\tvs.\t2017 | \t2017\tvs.\t2016 |
| Income\t(loss)\tfrom\tcontinuing\toperations |  |  |  |  |  |
| Global\tConsumer\tBanking |  |  |  |  |  |
| North\tAmerica | $3,340 | $1,990 | $3,239 | 68\t% | (39)% |
| Latin\tAmerica | 928 | 610 | 633 | 52 | (4) |
| Asia(2) | 1,494 | 1,278 | 1,059 | 17 | 21 |
| Total | $5,762 | $3,878 | $4,931 | 49\t% | (21)% |
| Institutional\tClients\tGroup |  |  |  |  |  |
| North\tAmerica | $3,500 | $2,355 | $3,515 | 49\t% | (33)% |
| EMEA | 3,891 | 2,832 | 2,345 | 37 | 21 |
| Latin\tAmerica | 1,889 | 1,544 | 1,454 | 22 | 6 |
| Asia | 2,920 | 2,335 | 2,211 | 25 | 6 |
| Total | $12,200 | $9,066 | $9,525 | 35\t% | (5)% |
| Corporate/Other | $126 | $(19,571) | $577 | NM | NM |
| Income\t(loss)\tfrom\tcontinuing\toperations | $18,088 | $(6,627) | $15,033 | NM | NM |
| Discontinued\toperations | $(8) | $(111) | $(58) | 93\t% | (91)% |
| Net\tincome\tattributable\tto\tnoncontrolling\tinterests | 35 | 60 | 63 | (42) | (5) |
| Citigroup's\tnet\tincome\t(loss) | $18,045 | $(6,798) | $14,912 | NM | NM |

(1) 2017	includes	the	one-time	impact	related	to	the	enactment	of	Tax	Reform.	For	additional	information,	see	"Significant	Accounting	Policies	and	Estimates—Income	Taxes"	below.

# CITIGROUP	REVENUES

| In	millions	of	dollars | 2018 | 2017 | 2016 | %	Change<br>	2018	vs.	2017 | %	Change<br>	2017	vs.	2016 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Global\tConsumer\tBanking |  |  |  |  |  |
| North\tAmerica | $20,544 | $20,270 | $19,764 | 1\t% | 3\t% |
| Latin\tAmerica | 5,760 | 5,222 | 4,971 | 10 | 5 |
| Asia(1) | 7,473 | 7,346 | 6,889 | 2 | 7 |
| Total | $33,777 | $32,838 | $31,624 | 3\t% | 4\t% |
| Institutional\tClients\tGroup |  |  |  |  |  |
| North\tAmerica | $12,914 | $13,923 | $12,767 | (7)% | 9\t% |
| EMEA | 11,770 | 10,879 | 10,012 | 8 | 9 |
| Latin\tAmerica | 4,504 | 4,385 | 4,125 | 3 | 6 |
| Asia | 7,806 | 7,287 | 7,036 | 7 | 4 |
| Total | $36,994 | $36,474 | $33,940 | 1\t% | 7\t% |
| Corporate/Other | $2,083 | $3,132 | $5,233 | (33)% | (40)% |
| Total\tCitigroup\tnet\trevenues | $72,854 | $72,444 | $70,797 | 1\t% | 2\t% |

# SEGMENT	BALANCE	SHEET(1)

| In	millions	of	dollars | Global<br>Consumer<br>Banking | Institutional<br>Clients<br>Group | Corporate/Other<br>and<br>consolidating<br>eliminations(2) | Citigroup<br>parent<br>company-<br>issued<br>long-term<br>debt	and<br>stockholders'<br>equity(3) | Total<br>Citigroup<br>consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Assets |  |  |  |  |  |
| Cash\tand\tdeposits\twith\tbanks | $8,338 | $66,963 | $112,804 | $— | $188,105 |
| Federal\tfunds\tsold\tand\tsecurities\tborrowed\tand\npurchased\tunder\tagreements\tto\tresell | 140 | 270,322 | 222 | — | 270,684 |
| Trading\taccount\tassets | 949 | 245,521 | 9,647 | — | 256,117 |
| Investments | 1,152 | 116,006 | 241,449 | — | 358,607 |
| Loans,\tnet\tof\tunearned\tincome\tand\tallowance\tfor\tloan\nlosses | 305,631 | 351,333 | 14,917 | — | 671,881 |
| Other\tassets | 37,551 | 99,638 | 34,800 | — | 171,989 |
| Net\tinter-segment\tliquid\tassets(4) | 78,378 | 244,387 | (322,765) | — | — |
| Total\tassets | $432,139 | $1,394,170 | $91,074 | $— | $1,917,383 |
| Liabilities\tand\tequity |  |  |  |  |  |
| Total\tdeposits | $308,106 | $689,983 | $15,081 | $— | $1,013,170 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tand\tsold\nunder\tagreements\tto\trepurchase | 4,459 | 173,302 | 7 | — | 177,768 |
| Trading\taccount\tliabilities | 140 | 143,751 | 414 | — | 144,305 |
| Short-term\tborrowings | 491 | 22,381 | 9,474 | — | 32,346 |
| Long-term\tdebt(3) | 1,865 | 42,557 | 43,809 | 143,768 | 231,999 |
| Other\tliabilities | 18,854 | 88,036 | 13,831 | — | 120,721 |
| Net\tinter-segment\tfunding\t(lending)(3) | 98,224 | 234,160 | 7,604 | (339,988) | — |
| Total\tliabilities | $432,139 | $1,394,170 | $90,220 | $(196,220) | $1,720,309 |
| Total\tstockholders'\tequity(5) | — | — | 854 | 196,220 | 197,074 |
| Total\tliabilities\tand\tequity | $432,139 | $1,394,170 | $91,074 | $— | $1,917,383 |

(1) The	supplemental	information	presented	in	the	table	above	reflects	Citigroup's	consolidated	GAAP	balance	sheet	by	reporting	segment	as	of	December	31, 2018.	The	respective	segment information	depicts	the	assets	and	liabilities	managed	by	each	segment	as	of	such	date.

(2) Consolidating	eliminations	for	total	Citigroup	and	Citigroup	parent	company	assets	and	liabilities	are	recorded	within	 Corporate/Other.

(3) The	total	stockholders'	equity	and	the	majority	of	long-term	debt	of	Citigroup	reside	in	the	Citigroup	parent	company	Consolidated	Balance	Sheet.	Citigroup	allocates	stockholders'	equity	and long-term	debt	to	its	businesses	through	inter-segment	allocations	as	shown	above.

(4) Represents	the	attribution	of	Citigroup's	liquidity	assets	(primarily	consisting	of	cash,	marketable	equity	securities	and	available-for-sale	debt	securities)	to	the	various	businesses	based	on Liquidity	Coverage	Ratio	(LCR)	assumptions.

(5) Corporate/Other	equity	represents	noncontrolling	interests.

Global	Consumer	Banking	(GCB)	consists	of	consumer	banking	businesses	in	North	America,	Latin	America	(consisting	of	Citi's	consumer	banking	business	in	Mexico) and	Asia.	GCB	provides	traditional	banking	services	to	retail	customers	through	retail	banking,	including	commercial	banking,	and	Citi-branded	cards	and	Citi	retail services	(for	additional	information	on	these	businesses,	see	"Citigroup	Segments"	above	and	"Managing	Global	Risk—Consumer	Credit"	below).	GCB	is	focused	on its	priority	markets	in	the	U.S.,	Mexico	and	Asia	with	2,410	branches	in	19	countries	and	jurisdictions	as	of	December	31,	2018.	Asia	GCB	also	includes	traditional	retail banking	and	Citi-branded	card	products	that	are	provided	to	retail	customers	in	certain	EMEA	countries.	At	December	31,	2018,	GCB	had	approximately	$432	billion	in assets	and	$308	billion	in	deposits.

GCB's	overall	strategy	is	to	leverage	Citi's	global	footprint	and	be	the	pre-eminent	bank	for	the	emerging	affluent	and	affluent	consumers	in	large	urban	centers.	In credit	cards	and	in	certain	retail	markets	(including	commercial	banking),	Citi	serves	customers	in	a	somewhat	broader	set	of	segments	and	geographies.

| In	millions	of	dollars,	except	as	otherwise	noted | 2018 | 2017 | 2016 | %	Change<br>	2018	vs.	2017 | %	Change<br>	2017	vs.	2016 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tinterest\trevenue | $28,583 | $27,425 | $26,232 | 4\t% | 5\t% |
| Non-interest\trevenue | 5,194 | 5,413 | 5,392 | (4) | — |
| Total\trevenues,\tnet\tof\tinterest\texpense | $33,777 | $32,838 | $31,624 | 3\t% | 4\t% |
| Total\toperating\texpenses | $18,590 | $18,003 | $17,627 | 3\t% | 2\t% |
| Net\tcredit\tlosses | $6,920 | $6,562 | $5,610 | 5\t% | 17\t% |
| Credit\treserve\tbuild\t(release) | 563 | 965 | 708 | (42) | 36 |
| Provision\t(release)\tfor\tunfunded\tlending\tcommitments | — | (2) | 3 | 100 | NM |
| Provision\tfor\tbenefits\tand\tclaims | 103 | 116 | 106 | (11) | 9 |
| Provisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\tclaims\n\t\t(LLR\t&amp;\tPBC) | $7,586 | $7,641 | $6,427 | (1)% | 19\t% |
| Income\tfrom\tcontinuing\toperations\tbefore\ttaxes | $7,601 | $7,194 | $7,570 | 6\t% | (5)% |
| Income\ttaxes | 1,839 | 3,316 | 2,639 | (45) | 26 |
| Income\tfrom\tcontinuing\toperations | $5,762 | $3,878 | $4,931 | 49\t% | (21)% |
| Noncontrolling\tinterests | 7 | 9 | 7 | (22) | 29 |
| Net\tincome | $5,755 | $3,869 | $4,924 | 49\t% | (21)% |
| Balance\tSheet\tdata\tand\tratios\t(in\tbillions\tof\tdollars) |  |  |  |  |  |
| Total\tEOP\tassets | $432 | $428 | $411 | 1\t% | 4\t% |
| Average\tassets | 423 | 417 | 395 | 1 | 6 |
| Return\ton\taverage\tassets | 1.36% | 0.93% | 1.25% |  |  |
| Efficiency\tratio | 55 | 55 | 56 |  |  |
| Average\tdeposits | $307 | $306 | $298 | — | 3 |
| Net\tcredit\tlosses\tas\ta\tpercentage\tof\taverage\tloans | 2.26% | 2.21% | 2.01% |  |  |
| Revenue\tby\tbusiness |  |  |  |  |  |
| Retail\tbanking | $14,065 | $13,481 | $12,990 | 4\t% | 4\t% |
| Cards(1) | 19,712 | 19,357 | 18,634 | 2 | 4 |
| Total | $33,777 | $32,838 | $31,624 | 3\t% | 4\t% |
| Income\tfrom\tcontinuing\toperations\tby\tbusiness |  |  |  |  |  |
| Retail\tbanking | $2,304 | $1,656 | $1,538 | 39\t% | 8\t% |
| Cards(1) | 3,458 | 2,222 | 3,393 | 56 | (35) |
| Total | $5,762 | $3,878 | $4,931 | 49\t% | (21)% |

| Total	revenue—as	reported | $33,777 | $32,838 | $31,624 | 3	% | 4	% |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Impact\tof\tFX\ttranslation(2) | — | (132) | (54) |  |  |
| Total\trevenues—ex-FX(3) | $33,777 | $32,706 | $31,570 | 3\t% | 4\t% |
| Total\toperating\texpenses—as\treported | $18,590 | $18,003 | $17,627 | 3\t% | 2\t% |
| Impact\tof\tFX\ttranslation(2) | — | (54) | 7 |  |  |
| Total\toperating\texpenses—ex-FX(3) | $18,590 | $17,949 | $17,634 | 4\t% | 2\t% |
| Total\tprovisions\tfor\tLLR\t&amp;\tPBC—as\treported | $7,586 | $7,641 | $6,427 | (1)% | 19\t% |
| Impact\tof\tFX\ttranslation(2) | — | (32) | (31) |  |  |
| Total\tprovisions\tfor\tLLR\t&amp;\tPBC—ex-FX(3) | $7,586 | $7,609 | $6,396 | —\t% | 19\t% |
| Net\tincome—as\treported | $5,755 | $3,869 | $4,924 | 49\t% | (21)% |
| Impact\tof\tFX\ttranslation(2) | — | (28) | (19) |  |  |
| Net\tincome—ex-FX(3) | $5,755 | $3,841 | $4,905 | 50\t% | (22)% |

(1) Includes	both	Citi-branded	cards	and	Citi	retail	services.

(2) Reflects	the	impact	of	FX	translation	into	U.S.	dollars	at	the	2018	average	exchange	rates	for	all	periods	presented.

(3) Presentation	of	this	metric	excluding	FX	translation	is	a	non-GAAP	financial	measure.

# NORTH	AMERICA	GCB

North	America	GCB	provides	traditional	retail	banking,	including	commercial	banking,	Citi-branded	cards	products	and	Citi	retail	services	card	products	to	retail customers	and	small	to	mid-size	businesses,	as	applicable,	in	the	U.S.	North	America	GCB's	U.S.	cards	product	portfolio	includes	its	proprietary	portfolio	(including	the Citi	Double	Cash,	Thank	You	and	Value	cards)	and	co-branded	cards	(including,	among	others,	American	Airlines	and	Costco)	within	Citi-branded	cards,	as	well	as	its co-brand	and	private	label	relationships	(including,	among	others,	Sears,	The	Home	Depot,	Best	Buy	and	Macy's)	within	Citi	retail	services.

As	of	December	31,	2018,	North	America	GCB's	689	retail	bank	branches	were	concentrated	in	the	six	key	metropolitan	areas	of	New	York,	Chicago,	Miami,

Washington,	D.C.,	Los	Angeles	and	San	Francisco.	Also	as	of	December	31,	2018,	North	America	GCB	had	approximately	9.1	million	retail	banking	customer	accounts, $56.8	billion	in	retail	banking	loans	and	$181.2	billion	in	deposits.	In	addition,	North	America	GCB	had	approximately	121	million	Citi-branded	and	Citi	retail	services credit	card	accounts	with	$144.5	billion	in	outstanding	card	loan	balances.

| In	millions	of	dollars,	except	as	otherwise	noted | 2018 | 2017 | 2016 | %	Change<br>	2018	vs.	2017 | %	Change<br>	2017	vs.	2016 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tinterest\trevenue | $19,621 | $18,879 | $18,131 | 4\t% | 4\t% |
| Non-interest\trevenue | 923 | 1,391 | 1,633 | (34) | (15) |
| Total\trevenues,\tnet\tof\tinterest\texpense | $20,544 | $20,270 | $19,764 | 1\t% | 3\t% |
| Total\toperating\texpenses | $10,631 | $10,245 | $10,067 | 4\t% | 2\t% |
| Net\tcredit\tlosses | $5,097 | $4,796 | $3,919 | 6\t% | 22\t% |
| Credit\treserve\tbuild | 438 | 869 | 653 | (50) | 33 |
| Provision\tfor\tunfunded\tlending\tcommitments | — | 4 | 6 | (100) | (33) |
| Provision\tfor\tbenefits\tand\tclaims | 22 | 33 | 34 | (33) | (3) |
| Provisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\tclaims | $5,557 | $5,702 | $4,612 | (3)% | 24\t% |
| Income\tfrom\tcontinuing\toperations\tbefore\ttaxes | $4,356 | $4,323 | $5,085 | 1\t% | (15)% |
| Income\ttaxes | 1,016 | 2,333 | 1,846 | (56) | 26 |
| Income\tfrom\tcontinuing\toperations | $3,340 | $1,990 | $3,239 | 68\t% | (39)% |
| Noncontrolling\tinterests | — | (1) | (2) | 100 | 50 |
| Net\tincome | $3,340 | $1,991 | $3,241 | 68\t% | (39)% |
| Balance\tSheet\tdata\tand\tratios\t(in\tbillions\tof\tdollars) |  |  |  |  |  |
| Average\tassets | $249 | $248 | $229 | —\t% | 8\t% |
| Return\ton\taverage\tassets | 1.34% | 0.80% | 1.42% |  |  |
| Efficiency\tratio | 52 | 51 | 51 |  |  |
| Average\tdeposits | $180.4 | $184.1 | $183.2 | (2) | — |
| Net\tcredit\tlosses\tas\ta\tpercentage\tof\taverage\tloans | 2.66% | 2.58% | 2.29% |  |  |
| Revenue\tby\tbusiness |  |  |  |  |  |
| Retail\tbanking | $5,315 | $5,264 | $5,227 | 1\t% | 1\t% |
| Citi-branded\tcards | 8,628 | 8,579 | 8,150 | 1 | 5 |
| Citi\tretail\tservices | 6,601 | 6,427 | 6,387 | 3 | 1 |
| Total | $20,544 | $20,270 | $19,764 | 1\t% | 3\t% |
| Income\tfrom\tcontinuing\toperations\tby\tbusiness |  |  |  |  |  |
| Retail\tbanking | $565 | $412 | $534 | 37\t% | (23)% |
| Citi-branded\tcards | 1,581 | 1,009 | 1,441 | 57 | (30) |
| Citi\tretail\tservices | 1,194 | 569 | 1,264 | NM | (55) |
| Total | $3,340 | $1,990 | $3,239 | 68\t% | (39)% |

Net	income	increased	68%,	largely	reflecting	the	impact	of	the	$750	million	one- time,	non-cash	charge	recorded	in	the	tax	line	due	to	the	impact	of	Tax	Reform in	2017	(for	additional	information,	see	"Significant	Accounting	Policies	and Significant	Estimates—Income	Taxes"	below).	Excluding	the	one-time	impact of	Tax	Reform,	net	income	increased	22%,	driven	primarily	by	a	lower	effective tax	rate	due	to	Tax	Reform,	higher	revenues	and	lower	cost	of	credit,	partially offset	by	higher	expenses.

Revenues	increased	1%,	driven	by	higher	revenues	across	all	businesses. Retail	banking	revenues	increased	1%.	Excluding	mortgage	revenues (decline	of	27%),	retail	banking	revenues	were	up	6%,	driven	by	continued growth	in	deposit	margins,	partially	offset	by	lower	deposit	volumes.	Average deposits	decreased	2%	year-over-year,	primarily	driven	by	a	reduction	in	money market	balances,	as	clients	transferred	money	to	investments.	Assets	under management	were	largely	unchanged	from	the	prior	year	as	5%	underlying growth	was	offset	by	the	impact	of	market	movements,	due	to	the	equity	market sell-off	at	the	end	of	2018.	The	decline	in	mortgage	revenues	was	driven	by lower	origination	activity	and	higher	cost	of	funds,	reflecting	the	higher	interest rate	environment.

Cards	revenues	increased	1%.	In	Citi-branded	cards,	revenues	increased	1%, as	growth	in	interest-earning	balances,	driven	by	maturity	of	recent	vintages	and strength	in	loan	balance	retention,	was	largely	offset	by	the	impact	of	previously disclosed	partnership	terms	that	went	into	effect	in	2018.	Citi	sold	its	Hilton portfolio	in	the	first	quarter	of	2018,	which	resulted	in	a	gain	of	approximately $150	million.	This	gain	was	offset	by	the	loss	of	operating	revenue	in	the portfolio	in	2018.	Average	loans	increased	4%	and	purchase	sales	increased	8%. Citi	retail	services	revenues	increased	3%,	primarily	reflecting	organic	loan growth	and	the	benefit	of	the	L.L.Bean	portfolio	acquisition	in	June	2018, partially	offset	by	higher	partner	payments.	Average	loans	increased	6%	and purchase	sales	increased	7%.

Expenses	increased	4%,	as	volume	growth	and	ongoing	investments	were partially	offset	by	efficiency	savings.

Provisions	decreased	3%	from	the	prior	year,	driven	by	a	lower	net	loan loss	reserve	build,	partially	offset	by	higher	net	credit	losses.	The	net	loan	loss reserve	build	was	$438	million	in	2018,	primarily	reflecting	volume	growth	and seasoning	in	both	cards	portfolios.	This	compares	to	a	build	of	$873	million	in the	prior	year,	which	included	$300	million	related	to	an	increase	in	net	flow rates	in	later	delinquency	buckets	in	Citi	retail	services	and	a	slight	increase	in delinquencies	for	the	Citi-branded	cards	portfolio.

Net	credit	losses	increased	6%	to	$5.1	billion,	driven	by	higher	net	credit losses	in	both	Citi-branded	cards	(up	6%	to	$2.6	billion)	and	Citi	retail	services (up	9%	to	$2.4	billion).	The	increase	in	the	cards	net	credit	losses	primarily reflected	volume	growth	and	seasoning	in	both	portfolios.

For	additional	information	on	North	America	GCB's	retail	banking, including	commercial	banking,	and	its	Citi-branded	cards	and	Citi	retail	services portfolios,	see	"Credit	Risk—Consumer	Credit"	below.

As	part	of	its	Citi	retail	services	business,	Citi	issues	co-brand	and	private label	credit	card	products	with	Sears.	As	previously	disclosed,	in	October	2018, Sears	filed	for	Chapter	11	bankruptcy	protection	and	in	connection	with	the	filing Sears	has	closed,	or	announced	plans	to	close,	additional	stores.	On	February	11, 2019,	after	bankruptcy	court	approval,	ESL	Investments,	Inc.	purchased substantially	all	of	Sears'	assets	on	a	going	concern	basis,	including	its	credit card	program	agreement	with	Citi.	The	impact	to	Citi	retail	services,	from reduced	new	account	acquisitions	or	lower	purchase	sales,	will	depend	in	part	on the	magnitude	and	timing	of	additional	Sears	store	closures	and	continued customer	attrition.	Citi	does	not	currently	expect	that	the	sale	of	Sears	to	ESL will	have	an	immediate	or	ongoing	material	impact	on	Citi's	consolidated results.	For	additional	information	on	the	potential	impact	from	a	deterioration	in or	failure	to	maintain	Citi's	co-branding	and	private	label	credit	card relationships,	see	"Risk	Factors—Strategic	Risks"	below.

Net	income	decreased	39%	largely	due	to	the	one-time	impact	of	Tax	Reform. Excluding	the	one-time	impact	of	Tax	Reform,	net	income	decreased	15%,	due to	higher	cost	of	credit	and	higher	expenses,	partially	offset	by	higher	revenues.

Revenues	increased	3%,	driven	by	higher	revenues	across	all	businesses. Retail	banking	revenues	increased	1%.	Excluding	mortgage	revenues	(down 32%),	retail	banking	revenues	were	up	9%,	driven	by	growth	in	checking deposits,	loans	(average	loans	up	3%)	and	assets	under	management	(up	14%) and	increased	commercial	banking	activity,	as	well	as	a	benefit	from	higher interest	rates.

Cards	revenues	increased	3%.	In	Citi-branded	cards,	revenues	increased	5%, primarily	reflecting	the	acquisition	of	the	Costco	portfolio,	as	well	as	modest growth	in	interest-earning	balances,	partially	offset	by	the	continued	run-off	of non-core	portfolios	and	the	higher	cost	to	fund	growth	in	transactor	and promotional	balances.

Citi	retail	services	revenues	increased	1%,	as	loan	growth	was	partially offset	by	the	impact	of	the	renewal	and	extension	of	certain	partnerships	within the	portfolio,	as	well	as	the	absence	of	gains	on	sales	of	two	cards	portfolios	in 2016.

Expenses	increased	2%,	driven	by	the	addition	of	the	Costco	portfolio, higher	volume-related	expenses	and	investments	as	well	as	remediation	costs related	to	a	CARD	Act	matter,	partially	offset	by	efficiency	savings.

Provisions	increased	24%,	driven	by	higher	net	credit	losses	and	a	higher	net loan	loss	reserve	build.

Net	credit	losses	increased	22%,	largely	driven	by	higher	net	credit	losses	in both	cards	portfolios,	primarily	reflecting	volume	growth	and	seasoning,	as	well as	the	impact	of	acquiring	the	Costco	portfolio.

The	net	loan	loss	reserve	build	was	$873	million,	compared	to	a	build	of $659	million	in	the	prior	year,	driven	by	volume	growth	and	seasoning	in	both cards	portfolios,	as	well	as	the	increase	in	net	flow	rates	in	later	delinquency buckets,	primarily	in	Citi	retail	services.

# LATIN	AMERICA	GCB

Latin	America	GCB	provides	traditional	retail	banking,	including	commercial	banking,	and	its	Citi-branded	card	products	to	retail	customers	and	small	to	mid-size businesses	in	Mexico	through	Citibanamex,	one	of	Mexico's	largest	banks.

At	December	31,	2018,	Latin	America	GCB	had	1,463	retail	branches	in	Mexico,	with	approximately	29.4	million	retail	banking	customer	accounts,	$19.7	billion	in retail	banking	loans	and	$27.7	billion	in	deposits.	In	addition,	the	business	had	approximately	5.6	million	Citi-branded	card	accounts	with	$5.7	billion	in	outstanding loan	balances.

| In	millions	of	dollars,	except	as	otherwise	noted | 2018 | 2017 | 2016 | %	Change<br>	2018	vs.	2017 | %	Change<br>	2017	vs.	2016 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tinterest\trevenue | $4,058 | $3,844 | $3,606 | 6\t% | 7\t% |
| Non-interest\trevenue(1) | 1,702 | 1,378 | 1,365 | 24 | 1 |
| Total\trevenues,\tnet\tof\tinterest\texpense | $5,760 | $5,222 | $4,971 | 10\t% | 5\t% |
| Total\toperating\texpenses | $3,156 | $2,959 | $2,885 | 7\t% | 3\t% |
| Net\tcredit\tlosses | $1,153 | $1,117 | $1,040 | 3\t% | 7\t% |
| Credit\treserve\tbuild | 83 | 125 | 83 | (34) | 51 |
| Provision\t(release)\tfor\tunfunded\tlending\tcommitments | — | (1) | 1 | 100 | NM |
| Provision\tfor\tbenefits\tand\tclaims | 81 | 83 | 72 | (2) | 15 |
| Provisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\tclaims\t(LLR\t&amp;\tPBC) | $1,317 | $1,324 | $1,196 | (1)% | 11\t% |
| Income\tfrom\tcontinuing\toperations\tbefore\ttaxes | $1,287 | $939 | $890 | 37\t% | 6\t% |
| Income\ttaxes | 359 | 329 | 257 | 9 | 28 |
| Income\tfrom\tcontinuing\toperations | $928 | $610 | $633 | 52\t% | (4)% |
| Noncontrolling\tinterests | — | 5 | 5 | (100) | — |
| Net\tincome | $928 | $605 | $628 | 53\t% | (4)% |
| Balance\tSheet\tdata\tand\tratios\t(in\tbillions\tof\tdollars) |  |  |  |  |  |
| Average\tassets | $44 | $45 | $47 | (2)% | (4)% |
| Return\ton\taverage\tassets | 2.11% | 1.34% | 1.34% |  |  |
| Efficiency\tratio | 55 | 57 | 58 |  |  |
| Average\tdeposits | $28.7 | $27.4 | $25.7 | 5 | 7 |
| Net\tcredit\tlosses\tas\ta\tpercentage\tof\taverage\tloans | 4.47% | 4.42% | 4.32% |  |  |
| Revenue\tby\tbusiness |  |  |  |  |  |
| Retail\tbanking(1) | $4,195 | $3,752 | $3,493 | 12\t% | 7\t% |
| Citi-branded\tcards | 1,565 | 1,470 | 1,478 | 6 | (1) |
| Total | $5,760 | $5,222 | $4,971 | 10\t% | 5\t% |
| Income\tfrom\tcontinuing\toperations\tby\tbusiness |  |  |  |  |  |
| Retail\tbanking(1) | $722 | $426 | $352 | 69\t% | 21\t% |
|  | 206 | 184 | 281 | 12 | (35) |
| Citi-branded\tcards |  |  |  |  |  |
| Total | $928 | $610 | $633 | 52\t% | (4)% |
| FX\ttranslation\timpact |  |  |  |  |  |
| Total\trevenues—as\treported | $5,760 | $5,222 | $4,971 | 10\t% | 5\t% |
| Impact\tof\tFX\ttranslation(2) | — | (105) | (145) |  |  |
| Total\trevenues—ex-FX(3) | $5,760 | $5,117 | $4,826 | 13\t% | 6\t% |
| Total\toperating\texpenses—as\treported | $3,156 | $2,959 | $2,885 | 7\t% | 3\t% |
| Impact\tof\tFX\ttranslation(2) | — | (50) | (66) |  |  |
| Total\toperating\texpenses—ex-FX(3) | $3,156 | $2,909 | $2,819 | 8\t% | 3\t% |
| Provisions\tfor\tLLR\t&amp;\tPBC—as\treported | $1,317 | $1,324 | $1,196 | (1)% | 11\t% |
| Impact\tof\tFX\ttranslation(2) | — | (27) | (34) |  |  |
| Provisions\tfor\tLLR\t&amp;\tPBC—ex-FX(3) | $1,317 | $1,297 | $1,162 | 2\t% | 12\t% |
| Net\tincome—as\treported | $928 | $605 | $628 | 53\t% | (4)% |
| Impact\tof\tFX\ttranslation(2) | — | (19) | (30) |  |  |
| Net\tincome—ex-FX(3) | $928 | $586 | $598 | 58\t% | (2)% |

(1) 2018	includes	an	approximate	$250	million	gain	on	the	sale	of	an	asset	management	business.	See	Note	2	to	the	Consolidated	Financial	Statements.

The	discussion	of	the	results	of	operations	for	Latin	America	GCB	below	excludes	the	impact	of	FX	translation	for	all	periods	presented.	Presentations	of	the	results	of operations,	excluding	the	impact	of	FX	translation,	are	non-GAAP	financial	measures.	For	a	reconciliation	of	certain	of	these	metrics	to	the	reported	results,	see	the table	above.

Net	income	increased	58%	to	$928	million,	reflecting	higher	revenues	and	a lower	effective	tax	rate	as	a	result	of	Tax	Reform,	partially	offset	by	higher expenses	and	cost	of	credit.

Revenues	increased	13%,	including	the	gain	on	sale	of	an	asset	management business	(approximately	$250	million).	Excluding	the	gain	on	sale,	revenues were	up	8%,	driven	by	increases	in	both	retail	banking	and	cards.

Retail	banking	revenues	increased	14%.	Excluding	the	gain	on	sale,	retail banking	revenues	increased	7%,	driven	by	continued	growth	across	commercial loans	and	deposits,	as	well	as	improved	deposit	spreads	due	to	higher	interest rates.	Average	loans	grew	3%,	and	average	deposits	grew	6%,	while	assets under	management	declined	5%,	primarily	driven	by	market	performance	during the	second	half	of	2018.	Cards	revenues	increased	9%,	due	to	continued	volume growth,	reflecting	higher	purchase	sales	(up	11%)	and	full-rate	revolving	loans. Average	cards	loans	grew	6%.

Expenses	increased	8%,	driven	by	volume	growth,	ongoing	investment spending	and	higher	repositioning	charges,	partially	offset	by	efficiency	savings. As	previously	disclosed,	Citi	continues	to	execute	on	its	investment	plans	for Citibanamex	(totaling	more	than	$1	billion	through	2020),	including	initiatives	to modernize	the	branch	network,	enhance	digital	capabilities	and	upgrade	core operating	platforms.

Provisions	increased	2%,	as	higher	net	credit	losses	were	largely	offset	by	a lower	net	loan	loss	reserve	build.	The	increase	in	net	credit	losses	was	primarily due	to	volume	growth	and	seasoning	in	cards.

For	additional	information	on	Latin	America	GCB's	retail	banking,	including commercial	banking,	and	its	Citi-branded	cards	portfolios,	see	"Credit	Risk— Consumer	Credit"	below.

For	additional	information	on	potential	macroeconomic and	geopolitical	challenges	and	other	risks	facing	Latin

America	GCB,	see	"Risk	Factors—Strategic	Risks"	below.

Net	income	decreased	2%,	primarily	driven	by	higher	credit	costs	and	expenses, partially	offset	by	higher	revenues.

Revenues	increased	6%,	driven	by	higher	revenues	in retail	banking.

Retail	banking	revenues	increased	8%,	reflecting	continued	growth	in volumes,	including	increases	in	average	deposits	(8%),	average	loans	(6%)	and assets	under	management	(4%),	as	well	as	improved	deposit	spreads,	driven	by higher	interest	rates.	Cards	revenues	were	largely	unchanged,	as	continued improvement	in	full-rate	revolving	loans	was	offset	by	a	higher	cost	to	fund	non- revolving	loans.

Expenses	increased	3%,	as	ongoing	investment	spending	and	business growth	were	partially	offset	by	efficiency	savings.

Provisions	increased	12%,	primarily	driven	by	higher	net	credit	losses	and	an increase	in	the	net	loan	loss	reserve	build,	largely	reflecting	volume	growth	and seasoning,	as	well	as	a	Mexico	earthquake-related	loan	loss	reserve	build.

# ASIA	GCB

Asia	GCB	provides	traditional	retail	banking,	including	commercial	banking,	and	its	Citi-branded	card	products	to	retail	customers	and	small	to	mid-size	businesses,	as applicable.	During	2018,	Asia	GCB's	most	significant	revenues	were	from	Singapore,	Hong	Kong,	Korea,	India,	Australia,	Taiwan,	Thailand,	Philippines,	Indonesia	and Malaysia.	Asia	GCB	also	includes	traditional	retail	banking	and	Citi-branded	card	products	that	are	provided	to	retail	customers	in	certain	EMEA	countries,	primarily	in Poland,	Russia	and	the	United	Arab	Emirates.

At	December	31,	2018,	on	a	combined	basis,	the	businesses	had	258	retail	branches,	approximately	16.0	million	retail	banking	customer	accounts,	$69.2	billion	in retail	banking	loans	and	$99.2	billion	in	deposits.	In	addition,	the	businesses	had	approximately	15.3	million	Citi-branded	card	accounts	with	$19.3	billion	in outstanding	loan	balances.

| In	millions	of	dollars,	except	as	otherwise	noted (1) | 2018 | 2017 | 2016 | %	Change<br>	2018	vs.	2017 | %	Change<br>	2017	vs.	2016 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tinterest\trevenue | $4,904 | $4,702 | $4,495 | 4\t% | 5\t% |
| Non-interest\trevenue | 2,569 | 2,644 | 2,394 | (3) | 10 |
| Total\trevenues,\tnet\tof\tinterest\texpense | $7,473 | $7,346 | $6,889 | 2\t% | 7\t% |
| Total\toperating\texpenses | $4,803 | $4,799 | $4,675 | —\t% | 3\t% |
| Net\tcredit\tlosses | $670 | $649 | $651 | 3\t% | —\t% |
| Credit\treserve\tbuild\t(release) | 42 | (29) | (28) | NM | (4) |
| Provision\t(release)\tfor\tunfunded\tlending\tcommitments | — | (5) | (4) | 100 | (25) |
| Provisions\tfor\tcredit\tlosses | $712 | $615 | $619 | 16\t% | (1)% |
| Income\tfrom\tcontinuing\toperations\tbefore\ttaxes | $1,958 | $1,932 | $1,595 | 1\t% | 21\t% |
| Income\ttaxes | 464 | 654 | 536 | (29) | 22 |
| Income\tfrom\tcontinuing\toperations | $1,494 | $1,278 | $1,059 | 17\t% | 21\t% |
| Noncontrolling\tinterests | 7 | 5 | 4 | 40 | 25 |
| Net\tincome | $1,487 | $1,273 | $1,055 | 17\t% | 21\t% |
| Balance\tSheet\tdata\tand\tratios\t(in\tbillions\tof\tdollars) |  |  |  |  |  |
| Average\tassets | $131 | $124 | $119 | 6\t% | 4\t% |
| Return\ton\taverage\tassets | 1.14% | 1.03% | 0.89% |  |  |
| Efficiency\tratio | 64 | 65 | 68 |  |  |
| Average\tdeposits | $98.0 | $94.6 | $89.5 | 4 | 6 |
| Net\tcredit\tlosses\tas\ta\tpercentage\tof\taverage\tloans | 0.76% | 0.76% | 0.77% |  |  |
| Revenue\tby\tbusiness |  |  |  |  |  |
| Retail\tbanking | $4,555 | $4,465 | $4,270 | 2\t% | 5\t% |
| Citi-branded\tcards | 2,918 | 2,881 | 2,619 | 1 | 10 |
| Total | $7,473 | $7,346 | $6,889 | 2\t% | 7\t% |
| Income\tfrom\tcontinuing\toperations\tby\tbusiness |  |  |  |  |  |
| Retail\tbanking | $1,017 | $818 | $652 | 24\t% | 25\t% |
| Citi-branded\tcards | 477 | 460 | 407 | 4 | 13 |
| Total | $1,494 | $1,278 | $1,059 | 17\t% | 21\t% |

| Total	revenues—as	reported | $7,473 | $7,346 | $6,889 | 2	% | 7	% |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Impact\tof\tFX\ttranslation(2) | — | (27) | 91 |  |  |
| Total\trevenues—ex-FX(3) | $7,473 | $7,319 | $6,980 | 2\t% | 5\t% |
| Total\toperating\texpenses—as\treported | $4,803 | $4,799 | $4,675 | —\t% | 3\t% |
| Impact\tof\tFX\ttranslation(2) | — | (4) | 73 |  |  |
| Total\toperating\texpenses—ex-FX(3) | $4,803 | $4,795 | $4,748 | —\t% | 1\t% |
| Provisions\tfor\tcredit\tlosses—as\treported | $712 | $615 | $619 | 16\t% | (1)% |
| Impact\tof\tFX\ttranslation(2) | — | (5) | 3 |  |  |
| Provisions\tfor\tcredit\tlosses—ex-FX(3) | $712 | $610 | $622 | 17\t% | (2)% |
| Net\tincome—as\treported | $1,487 | $1,273 | $1,055 | 17\t% | 21\t% |
| Impact\tof\tFX\ttranslation(2) | — | (9) | 11 |  |  |
| Net\tincome—ex-FX(3) | $1,487 | $1,264 | $1,066 | 18\t% | 19\t% |

The	discussion	of	the	results	of	operations	for	Asia	GCB	below	excludes	the	impact	of	FX	translation	for	all	periods	presented.	Presentations	of	the	results	of	operations, excluding	the	impact	of	FX	translation,	are	non-GAAP	financial	measures.	For	a	reconciliation	of	certain	of	these	metrics	to	the	reported	results,	see	the	table	above.

Net	income	increased	18%,	reflecting	higher	revenues	and	a	lower	effective	tax rate	as	a	result	of	Tax	Reform,	partially	offset	by	higher	cost	of	credit.

Revenues	increased	2%,	driven	by	higher	retail	banking	and	cards	revenues. Retail	banking	revenues	increased	2%,	as	continued	growth	in	deposit	and insurance	revenues	was	partially	offset	by	lower	investment	revenues	due	to weak	market	sentiment.	Average	deposits	increased	3%	and	assets	under management	grew	1%,	while	investment	sales	decreased	8%.	Retail	lending revenues	increased	1%,	as	volume	growth	in	personal	and	commercial	loans	was largely	offset	by	lower	mortgage	revenues	due	to	spread	compression.	Average retail	banking	loans	grew	3%.

Cards	revenues	increased	2%.	Excluding	the	benefit	of	modest	one-time gains	in	the	prior	year,	revenues	increased	4%,	driven	by	continued	growth	in purchase	sales	(up	6%)	and	average	loans	(up	2%).

Expenses	were	largely	unchanged,	as	volume-driven	growth	and	ongoing investment	spending	were	offset	by	efficiency	savings.

Provisions	increased	17%,	primarily	driven	by	higher	net	credit	losses	and	a modest	net	loan	loss	reserve	build	compared	to	a	modest	net	loan	loss	reserve release	in	the	prior	year	due	to	volume	growth.	Overall	credit	quality	continued to	remain	stable	in	the	region.

For	additional	information	on	Asia	GCB's	retail	banking	portfolios, including	commercial	banking,	and	its	Citi-branded	cards	portfolio,	see	"Credit Risk—Consumer	Credit"	below.

Net	income	increased	19%,	reflecting	higher	revenues	and	lower	cost	of	credit, partially	offset	by	higher	expenses.

Revenues	increased	5%,	driven	by	improvement	in	cards	and	wealth management	revenues,	partially	offset	by	continued	lower	retail	lending revenues.

Retail	banking	revenues	increased	3%,	primarily	due	to	higher	investment revenues,	driven	by	improved	investor	sentiment,	partially	offset	by	the repositioning	of	the	retail	loan	portfolio.	The	lower	retail	lending	revenues (down	4%)	reflected	lower	average	loans	(down	1%)	due	to	the	continued optimization	of	the	portfolio	away	from	lower	yielding	mortgage	loans.

Cards	revenues	increased	8%,	reflecting	5%	growth	in	average	loans	and 6%	growth	in	purchase	sales,	both	of	which	benefited	from	the	portfolio acquisition	in	Australia,	as	well	as	modest	gains	related	to	sales	of	merchant acquiring	businesses	in	certain	countries.

Expenses	increased	1%,	resulting	from	volume-driven	growth	and	ongoing investment	spending,	partially	offset	by	efficiency	savings.

Provisions	decreased	2%,	primarily	driven	by	a	decrease	in	net	credit	losses.

Institutional	Clients	Group	(ICG)	includes	Banking	and	Markets	and	securities services	(for	additional	information	on	these	businesses,	see	"Citigroup Segments"	above).	ICG	provides	corporate,	institutional,	public	sector	and	high- net-worth	clients	around	the	world	with	a	full	range	of	wholesale	banking products	and	services,	including	fixed	income	and	equity	sales	and	trading, foreign	exchange,	prime	brokerage,	derivative	services,	equity	and	fixed	income research,	corporate	lending,	investment	banking	and	advisory	services,	private banking,	cash	management,	trade	finance	and	securities	services.	ICG	transacts with	clients	in	both	cash	instruments	and	derivatives,	including	fixed	income, foreign	currency,	equity	and	commodity	products.

ICG	revenue	is	generated	primarily	from	fees	and	spreads	associated	with these	activities.	ICG	earns	fee	income	for	assisting	clients	with	transactional services	and	clearing	and	providing	brokerage	and	investment	banking	services and	other	such	activities.	Such	fees	are	recognized	at	the	point	in	time	when Citigroup's	performance	under	the	terms	of	a	contractual	arrangement	is completed,	which	is	typically	at	the	trade/execution	date	or	closing	of	a transaction.	Revenue	generated	from	these	activities	is	recorded	in	Commissions and	fees	and	Investment	banking.	Revenue	is	also	generated	from	assets	under custody	and	administration,	which	is	recognized	as/when	the	associated promised	service	is	satisfied,	which	normally	occurs	at	the	point	in	time	the service	is	requested	by	the	customer	and	provided	by	Citi.	Revenue	generated from	these	activities	is	primarily	recorded	in	Administration	and	other	fiduciary fees.	For	additional	information	on	these	various	types	of	revenues,	see	Note	5	to the	Consolidated	Financial	Statements.

In	addition,	as	a	market	maker,	ICG	facilitates	transactions,	including holding	product	inventory	to	meet	client	demand,	and	earns	the	differential between	the	price	at	which	it	buys	and	sells	the	products.	These	price differentials	and	the	unrealized	gains	and	losses	on	the	inventory	are	recorded	in Principal	transactions (for	additional	information	on	Principal	transactions revenue,	see	Note	6	to	the	Consolidated	Financial	Statements).	Other	primarily includes	mark-to-market	gains	and	losses	on	certain	credit	derivatives,	realized gains	and	losses	on	available-for-sale	(AFS)	debt	securities,	gains	and	losses	on equity	securities	not	held	in	trading	accounts	and	other	non-recurring	gains	and losses.	Interest	income	earned	on	assets	held,	less	interest	paid	on	long-	and short-term	debt	and	to	customers	on	deposits,	is	recorded	as	Net	interest	revenue. The	amount	and	types	of	Markets	revenues	are	impacted	by	a	variety	of interrelated	factors,	including	market	liquidity;	changes	in	market	variables	such as	interest	rates,	foreign	exchange	rates,	equity	prices,	commodity	prices	and credit	spreads,	as	well	as	their	implied	volatilities;	investor	confidence	and	other macroeconomic	conditions.	Assuming	all	other	market	conditions	do	not	change, increases	in	client	activity	levels	or	bid/offer	spreads	generally	result	in	increases in	revenues.	However,	changes	in	market	conditions	can	significantly	impact client	activity	levels,	bid/offer	spreads	and	the	fair	value	of	product	inventory. For	example,	a	decrease	in

market	liquidity	may	increase	bid/offer	spreads,	decrease	client	activity	levels and	widen	credit	spreads	on	product	inventory	positions.

ICG's	management	of	the	Markets	businesses	involves	daily	monitoring	and evaluation	of	the	above	factors	at	the	trading	desk	as	well	as	the	country	level. ICG	does	not	separately	track	the	impact	on	total	Markets	revenues	of	the volume	of	transactions,	bid/offer	spreads,	fair	value	changes	of	product inventory	positions	and	economic	hedges	because,	as	noted	above,	these components	are	interrelated	and	are	not	deemed	useful	or	necessary	individually to	manage	the	Markets	businesses	at	an	aggregate	level.

In	the	Markets	businesses,	client	revenues	are	those	revenues	directly attributable	to	client	transactions	at	the	time	of	inception,	including	commissions, interest	or	fees	earned.	Client	revenues	do	not	include	the	results	of	client facilitation	activities	(e.g.,	holding	product	inventory	in	anticipation	of	client demand)	or	the	results	of	certain	economic	hedging	activities.

ICG's	international	presence	is	supported	by	trading	floors	in	approximately 80	countries	and	a	proprietary	network	in	98	countries	and	jurisdictions.	At December	31,	2018,	ICG	had	approximately	$1.4	trillion	of	assets	and	$690 billion	of	deposits,	while	two	of	its	businesses—securities	services	and	issuer services—managed	approximately	$17.5	trillion	of	assets	under	custody	as	of December	31,	2018	and	2017.

| In	millions	of	dollars,	except	as	otherwise	noted | 2018 | 2017 | 2016 | %	Change<br>	2018	vs.	2017 | %	Change<br>	2017	vs.	2016 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Commissions\tand\tfees | $4,516 | $4,318 | $3,998 | 5\t% | 8\t% |
| Administration\tand\tother\tfiduciary\tfees | 2,755 | 2,668 | 2,448 | 3 | 9 |
| Investment\tbanking | 4,352 | 4,661 | 3,868 | (7) | 21 |
| Principal\ttransactions | 8,852 | 8,012 | 7,570 | 10 | 6 |
| Other(1) | 794 | 1,179 | (143) | (33) | NM |
| Total\tnon-interest\trevenue | $21,269 | $20,838 | $17,741 | 2\t% | 17\t% |
| Net\tinterest\trevenue\t(including\tdividends) | 15,725 | 15,636 | 16,199 | 1 | (3) |
| Total\trevenues,\tnet\tof\tinterest\texpense | $36,994 | $36,474 | $33,940 | 1\t% | 7\t% |
| Total\toperating\texpenses | $20,979 | $20,415 | $19,669 | 3\t% | 4\t% |
| Net\tcredit\tlosses | $172 | $365 | $516 | (53)% | (29)% |
| Credit\treserve\tbuild\t(release) | (104) | (221) | (64) | 53 | NM |
| Provision\t(release)\tfor\tunfunded\tlending\tcommitments | 116 | (159) | 34 | NM | NM |
| Provisions\tfor\tcredit\tlosses | $184 | $(15) | $486 | NM | NM |
| Income\tfrom\tcontinuing\toperations\tbefore\ttaxes | $15,831 | $16,074 | $13,785 | (2)% | 17\t% |
| Income\ttaxes | 3,631 | 7,008 | 4,260 | (48) | 65 |
| Income\tfrom\tcontinuing\toperations | $12,200 | $9,066 | $9,525 | 35\t% | (5)% |
| Noncontrolling\tinterests | 17 | 57 | 58 | (70) | (2) |
| Net\tincome | $12,183 | $9,009 | $9,467 | 35\t% | (5)% |
| EOP\tassets\t(in\tbillions\tof\tdollars) | $1,394 | $1,336 | $1,277 | 4\t% | 5\t% |
| Average\tassets\t(in\tbillions\tof\tdollars) | 1,404 | 1,358 | 1,298 | 3 | 5 |
| Return\ton\taverage\tassets | 0.87% | 0.66% | 0.73% |  |  |
| Efficiency\tratio | 57 | 56 | 58 |  |  |
| Revenues\tby\tregion |  |  |  |  |  |
| North\tAmerica | $12,914 | $13,923 | $12,767 | (7)% | 9\t% |
| EMEA | 11,770 | 10,879 | 10,012 | 8 | 9 |
| Latin\tAmerica | 4,504 | 4,385 | 4,125 | 3 | 6 |
| Asia | 7,806 | 7,287 | 7,036 | 7 | 4 |
| Total | $36,994 | $36,474 | $33,940 | 1\t% | 7\t% |
| Income\tfrom\tcontinuing\toperations\tby\tregion |  |  |  |  |  |
| North\tAmerica | $3,500 | $2,355 | $3,515 | 49\t% | (33)% |
| EMEA | 3,891 | 2,832 | 2,345 | 37 | 21 |
| Latin\tAmerica | 1,889 | 1,544 | 1,454 | 22 | 6 |
| Asia | 2,920 | 2,335 | 2,211 | 25 | 6 |
| Total | $12,200 | $9,066 | $9,525 | 35\t% | (5)% |
| Average\tloans\tby\tregion\t(in\tbillions\tof\tdollars) |  |  |  |  |  |
| North\tAmerica | $165 | $151 | $145 | 9\t% | 4\t% |
| EMEA | 81 | 69 | 66 | 17 | 5 |
| Latin\tAmerica | 34 | 34 | 35 | — | (3) |
| Asia | 66 | 62 | 57 | 6 | 9 |
| Total | $346 | $316 | $303 | 9\t% | 4\t% |
| EOP\tdeposits\tby\tbusiness\t(in\tbillions\tof\tdollars) |  |  |  |  |  |
| Treasury\tand\ttrade\tsolutions | $472 | $432 | $412 | 9\t% | 5\t% |
| All\tother\tICG\tbusinesses | 218 | 208 | 200 | 5 | 4 |
| Total | $690 | $640 | $612 | 8\t% | 5\t% |

(1) 2017	includes	the	approximate	$580	million	gain	on	the	sale	of	a	fixed	income	analytics	business.	2016	includes	a	charge	of	approximately	$180	million,	primarily	reflecting	the	write-down	of Citi's	net	investment	in	Venezuela	due	to	changes	in	the	exchange	rate.

# ICG	Revenue	Details—Excluding	Gains	(Losses)	on	Loan	Hedges

| In	millions	of	dollars | 2018 | 2017 | 2016 | %	Change<br>	2018	vs.	2017 | %	Change<br>	2017	vs.	2016 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Investment\tbanking\trevenue\tdetails |  |  |  |  |  |
| Advisory | $1,301 | $1,123 | $1,013 | 16\t% | 11\t% |
| Equity\tunderwriting | 991 | 1,121 | 663 | (12) | 69 |
| Debt\tunderwriting | 2,719 | 3,126 | 2,776 | (13) | 13 |
| Total\tinvestment\tbanking | $5,011 | $5,370 | $4,452 | (7)% | 21\t% |
| Treasury\tand\ttrade\tsolutions | 9,289 | 8,635 | 8,022 | 8 | 8 |
| Corporate\tlending—excluding\tgains\t(losses)\ton\tloan\thedges(1) | 2,232 | 1,938 | 1,734 | 15 | 12 |
| Private\tbank | 3,398 | 3,108 | 2,728 | 9 | 14 |
| Total\tBanking\trevenues\t(ex-gains\t(losses)\ton\n\t\tloan\thedges) | $19,930 | $19,051 | $16,936 | 5\t% | 12\t% |
| Corporate\tlending—gains\t(losses)\ton\tloan\thedges(1) | $45 | $(133) | $(594) | NM | 78\t% |
| Total\tBanking\trevenues\t(including\tgains\t(losses)\ton\tloan\thedges),\tnet\tof\ninterest\texpense | $19,975 | $18,918 | $16,342 | 6\t% | 16\t% |
| Fixed\tincome\tmarkets | $11,635 | $12,351 | $13,063 | (6)% | (5)% |
| Equity\tmarkets | 3,427 | 2,879 | 2,933 | 19 | (2) |
| Securities\tservices | 2,631 | 2,366 | 2,181 | 11 | 8 |
| Other(2) | (674) | (40) | (579) | NM | 93 |
| Total\tMarkets\tand\tsecurities\tservices\trevenues,\tnet |  |  |  |  |  |
| of\tinterest\texpense | $17,019 | $17,556 | $17,598 | (3)% | —\t% |
| Total\trevenues,\tnet\tof\tinterest\texpense | $36,994 | $36,474 | $33,940 | 1\t% | 7\t% |
| Commissions\tand\tfees | $706 | $641 | $498 | 10\t% | 29\t% |
| Principal\ttransactions(3) | 7,108 | 6,995 | 6,680 | 2 | 5 |
| Other | 380 | 596 | 595 | (36) | — |
| Total\tnon-interest\trevenue | $8,194 | $8,232 | $7,773 | —\t% | 6\t% |
| Net\tinterest\trevenue | 3,441 | 4,119 | 5,290 | (16) | (22) |
| Total\tfixed\tincome\tmarkets | $11,635 | $12,351 | $13,063 | (6)% | (5)% |
| Rates\tand\tcurrencies | $8,461 | $8,885 | $9,381 | (5)% | (5)% |
| Spread\tproducts/other\tfixed\tincome | 3,174 | 3,466 | 3,682 | (8) | (6) |
| Total\tfixed\tincome\tmarkets | $11,635 | $12,351 | $13,063 | (6)% | (5)% |
| Commissions\tand\tfees | $1,268 | $1,271 | $1,338 | —\t% | (5)% |
| Principal\ttransactions(3) | 1,240 | 478 | 218 | NM | NM |
| Other | 109 | 7 | 139 | NM | (95) |
| Total\tnon-interest\trevenue | $2,617 | $1,756 | $1,695 | 49\t% | 4\t% |
| Net\tinterest\trevenue | 810 | 1,123 | 1,238 | (28) | (9) |
| Total\tequity\tmarkets | $3,427 | $2,879 | $2,933 | 19\t% | (2)% |

(1) Credit	derivatives	are	used	to	economically	hedge	a	portion	of	the	corporate	loan	portfolio	that	includes	both	accrual	loans	and	loans	at	fair	value.	Gains	(losses)	on	loan	hedges	includes	the mark-to-market	on	the	credit	derivatives	and	the	mark-to-market	on	the	loans	in	the	portfolio	that	are	at	fair	value.	The	fixed	premium	costs	of	these	hedges	are	netted	against	the	corporate lending	revenues	to	reflect	the	cost	of	credit	protection.	Citigroup's	results	of	operations	excluding	the	impact	of	gains	(losses)	on	loan	hedges	are	non-GAAP	financial	measures.

(3) Excludes	principal	transactions	revenues	of	ICG	businesses	other	than	Markets	and	securities	services,	primarily	treasury	and	trade	solutions	and	the	private	bank.

The	discussion	of	the	results	of	operations	for	ICG	below	excludes	(where	noted)	the	impact	of	gains	(losses)	on	hedges	of	accrual	loans,	which	are	non-GAAP	financial measures.	For	a	reconciliation	of	these	metrics	to	the	reported	results,	see	the	table	above.

Net	income	increased	35%,	reflecting	the	impact	of	a	$2.0	billion	one-time,	non- cash	charge	recorded	in	the	tax	line	due	to	the	impact	of	Tax	Reform	in	2017	(for additional	information,	see	"Significant	Accounting	Policies	and	Significant Estimates—Income	Taxes"	below).	Excluding	the	one-time	impact	of	Tax Reform,	net	income	increased	11%,	driven	primarily	by	a	lower	effective	tax rate	as	a	result	of	Tax	Reform	and	higher	revenues,	partially	offset	by	higher expenses	and	higher	cost	of	credit.

•Revenues	increased	1%,	reflecting	a	6%	increase	in	Banking	(including	the gains	(losses)	on	loan	hedges),	largely	offset	by	a	3%	decrease	in	Markets and	securities	services.	Excluding	the	impact	of	a	gain	of	approximately $580	million	on	the	sale	of	a	fixed	income	analytics	business	in	the	prior year,	revenues	increased	3%,	primarily	driven	by	a	6%	increase	in	Banking revenue,	as	Markets	and	securities	services	revenues	were	largely unchanged	versus	the	prior	year.	Excluding	the	impact	of	the	gains	(losses) on	loan	hedges,	Banking	revenues	increased	5%,	driven	by	solid	growth across	treasury	and	trade	solutions,	private	bank	and	corporate	lending. Excluding	the	gain	on	sale	in	the	prior	year,	Markets	and	securities	services revenues	were	largely	unchanged,	as	increases	in	equity	markets	and securities	services	revenues	were	offset	by	a	decrease	in	fixed	income markets	revenues.	Citi	expects	that	revenues	in	its	markets	and	investment banking	businesses	will	likely	reflect	the	overall	market	environment	during 2019.

# Within	Banking:

•Investment	banking	revenues	decreased	7%,	largely	reflecting	a	decline	in market	wallet	and	market	share	across	debt	and	equity	underwriting	as	well as	the	comparison	to	the	particularly	strong	performance	in	the	prior	year. Advisory	revenues	increased	16%,	reflecting	strength	in	North	America, driven	by	gains	in	wallet	share	and	increased	market	activity.	Equity underwriting	revenues	decreased	12%,	primarily	driven	by	lower	revenues in	EMEA.	Debt	underwriting	revenues	decreased	13%,	primarily	driven	by lower	revenues	in	North	America.

•Treasury	and	trade	solutions	revenues	increased	8%.	Excluding	the	impact of	FX	translation,	revenues	increased	9%,	reflecting	strength	in	all	regions, driven	by	growth	across	both	net	interest	and	fee	income.	Revenues increased	in	the	cash	business,	primarily	driven	by	continued	growth	in deposit	balances	and	improved	deposit	spreads	due	to	higher	interest	rates, as	well	as	higher	transaction	volumes	from	both	new	and	existing	clients. The	trade	business	experienced	strong	revenue	growth,	as	the	business continued	to	focus	on	high-quality	loan	growth,	while	spreads	remained largely	stable	throughout	the	year.	Average	deposits	increased	6%,	with

growth	across	regions.	Average	trade	loans	increased	4%,	driven	by	growth in	EMEA	and	Asia.

•Corporate	lending	revenues	increased	26%.	Excluding	the	impact	of	gains (losses)	on	loan	hedges,	revenues	increased	15%,	driven	by	higher	loan volumes	and	lower	hedging	costs.	Average	loans	increased	9%	versus	the prior	year.

•Private	bank	revenues	increased	9%,	driven	by	underlying	growth	across	all regions,	reflecting	improved

deposit	spreads	due	to	higher	interest	rates	and	higher	managed	investment revenues.

# Within	Markets	and	securities	services:

•Fixed	income	markets	revenues	decreased	6%,	driven	by	lower	revenues	in North	America	and	Asia.	The	decrease	in	revenues	was	due	to	lower	net interest	revenue	(decrease	of	16%),	as	non-interest	revenues	were	largely unchanged.	The	decline	in	net	interest	revenues	was	driven	by	rates	and currencies	as	well	as	spread	products	and	other	fixed	income	revenues, mainly	reflecting	a	change	in	the	mix	of	trading	positions	in	support	of	client activity,	as	well	as	higher	funding	costs,	given	the	higher	interest	rate environment.

Rates	and	currencies	revenues	decreased	5%,	primarily	driven	by	lower G10	rates	revenues	in	North	America,	Asia	and	EMEA,	reflecting	lower client	activity	given	the	uncertain	macroenvironment	and	challenging trading	environment,	and	comparison	to	a	strong	prior	year,	particularly	in EMEA.	This	decrease	in	revenues	was	partially	offset	by	higher	G10	FX revenues,	particularly	in	EMEA,	reflecting	the	continued	benefit	from	the return	of	volatility	in	FX	markets	as	well	as	strong	corporate	and	investor client	activity.	Spread	products	and	other	fixed	income	revenues	decreased 8%,	driven	by	North	America,	primarily	due	to	the	challenging	trading environment	characterized	by	widening	spreads	and	lower	investor	client activity.

•Equity	markets	revenues	increased	19%.	Excluding	an	episodic	loss	in derivatives	of	approximately	$130	million	related	to	a	single	client	event	in the	prior	year,	revenues	increased	14%,	as	growth	in	equity	derivatives	and prime	finance	was	partially	offset	by	lower	cash	equities	revenues. Excluding	the	episodic	loss	in	the	prior	year,	equity	derivatives	revenues increased	in	all	regions,	driven	by	strong	investor	and	corporate	client activity	as	well	as	a	more	favorable	market	environment.	Principal transaction	revenues	increased,	partially	offset	by	a	decrease	in	net	interest revenue,	mainly	reflecting	a	change	in	the	mix	of	trading	positions	in support	of	client	activity.	Prime	finance	revenues	increased,	particularly	in EMEA	and	Asia,	reflecting	growth	in	client	balances	and	higher	investor client	activity.	Cash	equities	revenues	decreased	modestly,	primarily	driven by	Asia,	due	to	a	more	challenging	trading	environment.

•Securities	services	revenues	increased	11%.	Excluding	the	impact	of	FX translation,	revenues	increased	13%,	reflecting	continued	strength	in	EMEA and	Asia.	The	increase	in	revenues	was	driven	by	higher	fee	revenues, reflecting	growth	in	client	volumes,	as	well	as	higher	net	interest	revenue driven	by	higher	deposit	volumes	and	higher	interest	rates.

Expenses	increased	3%,	as	higher	compensation,	volume-related	expenses and	continued	investments	were	partially	offset	by	efficiency	savings.

Provisions	increased	$199	million,	driven	by	a	net	loan	loss	reserve	build	of $12	million	(compared	to	a	net	release	of	$380	million	in	the	prior	year), partially	offset	by	a	53%	decline	in	net	credit	losses.	The	modest	net	loan	loss reserve	build	was	driven	by	volume-related	reserve	builds	for	both	funded	loans and	unfunded	lending	commitments,	despite	credit	quality	remaining stable	during	2018.	The	decline	in	net	credit	losses	was	largely	driven	by	the absence	of	a	single	client	event	in	the	fourth	quarter	of	2017.

Net	income	decreased	5%,	reflecting	the	one-time	impact	of	Tax	Reform	in 2017.	Excluding	the	one-time	impact	of	Tax	Reform	in	2017,	net	income increased	16%,	primarily	driven	by	higher	revenues	and	lower	cost	of	credit, partially	offset	by	higher	expenses.

•Revenues	increased	7%,	reflecting	a	16%	increase	in	Banking	(including	the losses	on	loan	hedges).	Excluding	the	impact	of	the	losses	on	loan	hedges, Banking	revenues	increased	12%.	Markets	and	securities	services	revenues were	largely	unchanged,	as	growth	in	securities	services	revenues	(increase of	8%)	as	well	as	the	gain	on	the	sale	of	the	fixed	income	analytics	business in	2017	were	offset	by	a	5%	decrease	in	fixed	income	markets	and	a	2% decrease	in	equity	markets	revenues.

•Investment	banking	revenues	increased	21%,	largely	reflecting	gains	in wallet	share	and	increased	market	activity.	Advisory	revenues	increased 11%,	equity	underwriting	revenues	increased	69%	and	debt	underwriting revenues	increased	13%.

•Treasury	and	trade	solutions	revenues	increased	8%.	Excluding	the	impact of	FX	translation,	revenues	increased	7%,	primarily	due	to	continued growth	in	transaction	volumes	and	deposit	balances	and	improved	spreads. Trade	revenues	increased	modestly,	driven	by	steady	loan	growth,	partially offset	by	an	industry-wide	tightening	of	loan	spreads.

•Corporate	lending	revenues	increased	58%.	Excluding	the	impact	of	losses on	loans	hedges,	revenues	increased	12%,	driven	by	lower	hedging	costs and	the	absence	of	a	prior-year	adjustment	to	the	residual	value	of	a	lease financing	transaction.

•Private	bank	revenues	increased	14%,	primarily	due	to	higher	loan	and deposit	volumes,	higher	deposit	spreads

and	increased	managed	investments	and	capital	markets	activity.

•Fixed	income	markets	revenues	decreased	5%,	primarily	due	to	low volatility	as	well	as	the	comparison	to	higher	revenues	in	the	prior	year	from a	more	robust	trading	environment.	The	decline	in	revenues	was	driven	by lower	net	interest	revenue,	largely	due	to	higher	funding	costs	and	a	change in	the	mix	of	trading	positions	in	support	of	client	activity.	The	decline	was partially	offset	by	higher	principal	transactions	revenues	and	commissions and	fees	revenues.

Rates	and	currencies	revenues	decreased	5%,	driven	by	lower	G10	rates and	currencies	revenues.	Spread	products	and	other	fixed	income	revenues decreased	6%,	due	to	a	difficult	trading	environment	in	2017	given	low volatility,	driving	lower	credit	markets	and	commodities	revenues,	partially offset	by	higher	municipals	revenues,	as	well	as	higher	securitized	markets revenues.

•Equity	markets	revenues	decreased	2%.	Excluding	the	episodic	loss	in derivatives	of	approximately	$130	million	related	to	a	single	client	event	in 2017,	revenues	increased	3%,	as	continued	growth	in	prime	finance	and delta	one	client	balances	and	higher	investor	client	activity	were	partially offset	by	lower	episodic	activity	with	corporate	clients.	Excluding	the episodic	loss	in	derivatives,	equity	derivatives	revenues	increased,	driven	by the	stronger	investor	client	activity.	Cash	equities	revenues	were	modestly higher	as	well,	partially	offset	by	lower	cash	commissions,	as	clients continued	to	move	toward	automated	execution	platforms	across	the industry.

•Securities	services	revenues	increased	8%.	Excluding	the	impact	of	the divestiture	of	a	private	equity	fund	services	business	in	2016,	revenues increased	12%,	driven	by	growth	in	client	volumes	and	higher	interest revenue	due	to	a	more	favorable	rate	environment.

Expenses	increased	4%,	as	higher	compensation,	volume-related	expenses and	investments	were	partially	offset	by	efficiency	savings.

Provisions	improved	$501	million,	driven	by	a	net	loan	loss	release	of	$380 million	(compared	to	a	net	release	of	$30	million	in	2016)	and	a	29%	decline	in net	credit	losses.	The	increase	in	net	loan	loss	reserve	releases	was	driven	by	an improvement	in	the	provision	for	unfunded	lending	commitments	in	the corporate	loan	portfolio,	as	well	as	a	favorable	credit	environment,	stability	in commodity	prices	and	continued	improvement	in	the	portfolio.	The	decline	in net	credit	losses	was	largely	driven	by	improvement	in	the	energy	sector, partially	offset	by	the	impact	of	the	single	client	event	noted	above.

Corporate/Other	includes	certain	unallocated	costs	of	global	staff	functions	(including	finance,	risk,	human	resources,	legal	and	compliance),	other	corporate	expenses and	unallocated	global	operations	and	technology	expenses	and	income	taxes,	as	well	as	Corporate	Treasury,	certain	North	America	legacy	consumer	loan	portfolios, other	legacy	assets	and	discontinued	operations	(for	additional	information	on	Corporate/Other,	see	"Citigroup	Segments"	above).	At	December	31,	2018,

Corporate/Other	had	$91	billion	in	assets,	an	increase	of	17%	from	the	prior	year.

| In	millions	of	dollars | 2018 | 2017 | 2016 | %	Change<br>	2018	vs.	2017 | %	Change<br>	2017	vs.	2016 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tinterest\trevenue | $2,254 | $2,000 | $3,045 | 13\t% | (34)% |
| Non-interest\trevenue | (171) | 1,132 | 2,188 | NM | (48) |
| Total\trevenues,\tnet\tof\tinterest\texpense | $2,083 | $3,132 | $5,233 | (33)% | (40)% |
| Total\toperating\texpenses | $2,272 | $3,814 | $5,042 | (40)% | (24)% |
| Net\tcredit\tlosses | $21 | $149 | $435 | (86)% | (66)% |
| Credit\treserve\tbuild\t(release) | (218) | (317) | (456) | 31 | 30 |
| Provision\t(release)\tfor\tunfunded\tlending\tcommitments | (3) | — | (8) | — | 100 |
| Provision\tfor\tbenefits\tand\tclaims | (2) | (7) | 98 | 71 | NM |
| Provisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\tclaims | $(202) | $(175) | $69 | (15) | NM |
| Income\t(loss)\tfrom\tcontinuing\toperations\tbefore\ttaxes | $13 | $(507) | $122 | NM | NM |
| Income\ttaxes\t(benefits) | (113) | 19,064 | (455) | NM | NM |
| Income\t(loss)\tfrom\tcontinuing\toperations | $126 | $(19,571) | $577 | NM | NM |
| Income\t(loss)\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes | (8) | (111) | (58) | 93 | (91) |
| Net\tincome\t(loss)\tbefore\tattribution\tof\tnoncontrolling\tinterests | $118 | $(19,682) | $519 | NM | NM |
| Noncontrolling\tinterests | 11 | (6) | (2) | NM | NM |
| Net\tincome\t(loss) | $107 | $(19,676) | $521 | NM | NM |

Net	income	was	$107	million	in	2018,	compared	to	a	net	loss	of	$19.7	billion	in the	prior	year,	primarily	driven	by	the	$19.8	billion	one-time,	non-cash	charge recorded	in	the	tax	line	in	2017	due	to	the	impact	of	Tax	Reform.	Results	in	2018 included	the	one-time	benefit	of	$94	million	in	the	tax	line,	related	to	Tax Reform.	For	additional	information,	see	"Significant	Accounting	Policies	and Significant	Estimates—Income	Taxes"	below.

Excluding	the	one-time	impact	of	Tax	Reform	in	2018	and	2017,	net	income decreased	92%,	reflecting	lower	revenues,	partially	offset	by	lower	expenses, lower	cost	of	credit	and	tax	benefits	related	to	the	reorganization	of	certain	non- U.S.	subsidiaries.	The	tax	benefits	were	largely	offset	by	the	release	of	a	foreign currency	translation	adjustment	(CTA)	from	AOCI	to	earnings	(for	additional information	on	the	CTA	release,	see	Note	19	to	the	Consolidated	Financial Statements).

Revenues	decreased	33%,	driven	by	the	continued	wind-down	of	legacy assets.

Expenses	decreased	40%,	primarily	driven	by	the	wind-down	of	legacy assets,	lower	infrastructure	costs	and	lower	legal	expenses.

Provisions	decreased	$27	million	to	a	net	benefit	of	$202	million,	primarily due	to	lower	net	credit	losses,	partially	offset	by	a	lower	net	loan	loss	reserve release.	Net	credit	losses	declined	86%	to	$21	million,	primarily	reflecting	the impact	of	ongoing	divestiture	activity	and	the	continued	wind-

down	of	the	North	America	mortgage	portfolio.	The	net	reserve	release	declined by	$96	million	to	$221	million,	and

reflected	the	continued	wind-down	of	the	legacy	North	America	mortgage portfolio	and	divestitures.

The	net	loss	was	$19.7	billion,	compared	to	net	income	of	$521	million	in	the prior	year,	primarily	driven	by	the	one-time	impact	of	Tax	Reform.	Excluding the	one-time	impact	of	Tax	Reform,	net	income	declined	69%	to	$168	million, reflecting	lower	revenues,	partially	offset	by	lower	expenses	and	lower	cost	of credit.

Revenues	declined	40%,	primarily	reflecting	the	continued	wind-down	of legacy	assets	and	the	absence	of	gains	related	to	debt	buybacks	in	2016. Revenues	included	approximately	$750	million	in	gains	on	asset	sales	in	the	first quarter	of	2017,	which	more	than	offset	a	roughly	$300	million	charge	related	to the	exit	of	Citi's	U.S.	mortgage	servicing	operations	in	the	quarter.

Expenses	declined	24%,	reflecting	the	wind-down	of	legacy	assets	and lower	legal	expenses,	partially	offset	by	approximately	$100	million	in	episodic expenses	primarily	related	to	the	exit	of	the	U.S.	mortgage	servicing	operations. Also	included	in	expenses	is	an	approximately	$255	million	provision	for remediation	costs	related	to	a	CARD	Act	matter	in	2017.

Provisions	decreased	$244	million	to	a	net	benefit	of	$175	million, primarily	due	to	lower	net	credit	losses	and	a	lower	provision	for	benefits	and claims,	partially	offset	by	a	lower	net	loan	loss	reserve	release.	Net	credit	losses declined	66%,	primarily	reflecting	the	impact	of	ongoing	divestiture	activity	and the	continued	wind-down	of	the	North	America	mortgage	portfolio.	The	decline in	the	provision	for	benefits	and	claims	was	primarily	due	to	lower	insurance activity.	The	net	reserve	release	declined	$147	million,	and	reflected	the continued	wind-down	of	the	legacy	North	America	mortgage	portfolio	and divestitures.

# OFF-BALANCE	SHEET	ARRANGEMENTS

Citigroup	enters	into	various	types	of	off-balance	sheet	arrangements	in	the ordinary	course	of	business.	Citi's	involvement	in	these	arrangements	can	take many	different	forms,	including	without	limitation:

•purchasing	or	retaining	residual	and	other	interests	in	unconsolidated	special purpose	entities,	such	as	mortgage-backed	and	other	asset-backed securitization	entities;

•holding	senior	and	subordinated	debt,	interests	in	limited	and	general partnerships	and	equity	interests	in	other	unconsolidated	special	purpose entities;

•providing	guarantees,	indemnifications,	loan	commitments,	letters	of	credit and	representations	and	warranties;	and

•entering	into	operating	leases	for	property	and	equipment.

Citi	enters	into	these	arrangements	for	a	variety	of	business	purposes.	For example,	securitization	arrangements	offer	investors	access	to	specific	cash flows	and	risks	created	through	the	securitization	process.	Securitization arrangements	also	assist	Citi	and	its	customers	in	monetizing	their	financial assets	and	securing	financing	at	more	favorable	rates	than	Citi	or	the	customers could	otherwise	obtain.

The	table	below	shows	where	a	discussion	of	Citi's	various	off-balance sheet	arrangements	may	be	found	in	this	Form	10-K.	In	addition,	see	Note	1	to the	Consolidated	Financial	Statements.

# Types	of	Off-Balance	Sheet	Arrangements	Disclosures	in	this	Form	10-K

# CONTRACTUAL	OBLIGATIONS

The	following	table	includes	information	on	Citigroup's	contractual	obligations,	as	specified	and	aggregated	pursuant	to	SEC	requirements:

|  |  |  |  |  |  | Contractual	obligations	by	year | Contractual	obligations	by	year |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total |
| Long-term\tdebt\tobligations—principal(1) | $38,590 | $37,303 | $28,542 | $14,095 | $19,061 | $94,408 | $231,999 |
| Long-term\tdebt\tobligations—interest\tpayments(2) | 8,232 | 6,763 | 5,489 | 4,664 | 4,022 | 37,617 | 66,787 |
| Operating\tand\tcapital\tlease\tobligations | 925 | 748 | 657 | 525 | 394 | 1,890 | 5,139 |
| Purchase\tobligations(3) | 535 | 494 | 509 | 501 | 329 | 1,024 | 3,392 |
| Other\tliabilities(4) | 33,077 | 523 | 132 | 79 | 75 | 1,718 | 35,604 |
| Total | $81,359 | $45,831 | $35,329 | $19,864 | $23,881 | $136,657 | $342,921 |

(1) For	additional	information	about	long-term	debt	obligations,	see	"Liquidity	Risk—Long-Term	Debt"	below	and	Note	17	to	the	Consolidated	Financial	Statements.

(2) Contractual	obligations	related	to	interest	payments	on	long-term	debt	for	 2019–2023	are	calculated	by	applying	the	December	31,	2018	weighted-average	interest	rate	(3.87%)	on	average outstanding	long-term	debt	to	the	average	remaining	contractual	obligations	on	long-term	debt	for	each	of	those	years.	The	"Thereafter"	interest	payments	on	long-term	debt	for	the	remaining years	to	maturity	(2024–2098)	are	calculated	by	applying	current	interest	rates	on	the	remaining	contractual	obligations	on	long-term	debt	for	each	of	those	years.

(3) Purchase	obligations	consist	of	obligations	to	purchase	goods	or	services	that	are	enforceable	and	legally	binding	on	Citi.	For	presentation	purposes,	purchase	obligations	are	included	in	the	table above	through	the	termination	date	of	the	respective	agreements,	even	if	the	contract	is	renewable.	Many	of	the	purchase	agreements	for	goods	or	services	include	clauses	that	would	allow	Citi	to cancel	the	agreement	with	specified	notice;	however,	that	impact	is	not	included	in	the	table	above	(unless	Citi	has	already	notified	the	counterparty	of	its	intention	to	terminate	the	agreement).

(4) Other	liabilities	reflected	on	Citigroup's	Consolidated	Balance	Sheet	includes	accounts	payable,	accrued	expenses,	uncertain	tax	positions	and	other	liabilities	that	have	been	incurred	and	will ultimately	be	paid	in	cash;	legal	reserve	accruals	are	not	included	in	the	table	above.	Also	includes	discretionary	contributions	in	2018	for	Citi's	employee-defined	benefit	obligations	for	the pension,	postretirement	and	post	employment	plans	and	defined	contribution	plans.

# CAPITAL	RESOURCES

Capital	is	used	principally	to	support	assets	in	Citi's	businesses	and	to	absorb credit,	market	and	operational	losses.	Citi	primarily	generates	capital	through earnings	from	its	operating	businesses.	Citi	may	augment	its	capital	through issuances	of	common	stock,	noncumulative	perpetual	preferred	stock	and	equity issued	through	awards	under	employee	benefit	plans,	among	other	issuances. Further,	Citi's	capital	levels	may	also	be	affected	by	changes	in	accounting	and regulatory	standards,	as	well	as	U.S.	corporate	tax	laws	and	the	impact	of	future events	on	Citi's	business	results,	such	as	changes	in	interest	and	foreign exchange	rates,	as	well	as	business	and	asset	dispositions.

During	2018,	Citi	returned	a	total	of	$18.4	billion	of	capital	to	common shareholders	in	the	form	of	share	repurchases	(approximately	212	million common	shares)	and	dividends.

# Capital	Management

Citi's	capital	management	framework	is	designed	to	ensure	that	Citigroup	and	its principal	subsidiaries	maintain	sufficient	capital	consistent	with	each	entity's respective	risk	profile,	management	targets	and	all	applicable	regulatory standards	and	guidelines.	Citi	assesses	its	capital	adequacy	against	a	series	of internal	quantitative	capital	goals,	designed	to	evaluate	its	capital	levels	in expected	and	stressed	economic	environments.	Underlying	these	internal quantitative	capital	goals	are	strategic	capital	considerations,	centered	on preserving	and	building	financial	strength.	The	Citigroup	Capital	Committee, with	oversight	from	the	Risk	Management	Committee	of	Citigroup's	Board	of Directors,	has	responsibility	for	Citi's	aggregate	capital	structure,	including	the capital	assessment	and	planning	process,	which	is	integrated	into	Citi's	capital plan.	Balance	sheet	management,	including	oversight	of	capital	adequacy,	for Citigroup's	subsidiaries	is	governed	by	each	entity's	Asset	and	Liability Committee,	where	applicable.

Based	on	Citigroup's	current	regulatory	capital	requirements,	as	well	as consideration	of	potential	future	changes	to	the	U.S.	Basel	III	rules,	management currently	believes	that	a	targeted	Common	Equity	Tier	1	Capital	ratio	of approximately	11.5%	represents	the	amount	necessary	to	prudently	operate	and invest	in	Citi's	franchise,	including	when	considering	future	growth	plans, capital	return	projections	and	other	factors	that	may	impact	Citi's	businesses. However,	management	may	revise	Citigroup's	targeted	Common	Equity	Tier	1 Capital	ratio	in	response	to	changing	regulatory	capital	requirements	as	well	as other	relevant	factors.

For	additional	information	regarding	Citi's	capital	planning	and	stress testing	exercises,	see	"Stress	Testing	Component	of	Capital	Planning"	below.

# Current	Regulatory	Capital	Standards

Citi	is	subject	to	regulatory	capital	standards	issued	by	the	Federal	Reserve Board,	which	constitute	the	U.S.	Basel	III	rules.	These	rules	establish	an integrated	capital	adequacy	framework,	encompassing	both	risk-based	capital ratios	and	leverage	ratios.

# Risk-Based	Capital	Ratios

The	U.S.	Basel	III	rules	set	forth	the	composition	of	regulatory	capital (including	the	application	of	regulatory	capital	adjustments	and	deductions),	as well	as	two	comprehensive	methodologies	(a	Standardized	Approach	and Advanced	Approaches)	for	measuring	total	risk-weighted	assets.	Total	risk- weighted	assets	under	the	Advanced	Approaches,	which	are	primarily	models based,	include	credit,	market,	and	operational	risk-weighted	assets.	The Standardized	Approach	generally	applies	prescribed	supervisory	risk	weights	to broad	categories	of	credit	risk	exposures.	As	a	result,	credit	risk-weighted	assets calculated	under	the	Advanced	Approaches	are	more	risk	sensitive	than	those calculated	under	the	Standardized	Approach.	Market	risk-weighted	assets	are currently	calculated	on	a	generally	consistent	basis	under	both	approaches.	The Standardized	Approach	excludes	operational	risk-weighted	assets. The	U.S.	Basel	III	rules	establish	stated	minimum	Common	Equity	Tier	1 Capital,	Tier	1	Capital	and	Total	Capital	ratios	for	substantially	all	U.S.	banking organizations,	including	Citi	and	Citibank,	N.A.	(Citibank).	Moreover,	these rules	provide	for	both	a	fixed	2.5%	Capital	Conservation	Buffer	and,	for Advanced	Approaches	banking	organizations,	such	as	Citi	and	Citibank,	a discretionary	Countercyclical	Capital	Buffer.	These	capital	buffers	would	be available	to	absorb	losses	in	advance	of	any	potential	impairment	of	regulatory capital	below	the	stated	minimum	risk-based	capital	ratio	requirements.	Any breach	of	the	buffers	to	absorb	losses	during	periods	of	financial	or	economic stress	would	result	in	restrictions	on	earnings	distributions	(e.g.,	dividends, equity	repurchases,	and	discretionary	executive	bonuses),	with	the	degree	of such	restrictions	based	upon	the	extent	to	which	the	buffers	are	breached.	The Federal	Reserve	Board	last	voted	to	affirm	the	Countercyclical	Capital	Buffer amount	at	the	current	level	of	0%	in	December	2017.

Further,	the	U.S.	Basel	III	rules	implement	the	"capital	floor	provision"	of the	so-called	"Collins	Amendment"	of	the	Dodd-Frank	Act,	which	requires Advanced	Approaches

banking	organizations	to	calculate	each	of	the	three	risk-based	capital	ratios (Common	Equity	Tier	1	Capital,	Tier	1	Capital,	and	Total	Capital)	under	both the	U.S.	Basel	III	Standardized	Approach	and	the	Advanced	Approaches	and comply	with	the	lower	of	each	of	the	resulting	risk-based	capital	ratios.

# GSIB	Surcharge

The	Federal	Reserve	Board	imposes	a	risk-based	capital	surcharge	upon	U.S. bank	holding	companies	that	are	identified	as	global	systemically	important bank	holding	companies	(GSIBs),	including	Citi.	The	GSIB	surcharge	augments the	Capital	Conservation	Buffer	and,	if	invoked,	any	Countercyclical	Capital Buffer.

Under	the	Federal	Reserve	Board's	rule,	identification	of	a	GSIB	is	based on	the	Basel	Committee	on	Banking	Supervision's	(Basel	Committee)	GSIB methodology,	which	primarily	looks	to	five	equally	weighted	broad	categories	of systemic	importance:	(i)	size,	(ii)	interconnectedness,	(iii)	cross-jurisdictional activity,	(iv)	substitutability	and	(v)	complexity.	With	the	exception	of	size,	each of	the	other	categories	is	composed	of	multiple	indicators,	also	of	equal	weight, and	amounting	to	12	indicators	in	total.

A	U.S.	bank	holding	company	that	is	designated	a	GSIB	is	required,	on	an annual	basis,	to	calculate	a	surcharge	using	two	methods	and	is	subject	to	the higher	of	the	resulting	two	surcharges.	The	first	method	("method	1")	is	based	on the	Basel	Committee's	GSIB	methodology	described	above.	Under	the	second method	("method	2"),	the	substitutability	category	is	replaced	with	a	quantitative measure	intended	to	assess	a	GSIB's	reliance	on	short-term	wholesale	funding. In	addition,	method	1	incorporates	relative	measures	of	systemic	importance across	certain	global	banking	organizations	and	a	year-end	spot	foreign exchange	rate,	whereas	method	2	uses	fixed	measures	of	systemic	importance and	application	of	an	average	foreign	exchange	rate	over	a	three-year	period. The	GSIB	surcharges	calculated	under	both	method	1	and	method	2	are	based	on measures	of	systemic	importance	from	the	year	immediately	preceding	that	in which	the	GSIB	surcharge	calculations	are	being	performed	(e.g.,	the	method	1 and	method	2	GSIB	surcharges	to	be	calculated	by	December	31,	2019	will	be based	on	2018	systemic	indicator	data).	Generally,	Citi's	surcharge	determined under	method	2	will	result	in	a	higher	surcharge	than	its	surcharge	determined under	method	1.

Should	a	GSIB's	systemic	importance	change	year-over-year	such	that	it becomes	subject	to	a	higher	surcharge,	the	higher	surcharge	would	not	become effective	for	a	full	year	(e.g.,	a	higher	surcharge	calculated	by	December	31, 2019	would	not	become	effective	until	January	1,	2021).	However,	if	a	GSIB's systemic	importance	changes	such	that	the	GSIB	would	be	subject	to	a	lower surcharge,	the	GSIB	would	be	subject	to	the	lower	surcharge	beginning	with	the next	calendar	year	(e.g.,	a	lower	surcharge	calculated	by	December	31,	2019 would	become	effective	January	1,	2020).

The	following	table	sets	forth	Citi's	GSIB	surcharge	as	determined	under method	1	and	method	2	for	2018	and	2017:

Citi's	GSIB	surcharge	effective	for	both	2018	and	2017	was	3.0%,	as derived	under	the	higher	method	2	result.	Citi's	GSIB	surcharge	effective	for 2019	will	remain	unchanged	at	3.0%,	as	derived	under	the	higher	method	2 result.	Citi	expects	that	its	method	2	GSIB	surcharge	will	continue	to	remain higher	than	its	method	1	GSIB	surcharge	and,	as	such,	Citi's	GSIB	surcharge effective	for	2020	will	not	exceed	3.0%,	and	Citi's	GSIB	surcharge	effective	for 2021	is	not	expected	to	exceed	3.0%.

# Transition	Provisions

Generally,	the	U.S.	Basel	III	rules	contain	several	differing,	largely	multi-year transition	provisions,	with	various	"phase-ins"	and	"phase-outs."	Moreover,	the GSIB	surcharge,	Capital	Conservation	Buffer,	and	any	Countercyclical	Capital Buffer	(currently	0%)	commenced	phase-in	on	January	1,	2016,	becoming	fully effective	on	January	1,	2019.	However,	with	the	exception	of	the	non- grandfathered	trust	preferred	securities,	which	do	not	fully	phase-out	of	Tier	2 Capital	until	January	1,	2022,	and	the	capital	buffers	and	GSIB	surcharge,	which do	not	fully	phase-in	until	January	1,	2019,	all	other	transition	provisions	have occurred	and	were	entirely	reflected	in	Citi's	regulatory	capital	ratios	beginning January	1,	2018.	Accordingly,	commencing	with	2018,	Citi	is	presenting	a	single set	of	regulatory	capital	components	and	ratios,	reflecting	current	regulatory capital	standards	in	effect	throughout	2018.	Citi	previously	disclosed	its	Basel III	risk-based	capital	and	leverage	ratios	and	related	components	reflecting	Basel III	transition	arrangements	with	respect	to	regulatory	capital	adjustments	and deductions,	as	well	as	full	implementation,	in	Citi's	2017	Annual	Report	on Form	10-K;	however,	beginning	January	1,	2018,	that	distinction	is	no	longer relevant.

The	following	chart	sets	forth	the	transitional	progression	from	January	1, 2017	to	full	implementation	by	January	1,	2019	of	the	regulatory	capital components	comprising	the	effective	minimum	risk-based	capital	ratios.

# Basel	III	Transition	Arrangements:	Minimum	Risk-Based	Capital	Ratios

# basel18q4.jpg

For	additional	information	regarding	the	transition	arrangements	under	the U.S.	Basel	III	rules,	including	Citigroup's	and	Citibank's	capital	resources reflecting	Basel	III	transition	arrangements	as	of	December	31,	2017,	see "Capital	Resources—Current	Regulatory	Capital	Standards"	in	Citigroup's	2017 Annual	Report	on	Form	10-K.

# Tier	1	Leverage	Ratio

Under	the	U.S.	Basel	III	rules,	Citi	is	also	required	to	maintain	a	minimum	Tier 1	Leverage	ratio	of	4.0%.	The	Tier	1	Leverage	ratio,	a	non-risk-based	measure of	capital	adequacy,	is	defined	as	Tier	1	Capital	as	a	percentage	of	quarterly adjusted	average	total	assets	less	amounts	deducted	from	Tier	1	Capital.

# Supplementary	Leverage	Ratio

Citi	is	also	required	to	calculate	a	Supplementary	Leverage	ratio,	which	differs from	the	Tier	1	Leverage	ratio	by	also	including	certain	off-balance	sheet exposures	within	the	denominator	of	the	ratio	(Total	Leverage	Exposure).	The Supplementary	Leverage	ratio	represents	end	of	period	Tier	1	Capital	to	Total Leverage	Exposure,	with	the	latter	defined	as	the	sum	of	the	daily	average	of	on- balance	sheet	assets	for	the	quarter	and	the	average	of	certain	off-balance	sheet exposures	calculated	as	of	the	last	day	of	each	month	in	the	quarter,	less applicable	Tier	1	Capital	deductions.	Effective	January	1,

2018,	Advanced	Approaches	banking	organizations	are	required	to	maintain	a stated	minimum	Supplementary	Leverage	ratio	of	3.0%.

Further,	U.S.	GSIBs,	including	Citi,	are	subject	to	enhanced	Supplementary Leverage	ratio	standards.	The	enhanced	Supplementary	Leverage	ratio	standards establish	a	2.0%	leverage	buffer	in	addition	to	the	stated	3.0%	minimum Supplementary	Leverage	ratio	requirement,	for	a	total	effective	minimum Supplementary	Leverage	ratio	requirement	of	5.0%.	Effective	January	1,	2018, if	a	U.S.	GSIB	fails	to	exceed	the	2.0%	buffer,	it	will	be	subject	to	increasingly onerous	restrictions	(depending	upon	the	extent	of	the	shortfall)	regarding	capital distributions	and	discretionary	executive	bonus	payments.

# Prompt	Corrective	Action	Framework

In	general,	the	Prompt	Corrective	Action	(PCA)	regulations	direct	the	U.S. banking	agencies	to	enforce	increasingly	strict	limitations	on	the	activities	of insured	depository	institutions	that	fail	to	meet	certain	regulatory	capital thresholds.	The	PCA	framework	contains	five	categories	of	capital	adequacy	as measured	by	risk-based	capital	and	leverage	ratios:	(i)	"well	capitalized,"	(ii) "adequately	capitalized,"	(iii)	undercapitalized,"	(iv)	"significantly undercapitalized,"	and	(v)	"critically	undercapitalized."

Accordingly,	an	insured	depository	institution,	such	as	Citibank,	must maintain	minimum	Common	Equity	Tier	1	Capital,	Tier	1	Capital,	Total	Capital, and	Tier	1	Leverage	ratios	of	6.5%,	8.0%,	10.0%	and	5.0%,	respectively,	to	be considered	"well	capitalized."	Additionally,	insured	depository	institution subsidiaries	of	U.S.	GSIBs,	including	Citibank,	must	maintain	a	minimum Supplementary	Leverage	ratio	of	6.0%,	effective	January	1,	2018,	to	be considered	"well	capitalized."

# Stress	Testing	Component	of	Capital	Planning

Citi	is	subject	to	an	annual	assessment	by	the	Federal	Reserve	Board	as	to whether	Citigroup	has	effective	capital	planning	processes	as	well	as	sufficient regulatory	capital	to	absorb	losses	during	stressful	economic	and	financial conditions,	while	also	meeting	obligations	to	creditors	and	counterparties	and continuing	to	serve	as	a	credit	intermediary.	This	annual	assessment	includes two	related	programs:

•The	Comprehensive	Capital	Analysis	and	Review	(CCAR)	evaluates	Citi's capital	adequacy,	capital	adequacy	process,	and	its	planned	capital distributions,	such	as	dividend	payments	and	common	stock	repurchases. As	part	of	CCAR,	the	Federal	Reserve	Board	assesses	whether	Citi	has sufficient	capital	to	continue	operations	throughout	times	of	economic	and financial	market	stress	and	whether	Citi	has	robust,	forward-looking	capital planning	processes	that	account	for	its	unique	risks.	The	Federal	Reserve Board	may	object	to	Citi's	annual	capital	plan	based	on	either	quantitative or	qualitative	grounds.	If	the	Federal	Reserve	Board	objects	to	Citi's	annual capital	plan,	Citi	may	not	undertake	any	capital	distribution	unless	the Federal	Reserve	Board	indicates	in	writing	that	it	does	not	object	to	the distribution.

•Dodd-Frank	Act	Stress	Testing	(DFAST)	is	a	forward-looking	quantitative evaluation	of	the	impact	of	stressful	economic	and	financial	market conditions	on	Citi's	regulatory	capital.	This	program	serves	to	inform	the Federal	Reserve	Board	and	the	general	public	as	to	how	Citi's	regulatory capital	ratios	might	change	using	a	hypothetical	set	of	adverse	economic conditions	as	designed	by	the	Federal	Reserve	Board.	In	addition	to	the annual	supervisory	stress	test	conducted	by	the	Federal	Reserve	Board,	Citi is	required	to	conduct	annual	company-run	stress	tests	under	the	same adverse	economic	conditions	designed	by	the	Federal	Reserve	Board,	as well	as	conduct	a	mid-cycle	stress	test	under	company-developed	scenarios.

Both	CCAR	and	DFAST	include	an	estimate	of	projected	revenues,	losses, reserves,	pro	forma	regulatory	capital	ratios,	and	any	other	additional	capital measures	deemed	relevant	by	Citi.	Projections	are	required	over	a	nine-quarter planning	horizon	under	three	supervisory	scenarios	(baseline,	adverse	and severely	adverse	conditions).	All	risk-based	capital	ratios	reflect	application	of the	Standardized	Approach	framework	under	the	U.S.	Basel	III	rules.	Moreover, the	Federal	Reserve	Board	has	deferred	the	use	of	the	Advanced	Approaches framework	indefinitely.

For	additional	information	regarding	CCAR,	see	"Risk	Factors—Strategic Risks"	below.	For	additional	information	on	potential	changes	to	the	stress testing	component	of	capital	planning	and	assessment	process	applicable	to	Citi, see	"Regulatory	Capital	Standards	Developments"	below.

In	addition,	Citibank	is	required	to	conduct	the	annual	Dodd-Frank	Act Stress	Test.	The	annual	stress	test	consists	of	a	forward-looking	quantitative evaluation	of	the	impact	of	stressful	economic	and	financial	market	conditions under

several	scenarios	on	Citibank's	regulatory	capital.	This	program	serves	to	inform the	Office	of	the	Comptroller	of

the	Currency	as	to	how	Citibank's	regulatory	capital	ratios	might	change	during a	hypothetical	set	of	adverse	economic

conditions	and	to	ultimately	evaluate	the	reliability	of	Citibank's	capital planning	process.

# Citigroup's	Capital	Resources

Citi	is	required	to	maintain	stated	minimum	Common	Equity	Tier	1	Capital,	Tier 1	Capital	and	Total	Capital	ratios	of	4.5%,	6.0%	and	8.0%,	respectively. Citi's	effective	minimum	Common	Equity	Tier	1	Capital,	Tier	1	Capital and	Total	Capital	ratios	during	2018,	inclusive	of	the	75%	phase-in	of	both	the 2.5%	Capital	Conservation	Buffer	and	the	3.0%	GSIB	surcharge	(all	of	which	is to	be	composed	of	Common	Equity	Tier	1	Capital),	are	8.625%,	10.125%	and 12.125%,	respectively.	Citi's	effective	minimum	Common	Equity	Tier	1 Capital,	Tier	1	Capital	and	Total	Capital	ratios	during	2017,	inclusive	of	the 50%	phase-in	of	both	the	2.5%	Capital	Conservation	Buffer	and	the	3.0%	GSIB surcharge	(all	of	which	is	to	be	composed	of	Common	Equity	Tier	1	Capital), were	7.25%,	8.75%	and	10.75%,	respectively.

Citi's	effective	minimum	Common	Equity	Tier	1	Capital,	Tier	1	Capital and	Total	Capital	ratio	requirements	during	2019,	inclusive	of	the	2.5%	Capital Conservation	Buffer	and	the	Countercyclical	Capital	Buffer	at	its	current	level of	0%,	as	well	as	a	3.0%	GSIB	surcharge,	will	be	10.0%,	11.5%	and	13.5%, respectively.

Furthermore,	to	be	"well	capitalized"	under	current	federal	bank	regulatory agency	definitions,	a	bank	holding	company	must	have	a	Tier	1	Capital	ratio	of at	least	6.0%,	a	Total	Capital	ratio	of	at	least	10.0%,	and	not	be	subject	to	a Federal	Reserve	Board	directive	to	maintain	higher	capital	levels.

Under	the	U.S.	Basel	III	rules,	Citi	must	comply	with	a	4.0%	minimum	Tier 1	Leverage	ratio	requirement.	Effective	January	1,	2018,	Citi	must	also	comply with	an	effective	5.0%	minimum	Supplementary	Leverage	ratio	requirement.

The	following	tables	set	forth	the	capital	tiers,	total	risk-weighted	assets	and underlying	risk	components,	risk-based	capital	ratios,	quarterly	adjusted	average total	assets,	Total	Leverage	Exposure	and	leverage	ratios	for	Citi	as	of December	31,	2018	and	2017.

# Citigroup	Capital	Components	and	Ratios

(1) As	of	December	31,	2018	and	2017,	Citi's	reportable	Common	Equity	Tier	1	Capital	and	Tier	1	Capital	ratios	were	the	lower	derived	under	the	Basel	III	Standardized	Approach,	whereas	the reportable	Total	Capital	ratio	was	the	lower	derived	under	the	Basel	III	Advanced	Approaches	framework.

(2) Citi's	risk-based	capital	and	leverage	ratios	and	related	components	as	of	December	31,	2017	are	non-GAAP	financial	measures,	which	reflect	full	implementation	of	regulatory	capital adjustments	and	deductions	prior	to	the	effective	date	of	January	1,	2018.	Citi	believes	these	ratios	and	the	related	components	provide	useful	information	to	investors	and	others	by	measuring Citi's	progress	in	prior	periods	against	currently	effective	regulatory	capital	standards.

(3) Tier	1	Leverage	ratio	denominator.

(4) Supplementary	Leverage	ratio	denominator.

# Common	Equity	Tier	1	Capital	Ratio

Citi's	Common	Equity	Tier	1	Capital	ratio	was	11.9%	at	December	31,	2018, compared	to	11.7%	at	September	30,	2018	and	12.4%	at	December	31,	2017. The	quarter-over-quarter	increase	was	primarily	due	to	net	income	of	$4.3	billion as	well	as	decreases	in	risk-weighted	assets,	partially	offset	by	the	return	of	$5.8 billion	of	capital	to	common	shareholders.	Citi's	Common	Equity	Tier	1	Capital ratio	declined	from	year-end	2017	primarily	due	to	a	reduction	in	Common Equity	Tier	1	Capital	resulting	from	the	return	of	$18.4	billion	capital	to common	shareholders,	an	increase	in	risk-weighted	assets,	and	adverse	net movements	in	AOCI,	partially	offset	by	net	income	of	$18.0	billion	in	2018.

# Components	of	Citigroup	Capital

| In	millions	of	dollars | December	31,<br>2018 | December	31,<br>2017 |
| :--- | :--- | :--- |
| Common\tEquity\tTier\t1\tCapital |  |  |
| Citigroup\tcommon\tstockholders'\tequity(1) | $177,928 | $181,671 |
| Add:\tQualifying\tnoncontrolling\tinterests | 147 | 153 |
| Regulatory\tCapital\tAdjustments\tand\tDeductions: |  |  |
| Less:\tAccumulated\tnet\tunrealized\tlosses\ton\tcash\tflow\thedges,\tnet\tof\ttax(2) | (728) | (698) |
| Less:\tCumulative\tunrealized\tnet\tgain\t(loss)\trelated\tto\tchanges\tin\tfair\tvalue\tof\tfinancial\tliabilities\n\t\t\tattributable\tto\town\tcreditworthiness,\tnet\tof\ttax(3) | 580 | (721) |
| Less:\tIntangible\tassets: |  |  |
| \t\tGoodwill,\tnet\tof\trelated\tDTLs(4) | 21,778 | 22,052 |
| \t\t\t\tIdentifiable\tintangible\tassets\tother\tthan\tMSRs,\tnet\tof\trelated\tDTLs | 4,402 | 4,401 |
| Less:\tDefined\tbenefit\tpension\tplan\tnet\tassets | 806 | 896 |
| Less:\tDTAs\tarising\tfrom\tnet\toperating\tloss,\tforeign\ttax\tcredit\tand\tgeneral\tbusiness\tcredit\n\t\t\tcarry-forwards(5) | 11,985 | 13,072 |
| Total\tCommon\tEquity\tTier\t1\tCapital\t(Standardized\tApproach\tand\tAdvanced\tApproaches) | $139,252 | $142,822 |
| Additional\tTier\t1\tCapital |  |  |
| Qualifying\tnoncumulative\tperpetual\tpreferred\tstock(1) | $18,292 | $19,069 |
| Qualifying\ttrust\tpreferred\tsecurities(6) | 1,384 | 1,377 |
| Qualifying\tnoncontrolling\tinterests | 55 | 61 |
| Regulatory\tCapital\tDeductions: |  |  |
|  | 806 | 900 |
| Less:\tPermitted\townership\tinterests\tin\tcovered\tfunds(7) |  |  |
| Less:\tMinimum\tregulatory\tcapital\trequirements\tof\tinsurance\tunderwriting\tsubsidiaries(8) | 55 | 52 |
| Total\tAdditional\tTier\t1\tCapital\t(Standardized\tApproach\tand\tAdvanced\tApproaches) | $18,870 | $19,555 |
| Total\tTier\t1\tCapital\t(Common\tEquity\tTier\t1\tCapital\t+\tAdditional\tTier\t1\tCapital)\n\t\t\t(Standardized\tApproach\tand\tAdvanced\tApproaches) | $158,122 | $162,377 |
| Tier\t2\tCapital |  |  |
| Qualifying\tsubordinated\tdebt | $23,324 | $23,673 |
| Qualifying\ttrust\tpreferred\tsecurities(9) | 321 | 329 |
| Qualifying\tnoncontrolling\tinterests | 47 | 50 |
| Eligible\tallowance\tfor\tcredit\tlosses(10) | 13,681 | 13,612 |
| Regulatory\tCapital\tDeduction: |  |  |
| Less:\tMinimum\tregulatory\tcapital\trequirements\tof\tinsurance\tunderwriting\tsubsidiaries(8) | 55 | 52 |
| Total\tTier\t2\tCapital\t(Standardized\tApproach) | $37,318 | $37,612 |
| Total\tCapital\t(Tier\t1\tCapital\t+\tTier\t2\tCapital)\t(Standardized\tApproach) | $195,440 | $199,989 |
| Adjustment\tfor\texcess\tof\teligible\tcredit\treserves\tover\texpected\tcredit\tlosses(10) | $(12,296) | $(12,112) |
| Total\tTier\t2\tCapital\t(Advanced\tApproaches) | $25,022 | $25,500 |
| Total\tCapital\t(Tier\t1\tCapital\t+\tTier\t2\tCapital)\t(Advanced\tApproaches) | $183,144 | $187,877 |

(1) Issuance	costs	of	$168	million	and	$184	million	related	to	noncumulative	perpetual	preferred	stock	outstanding	at	December	31,	2018	and	2017,	respectively,	are	excluded	from	common stockholders'	equity	and	netted	against	such	preferred	stock	in	accordance	with	Federal	Reserve	Board	regulatory	reporting	requirements,	which	differ	from	those	under	U.S.	GAAP.

(2) Common	Equity	Tier	1	Capital	is	adjusted	for	accumulated	net	unrealized	gains	(losses)	on	cash	flow	hedges	included	in	AOCI	that	relate	to	the	hedging	of	items	not	recognized	at	fair	value	on the	balance	sheet.

(3) The	cumulative	impact	of	changes	in	Citigroup's	own	creditworthiness	in	valuing	liabilities	for	which	the	fair	value	option	has	been	elected,	and	own-credit	valuation	adjustments	on	derivatives, are	excluded	from	Common	Equity	Tier	1	Capital,	in	accordance	with	the	U.S.	Basel	III	rules.

(4) Includes	goodwill	"embedded"	in	the	valuation	of	significant	common	stock	investments	in	unconsolidated	financial	institutions.

Footnotes	continue	on	the	following	page.

(5) Of	Citi's	$22.9	billion	of	net	DTAs	at	December	31,	2018,	$11.9	billion	was	includable	in	Common	Equity	Tier	1	Capital	pursuant	to	the	U.S.	Basel	III	rules,	while	$11.0	billion	was	excluded. Excluded	from	Citi's	Common	Equity	Tier	1	Capital	as	of	December	31,	2018	was	$12.0	billion	of	net	DTAs	arising	from	net	operating	loss,	foreign	tax	credit	and	general	business	credit carry-forwards,	which	was	reduced	by	$1.0	billion	of	net	DTLs	primarily	associated	with	goodwill	and	certain	other	intangible	assets.	Separately,	under	the	U.S.	Basel	III	rules,	goodwill	and these	other	intangible	assets	are	deducted	net	of	associated	DTLs	in	arriving	at	Common	Equity	Tier	1	Capital.	DTAs	arising	from	net	operating	loss,	foreign	tax	credit	and	general	business credit	carry-forwards	are	required	to	be	entirely	deducted	from	Common	Equity	Tier	1	Capital	under	the	U.S.	Basel	III	rules.	Commencing	on	December	31,	2017,	Citi's	DTAs	arising	from temporary	differences	were	less	than	the	10%	limitation	under	the	U.S.	Basel	III	rules	and	therefore	not	subject	to	deduction	from	Common	Equity	Tier	1	Capital,	but	are	subject	to	risk- weighting	at	250%.

(6) Represents	Citigroup	Capital	XIII	trust	preferred	securities,	which	are	permanently	grandfathered	as	Tier	1	Capital	under	the	U.S.	Basel	III	rules.

(7) Banking	entities	are	required	to	be	in	compliance	with	the	Volcker	Rule	of	the	Dodd-Frank	Act	which	prohibits	conducting	certain	proprietary	investment	activities	and	limits	their	ownership	of, and	relationships	with,	covered	funds.	Accordingly,	Citi	is	required	by	the	Volcker	Rule	to	deduct	from	Tier	1	Capital	all	permitted	ownership	interests	in	covered	funds.

(8) 50%	of	the	minimum	regulatory	capital	requirements	of	insurance	underwriting	subsidiaries	must	be	deducted	from	each	of	Tier	1	Capital	and	Tier	2	Capital.

(9) Represents	the	amount	of	non-grandfathered	trust	preferred	securities	eligible	for	inclusion	in	Tier	2	Capital	under	the	U.S.	Basel	III	rules,	which	will	be	fully	phased-out	of	Tier	2	Capital	by January	1,	2022.

(10) Under	the	Standardized	Approach,	the	allowance	for	credit	losses	is	eligible	for	inclusion	in	Tier	2	Capital	up	to	1.25%	of	credit	risk-weighted	assets,	with	any	excess	allowance	for	credit	losses being	deducted	in	arriving	at	credit	risk-weighted	assets,	which	differs	from	the	Advanced	Approaches	framework,	in	which	eligible	credit	reserves	that	exceed	expected	credit	losses	are eligible	for	inclusion	in	Tier	2	Capital	to	the	extent	the	excess	reserves	do	not	exceed	0.6%	of	credit	risk-weighted	assets.	The	total	amount	of	eligible	credit	reserves	in	excess	of	expected credit	losses	that	were	eligible	for	inclusion	in	Tier	2	Capital,	subject	to	limitation,	under	the	Advanced	Approaches	framework	was	$1.4	billion	and	$1.5	billion	at	December	31,	2018	and 2017,	respectively.

# Citigroup	Capital	Rollforward

| In	millions	of	dollars | Three	Months	Ended	December<br>31,	2018 | Twelve	Months	Ended<br>	December	31,	2018 |
| :--- | :--- | :--- |
| Common\tEquity\tTier\t1\tCapital,\tbeginning\tof\tperiod | $140,428 | $142,822 |
| Net\tincome | 4,313 | 18,045 |
| Common\tand\tpreferred\tstock\tdividends\tdeclared | (1,402) | (5,039) |
| \tNet\tincrease\tin\ttreasury\tstock | (4,692) | (14,061) |
| Net\tchange\tin\tcommon\tstock\tand\tadditional\tpaid-in\tcapital | 81 | (102) |
| Net\tincrease\tin\tforeign\tcurrency\ttranslation\tadjustment\tnet\tof\thedges,\tnet\tof\ttax | (394) | (2,362) |
| Net\tchange\tin\tunrealized\tgains\t(losses)\ton\tdebt\tsecurities\tAFS,\tnet\tof\ttax | 1,072 | (1,092) |
| Net\tincrease\tin\tdefined\tbenefit\tplans\tliability\tadjustment,\tnet\tof\ttax | (489) | (74) |
| Net\tchange\tin\tadjustment\trelated\tto\tchanges\tin\tfair\tvalue\tof\tfinancial\tliabilities\n\t\t\t\tattributable\tto\town\tcreditworthiness,\tnet\tof\ttax | (129) | (188) |
| Net\tdecrease\tin\tASC\t815—Excluded\tcomponent\tof\tFair\tValue\tHedges | (35) | (57) |
| Net\tdecrease\tin\tgoodwill,\tnet\tof\trelated\tDTLs | 113 | 274 |
| Net\tincrease\tin\tidentifiable\tintangible\tassets\tother\tthan\tMSRs,\tnet\tof\trelated\tDTLs | (98) | (1) |
| Net\tdecrease\tin\tdefined\tbenefit\tpension\tplan\tnet\tassets | 125 | 90 |
| \tNet\tdecrease\tin\tDTAs\tarising\tfrom\tnet\toperating\tloss,\tforeign\ttax\tcredit\tand\n\t\t\t\t\t\tgeneral\tbusiness\tcredit\tcarry-forwards | 360 | 1,087 |
| Other | (1) | (90) |
| Net\tdecrease\tin\tCommon\tEquity\tTier\t1\tCapital | $(1,176) | $(3,570) |
| Common\tEquity\tTier\t1\tCapital,\tend\tof\tperiod\n\t\t\t\t(Standardized\tApproach\tand\tAdvanced\tApproaches) | $139,252 | $139,252 |
| Additional\tTier\t1\tCapital,\tbeginning\tof\tperiod | $19,449 | $19,555 |
| Net\tdecrease\tin\tqualifying\tperpetual\tpreferred\tstock | (559) | (777) |
| Net\tincrease\tin\tqualifying\ttrust\tpreferred\tsecurities | 2 | 7 |
| Net\tchange\tin\tpermitted\townership\tinterests\tin\tcovered\tfunds | (11) | 94 |
| Other | (11) | (9) |
| Net\tdecrease\tin\tAdditional\tTier\t1\tCapital | $(579) | $(685) |
| Additional\tTier\t1\tCapital,\tend\tof\tperiod\n\t\t\t\t(Standardized\tApproach\tand\tAdvanced\tApproaches) | $18,870 | $18,870 |
| Tier\t1\tCapital,\tend\tof\tperiod\n\t\t\t\t(Standardized\tApproach\tand\tAdvanced\tApproaches) | $158,122 | $158,122 |
| Tier\t2\tCapital,\tbeginning\tof\tperiod\t(Standardized\tApproach) | $36,931 | $37,612 |
| Net\tchange\tin\tqualifying\tsubordinated\tdebt | 376 | (349) |
| Net\tincrease\tin\teligible\tallowance\tfor\tcredit\tlosses | 25 | 69 |
| Other | (14) | (14) |
| Net\tchange\tin\tTier\t2\tCapital\t(Standardized\tApproach) | $387 | $(294) |
| Tier\t2\tCapital,\tend\tof\tperiod\t(Standardized\tApproach) | $37,318 | $37,318 |
| Total\tCapital,\tend\tof\tperiod\t(Standardized\tApproach) | $195,440 | $195,440 |
| Tier\t2\tCapital,\tbeginning\tof\tperiod\t(Advanced\tApproaches) | $24,746 | $25,500 |
| Net\tchange\tin\tqualifying\tsubordinated\tdebt | 376 | (349) |
| Net\tdecrease\tin\texcess\tof\teligible\tcredit\treserves\tover\texpected\tcredit\tlosses | (86) | (115) |
| Other | (14) | (14) |
| Net\tchange\tin\tTier\t2\tCapital\t(Advanced\tApproaches) | $276 | $(478) |
| Tier\t2\tCapital,\tend\tof\tperiod\t(Advanced\tApproaches) | $25,022 | $25,022 |
| Total\tCapital,\tend\tof\tperiod\t(Advanced\tApproaches) | $183,144 | $183,144 |

# Citigroup	Risk-Weighted	Assets	Rollforward	(Basel	III	Standardized	Approach)

| In	millions	of	dollars | Three	Months	Ended<br>December	31,	2018 | Twelve	Months	Ended<br>	December	31,	2018 |
| :--- | :--- | :--- |
| \tTotal\tRisk-Weighted\tAssets,\tbeginning\tof\tperiod | $1,196,923 | $1,155,099 |
| Changes\tin\tCredit\tRisk-Weighted\tAssets |  |  |
| Net\tincrease\tin\tgeneral\tcredit\trisk\texposures(1) | 135 | 2,850 |
| Net\tincrease\tin\trepo-style\ttransactions(2) | 1,449 | 7,070 |
| Net\tincrease\tin\tsecuritization\texposures(3) | 2,300 | 2,068 |
| Net\tchange\tin\tequity\texposures | (1,484) | 1,195 |
| Net\tchange\tin\tover-the-counter\t(OTC)\tderivatives(4) | (10,849) | 7,364 |
| Net\tchange\tin\tother\texposures(5) | (535) | 1,464 |
| Net\tdecrease\tin\toff-balance\tsheet\texposures(6) | (8,878) | (2,376) |
| Net\tchange\tin\tCredit\tRisk-Weighted\tAssets | $(17,862) | $19,635 |
| Changes\tin\tMarket\tRisk-Weighted\tAssets |  |  |
| Net\tchange\tin\trisk\tlevels(7) | $(4,219) | $7,383 |
| Net\tdecrease\tdue\tto\tmodel\tand\tmethodology\tupdates(8) | (394) | (7,669) |
| Net\tdecrease\tin\tMarket\tRisk-Weighted\tAssets | $(4,613) | $(286) |
| Total\tRisk-Weighted\tAssets,\tend\tof\tperiod | $1,174,448 | $1,174,448 |

(1) General	credit	risk	exposures	include	cash	and	balances	due	from	depository	institutions,	securities,	and	loans	and	leases.	General	credit	risk	exposures	increased	during	the	12	months	ended December	31,	2018	mainly	driven	by	growth	in	corporate	loans.

(2) Repo-style	transactions	include	repurchase	and	reverse	repurchase	transactions	as	well	as	securities	borrowing	and	securities	lending	transactions.

(3) Securitization	exposures	increased	during	the	three	and	12	months	ended	December	31,	2018	due	to	increased	exposures	from	new	deals.

(4) OTC	derivatives	decreased	during	the	three	months	ended	December	31,	2018	due	to	a	decrease	in	notional	amounts	for	bilateral	trades.	OTC	derivatives	increased	during	the	12	months	ended December	31,	2018,	primarily	due	to	notional	increases.

(5) Other	exposures	include	cleared	transactions,	unsettled	transactions,	and	other	assets.	Other	exposures	increased	during	the	12	months	ended	December	31,	2018	primarily	due	to	increases	in various	other	assets	subject	to	risk-weighting	at	100%	and	additional	DTAs	arising	from	temporary	differences,	which	are	subject	to	risk-weighting	at	250%.

(6) Off-balance	sheet	exposures	decreased	during	the	three	and	12	months	ended	December	31,	2018,	primarily	due	to	a	reduction	in	loan	commitments.

(7) Risk	levels	decreased	during	the	three	months	ended	December	31,	2018	primarily	due	to	a	decrease	in	positions	subject	to	incremental	risk	charges.	Risk	levels	increased	during	the	12	months ended	December	31,	2018	primarily	due	to	changes	in	exposure	levels	subject	to	Value	at	Risk	and	Stressed	Value	at	Risk.

(8) Risk-weighted	assets	decreased	during	the	12	months	ended	December	31,	2018	primarily	due	to	changes	in	model	inputs	regarding	volatility	and	the	correlation	between	market	risk	factors,	as well	as	methodology	changes	for	standard	specific	risk	charges.

# Citigroup	Risk-Weighted	Assets	Rollforward	(Basel	III	Advanced	Approaches)

| In	millions	of	dollars | Three	Months	Ended	December<br>31,	2018 | Twelve	Months	Ended<br>	December	31,	2018 |
| :--- | :--- | :--- |
| \tTotal\tRisk-Weighted\tAssets,\tbeginning\tof\tperiod | $1,155,188 | $1,152,644 |
| Changes\tin\tCredit\tRisk-Weighted\tAssets |  |  |
| Net\tchange\tin\tretail\texposures(1) | 2,320 | (11,898) |
| Net\tdecrease\tin\twholesale\texposures(2) | (6,392) | (635) |
| Net\tincrease\tin\trepo-style\ttransactions(3) | 3,334 | 4,728 |
| Net\tincrease\tin\tsecuritization\texposures(4) | 2,118 | 2,505 |
| Net\tchange\tin\tequity\texposures | (1,412) | 1,466 |
| Net\tdecrease\tin\tover-the-counter\t(OTC)\tderivatives(5) | (8,817) | (7,063) |
| Net\tchange\tin\tderivatives\tCVA | (465) | 1,318 |
| Net\tchange\tin\tother\texposures(6) | (1,141) | 1,904 |
| Net\tdecrease\tin\tsupervisory\t6%\tmultiplier(7) | (600) | (540) |
| Net\tdecrease\tin\tCredit\tRisk-Weighted\tAssets | $(11,055) | $(8,215) |
| Changes\tin\tMarket\tRisk-Weighted\tAssets |  |  |
| Net\tchange\tin\trisk\tlevels(8) | $(4,266) | $6,653 |
| Net\tdecrease\tdue\tto\tmodel\tand\tmethodology\tupdates(9) | (394) | (7,669) |
| Net\tdecrease\tin\tMarket\tRisk-Weighted\tAssets | $(4,660) | $(1,016) |
| Net\tdecrease\tin\tOperational\tRisk-Weighted\tAssets(10) | $(7,540) | $(11,480) |
| Total\tRisk-Weighted\tAssets,\tend\tof\tperiod | $1,131,933 | $1,131,933 |

(1) Retail	exposures	increased	during	the	three	months	ended	December	31,	2018,	primarily	due	to	seasonal	spending	for	qualifying	revolving	(cards)	exposures.	Retail	exposures	decreased	during the	12	months	ended	December	31,	2018,	primarily	due	to	residential	mortgage	loan	sales	and	repayments.

(2) Wholesale	exposures	decreased	during	the	three	months	ended	December	31,	2018,	primarily	due	to	decreases	in	loan	commitments.

(5) OTC	derivatives	decreased	during	the	three	and	12	months	ended	December	31,	2018,	primarily	due	to	decreases	in	potential	future	exposure	and	fair	value.

(6) Other	exposures	include	cleared	transactions,	unsettled	transactions,	assets	other	than	those	reportable	in	specific	exposure	categories	and	non-material	portfolios.

(7) Supervisory	6%	multiplier	does	not	apply	to	derivatives	CVA.

(10) Operational	risk-weighted	assets	decreased	during	the	three	months	and	12	months	ended	December	31,	2018	primarily	due	to	changes	in	operational	loss	severity	and	frequency.

Total	risk-weighted	assets	under	the	Basel	III	Standardized	Approach increased	from	year-end	2017	due	to	higher	credit	risk-weighted	assets,	slightly offset	by	a	decrease	in	market	risk-weighted	assets.	The	increase	in	credit	risk- weighted	assets	was	primarily	due	to	changes	in	OTC	derivative	trade	activity, repo-style	transactions,	growth	in	corporate	loans,	securitization	exposures	and other	exposures,	partially	offset	by	a	decrease	in	loan	commitments. Total	risk-weighted	assets	under	the	Basel	III	Advanced	Approaches decreased	from	year-end	2017	driven	by	lower	operational	and	credit,	as	well	as market	risk-weighted	assets.	The	decrease	in	operational	risk-weighted	assets was	primarily	due	to	changes	in	operational	loss	severity	and	frequency.	The decrease	in	credit	risk-weighted	assets	was	primarily	due	to	a	decline	in	retail exposures	driven	by	a	reduction	in	residential	mortgage	loan	sales	and repayments,	and	changes	in	OTC	derivative	trade	activity,	partially	offset	by increases	in	repo-style	transactions,	securitization	exposures	and	other exposures.

Market	risk-weighted	assets	decreased	under	both	the	Basel	III	Standardized Approach	and	Basel	III	Advanced	Approaches	primarily	due	to	changes	in model	inputs	regarding	volatility	and	the	correlation	between	market	risk	factors, as	well	as	methodology	changes	for	standard	specific	risk	charges,	partially offset	by	increases	in	positions	subject	to	Value	at	Risk	and	Stressed	Value	at Risk.

Citigroup's	Supplementary	Leverage	ratio	was	6.4%	for	the	fourth	quarter	of 2018,	compared	to	6.5%	for	the	third	quarter	of	2018	and	6.7%	for	the	fourth quarter	of	2017.	The	decline	in	the	ratio	quarter-over-quarter	was	principally driven	by	a	reduction	in	Tier	1	Capital	resulting	from	the	return	of	$5.8	billion	of capital	to	common	shareholders,	partially	offset	by	net	income	of	$4.3	billion. The	decline	in	the	ratio	from	the	fourth	quarter	of	2017	was	largely	attributable to	a	reduction	in	Tier	1	Capital	resulting	from	the	return	of	$18.4	billion	of capital	to	common	shareholders,	adverse	net	movements	in	AOCI,	as	well	as	an increase	in	Total	Leverage	Exposure	primarily	due	to	growth	in	average	on- balance	sheet	assets,	partially	offset	by	net	income	of	$18.0	billion. The	following	table	sets	forth	Citi's	Supplementary	Leverage	ratio	and related	components	as	of	December	31,	2018	and	2017.

# Citigroup	Basel	III	Supplementary	Leverage	Ratio	and	Related	Components

| In	millions	of	dollars,	except	ratios | December	31,	2018 | December	31,	2017 |
| :--- | :--- | :--- |
| Tier\t1\tCapital | $158,122 | $162,377 |
| Total\tLeverage\tExposure\t(TLE) |  |  |
| On-balance\tsheet\tassets(1) | $1,936,791 | $1,909,699 |
| Certain\toff-balance\tsheet\texposures:(2) |  |  |
| \t\t\tPotential\tfuture\texposure\ton\tderivative\tcontracts | 187,130 | 191,555 |
| \t\t\tEffective\tnotional\tof\tsold\tcredit\tderivatives,\tnet(3) | 49,402 | 59,207 |
| \t\t\tCounterparty\tcredit\trisk\tfor\trepo-style\ttransactions(4) | 23,715 | 27,005 |
| \t\t\tUnconditionally\tcancelable\tcommitments | 69,630 | 67,644 |
| \t\t\tOther\toff-balance\tsheet\texposures | 238,805 | 218,754 |
| Total\tof\tcertain\toff-balance\tsheet\texposures | $568,682 | $564,165 |
| Less:\tTier\t1\tCapital\tdeductions | 39,832 | 41,373 |
| Total\tLeverage\tExposure | $2,465,641 | $2,432,491 |
| Supplementary\tLeverage\tratio | 6.41% | 6.68% |

(1) Represents	the	daily	average	of	on-balance	sheet	assets	for	the	quarter.

(2) Represents	the	average	of	certain	off-balance	sheet	exposures	calculated	as	of	the	last	day	of	each	month	in	the	quarter.

(3) Under	the	U.S.	Basel	III	rules,	banking	organizations	are	required	to	include	in	TLE	the	effective	notional	amount	of	sold	credit	derivatives,	with	netting	of	exposures	permitted	if	certain conditions	are	met.

(4) Repo-style	transactions	include	repurchase	or	reverse	repurchase	transactions	and	securities	borrowing	or	securities	lending	transactions.

# Capital	Resources	of	Citigroup's	Subsidiary	U.S.

# Depository	Institutions

Citigroup's	subsidiary	U.S.	depository	institutions	are	also	subject	to	regulatory capital	standards	issued	by	their	respective	primary	federal	bank	regulatory agencies,	which	are	similar	to	the	standards	of	the	Federal	Reserve	Board.

During	2018,	Citi's	primary	subsidiary	U.S.	depository	institution,	Citibank, N.A.	(Citibank),	is	subject	to	effective	minimum	Common	Equity	Tier	1	Capital, Tier	1	Capital	and	Total	Capital	ratios,	inclusive	of	the	75%	phase-in	of	the	2.5% Capital	Conservation	Buffer,	of	6.375%,	7.875%	and	9.875%,	respectively. Citibank's	effective	minimum	Common	Equity	Tier	1	Capital,	Tier	1	Capital and	Total	Capital	ratios	during

2017,	inclusive	of	the	50%	phase-in	of	the	2.5%	Capital	Conservation	Buffer, were	5.75%,	7.25%	and	9.25%,	respectively.	Citibank	is	required	to	maintain stated	minimum	Common	Equity	Tier	1	Capital,	Tier	1	Capital	and	Total Capital	ratios	of	4.5%,	6.0%	and	8.0%,	respectively.

The	following	tables	set	forth	the	capital	tiers,	total	risk-weighted	assets	and underlying	risk	components,	risk-based	capital	ratios,	quarterly	adjusted	average total	assets,	Total	Leverage	Exposure	and	leverage	ratios	for	Citibank,	Citi's primary	subsidiary	U.S.	depository	institution,	as	of	December	31,	2018	and 2017.

# Citibank	Capital	Components	and	Ratios

(1) Under	the	Advanced	Approaches	framework	eligible	credit	reserves	that	exceed	expected	credit	losses	are	eligible	for	inclusion	in	Tier	2	Capital	to	the	extent	the	excess	reserves	do	not	exceed 0.6%	of	credit	risk-weighted	assets,	which	differs	from	the	Standardized	Approach	in	which	the	allowance	for	credit	losses	is	eligible	for	inclusion	in	Tier	2	Capital	up	to	1.25%	of	credit	risk- weighted	assets,	with	any	excess	allowance	for	credit	losses	being	deducted	in	arriving	at	credit	risk-weighted	assets.

(2) Citibank's	risk-based	capital	and	leverage	ratios	and	related	components	as	of	December	31,	2017	are	non-GAAP	financial	measures,	which	reflect	full	implementation	of	regulatory	capital adjustments	and	deductions	prior	to	the	effective	date	of	January	1,	2018.	Citi	believes	these	ratios	and	the	related	components	provide	useful	information	to	investors	and	others	by	measuring Citi's	progress	in	prior	periods	against	currently	effective	regulatory	capital	standards.

(3) As	of	December	31,	2018,	Citibank's	reportable	Common	Equity	Tier	1	Capital,	Tier	1	Capital	and	Total	Capital	ratios	were	the	lower	derived	under	the	Basel	III	Standardized	Approach.	As	of December	31,	2017,	Citibank's	reportable	Common	Equity	Tier	1	Capital	and	Tier	1	Capital	ratios	were	the	lower	derived	under	the	Basel	III	Standardized	Approach,	whereas	the	reportable Total	Capital	ratio	was	the	lower	derived	under	the	Basel	III	Advanced	Approaches	framework.

(4) Citibank	must	maintain	minimum	Common	Equity	Tier	1	Capital,	Tier	1	Capital,	Total	Capital	and	Tier	1	Leverage	ratios	of	6.5%,	8.0%,	10.0%	and	5.0%,	respectively,	to	be	considered	"well capitalized"	under	the	revised	Prompt	Corrective	Action	(PCA)	regulations	applicable	to	insured	depository	institutions	as	established	by	the	U.S.	Basel	III	rules.	Effective	January	1,	2018, Citibank	must	also	maintain	a	minimum	Supplementary	Leverage	ratio	of	6.0%	to	be	considered	"well	capitalized."

# Impact	of	Changes	on	Citigroup	and	Citibank	Capital	Ratios

The	following	tables	present	the	estimated	sensitivity	of	Citigroup's	and Citibank's	capital	ratios	to	changes	of	$100	million	in	Common	Equity	Tier	1 Capital,	Tier	1	Capital	and	Total	Capital	(numerator),	and	changes	of	$1	billion in	Advanced	Approaches	and	Standardized	Approach	risk-weighted	assets	and quarterly	adjusted	average	total	assets,	as	well	as	Total	Leverage	Exposure (denominator),	as	of	December	31,	2018.	The	information	below	is	provided	for the	purpose	of	analyzing	the	impact	that	a	change	in	Citigroup's

or	Citibank's	financial	position	or	results	of	operations	could	have	on	these ratios.	These	sensitivities	only	consider	a	single	change	to	either	a	component	of regulatory	capital,	risk-weighted	assets,	quarterly	adjusted	average	total	assets	or Total	Leverage	Exposure.	Accordingly,	an	event	that	affects	more	than	one factor	may	have	a	larger	basis	point	impact	than	is	reflected	in	these	tables.

# Impact	of	Changes	on	Citigroup	and	Citibank	Risk-Based	Capital	Ratios

# Impact	of	Changes	on	Citigroup	and	Citibank	Leverage	Ratios

# Citigroup	Broker-Dealer	Subsidiaries

At	December	31,	2018,	Citigroup	Global	Markets	Inc.,	a	U.S.	broker-dealer registered	with	the	SEC	that	is	an	indirect	wholly	owned	subsidiary	of	Citigroup, had	net	capital,	computed	in	accordance	with	the	SEC's	net	capital	rule,	of	$8.2 billion,	which	exceeded	the	minimum	requirement	by	$5.6	billion. Moreover,	Citigroup	Global	Markets	Limited,	a	broker-dealer	registered with	the	United	Kingdom's	Prudential	Regulation	Authority	(PRA)	that	is	also an	indirect	wholly	owned	subsidiary	of	Citigroup,	had	total	capital	of	$20.9 billion	at	December	31,	2018,	which	exceeded	the	PRA's	minimum	regulatory capital	requirements.

In	addition,	certain	of	Citi's	other	broker-dealer subsidiaries	are	subject	to	regulation	in	the	countries	in	which	they	do	business, including	requirements	to	maintain	specified	levels	of	net	capital	or	its equivalent.	Citigroup's	other	broker-dealer	subsidiaries	were	in	compliance	with their	capital	requirements	at	December	31,	2018.

# Regulatory	Capital	Standards	Developments

The	U.S.	banking	agencies	and	the	Basel	Committee	issued	numerous	proposed and	final	rules	on	a	variety	of	topics	in	2018,	as	well	as	early	2019.	In	the	U.S., the	most	significant	proposals	would	introduce	stress	buffer	requirements,	as well	as	a	new	methodology	for	calculating	risk-weighted	assets	for	derivative contracts.	The	Basel	Committee,	among	other	things,	finalized	revisions	to	the GSIB	framework	as	well	as	the	minimum	capital	requirements	for	market	risk.

# U.S.	Banking	Agencies

# Regulatory	Capital	Treatment—Implementation	and	Transition	of	the	Current Expected	Credit	Losses	(CECL)	Methodology

In	February	2019,	the	U.S.	banking	agencies	issued	a	final	rule	that	provides banking	organizations	an	optional	phase-in	over	a	three-year	period	of	the	"Day One"	adverse	regulatory	capital	effects	resulting	from	adoption	of	the	CECL methodology.

The	rule	is	in	recognition	of	the	issuance	by	the	Financial	Accounting Standards	Board	of	ASU	No.	2016-13,	"Financial	Instruments—Credit	Losses," which	will	replace	the	current	incurred	loss	methodology	for	recognizing	credit losses	with	the	CECL	methodology.	The	ASU	will	be	effective	for	Citi	as	of January	1,	2020,	and	will	generally	result	in	the	earlier	recognition	of	the provision	for	credit	losses	and	related	allowance	for	credit	losses	than	current practice.	For	additional	information	regarding	the	CECL	methodology,	see "Future	Application	of	Accounting	Standards"	below.

Citi	and	Citibank	plan	to	elect	the	transition	provisions	provided	by	the	rule, and	will	phase-in	the	"Day	One"	regulatory	capital	effects	resulting	from adoption	of	the	CECL	methodology	over	the	three-year	period	beginning	January 1,	2020.

Separately,	in	December	2018,	the	Federal	Reserve	Board	issued	a statement	that	it	plans	to	maintain	its	current	framework	for	calculating allowances	on	loans	in	the	supervisory	stress	test	for	the	2020	and	2021 supervisory	stress	test	cycles,	and	to	evaluate	appropriate	future	enhancements	to this	framework	as	best	practices	for	implementing	CECL	are	developed. However,	banking	organizations	are	required	to	incorporate	CECL	into	their stress	testing	methodologies,	data,	and	disclosure	beginning	in	the	cycle coinciding	with	their	first	full	year	of	CECL	adoption	(2020	for	Citi).

# Stress	Buffer	Requirements

In	April	2018,	the	Federal	Reserve	Board	issued	a	proposal	that	is	designed	to more	closely	integrate	the	results	of	the	quantitative	assessment	in	CCAR	with firms'	ongoing	minimum	capital	requirements	under	the	U.S.	Basel	III	rules. Specifically,	the	proposed	rule	would	replace	the	existing	Capital Conservation	Buffer,	currently	fixed	at	2.5%	under	the	U.S.	Basel	III	rules,	with (i)	a	variable	buffer	known	as	the	Stress	Capital	Buffer	(as	described	below), plus	(ii)	for	U.S.	GSIBs,	the	GSIB's	then-current	GSIB	surcharge,	plus	(iii)	the Countercyclical	Capital	Buffer,	if	any.	These	three

components	would	constitute	the	new	Capital	Conservation	Buffer.

The	Stress	Capital	Buffer	(SCB)	would	be	equal	to	the	maximum	decline	in a	bank	holding	company's	Common	Equity	Tier	1	Capital	ratio	under	the severely	adverse	scenario	of	the	supervisory	stress	test,	plus	planned	common stock	dividends	for	each	of	the	fourth	through	seventh	quarters	of	the	planning horizon	(expressed	as	a	percentage	of	risk-weighted	assets)—the	so-called "dividend	add-on."	The	SCB	would	be	subject	to	a	floor	of	2.5%.

In	addition	to	the	SCB,	the	proposed	rule	would	establish	a	new	Stress Leverage	Buffer	requirement	above	the	stated	minimum	Tier	1	Leverage	ratio requirement.	The	Stress	Leverage	Buffer	would	be	equal	to	the	maximum decline	in	a	bank	holding	company's	Tier	1	Leverage	ratio	under	the	severely adverse	scenario	of	the	supervisory	stress	test,	plus	planned	common	stock dividends	for	each	of	the	fourth	through	seventh	quarters	of	the	planning	horizon (expressed	as	a	percentage	of	quarterly	adjusted	average	total	assets).

Finally,	the	proposed	rule	would	also	modify	certain	assumptions	currently required	in	supervisory	stress	tests,	including	continued	capital	distributions during	the	nine-quarter	capital	planning	horizon	and	balance	sheet	growth assumptions.

Under	the	timeline	for	stress	testing	and	CCAR	cycles	included	within	the proposed	rule,	the	Federal	Reserve	Board	would	generally	release	its	calculation of	each	bank	holding	company's	SCB	and	Stress	Leverage	Buffer	by	June	30	of each	year.

A	final	rule	has	not	yet	been	issued.	In	late	2018,	senior	staff	at	the	Federal Reserve	Board	indicated	publicly	that	the	proposal	would	not	take	effect	until 2020	at	the	earliest.	It	was	also	noted	that	the	Federal	Reserve	Board	plans	to	re- propose	certain	elements	of	the	proposal	to	better	balance	the	need	to	preserve the	dynamism	of	stress	testing	while	reducing	unnecessary	volatility.	The potential	re-proposal	may	also	address	certain	other	elements	of	the	original proposal,	such	as	the	relative	timing	between	stress	testing	results	and	the submission	of	a	firm's	capital	plan,	the	consequences	of	breaching	a	buffer,	the role	and	calibration	of	the	dividend	add-on,	and	the	necessity	of	the	Stress Leverage	Buffer.

# Enhanced	Supplementary	Leverage	Ratio	and	Total	Loss-Absorbing	Capacity (TLAC)	Requirements

In	April	2018,	the	Federal	Reserve	Board	and	the	Office	of	the	Comptroller	of the	Currency	(OCC)	jointly	issued	a	proposal	that	would	modify	the	enhanced Supplementary	Leverage	ratio	standards	applicable	to	U.S.	GSIBs	and	their Federal	Reserve	Board	or	OCC-regulated	insured	depository	institution subsidiaries.

The	proposed	rule	would	replace	the	currently	fixed	2.0%	leverage	buffer requirement	with	a	variable	leverage	buffer	requirement	equal	to	50%	of	the	U.S. GSIB's	currently	applicable	GSIB	surcharge.	Similarly,	for	the	regulated	insured depository	institution	subsidiaries	of	U.S.	GSIBs,	such	as	Citibank,	the	proposed rule	would	replace	the	currently	fixed	6.0%	threshold	at	which	these	subsidiaries are	considered	to	be	"well	capitalized"	under	the	PCA	framework	with	a threshold	set	at	the	stated	minimum	requirement	of

3.0%	plus	50%	of	the	GSIB	surcharge	applicable	to	the	U.S.	GSIB	of	which	it	is a	subsidiary.

The	proposed	rule	would	also	make	corresponding	modifications	to	certain of	the	Federal	Reserve	Board's	TLAC	requirements	applicable	to	U.S.	GSIBs. Accordingly,	under	the	proposed	rule,	each	U.S.	GSIB's	fixed	2.0%	leverage- based	TLAC	buffer	would	be	replaced	with	a	buffer	equal	to	50%	of	the	GSIB surcharge,	and	the	leverage	component	of	each	U.S.	GSIB's	Long-Term	Debt (LTD)	requirement	would	be	revised	to	equal	Total	Leverage	Exposure multiplied	by	2.5%	plus	50%	of	the	U.S.	GSIB's	applicable	GSIB	surcharge.	For additional	information	about	TLAC,	see	"Managing	Global	Risk—Liquidity Risk—Long-Term	Debt—Total	Loss-Absorbing	Capacity	(TLAC)"	below. If	adopted	as	proposed,	and	assuming	that	Citi	maintains	a	method	2	GSIB surcharge	of	3.0%,	Citi's	effective	minimum	Supplementary	Leverage	ratio requirement	would	be	reduced	to	4.5%,	compared	to	the	current	5.0%. Citibank's	effective	minimum	Supplementary	Leverage	ratio	to	be	determined "well	capitalized"	under	the	PCA	framework	would	similarly	be	reduced	to 4.5%,	compared	to	the	current	6.0%.	Citi's	leverage-based	TLAC	buffer	would decrease	from	2.0%	to	1.5%,	which	would	reduce	Citi's	effective	minimum leverage-based	TLAC	requirement	from	9.5%	to	9.0%.	Additionally,	the leverage	component	of	Citi's	long-term	debt	requirement	would	decrease	from 4.5%	to	4.0%.

The	Economic	Growth,	Regulatory	Relief,	and	Consumer	Protection	Act, which	was	signed	into	law	in	2018,	directs	the	U.S.	banking	agencies	to	amend the	U.S.	Basel	III	rules	to	exclude	certain	custody-related	deposits	from	the definition	of	Total	Leverage	Exposure	for	custody	banks.	The	U.S.	banking agencies	have	not	yet	issued	a	notice	of	proposed	rulemaking	in	response	to	this particular	provision	of	the	Act,	and	it	is	currently	unclear	how	this	may	impact	or interact	with	their	proposed	rulemaking	from	April	2018.

# Standardized	Approach	for	Counterparty	Credit	Risk

In	December	2018,	the	U.S.	banking	agencies	issued	a	proposal	to	introduce	the Standardized	Approach	for	Counterparty	Credit	Risk	(SA-CCR)	in	the	U.S.	SA- CCR	would	replace	the	Current	Exposure	Method	(CEM),	which	is	the	current methodology	used	to	calculate	risk-weighted	assets	for	all	derivative	contracts under	the	Standardized	Approach,	as	well	as	risk-weighted	assets	for	derivative contracts	under	the	Advanced	Approaches	in	cases	where	internal	models	are	not used.	Additionally,	SA-CCR	would	replace	CEM	in	numerous	other	instances throughout	the	regulatory	framework,	including	but	not	limited	to	the Supplementary	Leverage	Ratio,	single	counterparty	credit	limits,	and	legal lending	limits.

Under	SA-CCR,	a	banking	organization	would	calculate	the	exposure amount	of	its	derivative	contracts	at	the	netting	set	level.	Multiple	derivative contracts	would	generally	be	considered	to	be	under	the	same	netting	set	so	long as	each	derivative	contract	is	subject	to	the	same	qualifying	master	netting agreement.	SA-CCR	also	introduces	the	concept	of	hedging	sets,	which	would allow	a	banking	organization	to	fully	or	partially	net	derivative	contracts	within the	same	netting	set	that	share	similar	risk	factors.	Moreover,	SA-CCR

incorporates	updated	supervisory	factors	and	maturity	factors	to	calculate	the potential	future	exposure	of	a	derivative	contract,	and	provides	for	improved recognition	of	collateral.	Under	the	proposal,	the	exposure	amount	of	a	netting set	would	be	equal	to	an	alpha	factor	of	1.4	multiplied	by	the	sum	of	the replacement	cost	and	potential	future	exposure	of	the	netting	set.

The	effective	date	of	the	proposed	rule	is	July	1,	2020;	however,	early adoption	would	be	permitted.	If	adopted	as	proposed,	Citi's	risk-weighted	assets related	to	derivative	contracts	under	the	Standardized	Approach	are	likely	to increase.	The	ultimate	impact	on	Citi,	however,	will	depend	upon	the	specific provisions	of	any	final	rule.

# Stress	Testing	Requirements

The	U.S.	banking	agencies	have	recently	issued	a	number	of	proposals	that would	modify	company-run	stress	testing	requirements	to	conform	with	the Economic	Growth,	Regulatory	Relief,	and	Consumer	Protection	Act.	In	October 2018,	the	Federal	Reserve	Board	released	a	proposal	that	would	eliminate	the mid-cycle	stress	test	requirement	for	all	bank	holding	companies,	including	Citi, effective	in	the	2020	cycle	(the	proposal	would	maintain	the	requirement	to conduct	an	annual	company-run	stress	test).	In	January	2019,	the	Federal Reserve	Board	released	a	further	proposal	that	would	eliminate	the	hypothetical adverse	scenario	from	company-run	stress	tests	for	bank	holding	companies, including	Citi.	Similarly,	the	Federal	Reserve	Board	would	no	longer	include	an adverse	scenario	in	its	supervisory	stress	tests.	(The	Office	of	the	Comptroller	of the	Currency	and	the	Federal	Deposit	Insurance	Corporation	released	similar proposals	in	December	2018.)	Company-run	stress	tests	and	supervisory	stress tests	would	continue	to	include	a	severely	adverse	scenario.	The	proposals	did not	specify	a	proposed	effective	date	for	the	elimination	of	the	adverse	scenario.

# Basel	Committee

# Revised	Assessment	Framework	for	Global	Systemically	Important	Banks

In	July	2018,	the	Basel	Committee	issued	a	final	standard	which	revised	its framework	for	assessing	the	global	systemic	importance	of	banks,	beginning with	the	2021	assessment.	(For	a	description	of	the	Basel	Committee's	GSIB methodology,	so-called	"method	1"	under	the	U.S.	Basel	III	rules,	see	"Current Regulatory	Capital	Standards—GSIB	Surcharge"	above.)

The	final	standard	introduces	a	trading	volume	indicator	within	the substitutability/financial	institution	infrastructure	category,	accompanied	by	an equivalent	reduction	in	the	current	weighting	of	the	existing	underwriting indicator.	Among	other	revisions,	the	standard	also	expands	the	scope	of consolidation	to	include	exposures	of	insurance	subsidiaries	within	the	size, interconnectedness,	and	complexity	categories.

If	the	Federal	Reserve	Board	were	to	adopt	the	Basel	Committee's	revisions with	respect	to	the	U.S.	GSIB	framework,	Citi's	estimated	method	1	GSIB surcharge	would	remain	unchanged	at	2.0%.

The	Basel	Committee	indicated	in	the	standard	that	it	plans	to	complete another	review	of	the	GSIB	framework	by	2021,	at	which	time	it	will	consider alternative	methodologies	for	the	substitutability	category,	including	the	removal of	the	existing	cap.	Citi's	estimated	method	1	GSIB	surcharge	may	increase	in the	future,	if	the	Federal	Reserve	Board	were	to	adopt	alternative	methodologies for	the	substitutability	category.

If	the	U.S.	agencies	were	to	amend	the	Supplementary	Leverage	Ratio requirements	in	a	manner	similar	to	either	of	the	options	under	consideration	by the	Basel	Committee,	Citi's	Supplementary	Leverage	Ratio	would	likely	benefit modestly.	However,	the	impact	from	and	timing	of	any	actions	undertaken	by the	Basel	Committee	or	the	U.S.	banking	agencies	in	this	regard	remains uncertain.

# Revisions	to	the	Minimum	Capital	Requirements	for Market	Risk

In	January	2019,	the	Basel	Committee	issued	a	final	standard	that	revises	the market	risk	capital	framework—the	so-called	Fundamental	Review	of	the Trading	Book,	or	FRTB.	The	final	rule	revises	the	assessment	process	under	the Advanced	Approaches	to	determine	whether	a	bank's	internal	risk	management models	appropriately	reflect	the	risks	of	individual	trading	desks,	and	clarifies the	requirements	for	identification	of	risk	factors	that	are	eligible	for	internal modeling.	In	addition,	the	risk	weights	for	general	interest	rate	risk	and	foreign exchange	risk	under	the	Standardized	Approach	have	been	recalibrated. If	the	U.S.	banking	agencies	were	to	adopt	the	Basel	Committee's	revised market	risk	framework	unchanged,	Citi	believes	its	market	risk-weighted	assets could	increase	significantly.	The	ultimate	impact	on	Citi,	however,	will	depend upon	the	specific	provisions	of	any	final	rule.

# Leverage	Ratio	Treatment	of	Client	Cleared	Derivatives

In	October	2018,	the	Basel	Committee	issued	a	consultative	document	seeking views	as	to	whether	a	targeted	and	limited	revision	of	the	leverage	ratio	exposure measure	was	warranted	with	regard	to	the	treatment	of	client	cleared	derivatives. In	the	U.S.,	the	Basel	Committee's	leverage	ratio	framework	and	leverage	ratio exposure	measure	are	most	closely	aligned	with	the	Supplementary	Leverage Ratio	and	Total	Leverage	Exposure,	respectively.	Under	the	Basel	Committee's leverage	ratio	framework,	the	leverage	ratio	exposure	measure	is	generally	not adjusted	for	physical	or	financial	collateral,	guarantees	or	other	credit	risk mitigation	techniques,	including	initial	margin	received	from	clients.	However, the	Basel	Committee	consultative	document	proposes	two	alternative	treatments for	client	cleared	derivatives	that	would	reduce	the	leverage	ratio	exposure measure,	to	varying	degrees,	in	recognition	of	the	beneficial	effects	of	margin requirements	and	overcollateralization,	as	applicable.

One	of	the	options	under	consideration	would	allow	amounts	of	cash	and non-cash	initial	margin	that	are	received	from	the	client	to	offset	the	potential future	exposure	of	derivatives	centrally	cleared	on	the	client's	behalf.	Another option	would	amend	the	currently	specified	treatment	of	client	cleared derivatives	to	align	it	with	the	measurement	as	determined	per	the	Basel Committee's	standardized	approach	for	measuring	counterparty	credit	risk exposures,	as	used	for	risk-based	capital	requirements.	This	option	would	permit both	cash	and	non-cash	forms	of	initial	margin	and	variation	margin	received from	the	client	to	offset	replacement	cost	and	potential	future	exposure	for	client cleared	derivatives	only.

# Tangible	Common	Equity,	Book	Value	Per	Share,	Tangible	Book	Value	Per

# Share	and	Returns	on	Equity

Tangible	common	equity	(TCE),	as	defined	by	Citi,	represents	common stockholders'	equity	less	goodwill	and	identifiable	intangible	assets	(other	than MSRs).	Other	companies	may	calculate	TCE	in	a	different	manner.	TCE, tangible	book	value	(TBV)	per	share	and	return	on	average	TCE	are	non-GAAP financial	measures.	Citi	believes	the	presentation	of	TCE,	TBV	per	share	and return	on	average	TCE	provides	alternate	measures	of	capital	strength	and performance	that	are	commonly	used	by	investors	and	industry	analysts.

(1) Year	ended	December	31,	2017	excludes	the	one-time	impact	of	Tax	Reform.	For	a	reconciliation	of	these	measures,	see	"Significant	Accounting	Policies	and	Significant	Estimates—Income Taxes"	below.

(2) ROTCE	represents	net	income	available	to	common	shareholders	as	a	percentage	of	average	TCE.

# RISK	FACTORS

The	following	discussion	sets	forth	what	management	currently	believes	could be	the	most	significant	risks	and	uncertainties	that	could	impact	Citi's businesses,	results	of	operations	and	financial	condition.	Other	risks	and uncertainties,	including	those	not	currently	known	to	Citi	or	its	management, could	also	negatively	impact	Citi's	businesses,	results	of	operations	and	financial condition.	Thus,	the	following	should	not	be	considered	a	complete	discussion	of all	of	the	risks	and	uncertainties	Citi	may	face.

# STRATEGIC	RISKS

# Citi's	Ability	to	Return	Capital	to	Common	Shareholders	Consistent	with	Its Capital	Planning	Efforts	and	Targets	Substantially	Depends	on	the	CCAR Process	and	the	Results	of	Regulatory	Stress	Tests.

Citi's	ability	to	return	capital	to	its	common	shareholders	consistent	with	its capital	planning	efforts	and	targets,	whether	through	its	common	stock	dividend or	through	a	share	repurchase	program,	substantially	depends,	among	other things,	on	regulatory	approval,	including	through	the	CCAR	process	required	by the	Federal	Reserve	Board	(FRB)	and	the	supervisory	stress	tests	required	under the	Dodd-Frank	Act.	The	ability	to	return	capital	also	depends	on	Citi's	results	of operations	and	effectiveness	in	managing	its	level	of	risk-weighted	assets	and GSIB	surcharge.	Citi's	ability	to	accurately	predict,	interpret	or	explain	to stakeholders	the	outcome	of	the	CCAR	process,	and	thus	to	address	any	market or	investor	perceptions,	may	be	limited	as	the	FRB's	assessment	of	Citi's	capital adequacy	is	conducted	using	the	FRB's	proprietary	stress	test	models,	as	well	as a	number	of	qualitative	factors,	including	a	detailed	assessment	of	Citi's	"capital adequacy	process,"	as	defined	by	the	FRB.	For	additional	information	on	Citi's return	of	capital	to	common	shareholders	in	2018	as	well	as	the	CCAR	process, supervisory	stress	test	requirements	and	GSIB	surcharge,	see	"Capital	Resources —Overview"	and	"Capital	Resources—Current	Regulatory	Capital	Standards— Stress	Testing	Component	of	Capital	Planning"	above.

The	FRB	has	stated	that	it	expects	leading	capital	adequacy	practices	will continue	to	evolve	and	will	likely	be	determined	by	the	FRB	each	year	as	a result	of	its	cross-firm	review	of	capital	plan	submissions.	Similarly,	the	FRB has	indicated	that,	as	part	of	its	stated	goal	to	continually	evolve	its	annual	stress testing	requirements,	several	parameters	of	the	annual	stress	testing	process	may continue	to	be	altered,	including	the	severity	of	the	stress	test	scenario,	the	FRB modeling	of	Citi's	balance	sheet	and	the	addition	of	components	deemed important	by	the	FRB.

Additionally,	in	April	2018,	the	FRB	proposed	integration	of	the	annual stress	testing	requirements	with	ongoing	regulatory	capital	requirements. Proposed	changes	to	the	stress	testing	regime	include,	among	others, introduction	of	a	firm-specific	"stress	capital	buffer"	(SCB),	which	would	be equal	to	the	maximum	decline	in	a	firm's	Common	Equity	Tier	1	Capital	ratio under	a	severely	adverse	scenario	over	a	nine-quarter	CCAR	measurement period,	subject	to	a

minimum	requirement	of	2.5%.	The	FRB	proposed	that	the	SCB	would	replace the	capital	conservation	buffer	in	the	firm's	ongoing	regulatory	capital requirements	for	Standardized	Approach	capital	ratios.	The	SCB	would	be calculated	by	the	FRB	using	its	proprietary	data	and	modeling	of	each	firm's results.	Accordingly,	a	firm's	SCB	would	change	annually	based	on	the supervisory	stress	test	results,	thus	potentially	resulting	in	year-to-year	volatility in	the	calculation	of	the	SCB.	For	additional	information	on	the	FRB's	proposal, including	calculation	of	the	SCB,	see	"Capital	Resources—Regulatory	Capital Standards	Developments"	above.

Although	various	uncertainties	exist	regarding	the	extent	of,	and	the ultimate	impact	to	Citi	from,	these	changes	to	the	FRB's	stress	testing	and CCAR	regimes,	these	changes	would	likely	increase	the	level	of	capital	Citi	is required	or	elects	to	hold,	including	as	part	of	Citi's	estimated	management buffer,	thus	potentially	impacting	the	extent	to	which	Citi	is	able	to	return	capital to	shareholders.

# Citi,	Its	Management	and	Its	Businesses	Must	Continually	Review,	Analyze and	Successfully	Adapt	to	Ongoing	Regulatory	and	Other	Uncertainties	and Changes	in	the	U.S.	and	Globally.

Despite	the	adoption	of	final	regulations	in	numerous	areas	impacting	Citi	and its	businesses	over	the	past	several	years,	Citi,	its	management	and	its	businesses continually	face	ongoing	regulatory	uncertainties	and	changes,	both	in	the	U.S. and	globally.	While	the	areas	of	ongoing	regulatory	uncertainties	and	changes facing	Citi	are	too	numerous	to	list	completely,	various	examples	include,	but are	not	limited	to	(i)	uncertainties	and	potential	fiscal,	monetary	and	regulatory changes	arising	from	the	U.S.	Presidential	administration	and	Congress;	(ii) potential	changes	to	various	aspects	of	the	regulatory	capital	framework applicable	to	Citi	(see	the	CCAR	risk	factor	and	"Capital	Resources— Regulatory	Capital	Standards	Developments"	above);	and	(iii)	the	terms	of	and other	uncertainties	resulting	from	the	U.K.'s	potential	exit	from	the	European Union	(EU)	(see	the	macroeconomic	challenges	and	uncertainties	risk	factor below).

Ongoing	regulatory	uncertainties	and	changes	make	Citi's	and	its management's	long-term	business,	balance	sheet	and	budget	planning	difficult or	subject	to	change.	For	example,	the	U.S.	Presidential	administration	has implemented	and	continues	to	discuss	various	changes	to	certain	regulatory requirements,	which	would	require	ongoing	assessment	by	management	as	to	the impact	to	Citi,	its	businesses	and	business	planning.	Business	planning	is required	to	be	based	on	possible	or	proposed	rules	or	outcomes,	which	can change	dramatically	upon	finalization,	or	upon	implementation	or	interpretive guidance	from	numerous	regulatory	bodies	worldwide,	and	such	guidance	can change.

Moreover,	U.S.	and	international	regulatory	initiatives	have	not	always been	undertaken	or	implemented	on	a	coordinated	basis,	and	areas	of	divergence have	developed	and	continue	to	develop	with	respect	to	the	scope,	interpretation, timing,	structure	or	approach,	leading	to	inconsistent	or	even	conflicting regulations,	including	within	a	single	jurisdiction.	For	example,	in	2016,	the European	Commission	proposed	to

introduce	a	new	requirement	for	major	banking	groups	headquartered	outside	the EU	(which	would	include	Citi)	to	establish	an	intermediate	EU	holding	company where	the	foreign	bank	has	two	or	more	institutions	(broadly	meaning	banks, broker-dealers	and	similar	financial	firms)	established	in	the	EU.	While	the proposal	mirrors	an	existing	U.S.	requirement	for	non-U.S.	banking organizations	to	form	U.S.	intermediate	holding	companies,	if	adopted,	it	could lead	to	additional	complexity	with	respect	to	Citi's	resolution	planning,	capital and	liquidity	allocation	and	efficiency	in	various	jurisdictions.	Regulatory changes	have	also	significantly	increased	Citi's	compliance	risks	and	costs	(see the	implementation	and	interpretation	of	regulatory	changes	risk	factor	below).

# Citi's	Ability	to	Utilize	Its	DTAs,	and	Thus	Reduce	the	Negative	Impact	of	the DTAs	on	Citi's	Regulatory	Capital,	Will	Be	Driven	by	Its	Ability	to	Generate U.S.	Taxable	Income	and	by	the	Provisions	of	and	Guidance	Issued	in Connection	with	Tax	Reform.

At	December	31,	2018,	Citi's	net	DTAs	were	$22.9	billion,	net	of	a	valuation allowance	of	$9.3	billion,	of	which	$11.0	billion	was	excluded	from	Citi's Common	Equity	Tier	1	Capital	under	the	U.S.	Basel	III	rules	(for	additional information,	see	"Capital	Resources—Components	of	Citigroup	Capital" above).	Of	the	net	DTAs	at	December	31,	2018,	$6.8	billion	related	to	foreign tax	credit	carry-forwards	(FTCs),	net	of	a	valuation	allowance.	The	carry- forward	utilization	period	for	FTCs	is	10	years	and	represents	the	most	time- sensitive	component	of	Citi's	DTAs.	The	FTC	carry-forwards	at	December	31, 2018	expire	over	the	period	of	2019-2028.	Citi	must	utilize	any	FTCs	generated in	the	then-current	year	tax	return	prior	to	utilizing	any	carry-forward	FTCs. The	accounting	treatment	for	realization	of	DTAs,	including	FTCs,	is complex	and	requires	significant	judgment	and	estimates	regarding	future taxable	earnings	in	the	jurisdictions	in	which	the	DTAs	arise	and	available	tax planning	strategies.	Citi's	ability	to	utilize	its	DTAs,	including	the	FTC components,	will	be	dependent	upon	Citi's	ability	to	generate	U.S.	taxable income	in	the	relevant	tax	carry-forward	periods.	Failure	to	realize	any	portion	of the	net	DTAs	would	also	have	a	corresponding	negative	impact	on	Citi's	net income	and	financial	returns.

The	U.S.	Department	of	the	Treasury	(U.S.	Treasury)	issued	proposed regulations	in	November	2018	regarding	the	required	allocation	of	existing	FTC carry-forwards	to	the	appropriate	FTC	baskets	as	redefined	by	Tax	Reform	and the	allocation	of	the	overall	domestic	loss	(ODL)	to	these	FTC	baskets.	An	ODL allows	a	company	to	recharacterize	domestic	income	as	income	from	sources outside	the	U.S.,	which	enables	a	taxpayer	to	use	FTC	carry-forwards	and	FTCs generated	in	future	years,	assuming	the	generation	of	sufficient	U.S.	taxed income.	If	the	final	regulations	issued	by	the	U.S.	Treasury	differ	from	the proposed	regulations,	the	valuation	allowance	against	Citi's	FTC	carry-forwards would	increase	or	decrease,	depending	upon	the	content	of	the	final	regulations. Citi's	net	income	would	change	by	a	corresponding	amount.	However,	a	change in	recognized	FTC

carry-forwards	would	not	impact	Citi's	regulatory	capital,	given	that	such amounts	are	already	fully	disallowed.

Citi	does	not	expect	to	be	subject	to	the	Base	Erosion	Anti-Abuse	Tax (BEAT)	added	by	Tax	Reform.	However,	any	final	BEAT	regulations	could affect	Citi's	decisions	as	to	how	to	structure	its	non-U.S.	operations,	possibly	in a	less	cost-efficient	manner.	Further,	if	BEAT	were	to	be	applicable	to	Citi	in any	given	year,	it	could	have	a	significantly	adverse	effect	on	both	Citi's	net income	and	regulatory	capital.

For	additional	information	on	the	impact	of	Tax	Reform	and	on	Citi's DTAs,	including	the	FTCs,	see	"Significant	Accounting	Policies	and	Significant Estimates—Income	Taxes"	below	and	Notes	1	and	9	to	the	Consolidated Financial	Statements.

# Citi's	Interpretation	or	Application	of	the	Complex	Tax	Laws	to	Which	It	Is Subject	Could	Differ	from	Those	of	the	Relevant	Governmental	Authorities,

# Which	Could	Result	in	the	Payment	of	Additional	Taxes,	Penalties	or	Interest.

Citi	is	subject	to	the	various	tax	laws	of	the	U.S.	and	its	states	and	municipalities, as	well	as	the	numerous	non-U.S.	jurisdictions	in	which	it	operates.	These	tax laws	are	inherently	complex	and	Citi	must	make	judgments	and	interpretations about	the	application	of	these	laws,	including	Tax	Reform	as	mentioned	above, to	its	entities,	operations	and	businesses.	Citi's	interpretations	and	application	of the	tax	laws,	including	with	respect	to	Tax	Reform,	withholding	tax	obligations and	stamp	and	other	transactional	taxes,	could	differ	from	that	of	the	relevant governmental	taxing	authority,	which	could	result	in	the	payment	of	additional taxes,	penalties	or	interest,	which	could	be	material.

# Citi's	Continued	Investments	and	Efficiency	Initiatives	May	Not	Be	as Successful	as	It	Projects	or	Expects.

Citi	continues	to	leverage	its	scale	and	make	incremental	investments	to	deepen client	relationships,	increase	revenue	and	lower	expenses.	For	example,	Citi continues	to	make	investments	to	enhance	its	digital	capabilities	across	the franchise,	including	digital	platforms	and	mobile	and	cloud	architecture.	Citi	also has	been	investing	in	higher	return	businesses,	such	as	the	U.S.	cards	and	wealth management	businesses	in	Global	Consumer	Banking	(GCB)	as	well	as	equities and	other	businesses	in	Institutional	Clients	Group	(ICG).	Citi	also	continues	to execute	on	its	investment	of	more	than	$1	billion	in	Citibanamex	through	2020. Further,	Citi	has	been	pursuing	efficiency	savings	through	various	technology and	digital	initiatives,	location	strategy	and	organizational	simplification,	which are	intended	to	self-fund	Citi's	incremental	investment	initiatives	as	well	as offset	growth-related	expenses.

Citi's	investments	and	efficiency	initiatives	are	being	undertaken	as	part	of its	overall	strategy	to	meet	operational	and	financial	objectives	and	targets, including	operating	efficiency	and	revenue	and	earnings	growth	expectations. There	is	no	guarantee	that	these	or	other	initiatives	Citi	may	pursue	will	be	as productive	or	effective	as	Citi	expects,	or	at	all.	Citi's	investment	and	efficiency initiatives	may	continue	to	evolve	as	its	business	strategies	and	the	market environment	change,	which	could	make	the	initiatives	more	costly	and

more	challenging	to	implement,	and	limit	their	effectiveness.	Moreover,	Citi's ability	to	achieve	expected	returns	on	its	investments	and	costs	savings	depends, in	part,	on	factors	that	it	cannot	control,	such	as	macroeconomic	conditions, customer,	client	and	competitor	actions	and	ongoing	regulatory	changes,	among others.

# A	Deterioration	in	or	Failure	to	Maintain	Citi's	Co-Branding	or	Private	Label Credit	Card	Relationships,	Including	as	a	Result	of	any	Bankruptcy	or Liquidation,	Could	Have	a	Negative	Impact	on	Citi's	Results	of	Operations	or Financial	Condition.

Citi	has	co-branding	and	private	label	relationships	through	its	Citi-branded cards	and	Citi	retail	services	credit	card	businesses	with	various	retailers	and merchants	globally	in	the	ordinary	course	of	business	whereby	Citi	issues	credit cards	to	customers	of	the	retailers	or	merchants.	Citi's	co-branding	and	private label	agreements	provide	for	shared	economics	between	the	parties	and	generally have	a	fixed	term.	The	five	largest	relationships,	including	Sears,	constituted	an aggregate	of	approximately	11%	of	Citi's	revenues	in	2018.

These	relationships	could	be	negatively	impacted	by,	among	other	things, external	factors	outside	the	control	of	either	party	to	the	relationship,	such	as	the general	economic	environment,	declining	sales	and	revenues	or	other	operational difficulties	of	the	retailer	or	merchant,	termination	due	to	a	contractual	breach	by Citi	or	by	the	retailer	or	merchant,	or	other	factors,	including	bankruptcies, liquidations,	restructurings,	consolidations	or	other	similar	events.	Over	the	last several	years,	a	number	of	U.S.	retailers	have	continued	to	experience	declining sales,	which	has	resulted	in	significant	numbers	of	store	closures	and,	in	a number	of	cases,	bankruptcies,	as	retailers	attempt	to	cut	costs	and	reorganize. For	example,	as	previously	disclosed,	Sears	filed	for	Chapter	11	bankruptcy protection	in	October	2018.	On	February	11,	2019,	after	bankruptcy	court approval,	ESL	Investments	purchased	substantially	all	of	Sears'	assets	on	a going	concern	basis,	including	its	credit	card	program	agreement	with	Citi	(for further	information,	including	certain	potential	impacts	to	Citi	retail	services,	see "Global	Consumer	Banking—North	America	GCB"	above).	In	addition,	as	has been	widely	reported,	competition	among	card	issuers,	including	Citi,	for	these relationships	is	significant,	and	it	has	become	increasingly	difficult	in	recent years	to	maintain	such	relationships	on	the	same	terms	or	at	all.	While	various mitigating	factors	could	be	available	to	Citi	if	any	of	these	events	were	to	occur- such	as	by	replacing	the	retailer	or	merchant	or	offering	other	card	products— such	events,	particularly	bankruptcies	or	liquidations,	could	negatively	impact the	results	of	operations	or	financial	condition	of	Citi-branded	cards,	Citi	retail services	or	Citi	as	a	whole,	including	as	a	result	of	loss	of	revenues,	increased expenses,	higher	cost	of	credit,	impairment	of	purchased	credit	card	relationships and	contract-related	intangibles	or	other	losses	(for	information	on	Citi's	credit card	related	intangibles	generally,	see	Note	16	to	the	Consolidated	Financial Statements).

# Macroeconomic	and	Geopolitical	Challenges	and	Uncertainties	Globally Could	Have	a	Negative	Impact	on	Citi's	Businesses	and	Results	of	Operations.

Citi	has	experienced,	and	could	experience	in	the	future,	negative	impacts	to	its businesses	and	results	of	operations	as	a	result	of	macroeconomic	and geopolitical	challenges,	uncertainties	and	volatility.	For	example,	changes	in U.S.	trade	policies,	which	have	resulted	in	retaliatory	measures	from	other countries,	could	result	in	a	reduction	or	realignment	of	trade	flows	among countries	and	negatively	impact	businesses,	sectors	and	economic	growth	rates. Additional	areas	of	uncertainty	include,	among	others,	geopolitical	tensions	and conflicts,	natural	disasters,	election	outcomes	and	other	macroeconomic developments,	such	as	those	involving	economic	growth	rates,	consumer confidence	and	spending,	employment	rates	and	commodity	prices.

Governmental	fiscal	and	monetary	actions,	or	expected	actions,	such	as changes	in	interest	rate	policies	and	any	balance	sheet	normalization	program implemented	by	a	central	bank	to	reduce	the	size	of	its	balance	sheet	could significantly	impact	interest	rates,	economic	growth	rates,	the	volatility	of	global financial	markets,	foreign	exchange	rates	and	capital	flows	among	countries.	For example,	in	2017,	the	FRB	began	implementing	a	balance	sheet	normalization program	to	reduce	the	size	of	the	central	bank's	balance	sheet,	although	there	are various	uncertainties	regarding	the	ultimate	size	of	the	balance	sheet	and	its composition.	Such	actions	could,	among	other	things,	result	in	higher	interest rates.	Although	Citi	estimates	its	overall	net	interest	revenue	would	generally increase	due	to	higher	interest	rates,	higher	rates	could	adversely	affect	Citi's funding	costs,	levels	of	deposits	in	its	consumer	and	institutional	businesses	and certain	business	or	product	revenues.

As	a	result	of	the	U.K.'s	2016	referendum	on	exiting	the	EU,	numerous uncertainties	have	arisen	regarding	the	U.K.'s	potential	exit	from	and	future relationship	with	the	EU.	For	example,	the	terms	of	a	withdrawal	continue	to	be negotiated	within	the	U.K.	and	between	the	U.K.	and	the	EU,	and	it	is	unclear whether	the	parties	will	be	able	to	agree	on	terms	prior	to	the	currently	scheduled exit	on	March	29,	2019.	If	no	agreement	is	reached	on	terms	of	an	exit,	it	could result	in	what	is	commonly	referred	to	as	a	"cliff-edge"	or	"hard"	exit	scenario. A	hard	exit	scenario	would	result	in	the	U.K.	and	EU	losing	reciprocal	financial services	license-passporting	rights	and	require	the	U.K.	to	deal	with	the	EU	as	a third	country	regime,	but	without	an	equivalence	regime	or	transition	period	in place.	A	hard	exit	scenario	could	cause	severe	disruptions	in	the	movement	of goods	and	services	between	the	U.K.	and	EU	countries	and	negatively	impact financial	markets	and	the	U.K.	and	EU	economies.	Citi's	business	and	operations could	be	impacted	by	these	and	other	factors,	including	the	preparedness	and reaction	of	clients,	counterparties	and	financial	markets	infrastructure.	For information	about	Citi's	actions	to	manage	the	U.K.'s	potential	exit	from	the EU,	see	"Managing	Global	Risk—Strategic	Risk—Potential	Exit	of	U.K.	from EU"	below.	Further,	the	economic	and	fiscal	situations	of	some	EU	countries have	remained	fragile,	and	concerns	and	uncertainties	remain	in	Europe	over	the resulting	effects	of	the	U.K.'s	potential	exit	from	the	EU.

These	and	other	global	macroeconomic	and	geopolitical	challenges, uncertainties	and	volatilities	have	negatively	impacted,	and	could	continue	to negatively	impact,	Citi's	businesses,	results	of	operations	and	financial condition,	including	its	credit	costs,	revenues	in	its	Markets	and	securities services	and	other	businesses,	and	AOCI	(which	would	in	turn	negatively	impact Citi's	book	and	tangible	book	value).

# Citi's	Presence	in	the	Emerging	Markets	Subjects	It	to	Various	Risks	as	well as	Increased	Compliance	and	Regulatory	Risks	and	Costs.

During	2018,	emerging	markets	revenues	accounted	for	approximately	37%	of Citi's	total	revenues	(Citi	generally	defines	emerging	markets	as	countries	in Latin	America,	Asia	(other	than	Japan,	Australia	and	New	Zealand),	Central	and Eastern	Europe,	the	Middle	East	and	Africa).	Although	Citi	continues	to	pursue its	target	client	strategy,	Citi's	presence	in	the	emerging	markets	subjects	it	to	a number	of	risks,	including	sovereign	volatility,	election	outcomes,	regulatory changes	and	political	events,	foreign	exchange	controls,	limitations	on	foreign investment,	sociopolitical	instability	(including	from	hyperinflation),	fraud, nationalization	or	loss	of	licenses,	business	restrictions,	sanctions	or	asset freezes,	potential	criminal	charges,	closure	of	branches	or	subsidiaries	and confiscation	of	assets.	For	example,	Citi	operates	in	several	countries	that	have, or	have	had	in	the	past,	strict	foreign	exchange	controls,	such	as	Argentina,	that limit	its	ability	to	convert	local	currency	into	U.S.	dollars	and/or	transfer	funds outside	of	the	country.	In	prior	years,	Citi	has	also	discovered	fraud	in	certain emerging	markets	in	which	it	operates.	Political	turmoil	and	instability	have occurred	in	certain	regions	and	countries,	including	Asia,	the	Middle	East	and Latin	America,	which	have	required	management	time	and	attention	in	prior years	(such	as	monitoring	the	impact	of	sanctions	on	certain	emerging	market economies	as	well	as	on	Citi's	businesses	and	results	of	operations	in	affected countries).

Citi's	emerging	markets	presence	also	increases	its	compliance	and regulatory	risks	and	costs.	For	example,	Citi's	operations	in	emerging	markets, including	facilitating	cross	border	transactions	on	behalf	of	its	clients,	subject	it to	higher	compliance	risks	under	U.S.	regulations	primarily	focused	on	various aspects	of	global	corporate	activities,	such	as	anti-money	laundering	regulations and	the	Foreign	Corrupt	Practices	Act.	These	risks	can	be	more	acute	in	less- developed	markets	and	thus	require	substantial	investment	in	compliance infrastructure	or	could	result	in	a	reduction	in	certain	of	Citi's	business	activities. Any	failure	by	Citi	to	comply	with	applicable	U.S.	regulations,	as	well	as	the regulations	in	the	countries	and	markets	in	which	it	operates	as	a	result	of	its global	footprint,	could	result	in	fines,	penalties,	injunctions	or	other	similar restrictions,	any	of	which	could	negatively	impact	Citi's	results	of	operations	and reputation	(see	the	implementation	and	interpretation	of	regulatory	changes	and legal	and	regulatory	proceedings	risk	factors	below).

# Citi's	Inability	in	Its	Resolution	Plan	Submissions	to	Address	Any	Deficiencies Identified	or	Guidance	Provided	by	the	FRB	and	FDIC	Could	Subject	Citi	to More	Stringent	Capital,	Leverage	or	Liquidity	Requirements,	or	Restrictions on	Its	Growth,	Activities	or	Operations,	and	Could	Eventually	Require	Citi	to Divest	Assets	or	Operations.

Title	I	of	the	Dodd-Frank	Act	requires	Citi	to	prepare	and	submit	a	plan	to	the FRB	and	the	FDIC	for	the	orderly	resolution	of	Citigroup	(the	bank	holding company)	and	its	significant	legal	entities,	under	the	U.S.	Bankruptcy	Code	in the	event	of	future	material	financial	distress	or	failure.	As	previously announced,	Citi's	next	resolution	plan	submission	is	due	July	1,	2019.	On December	20,	2018,	the	FRB	and	FDIC	issued	final	guidance	for	the	2019	and subsequent	resolution	plan	submissions	for	the	eight	U.S.	GSIBs,	including	Citi. For	additional	information	on	Citi's	resolution	plan	submissions,	see	"Managing Global	Risk—Liquidity	Risk"	below.

Under	Title	I,	if	the	FRB	and	the	FDIC	jointly	determine	that	Citi's resolution	plan	is	not	"credible"	(which,	although	not	defined,	is	generally believed	to	mean	the	regulators	do	not	believe	the	plan	is	feasible	or	would otherwise	allow	the	regulators	to	resolve	Citi	in	a	way	that	protects	systemically important	functions	without	severe	systemic	disruption),	or	would	not	facilitate an	orderly	resolution	of	Citi	under	the	U.S.	Bankruptcy	Code,	and	Citi	fails	to resubmit	a	resolution	plan	that	remedies	any	identified	deficiencies,	Citi	could be	subjected	to	more	stringent	capital,	leverage	or	liquidity	requirements,	or restrictions	on	its	growth,	activities	or	operations.	If	within	two	years	from	the imposition	of	any	requirements	or	restrictions	Citi	has	still	not	remediated	any identified	deficiencies,	then	Citi	could	eventually	be	required	to	divest	certain assets	or	operations.	Any	such	restrictions	or	actions	would	negatively	impact Citi's	reputation,	market	and	investor	perception,	operations	and	strategy.

# Citi's	Performance	and	the	Performance	of	Its	Individual	Businesses	Could Be	Negatively	Impacted	if	Citi	Is	Not	Able	to	Effectively	Compete	for	Highly Qualified	Employees.

Citi's	performance	and	the	performance	of	its	individual	businesses	largely depends	on	the	talents	and	efforts	of	its	highly	skilled	employees.	Specifically, Citi's	continued	ability	to	compete	in	its	businesses,	to	manage	its	businesses effectively	and	to	continue	to	execute	its	overall	global	strategy	depends	on	its ability	to	attract	new	employees	and	to	retain	and	motivate	its	existing employees.	If	Citi	is	unable	to	continue	to	attract	and	retain	the	most	highly qualified	employees,	Citi's	performance,	including	its	competitive	position,	the successful	execution	of	its	overall	strategy	and	its	results	of	operations	could	be negatively	impacted.

Citi's	ability	to	attract	and	retain	employees	depends	on	numerous	factors, some	of	which	are	outside	of	its	control.	For	example,	the	banking	industry generally	is	subject	to	more	comprehensive	regulation	of	executive	and employee	compensation	than	other	industries,	including	deferral	and	clawback requirements	for	incentive	compensation.	Citi	often	competes	in	the	market	for talent	with	entities	that	are	not	subject	to	such	comprehensive	regulatory requirements	on	the	structure	of	incentive	compensation,	including,	among others,

technology	companies.	Other	factors	that	could	impact	Citi's	ability	to	attract and	retain	employees	include	its	culture	and	the	management	and	leadership	of the	Company	as	well	as	its	individual	businesses,	presence	in	the	particular market	or	region	at	issue	and	the	professional	opportunities	it	offers.

# Financial	Services	Companies	and	Others	as	well	as	Emerging	Technologies Pose	Increasingly	Competitive	Challenges	to	Citi.

Citi	operates	in	an	increasingly	competitive	environment,	which	includes	both financial	and	non-financial	services	firms,	such	as	traditional	banks,	online banks,	financial	technology	companies	and	others.	These	companies	compete	on the	basis	of,	among	other	factors,	size,	quality	and	type	of	products	and	services offered,	price,	technology	and	reputation.	Emerging	technologies	have	the potential	to	intensify	competition	and	accelerate	disruption	in	the	financial services	industry.	Citi	competes	with	financial	services	companies	in	the	U.S. and	globally	that	continue	to	develop	and	introduce	new	products	and	services. In	recent	years,	non-financial	services	firms,	such	as	financial	technology companies,	have	begun	to	offer	services	traditionally	provided	by	financial institutions,	such	as	Citi.	These	firms	attempt	to	use	technology	and	mobile platforms	to	enhance	the	ability	of	companies	and	individuals	to	borrow	money, save	and	invest.	To	the	extent	Citi	is	not	able	to	compete	effectively	with	these and	other	firms,	Citi	could	be	placed	at	a	competitive	disadvantage,	which	could result	in	loss	of	customers	and	market	share,	and	its	businesses,	results	of operations	and	financial	condition	could	suffer.	For	additional	information	on Citi's	competitors,	see	the	co-brand	and	private	label	cards	risk	factor	above	and "Supervision,	Regulation	and	Other—Competition"	below.

# Uncertainties	Regarding	the	Possible	Discontinuance	of	the	London	Inter- Bank	Offered	Rate	(LIBOR)	or	Any	Other	Interest	Rate	Benchmark	Could Have	Adverse	Consequences	for	Market	Participants,	Including	Citi.

In	2017,	the	U.K.	Financial	Conduct	Authority	(FCA)	noted	that	market conditions	raised	serious	questions	about	the	future	sustainability	of	LIBOR benchmarks.	With	the	FCA	securing	voluntary	panel	bank	support	to	sustain LIBOR	only	until	2021,	the	future	of	LIBOR	beyond	2021	remains	uncertain.	In addition,	following	guidance	provided	by	the	Financial	Stability	Board	(FSB), other	regulators	have	suggested	reforming	or	replacing	other	benchmark	rates with	alternative	reference	rates.

Given	LIBOR's	extensive	use	across	financial	markets,	the	transition	away from	LIBOR	presents	various	risks	and	challenges	to	financial	markets	and institutions,	including	Citi.	Citi's	consumer	and	institutional	businesses	issue, trade,	hold	or	otherwise	use	various	products	and	securities	that	reference LIBOR,	including,	among	others,	mortgages	and	other	consumer	loans, commercial	loans,	corporate	loans,	various	types	of	debt,	derivatives	and	other securities.	If	not	sufficiently	planned	for,	the	discontinuation	of	LIBOR	or	any other	interest	rate	benchmark	could	result	in	increased	financial,	operational, legal,	reputational	or	compliance	risks.	For	example,	a	significant	challenge	will be	the	impact	of	LIBOR	transition	on	contractual	mechanics	of	floating	rate

financial	instruments	and	contracts	that	reference	LIBOR	and	mature	after	2021. Certain	of	these	instruments	and	contracts	do	not	provide	for	alternative reference	rates.	Even	if	the	instruments	and	contracts	transition	to	alternative reference	rates,	the	new	reference	rates	are	likely	to	differ	from	the	prior benchmark	rates.	While	there	are	a	number	of	international	working	groups focused	on	transition	plans	and	fallback	contract	language	that	seek	to	address market	disruption	and	value	transfer,	replacement	of	LIBOR	or	any	other benchmark	with	a	new	benchmark	rate	could	adversely	impact	the	value	of	and return	on	existing	instruments	and	contracts.	Moreover,	replacement	of	LIBOR or	other	benchmark	rates	could	result	in	market	dislocations	and	have	other adverse	consequences	for	market	participants,	including	the	potential	for increased	costs,	including	by	requiring	Citi	to	pay	higher	interest	on	its obligations,	and	litigation	risks.	For	information	about	Citi's	management	of LIBOR	transition	risk,	see	"Managing	Global	Risk—Strategic	Risk—LIBOR Transition	Risk"	below.

# CREDIT	RISKS

# Credit	Risk	and	Concentrations	of	Risk	Can	Increase	the	Potential	for	Citi	to Incur	Significant	Losses.

Credit	risk	arises	from	Citi's	lending	and	other	businesses	in	both	GCB	and	ICG. Citi	has	credit	exposures	to	counterparties	in	the	U.S.	and	various	countries	and jurisdictions	globally,	including	end-of-period	consumer	loans	of	$331	billion and	end-of-period	corporate	loans	of	$354	billion	at	year-end	2018.	A	default	by a	borrower	or	counterparty,	or	a	decline	in	the	credit	quality	or	value	of	any underlying	collateral,	exposes	Citi	to	credit	risk.	Various	macroeconomic, geopolitical	and	other	factors,	among	other	things,	can	increase	Citi's	credit	risk and	credit	costs	(for	additional	information,	see	co-branding	and	private	label credit	card	and	macroeconomic	challenges	and	uncertainties	risk	factors	above). While	Citi	provides	reserves	for	probable	losses	for	its	credit	exposures,	such reserves	are	subject	to	judgments	and	estimates	that	could	be	incorrect	or	differ from	actual	future	events	(see	incorrect	assumptions	or	estimates	risk	factor below).	For	additional	information	on	Citi's	credit	and	country	risk,	see	each respective	business'	results	of	operations	above	and	"Managing	Global	Risk— Credit	Risk"	and	"Managing	Global	Risk—Strategic	Risk—Country	Risk" below	and	Note	14	to	the	Consolidated	Financial	Statements.

Concentrations	of	risk,	particularly	credit	and	market	risks,	can	also increase	Citi's	risk	of	significant	losses.	As	of	year-end	2018,	Citi's	most significant	concentration	of	credit	risk	was	with	the	U.S.	government	and	its agencies,	which	primarily	results	from	trading	assets	and	investments	issued	by the	U.S.	government	and	its	agencies	(for	additional	information,	including concentrations	of	credit	risk	to	other	public	sector	entities,	see	Note	23	to	the Consolidated	Financial	Statements).	Citi	also	routinely	executes	a	high	volume of	securities,	trading,	derivative	and	foreign	exchange	transactions	with	non-U.S. sovereigns	and	with	counterparties	in	the	financial	services	industry,	including banks,	insurance	companies,	investment	banks,	governments,	central	banks	and other	financial	institutions.	A	rapid	deterioration	of	a	large	counterparty	or within	a	sector	or	country	where	Citi	has	large

exposures	or	unexpected	market	dislocations	could	cause	Citi	to	incur	significant losses.

# LIQUIDITY	RISKS

# The	Maintenance	of	Adequate	Liquidity	and	Funding	Depends	on	Numerous Factors,	Including	Those	Outside	of	Citi's	Control,	Such	as	Market Disruptions	and	Increases	in	Citi's	Credit	Spreads.

As	a	global	financial	institution,	adequate	liquidity	and	sources	of	funding	are essential	to	Citi's	businesses.	Citi's	liquidity	and	sources	of	funding	can	be significantly	and	negatively	impacted	by	factors	it	cannot	control,	such	as general	disruptions	in	the	financial	markets,	governmental	fiscal	and	monetary policies,	regulatory	changes	or	negative	investor	perceptions	of	Citi's creditworthiness,	unexpected	increases	in	cash	or	collateral	requirements	and	the inability	to	monetize	available	liquidity	resources.	For	example,	Citi	competes with	other	banks	and	financial	institutions	for	deposits,	which	represent	Citi's most	stable	and	lowest	cost	of	long-term	funding.	The	competitive	environment has	increased	for	retail	banking	deposits,	including	as	online	banks	and	other competitors	have	increased	rates	paid	for	deposits.	More	recently,	as	interest rates	have	increased,	a	growing	number	of	customers	have	transferred	deposits to	other	products,	including	investments	and	interest	bearing	accounts,	and/or other	financial	institutions.	This,	along	with	slower	industry	growth	in	deposits, has	resulted	in	a	more	challenging	environment	for	deposits.	In	addition,	as interest	rates	continue	to	rise,	financial	institutions,	such	as	Citi,	may	have	to raise	the	rates	paid	for	deposits,	thus	increasing	the	cost	of	funds	and	affecting net	interest	income	and	margin.

Moreover,	Citi's	costs	to	obtain	and	access	secured	funding	and	long-term unsecured	funding	are	directly	related	to	its	credit	spreads.	Changes	in	credit spreads	constantly	occur	and	are	market	driven,	including	both	external	market factors	and	factors	specific	to	Citi,	and	can	be	highly	volatile.	For	additional information	on	Citi's	primary	sources	of	funding,	see	"Liquidity	Risk"	below. In	addition,	Citi's	ability	to	obtain	funding	may	be	impaired	if	other	market participants	are	seeking	to	access	the	markets	at	the	same	time,	or	if	market appetite	is	reduced,	as	is	likely	to	occur	in	a	liquidity	or	other	market	crisis.	A sudden	drop	in	market	liquidity	could	also	cause	a	temporary	or	lengthier dislocation	of	underwriting	and	capital	markets	activity.	In	addition,	clearing organizations,	central	banks,	clients	and	financial	institutions	with	which	Citi interacts	may	exercise	the	right	to	require	additional	collateral	based	on	these market	perceptions	or	market	conditions,	which	could	further	impair	Citi's access	to	and	cost	of	funding.

As	a	holding	company,	Citi	relies	on	interest,	dividends,	distributions	and other	payments	from	its	subsidiaries	to	fund	dividends	as	well	as	to	satisfy	its debt	and	other	obligations.	Several	of	Citi's	U.S.	and	non-U.S.	subsidiaries	are	or may	be	subject	to	capital	adequacy	or	other	regulatory	or	contractual	restrictions on	their	ability	to	provide	such	payments,	including	any	local	regulatory	stress test	requirements.	Limitations	on	the	payments	that	Citi	receives	from	its subsidiaries	could	also	impact	its	liquidity.

# The	Credit	Rating	Agencies	Continuously	Review	the	Credit	Ratings	of	Citi and	Certain	of	Its	Subsidiaries,	and	Ratings	Downgrades	Could	Have	a Negative	Impact	on	Citi's	Funding	and	Liquidity	Due	to	Reduced	Funding Capacity	and	Increased	Funding	Costs,	Including	Derivatives	Triggers	That Could	Require	Cash	Obligations	or	Collateral	Requirements.

The	credit	rating	agencies,	such	as	Fitch,	Moody's	and	S&P,	continuously evaluate	Citi	and	certain	of	its	subsidiaries,	and	their	ratings	of	Citi	and	its	more significant	subsidiaries'	long-term/senior	debt	and	short-term/commercial	paper, as	applicable,	are	based	on	a	number	of	factors,	including	standalone	financial strength,	as	well	as	factors	not	entirely	within	the	control	of	Citi	and	its subsidiaries,	such	as	the	agencies'	proprietary	rating	methodologies	and assumptions,	and	conditions	affecting	the	financial	services	industry	and	markets generally.

Citi	and	its	subsidiaries	may	not	be	able	to	maintain	their	current	respective ratings.	Ratings	downgrades	could	negatively	impact	Citi's	ability	to	access	the capital	markets	and	other	sources	of	funds	as	well	as	the	costs	of	those	funds, and	its	ability	to	maintain	certain	deposits.	A	ratings	downgrade	could	also	have a	negative	impact	on	Citi's	funding	and	liquidity	due	to	reduced	funding capacity,	as	well	as	the	impact	of	derivative	triggers,	which	could	require	Citi	to meet	cash	obligations	and	collateral	requirements.	In	addition,	a	ratings downgrade	could	also	have	a	negative	impact	on	other	funding	sources,	such	as secured	financing	and	other	margined	transactions	for	which	there	may	be	no explicit	triggers,	as	well	as	on	contractual	provisions	and	other	credit requirements	of	Citi's	counterparties	and	clients,	which	may	contain	minimum ratings	thresholds	in	order	for	Citi	to	hold	third-party	funds.

Moreover,	credit	ratings	downgrades	can	have	impacts	that	may	not	be currently	known	to	Citi	or	are	not	possible	to	quantify.	For	example,	some entities	may	have	ratings	limitations	as	to	their	permissible	counterparties,	of which	Citi	may	or	may	not	be	aware.	Further,	certain	of	Citi's	corporate customers	and	trading	counterparties,	among	other	clients,	could	re-evaluate their	business	relationships	with	Citi	and	limit	the	trading	of	certain	contracts	or market	instruments	with	Citi	in	response	to	ratings	downgrades.	Changes	in customer	and	counterparty	behavior	could	impact	not	only	Citi's	funding	and liquidity	but	also	the	results	of	operations	of	certain	Citi	businesses.	For additional	information	on	the	potential	impact	of	a	reduction	in	Citi's	or Citibank's	credit	ratings,	see	"Managing	Global	Risk—Liquidity	Risk"	below.

# OPERATIONAL	RISKS

# A	Disruption	of	Citi's	Operational	Systems	Could	Negatively	Impact	Citi's Reputation,	Customers,	Clients,	Businesses	or	Results	of	Operations	and Financial	Condition.

A	significant	portion	of	Citi's	operations	relies	heavily	on	the	secure	processing, storage	and	transmission	of	confidential	and	other	information	as	well	as	the monitoring	of	a	large	number	of	complex	transactions	on	a	minute-by-minute basis.	For	example,	through	its	GCB	and	treasury	and	trade	solutions	and securities	services	businesses	in	ICG,	Citi	obtains	and	stores	an	extensive amount	of	personal	and	client-specific	information	for	its	retail,	corporate	and governmental	customers	and	clients	and	must	accurately	record	and	reflect	their extensive	account	transactions.

With	the	evolving	proliferation	of	new	technologies	and	the	increasing	use of	the	Internet,	mobile	devices	and	cloud	technologies	to	conduct	financial transactions,	large	global	financial	institutions	such	as	Citi	have	been,	and	will continue	to	be,	subject	to	an	increasing	risk	of	operational	disruption	or	cyber	or information	security	incidents	from	these	activities	(for	additional	information on	cybersecurity	risk,	see	the	discussion	below).	These	incidents	are unpredictable	and	can	arise	from	numerous	sources,	not	all	of	which	are	in	Citi's control,	including,	among	others,	human	error,	fraud	or	malice	on	the	part	of employees,	accidental	technological	failure,	electrical	or	telecommunication outages,	failures	of	computer	servers	or	other	similar	damage	to	Citi's	property or	assets.	These	issues	can	also	arise	as	a	result	of	failures	by	third	parties	with which	Citi	does	business,	such	as	failures	by	Internet,	mobile	technology	and cloud	service	providers	or	other	vendors	to	adequately	safeguard	their	systems and	prevent	system	disruptions	or	cyber	attacks.

Such	events	could	cause	interruptions	or	malfunctions	in	the	operations	of Citi	(such	as	the	temporary	loss	of	availability	of	Citi's	online	banking	system	or mobile	banking	platform),	as	well	as	the	operations	of	its	clients,	customers	or other	third	parties.	Given	Citi's	global	footprint	and	the	high	volume	of transactions	processed	by	Citi,	certain	errors	or	actions	may	be	repeated	or compounded	before	they	are	discovered	and	rectified,	which	would	further increase	these	costs	and	consequences.	Any	such	events	could	also	result	in financial	losses	as	well	as	misappropriation,	corruption	or	loss	of	confidential and	other	information	or	assets,	which	could	negatively	impact	Citi's	reputation, customers,	clients,	businesses	or	results	of	operations	and	financial	condition, perhaps	significantly.

Citi	and	Third	Parties'	Computer	Systems	and	Networks	Have	Been,	and	Will Continue	to	Be,	Susceptible	to	an	Increasing	Risk	of	Continually	Evolving, Sophisticated	Cybersecurity	Activities	That	Could	Result	in	the	Theft,	Loss, Misuse	or	Disclosure	of	Confidential	Client	or	Customer	Information, Damage	to	Citi's	Reputation,	Additional	Costs	to	Citi,	Regulatory	Penalties, Legal	Exposure	and	Financial	Losses.

Citi's	computer	systems,	software	and	networks	are	subject	to	ongoing	cyber incidents	such	as	unauthorized	access,	loss	or	destruction	of	data	(including confidential	client	information),

account	takeovers,	unavailability	of	service,	computer	viruses	or	other	malicious code,	cyber	attacks	and	other	similar	events.	These	threats	can	arise	from external	parties,	including	cyber	criminals,	cyber	terrorists,	hacktivists	and nation	state	actors,	as	well	as	insiders	who	knowingly	or	unknowingly	engage	in or	enable	malicious	cyber	activities.

Third	parties	with	which	Citi	does	business,	as	well	as	retailers	and	other third	parties	with	which	Citi's	customers	do	business,	may	also	be	sources	of cybersecurity	risks,	particularly	where	activities	of	customers	are	beyond	Citi's security	and	control	systems.	For	example,	Citi	outsources	certain	functions, such	as	processing	customer	credit	card	transactions,	uploading	content	on customer-facing	websites,	and	developing	software	for	new	products	and services.	These	relationships	allow	for	the	storage	and	processing	of	customer information	by	third-party	hosting	of	or	access	to	Citi	websites,	which	could result	in	compromise	or	the	potential	to	introduce	vulnerable	or	malicious	code, resulting	in	security	breaches	impacting	Citi	customers.	Furthermore,	because financial	institutions	are	becoming	increasingly	interconnected	with	central agents,	exchanges	and	clearing	houses,	including	as	a	result	of	the	derivatives reforms	over	the	last	few	years,	Citi	has	increased	exposure	to	cyber	attacks through	third	parties.

Citi	has	been	subject	to	intentional	cyber	incidents	from	external	sources over	the	last	several	years,	including	(i)	denial	of	service	attacks,	which attempted	to	interrupt	service	to	clients	and	customers,	(ii)	data	breaches,	which obtained	unauthorized	access	to	customer	account	data	and	(iii)	malicious software	attacks	on	client	systems,	which	attempted	to	allow	unauthorized entrance	to	Citi's	systems	under	the	guise	of	a	client	and	the	extraction	of	client data.	While	Citi's	monitoring	and	protection	services	were	able	to	detect	and respond	to	the	incidents	targeting	its	systems	before	they	became	significant, they	still	resulted	in	limited	losses	in	some	instances	as	well	as	increases	in expenditures	to	monitor	against	the	threat	of	similar	future	cyber	incidents.	There can	be	no	assurance	that	such	cyber	incidents	will	not	occur	again,	and	they could	occur	more	frequently	and	on	a	more	significant	scale.

Further,	although	Citi	devotes	significant	resources	to	implement,	maintain, monitor	and	regularly	upgrade	its	systems	and	networks	with	measures	such	as intrusion	detection	and	prevention	and	firewalls	to	safeguard	critical	business applications,	there	is	no	guarantee	that	these	measures	or	any	other	measures	can provide	absolute	security.	Because	the	methods	used	to	cause	cyber	attacks change	frequently	or,	in	some	cases,	are	not	recognized	until	launched	or	even later,	Citi	may	be	unable	to	implement	effective	preventive	measures	or proactively	address	these	methods	until	they	are	discovered.	In	addition,	given the	evolving	nature	of	cyber	threat	actors	and	the	frequency	and	sophistication	of cyber	activities	they	carry	out,	the	determination	of	the	severity	and	potential impact	of	a	cyber	incident	may	not	occur	for	a	substantial	period	until	after	the incident	has	been	discovered.	Also,	while	Citi	engages	in	certain	actions	to reduce	the	exposure	resulting	from	outsourcing,	such	as	performing	security control	assessments	of	third-party	vendors	and	limiting	third-party	access	to	the

least	privileged	level	necessary	to	perform	job	functions,	these	actions	cannot prevent	all	third-party	related	cyber	attacks	or	data	breaches.

Cyber	incidents	can	result	in	the	disclosure	of	personal,	confidential	or proprietary	customer	or	client	information,	damage	to	Citi's	reputation	with	its clients	and	the	market,	customer	dissatisfaction	and	additional	costs,	including credit	costs,	to	Citi,	such	as	repairing	systems,	replacing	customer	payment	cards or	adding	new	personnel	or	protection	technologies.	Regulatory	penalties,	loss	of revenues,	exposure	to	litigation	and	other	financial	losses,	including	loss	of funds,	to	both	Citi	and	its	clients	and	customers	and	disruption	to	Citi's operational	systems	could	also	result	from	cyber	incidents	(for	additional information	on	the	potential	impact	of	operational	disruptions,	see	the operational	systems	risk	factor	above).	Moreover,	the	increasing	risk	of	cyber incidents	has	resulted	in	increased	legislative	and	regulatory	scrutiny	of	firms' cybersecurity	protection	services	and	calls	for	additional	laws	and	regulations	to further	enhance	protection	of	consumers'	personal	data.

While	Citi	maintains	insurance	coverage	that	may,	subject	to	policy	terms and	conditions	including	significant	self-insured	deductibles,	cover	certain aspects	of	cyber	risks,	such	insurance	coverage	may	be	insufficient	to	cover	all losses.

For	additional	information	about	Citi's	management	of	cybersecurity	risk, see	"Managing	Global	Risk—Operational	Risk—Cybersecurity	Risk"	below.

# Incorrect	Assumptions	or	Estimates	in	Citi's	Financial	Statements	Could Cause	Significant	Unexpected	Losses	in	the	Future,	and	Changes	to	Financial Accounting	and	Reporting	Standards	or	Interpretations	Could	Have	a Material	Impact	on	How	Citi	Records	and	Reports	Its	Financial	Condition and	Results	of	Operations.

U.S.	GAAP	requires	Citi	to	use	certain	assumptions	and	estimates	in	preparing its	financial	statements,	including	reserves	related	to	litigation	and	regulatory exposures,	valuation	of	DTAs,	the	estimate	of	the	allowance	for	credit	losses	and the	fair	values	of	certain	assets	and	liabilities,	among	other	items.	If	Citi's assumptions	or	estimates	underlying	its	financial	statements	are	incorrect	or differ	from	actual	events,	Citi	could	experience	unexpected	losses,	some	of which	could	be	significant.

Periodically,	the	Financial	Accounting	Standards	Board	(FASB)	issues financial	accounting	and	reporting	standards	that	may	govern	key	aspects	of Citi's	financial	statements	or	interpretations	thereof	when	those	standards become	effective,	including	those	areas	where	Citi	is	required	to	make assumptions	or	estimates.	For	example,	the	FASB's	new	accounting	standard	on credit	losses	(CECL),	which	will	become	effective	for	Citi	on	January	1,	2020, will	require	earlier	recognition	of	credit	losses	on	loans	and	held-to-maturity securities	and	other	financial	assets.	The	CECL	methodology	requires	that lifetime	"expected	credit	losses"	be	recorded	at	the	time	the	financial	asset	is originated	or	acquired.	The	expected	credit	losses	are	adjusted	each	period	for changes	in	expected	lifetime	credit	losses.	The	CECL	methodology	replaces	the multiple	existing	impairment

models	under	U.S.	GAAP	that	generally	require	that	a	loss	be	"incurred"	before it	is	recognized.	For	additional	information	on	this	and	other	accounting standards,	including	the	expected	impacts	on	Citi's	results	of	operations	and financial	condition,	see	"Future	Application	of	Accounting	Standards"	below. Changes	to	financial	accounting	or	reporting	standards	or	interpretations, whether	promulgated	or	required	by	the	FASB	or	other	regulators,	could	present operational	challenges	and	could	require	Citi	to	change	certain	of	the assumptions	or	estimates	it	previously	used	in	preparing	its	financial	statements, which	could	negatively	impact	how	it	records	and	reports	its	financial	condition and	results	of	operations	generally	and/or	with	respect	to	particular	businesses. For	additional	information	on	the	key	areas	for	which	assumptions	and	estimates are	used	in	preparing	Citi's	financial	statements,	see	"Significant	Accounting Policies	and	Significant	Estimates"	below	and	Notes	1	and	27	to	the Consolidated	Financial	Statements.

# Citi	May	Incur	Significant	Losses	and	Its	Regulatory	Capital	and	Capital Ratios	Could	Be	Negatively	Impacted	if	Its	Risk	Management	Processes, Strategies	or	Models	Are	Deficient	or	Ineffective.

Citi	utilizes	a	broad	and	diversified	set	of	risk	management	and	mitigation processes	and	strategies,	including	the	use	of	risk	models	in	analyzing	and monitoring	the	various	risks	Citi	assumes	in	conducting	its	activities.	For example,	Citi	uses	models	as	part	of	its	comprehensive	stress	testing	initiatives across	Citi.	Citi	also	relies	on	data	to	aggregate,	assess	and	manage	various	risk exposures.	Management	of	these	risks	is	made	even	more	challenging	within	a global	financial	institution	such	as	Citi,	particularly	given	the	complex,	diverse and	rapidly	changing	financial	markets	and	conditions	in	which	Citi	operates	as well	as	that	losses	can	occur	from	untimely,	inaccurate	or	incomplete	processes caused	by	unintentional	human	error.

These	processes,	strategies	and	models	are	inherently	limited	because	they involve	techniques,	including	the	use	of	historical	data	in	many	circumstances, assumptions	and	judgments	that	cannot	anticipate	every	economic	and	financial outcome	in	the	markets	in	which	Citi	operates,	nor	can	they	anticipate	the specifics	and	timing	of	such	outcomes.	Citi	could	incur	significant	losses,	and	its regulatory	capital	and	capital	ratios	could	be	negatively	impacted,	if	Citi's	risk management	processes,	including	its	ability	to	manage	and	aggregate	data	in	a timely	and	accurate	manner,	strategies	or	models	are	deficient	or	ineffective. Such	deficiencies	or	ineffectiveness	could	also	result	in	inaccurate	financial, regulatory	or	risk	reporting.

Moreover,	Citi's	Basel	III	regulatory	capital	models,	including	its	credit, market	and	operational	risk	models,	currently	remain	subject	to	ongoing regulatory	review	and	approval,	which	may	result	in	refinements,	modifications or	enhancements	(required	or	otherwise)	to	these	models.	Modifications	or requirements	resulting	from	these	ongoing	reviews,	as	well	as	any	future changes	or	guidance	provided	by	the	U.S.	banking	agencies	regarding	the regulatory	capital	framework	applicable	to	Citi,	have	resulted	in,	and	could continue	to	result	in,	significant	changes	to	Citi's	risk-

weighted	assets.	These	changes	can	negatively	impact	Citi's	capital	ratios	and	its ability	to	achieve	its	regulatory	capital	requirements	as	it	projects	or	as	required.

# COMPLIANCE	RISKS

# Ongoing	Implementation	and	Interpretation	of	Regulatory	Changes	and Requirements	in	the	U.S.	and	Globally	Have	Increased	Citi's	Compliance Risks	and	Costs.

As	referenced	above,	over	the	past	several	years,	Citi	has	been	required	to implement	a	significant	number	of	regulatory	changes	across	all	of	its	businesses and	functions,	and	these	changes	continue.	In	some	cases,	Citi's	implementation of	a	regulatory	requirement	is	occurring	simultaneously	with	changing	or conflicting	regulatory	guidance,	legal	challenges	or	legislative	action	to	modify or	repeal	existing	rules	or	enact	new	rules.	Moreover,	in	many	cases,	these	are entirely	new	regulatory	requirements	or	regimes,	resulting	in	much	uncertainty regarding	regulatory	expectations	as	to	what	is	definitely	required	in	order	to	be in	compliance.	Accompanying	this	compliance	uncertainty	is	heightened regulatory	scrutiny	and	expectations	in	the	U.S.	and	globally	for	the	financial services	industry	with	respect	to	governance	and	risk	management	practices, including	its	compliance	and	regulatory	risks	(for	a	discussion	of	heightened regulatory	expectations	on	"conduct	risk"	at,	and	the	overall	"culture"	of, financial	institutions	such	as	Citi,	see	the	legal	and	regulatory	proceedings	risk factor	below).	A	failure	to	resolve	any	identified	deficiencies	could	result	in increased	regulatory	oversight	and	restrictions.	All	of	these	factors	have	resulted in	increased	compliance	risks	and	costs	for	Citi.

Examples	of	regulatory	changes	that	have	resulted	in	increased	compliance risks	and	costs	include	(i)	a	proliferation	of	laws	relating	to	the	limitation	of cross-border	data	movement	and/or	collection	and	use	of	customer	information, including	data	localization	and	protection	and	privacy	laws,	which	also	can conflict	with	or	increase	compliance	complexity	with	respect	to	other	laws, including	anti-money	laundering	laws;	and	(ii)	the	FRB's	"total	loss	absorbing capacity"	(TLAC)	requirements,	including,	among	other	things,	consequences	of a	breach	of	the	clean	holding	company	requirements,	given	there	are	no	cure periods	for	the	requirements.

Extensive	compliance	requirements	can	result	in	increased	reputational	and legal	risks,	as	failure	to	comply	with	regulations	and	requirements,	or	failure	to comply	as	expected,	can	result	in	enforcement	and/or	regulatory	proceedings	(for additional	discussion,	see	the	legal	and	regulatory	proceedings	risk	factor below).	Additionally,	increased	and	ongoing	compliance	requirements	and uncertainties	have	resulted	in	higher	costs	for	Citi.	For	example,	Citi	employed roughly	30,000	risk,	regulatory	and	compliance	staff	as	of	year-end	2018,	out	of a	total	employee	population	of	204,000,	compared	to	approximately	14,000	as	of year-end	2008	with	a	total	employee	population	of	323,000.	These	higher regulatory	and	compliance	costs	can	impede	Citi's	ongoing,	business-as-usual cost	reduction	efforts,	and	can	also	require	management	to	reallocate	resources, including

potentially	away	from	ongoing	business	investment	initiatives,	as	discussed above.

# Citi	Is	Subject	to	Extensive	Legal	and	Regulatory	Proceedings,	Investigations and	Inquiries	That	Could	Result	in	Significant	Penalties	and	Other	Negative Impacts	on	Citi,	Its	Businesses	and	Results	of	Operations.

At	any	given	time,	Citi	is	defending	a	significant	number	of	legal	and	regulatory proceedings	and	is	subject	to	numerous	governmental	and	regulatory examinations,	investigations	and	other	inquiries.	The	global	judicial,	regulatory and	political	environment	has	generally	been	unfavorable	for	large	financial institutions.	The	complexity	of	the	federal	and	state	regulatory	and	enforcement regimes	in	the	U.S.,	coupled	with	the	global	scope	of	Citi's	operations,	also means	that	a	single	event	or	issue	may	give	rise	to	a	large	number	of	overlapping investigations	and	regulatory	proceedings,	either	by	multiple	federal	and	state agencies	in	the	U.S.	or	by	multiple	regulators	and	other	governmental	entities	in different	jurisdictions,	as	well	as	multiple	civil	litigation	claims	in	multiple jurisdictions.

Moreover,	U.S.	and	non-U.S.	regulators	have	been	increasingly	focused	on "conduct	risk,"	a	term	used	to	describe	the	risks	associated	with	behavior	by employees	and	agents,	including	third-party	vendors	utilized	by	Citi,	that	could harm	clients,	customers,	investors	or	the	markets,	such	as	improperly	creating, selling,	marketing	or	managing	products	and	services	or	improper	incentive compensation	programs	with	respect	thereto,	failures	to	safeguard	a	party's personal	information,	or	failures	to	identify	and	manage	conflicts	of	interest.	In addition	to	increasing	Citi's	compliance	and	reputational	risks,	this	focus	on conduct	risk	could	lead	to	more	regulatory	or	other	enforcement	proceedings	and civil	litigation,	including	for	practices,	which	historically	were	acceptable	but now	receive	greater	scrutiny.	Further,	while	Citi	takes	numerous	steps	to	prevent and	detect	conduct	by	employees	and	agents	that	could	potentially	harm	clients, customers,	investors	or	the	markets,	such	behavior	may	not	always	be	deterred or	prevented.	Banking	regulators	have	also	focused	on	the	overall	culture	of financial	services	firms,	including	Citi.	In	addition	to	regulatory	restrictions	or structural	changes	that	could	result	from	perceived	deficiencies	in	Citi's	culture, such	focus	could	also	lead	to	additional	regulatory	proceedings.

In	addition,	the	severity	of	the	remedies	sought	in	legal	and	regulatory proceedings	to	which	Citi	is	subject	has	remained	elevated.	U.S.	and	certain international	governmental	entities	have	increasingly	brought	criminal	actions against,	or	have	sought	criminal	convictions	from,	financial	institutions,	and criminal	prosecutors	in	the	U.S.	have	increasingly	sought	and	obtained	criminal guilty	pleas	or	deferred	prosecution	agreements	against	corporate	entities	and other	criminal	sanctions	from	those	institutions.	These	types	of	actions	by	U.S. and	international	governmental	entities	may,	in	the	future,	have	significant collateral	consequences	for	a	financial	institution,	including	loss	of	customers and	business,	and	the	inability	to	offer	certain	products	or	services	and/or operate	certain	businesses.	Citi	may	be	required	to	accept	or	be	subject	to	similar types	of	criminal	remedies,	consent	orders,	sanctions,	substantial	fines	and penalties,	remediation

and	other	financial	costs	or	other	requirements	in	the	future,	including	for matters	or	practices	not	yet	known	to	Citi,	any	of	which	could	materially	and negatively	affect	Citi's	businesses,	business	practices,	financial	condition	or results	of	operations,	require	material	changes	in	Citi's	operations	or	cause	Citi reputational	harm.

Further,	many	large	claims—both	private	civil	and	regulatory—asserted against	Citi	are	highly	complex,	slow	to	develop	and	may	involve	novel	or untested	legal	theories.	The	outcome	of	such	proceedings	is	difficult	to	predict	or estimate	until	late	in	the	proceedings.	Although	Citi	establishes	accruals	for	its legal	and	regulatory	matters	according	to	accounting	requirements,	Citi's estimates	of,	and	changes	to,	these	accruals	involve	significant	judgment	and may	be	subject	to	significant	uncertainty,	and	the	amount	of	loss	ultimately incurred	in	relation	to	those	matters	may	be	substantially	higher	than	the amounts	accrued.	In	addition,	certain	settlements	are	subject	to	court	approval and	may	not	be	approved.

For	additional	information	relating	to	Citi's	legal	and	regulatory proceedings	and	matters,	including	Citi's	policies	on	establishing	legal	accruals, see	Note	27	to	the	Consolidated	Financial	Statements.

# Managing	Global	Risk	Table	of	Contents

| MANAGING	GLOBAL	RISK | 59 |
| :--- | :--- |
| \t\t\tOverview | 59 |
| CREDIT\tRISK(1) | 63 |
| \t\t\tOverview | 63 |
| \t\t\tConsumer\tCredit | 64 |
| \t\t\tCorporate\tCredit | 71 |
| \t\t\tAdditional\tConsumer\tand\tCorporate\tCredit\tDetails | 74 |
| \t\t\t\t\t\t\tLoans\tOutstanding | 74 |
| \t\t\t\t\t\t\tDetails\tof\tCredit\tLoss\tExperience | 75 |
| \t\t\t\t\t\t\tAllowance\tfor\tLoan\tLosses | 77 |
| \t\t\t\t\t\t\tNon-Accrual\tLoans\tand\tAssets\tand\tRenegotiated\tLoans | 78 |
| \t\t\t\t\t\t\tForgone\tInterest\tRevenue\ton\tLoans | 81 |
| LIQUIDITY\tRISK | 82 |
| \t\t\t\t\tOverview | 82 |
| \t\t\t\t\tLiquidity\tMonitoring\tand\tMeasurement | 82 |
| \t\t\t\t\tHigh-Quality\tLiquid\tAssets\t(HQLA) | 83 |
| \t\t\t\t\tLoans | 84 |
| \t\t\t\t\tDeposits | 85 |
| \t\t\t\t\tLong-Term\tDebt(2) | 85 |
| \t\t\t\t\tSecured\tFunding\tTransactions\tand\tShort-Term\tBorrowings | 88 |
| \t\t\t\t\tCredit\tRatings | 90 |
| MARKET\tRISK(1) | 92 |
| \t\tOverview | 92 |
| \t\t\tMarket\tRisk\tof\tNon-Trading\tPortfolios | 92 |
| \t\t\t\t\t\t\t\tNet\tInterest\tRevenue\tat\tRisk | 92 |
| \t\t\t\t\t\t\t\tInterest\tRate\tRisk\tof\tInvestment\tPortfolios—Impact\ton\tAOCI | 92 |
| \t\t\t\t\t\t\t\tChanges\tin\tForeign\tExchange\tRates—Impacts\ton\tAOCI\tand\tCapital | 94 |
| \t\t\t\t\t\t\t\tInterest\tRevenue/Expense\tand\tNet\tInterest\tMargin | 95 |
| \t\t\t\t\t\t\t\tAdditional\tInterest\tRate\tDetails | 97 |
| \t\t\tMarket\tRisk\tof\tTrading\tPortfolios | 101 |
| \t\t\t\t\t\t\t\tFactor\tSensitivities | 102 |
| \t\t\t\t\t\t\t\tValue\tat\tRisk\t(VAR) | 102 |
| \t\t\t\t\t\t\t\tStress\tTesting | 105 |
| OPERATIONAL\tRISK | 106 |
| \t\tOverview | 106 |
| \t\tCybersecurity\tRisk | 106 |

(1) For	additional	information	regarding	certain	credit	risk,	market	risk	and	other	quantitative	and	qualitative	information,	refer	to	Citi's	Pillar	3	Basel	III	Advanced	Approaches	Disclosures,	as required	by	the	rules	of	the	Federal	Reserve	Board,	on	Citi's	Investor	Relations	website.

(2) See	"Long-Term	Debt—Resolution	Plan"	below	for	a	description	of	the	consequences	to	unsecured	debt	holders	in	the	event	of	Citi's	bankruptcy.

# MANAGING	GLOBAL	RISK

For	Citi,	effective	risk	management	is	of	primary	importance	to	its	overall operations.	Accordingly,	Citi's	risk	management	process	has	been	designed	to monitor,	evaluate	and	manage	the	principal	risks	it	assumes	in	conducting	its activities.	Specifically,	the	activities	that	Citi	engages	in,	and	the	risks	those activities	generate,	must	be	consistent	with	Citi's	mission	and	value	proposition, the	key	principles	that	guide	it,	and	Citi's	risk	appetite.

Risk	management	must	be	built	on	a	foundation	of	ethical	culture.	Under Citi's	mission	and	value	proposition,	which	was	developed	by	Citi's	senior leadership	and	distributed	throughout	the	Company,	Citi	strives	to	serve	its clients	as	a	trusted	partner	by	responsibly	providing	financial	services	that enable	growth	and	economic	progress	while	earning	and	maintaining	the	public's trust	by	constantly	adhering	to	the	highest	ethical	standards.	As	such,	Citi	asks all	employees	to	ensure	that	their	decisions	pass	three	tests:	they	are	in	our clients'	interests,	create	economic	value	and	are	always	systemically	responsible. Additionally,	Citi	evaluates	employees'	performance	against	behavioral expectations	set	out	in	Citi's	leadership	standards,	which	were	designed	in	part	to effectuate	Citi's	mission	and	value	proposition.	Other	culture-related	efforts	in connection	with	conduct	risk,	ethics	and	leadership,	escalation	and	treating customers	fairly	help	Citi	to	execute	its	mission	and	value	proposition. Citi's	Company-wide	risk	governance	framework	consists	of	the	policies, standards,	procedures	and	processes	through	which	Citi	identifies,	assesses, measures,	manages,	monitors,	reports	and	controls	risks	across	the	Company.	It also	emphasizes	Citi's	risk	culture	and	lays	out	standards,	procedures	and programs	that	are	designed	and	undertaken	to	enhance	the	Company's	risk culture,	embed	this	culture	deeply	within	the	organization,	and	give	employees tools	to	make	sound	and	ethical	risk	decisions	and	to	escalate	issues appropriately.	The	risk	governance	framework	has	been	developed	in	alignment with	the	expectations	of	the	Office	of	the	Comptroller	of	the	Currency	(OCC) Heightened	Standards.	It	is	also	aligned	with	the	relevant	components	of	the Basel	Committee	on	Banking	Supervision's	corporate	governance	principles	for banks	and	relevant	components	of	the	Federal	Reserve's	Enhanced	Prudential Standards	for	Bank	Holding	Companies	and	Foreign	Banking	Organizations. Four	key	principles—common	purpose,	responsible	finance,	ingenuity	and leadership—guide	Citi	as	it	performs	its	mission.	Citi's	risk	appetite,	which	is approved	by	the	Citigroup	Board	of	Directors,	specifies	the	aggregate	levels	and types	of	risk	the	Board	and	management	are	willing	to	assume	to	achieve	Citi's strategic	objectives	and	business	plan,	consistent	with	applicable	capital, liquidity	and	other	regulatory	requirements.

Citi	selectively	takes	risks	in	support	of	its	underlying	business	strategy, while	striving	to	ensure	it	operates	within	its	mission	and	value	proposition	and risk	appetite.

Citi's	risks	are	generally	categorized	and	summarized	as	follows:

•Credit	risk	is	the	risk	of	loss	resulting	from	the	decline	in	credit	quality	(or downgrade	risk)	or	failure	of	a	borrower,	counterparty,	third	party	or	issuer to	honor	its	financial	or	contractual	obligations.

•Liquidity	risk	is	the	risk	that	the	Company	will	not	be	able	to	meet efficiently	both	expected	and	unexpected	current	and	future	cash	flow	and collateral	needs	without	adversely	affecting	either	daily	operations	or financial	conditions	of	the	Company.	The	risk	may	be	exacerbated	by	the inability	of	the	Company	to	access	funding	sources	or	monetize	assets	and the	composition	of	liability	funding	and	liquid	assets.

•Market	risk	is	the	risk	of	loss	arising	from	changes	in	the	value	of	Citi's assets	and	liabilities	resulting	from	changes	in	market	variables,	such	as interest	rates,	exchange	rates	or	credit	spreads.	Losses	can	be	exacerbated	by the	presence	of	basis	or	correlation	risks.

•Operational	risk	is	the	risk	of	loss	resulting	from	inadequate	or	failed internal	processes,	systems	or	human	factors,	or	from	external	events.	It includes	risk	of	failing	to	comply	with	applicable	laws	and	regulations,	but excludes	strategic	risk	(see	below).	It	also	includes	the	reputation	and franchise	risk	associated	with	business	practices	or	market	conduct	in	which Citi	is	involved,	as	well	as	compliance,	conduct	and	legal	risks.	Operational risk	is	inherent	in	Citi's	global	business	activities,	as	well	as	related	support, and	can	result	in	losses	arising	from	events	related	to	fraud,	theft	and unauthorized	activity;	employment	practices	and	workplace	environment; clients,	products	and	business	practices;	physical	assets	and	infrastructure, and	execution,	delivery	and	process	management.

•Compliance	risk	is	the	risk	to	current	or	projected	financial	condition	and resilience	arising	from	violations	of	laws	or	regulations,	or	from nonconformance	with	prescribed	practices,	internal	policies	and	procedures, or	ethical	standards.	This	risk	exposes	a	bank	to	fines,	civil	money penalties,	payment	of	damages	and	the	voiding	of	contracts.	Compliance risk	is	not	limited	to	risk	from	failure	to	comply	with	consumer	protection laws;	it	encompasses	the	risk	of	noncompliance	with	all	laws	and regulations,	as	well	as	prudent	ethical	standards	and	contractual	obligations. It	also	includes	the	exposure	to	litigation	(known	as	legal	risk)	from	all aspects	of	banking,	traditional	and	nontraditional.	Compliance	risk	spans across	all	risk	types	outlined	in	the	risk	governance	framework. •Reputational	risk	is	the	risk	to	current	or	anticipated	earnings,	capital,	or franchise	or	enterprise	value	and	resilience	arising	from	negative	public opinion.

•Strategic	risk	is	the	risk	to	current	or	anticipated	earnings,	capital,	or franchise	or	enterprise	value	arising	from	poor,	but	authorized	business decisions	(in	compliance	with	regulations,	policies	and	procedures),	an inability	to	adapt	to	changes	in	the	operating	environment	or	other	external factors	that	may	impair	the	ability	to	carry	out	a	business	strategy.	Strategic risk	also	includes:

•Country	risk,	which	is	the	risk	that	an	event	in	a	country	(precipitated by	developments	within	or

external	to	a	country)	will	impair	the	value	of	Citi's	franchise	or	will adversely	affect	the	ability	of	obligors	within	that	country	to	honor	their obligations.	Country	risk	events	may	include	sovereign	defaults, banking	crises,	currency	crises,	currency	convertibility	and/or transferability	restrictions	or	political	events.

Citi	manages	its	risks	through	each	of	its	three	lines	of	defense:	(i)	business management,	(ii)	independent	control	functions	and	(iii)	internal	audit.	The	three lines	of	defense	collaborate	with	each	other	in	structured	forums	and	processes	to bring	various	perspectives	together	and	to	lead	the	organization	toward	outcomes that	are	in	clients'	interests,	create	economic	value	and	are	systemically responsible.

# First	Line	of	Defense:	Business	Management

Each	of	Citi's	businesses	owns	its	risks	and	is	responsible	for	identifying, assessing	and	managing	its	risks.	Each	business	is	also	responsible	for establishing	and	operating	controls	to	mitigate	key	risks,	assessing	internal controls	and	promoting	a	culture	of	compliance	and	control.	In	doing	so,	a business	is	required	to	maintain	appropriate	staffing	and	implement	appropriate procedures	to	fulfill	its	risk	governance	responsibilities.

The	CEOs	of	each	region	and	business	report	to	the	Citigroup	CEO.	The Head	of	Enterprise	Infrastructure,	Operations	and	Technology	(EIO&T),	who	is considered	part	of	the	first	line	of	defense,	also	reports	to	the	Citigroup	CEO. Businesses	at	Citi	organize	and	chair	committees	and	councils	that	cover risk	considerations	with	participation	from	independent	control	functions, including	committees	or	councils	that	are	designed	to	consider	matters	related	to capital,	assets	and	liabilities,	business	practices,	business	risks	and	controls, mergers	and	acquisitions,	the	Community	Reinvestment	Act	and	fair	lending	and incentives.

# Second	Line	of	Defense:	Independent	Control	Functions

Citi's	independent	control	functions,	including	Risk,	Independent	Compliance Risk	Management,	Human	Resources,	Legal	and	Finance,	set	standards	by which	Citi	and	its	businesses	manage	and	oversee	risks,	including	compliance with	applicable	laws,	regulatory	requirements,	policies	and	other	relevant standards	of	conduct.	Additionally,	among	other	responsibilities,	the independent	control	functions	provide	advice	and	training	to	Citi's	businesses and	establish	tools,	methodologies,	processes	and	oversight	for	controls	used	by the	businesses	to	foster	a	culture	of	compliance	and	control.

The	Risk	organization	is	designed	to	act	as	an	independent	partner	of	the business	to	manage	market,	credit	and	operational	risk	in	a	manner	consistent with	Citi's	risk	appetite.	Risk	establishes	policies	and	guidelines	for	risk assessments	and	risk	management	and	contributes	to	controls	and	tools	to manage,	measure	and	mitigate	risks	taken	by	the	Company.

There	is	an	independent	Chief	Risk	Officer	for	each	of	Citi's	consumer, commercial	and	corporate	lending	businesses

within	ICG	and	GCB	(Business	CROs).	Each	of	these	Business	CROs	reports directly	to	Citi's	Chief	Risk	Officer.	The	Business	CROs	are	the	focal	point	for most	day-to-day	risk	decisions,	such	as	setting	risk	limits	and	approving transactions	within	the	businesses.	In	addition	there	are	Regional	and	Legal Entity	Chief	Risk	Officers.	There	are	independent	Chief	Risk	Officers	for	Asia, EMEA	and	Latin	America,	including	Mexico	(Regional	CROs).	Each	of	these Regional	CROs	reports	directly	to	Citi's	Chief	Risk	Officer.	The	Regional	CROs are	accountable	for	overseeing	the	management	of	all	risks	in	their	geographic areas	and	across	businesses,	and	are	the	primary	risk	contacts	for	the	Regional Chief	Executive	Officers	and	local	regulators.	Legal	Entity	Chief	Risk	Officers are	responsible	for	identifying	and	managing	risks	in	Citibank	as	well	as	other specific	legal	entities.

The	Citi	Chief	Risk	Officer	reports	to	the	Citigroup	CEO	and	the	Risk Management	Committee	of	the	Citigroup	Board	of	Directors.	The	Chief	Risk Officer	has	regular	and	unrestricted	access	to	the	Risk	Management	Committee of	the	Board	and	also	to	the	Citigroup	Board	of	Directors	to	address	risks	and issues	identified	through	Risk's	activities.

# Independent	Compliance	Risk	Management

The	Independent	Compliance	Risk	Management	(ICRM)	organization	is designed	to	protect	Citi	by	overseeing	senior	management,	the	businesses	and other	control	functions	in	managing	compliance	risk,	as	well	as	promoting business	conduct	and	activity	that	is	consistent	with	Citi's	mission	and	value proposition.	Citi's	objective	is	to	embed	an	enterprise-wide	compliance	risk management	framework	and	culture	that	identifies,	measures,	monitors, mitigates	and	controls	compliance	risk	across	the	three	lines	of	defense.	For further	information	on	Citi's	compliance	risk	framework,	see	"Compliance Risk"	below.

The	Chief	Compliance	Officer	reports	to	the	Citigroup	CEO	and	has	regular and	unrestricted	access	to	the	committees	of	the	Citigroup	Board	of	Directors, including	the	Audit	Committee	and	the	Ethics	and	Culture	Committee.

# Human	Resources

The	Human	Resources	(HR)	organization	provides	personnel	support	and governance	in	connection	with,	among	other	things:	recognizing	and	rewarding employees	who	demonstrate	Citi's	values	and	excel	in	their	roles	and responsibilities;	setting	ethical	and	performance-related	expectations	and developing	and	promoting	employees	who	meet	those	expectations,	and searching	for,	assessing	and	hiring	staff	who	exemplify	Citi's	leadership standards,	which	outline	Citi's	expectations	of	its	employees'	behavior.	Through these	activities,	HR	serves	primarily	as	an	independent	control	function	advising business	management,	escalating	identified	risks	and	establishing	policies	or processes	to	manage	risk.	For	select	activities	HR	also	acts	in	a	first	line	capacity and	is	subject	to	appropriate	review	and	challenge	by	second	line	functions.

The	Head	of	Human	Resources	reports	to	the	Citigroup	CEO	and	interacts regularly	with	the	Personnel	and	Compensation	Committee	of	the	Citigroup Board	of	Directors.

# Legal

The	Legal	organization	is	involved	in	a	number	of	activities	designed	to	promote the	appropriate	management	of	Citi's	exposure	to	legal	risk,	which	includes	the risk	of	loss,	whether	financial	or	reputational,	due	to	legal	or	regulatory	actions, proceedings	or	investigations,	or	uncertainty	in	the	applicability	or	interpretation of	contracts,	laws	or	regulations.		Activities	designed	to	promote	appropriate management	of	legal	risk	include,	among	others:	promoting	and	supporting Citigroup's	governance	processes;	advising	business	management,	other independent	control	functions,	the	Citigroup	Board	of	Directors	and	committees of	the	Board	regarding	analysis	of	laws	and	regulations,	regulatory	matters, disclosure	matters,	and	potential	risks	and	exposures	on	key	litigation	and transactional	matters,	among	other	things;	advising	other	independent	control functions	in	their	efforts	to	ensure	compliance	with	applicable	laws	and regulations	as	well	as	internal	standards	of	conduct;	serving	on	key	management committees;	reporting	and	escalating	key	legal	issues	to	senior	management	or other	independent	control	functions;	participating	in	internal	investigations	and overseeing	regulatory	investigations,	and	advising	businesses	on	a	day-to-day basis	on	legal,	regulatory	and	contractual	matters.

The	General	Counsel	reports	to	the	Citigroup	CEO	and	is	responsible	to	the full	Citigroup	Board.	In	addition	to	having	regular	and	unrestricted	access	to	the full	Citigroup	Board	of	Directors,	the	General	Counsel	or	his/her	delegates regularly	attend	meetings	of	the	Risk	Management	Committee,	Audit Committee,	Personnel	and	Compensation	Committee,	Ethics	and	Culture Committee,	Operations	and	Technology	Committee,	and	Nomination, Governance	and	Public	Affairs	Committee,	as	well	as	other	ad	hoc	committees of	the	Citigroup	Board	of	Directors.

# Finance

The	Finance	organization	is	primarily	composed	of	the	following	disciplines: treasury,	controllers,	tax	and	financial	planning	and	analysis,	capital planning/recovery	and	resolution	planning,	corporate	M&A	and	investor relations.	These	disciplines	partner	with	the	businesses,	providing	key	data	and consultation	to	facilitate	sound	decisions	in	support	of	the	businesses'	objectives. Through	these	activities,	Finance	serves	primarily	as	an	independent	control function	advising	business	management,	escalating	identified	risks	and establishing	policies	or	processes	to	manage	risk.	For	select	activities	Finance also	acts	in	a	first	line	capacity	and	is	subject	to	appropriate	review	and challenge	by	second	line	functions.

Through	the	treasury	discipline,	Finance	has	overall	responsibility	for managing	Citi's	balance	sheet	and	accordingly	partners	with	the	businesses	to manage	Citi's	liquidity	and	interest	rate	risk	(price	risk	for	non-trading portfolios).	Treasury	works	with	the	businesses	to	establish	balance	sheet	targets and	limits,	as	well	as	sets	policies	on	funding	costs	charged	for	business	assets based	on	their	liquidity	and	duration.

Principally	through	the	controllers	discipline,	Finance	is	responsible	for establishing	a	strong	control	environment	over	Citi's	financial	reporting processes	consistent	with	the	2013	Committee	of	Sponsoring	Organizations	of the	Treadway	Commission,	or	COSO,	Internal	Control-Integrated	Framework.

Finance	is	led	by	Citi's	Chief	Financial	Officer	(CFO),	who	reports	directly to	the	Citigroup	CEO.	The	CFO	chairs	or	co-chairs	several	management committees	that	serve	as	key	governance	and	oversight	forums	for	business activities.	In	addition,	the	CFO	has	regular	and	unrestricted	access	to	the	full Citigroup	Board	of	Directors	as	well	as	to	the	Audit	Committee	of	the	Board	of Directors.

# Third	Line	of	Defense:	Internal	Audit

Citi's	Internal	Audit	function	independently	reviews	activities	of	the	first	two lines	of	defense	based	on	a	risk-based	audit	plan	and	methodology	approved	by the	Audit	Committee	of	the	Citigroup	Board	of	Directors.	Internal	Audit	also provides	independent	assurance	to	the	Citigroup	Board	of	Directors,	the	Audit Committee	of	the	Board,	senior	management	and	regulators	regarding	the effectiveness	of	Citi's	governance	and	controls	designed	to	mitigate	Citi's exposure	to	risks	and	to	enhance	Citi's	culture	of	compliance	and	control.

The	Chief	Auditor	reports	functionally	to	the	Chairman	of	the	Citigroup Audit	Committee	and	administratively	to	the	CEO	of	Citigroup.	Internal	Audit's responsibilities	are	carried	out	independently	under	the	oversight	of	the	Audit Committee.	Internal	Audit's	employees	accordingly	report	to	the	Chief	Auditor and	do	not	have	reporting	lines	to	front-line	units	or	senior	management.	Internal Audit's	staff	members	are	not	permitted	to	provide	internal-audit	services	for	a business	line	or	function	in	which	they	had	business	line	or	function responsibilities	within	the	previous	12	months.

# threelinesofbusinessq42018.jpg

# Three	Lines	of	Defense

# Citigroup	Board	of	Directors	and	Committees	of	the	Board

Citigroup's	Board	of	Directors	oversees	Citi's	risk-taking	activities	and	holds management	accountable	for	adhering	to	the	risk	governance	framework.	To	do so,	directors	review	reports	prepared	by	the	businesses,	Risk,	Independent Compliance	Risk	Management,	Internal	Audit	and	others,	and	exercise	sound independent	judgment	to	question,	probe	and	challenge	recommendations	and decisions	made	by	management.

The	standing	committees	of	the	Citigroup	Board	of	Directors	are	the Executive	Committee,	Risk	Management	Committee,	Audit	Committee, Personnel	and	Compensation	Committee,	Ethics	and	Culture	Committee, Operations	and	Technology	Committee	and	Nomination,	Governance	and	Public Affairs	Committee.	In	addition	to	the	standing	committees,	the	Board	creates	ad hoc	committees	from	time	to	time	in	response	to	regulatory,	legal	or	other requirements.

# CREDIT	RISK

Credit	risk	is	the	risk	of	loss	resulting	from	the	decline	in	credit	quality	or	the failure	of	a	borrower,	counterparty,	third	party	or	issuer	to	honor	its	financial	or contractual	obligations.	Credit	risk	arises	in	many	of	Citigroup's	business activities,	including:

•consumer,	commercial	and	corporate lending;

•capital	markets	derivative	transactions;

•structured	finance;	and

•securities	financing	transactions	(repurchase	and	reverse	repurchase agreements,	securities	loaned	and	borrowed).

Credit	risk	also	arises	from	settlement	and	clearing	activities,	when	Citi transfers	an	asset	in	advance	of	receiving	its	counter-value	or	advances	funds	to settle	a	transaction	on	behalf	of	a	client.	Concentration	risk,	within	credit	risk,	is the	risk	associated	with	having	credit	exposure	concentrated	within	a	specific client,	industry,	region	or	other	category.

Credit	risk	is	one	of	the	most	significant	risks	Citi	faces	as	an	institution. For	additional	information,	see	"Risk	Factors—Credit	Risk"	above.	As	a	result, Citi	has	a	well-established	framework	in	place	for	managing	credit	risk	across	all businesses.	This	includes	a	defined	risk	appetite,	credit	limits	and	credit	policies, both	at	the	business	level	as	well	as	at	the	Company-wide	level.	Citi's	credit	risk management	also	includes	processes	and	policies	with	respect	to	problem recognition,	including	"watch	lists,"	portfolio	reviews,	stress	tests,	updated	risk ratings	and	classification	triggers.

With	respect	to	Citi's	settlement	and	clearing	activities,	intraday	client usage	of	lines	is	monitored	against	limits,	as	well	as	against	usage	patterns.	To the	extent	a	problem	develops,	Citi	typically	moves	the	client	to	a	secured (collateralized)	operating	model.	Generally,	Citi's	intraday	settlement	and clearing	lines	are	uncommitted	and	cancelable	at	any	time.

To	manage	concentration	of	risk	within	credit	risk,	Citi	has	in	place	a correlation	framework	consisting	of	industry	limits,	an	idiosyncratic	framework consisting	of	single	name	concentrations	for	each	business	and	across	Citigroup and	a	specialized	framework	consisting	of	product	limits.

Credit	exposures	are	generally	reported	in	notional	terms	for	accrual	loans, reflecting	the	value	at	which	the	loans	as	well	as	loan	and	other	off-balance sheet	commitments	are	carried	on	the	Consolidated	Balance	Sheet.	Credit exposure	arising	from	capital	markets	activities	is	generally	expressed	as	the current	mark-to-market,	net	of	margin,	reflecting	the	net	value	owed	to	Citi	by	a given	counterparty.

The	credit	risk	associated	with	these	credit	exposures	is	a	function	of	the idiosyncratic	creditworthiness	of	the	obligor,	as	well	as	the	terms	and	conditions of	the	specific	obligation.	Citi	assesses	the	credit	risk	associated	with	its	credit exposures	on	a	regular	basis	through	its	loan	loss	reserve	process	(see "Significant	Accounting	Policies	and	Significant	Estimates—Allowance	for Credit	Losses"	below	and	Notes	1	and	15	to	the	Consolidated	Financial Statements),	as	well	as	through	regular	stress	testing	at	the	company,	business, geography	and	product

levels.	These	stress-testing	processes	typically	estimate	potential	incremental credit	costs	that	would	occur	as	a	result	of	either	downgrades	in	the	credit	quality or	defaults	of	the	obligors	or	counterparties.

For	additional	information	on	Citi's	credit	risk	management,	see	Note	14	to the	Consolidated	Financial	Statements.

# Consumer	Credit

Citi	provides	traditional	retail	banking,	including	commercial	banking,	and	credit card	products	in	19	countries	and	jurisdictions	through	North	America	GCB, Latin	America	GCB	and	Asia	GCB.	The	retail	banking	products	include consumer	mortgages,	home	equity,	personal	and	commercial	loans	and	lines	of credit	and	similar	related	products	with	a	focus	on	lending	to	prime	customers. Citi	uses	its	risk	appetite	framework	to	define	its	lending	parameters.	In	addition, Citi	uses	proprietary	scoring	models	for	new	customer	approvals.

As	stated	in	"Global	Consumer	Banking"	above,	GCB's	overall	strategy	is to	leverage	Citi's	global	footprint	and	be	the	pre-eminent	bank	for	the	affluent and	emerging	affluent	consumers	in	large	urban	centers.	In	credit	cards	and	in certain	retail	markets	(including	commercial	banking),	Citi	serves	customers	in	a somewhat	broader	set	of	segments	and	geographies.	GCB's	commercial	banking business	primarily	focuses	on	small	to	mid-size	businesses	and	also	serves	larger middle	market	companies	in	certain	regions.

# Consumer	Credit	Portfolio

The	following	table	shows	Citi's	quarterly	end-of-period	consumer	loans:(1)

| In	billions	of	dollars | 4Q'17 | 1Q'18 | 2Q'18 | 3Q'18 | 4Q'18 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Retail\tbanking: |  |  |  |  |  |
| Mortgages | $81.7 | $82.1 | $80.5 | $80.9 | $80.6 |
| Commercial\tbanking | 36.3 | 36.8 | 36.5 | 37.2 | 36.3 |
| Personal\tand\tother | 27.9 | 28.5 | 28.1 | 28.7 | 28.8 |
| Total\tretail\tbanking | $145.9 | $147.4 | $145.1 | $146.8 | $145.7 |
| Cards: |  |  |  |  |  |
| Citi-branded\tcards | $115.7 | $110.6 | $112.3 | $112.8 | $116.8 |
| Citi\tretail\tservices | 49.2 | 46.0 | 48.6 | 49.4 | 52.7 |
| Total\tcards | $164.9 | $156.6 | $160.9 | $162.2 | $169.5 |
| Total\tGCB | $310.8 | $304.0 | $306.0 | $309.0 | $315.2 |
| GCB\tregional\tdistribution: |  |  |  |  |  |
| North\tAmerica | 63% | 61% | 63% | 62% | 64% |
| Latin\tAmerica | 8 | 9 | 8 | 9 | 8 |
| Asia(2) | 29 | 30 | 29 | 29 | 28 |
| Total\tGCB | 100% | 100% | 100% | 100% | 100% |
| Corporate/Other(3) | $22.9 | $21.1 | $17.6 | $16.5 | $15.3 |
| Total\tconsumer\tloans | $333.7 | $325.1 | $323.6 | $325.5 | $330.5 |

(1) End-of-period	loans	include	interest	and	fees	on	credit	cards.

(2) Asia	includes	loans	and	leases	in	certain	 EMEA	countries	for	all	periods	presented.

(3) Primarily	consists	of	legacy	North	America	consumer	mortgages.

For	information	on	changes	to	Citi's	end-of-period	consumer	loans,	see "Liquidity	Risk—Loans"	below.

# Overall	Consumer	Credit	Trends

The	following	charts	show	the	quarterly	trends	in	delinquencies	and	net	credit losses	across	both	retail	banking,	including	commercial	banking,	and	cards	for total	GCB	and	by	region.

North	America	GCB	provides	mortgages,	home	equity	loans,	personal loans	and	commercial	banking	products	through	Citi's	retail	banking	network and	card	products	through	Citi-branded	cards	and	Citi	retail	services	businesses. The	retail	bank	is	concentrated	in	six	major	metropolitan	cities	in	the	United States	(for	additional	information	on	the	U.S.	retail	bank,	see	"North	America GCB"	above).

As	of	December	31,	2018,	72%	of	North	America	GCB	consumer	loans consisted	of	Citi-branded	and	Citi	retail	services	cards,	which	generally	drives the	overall	credit	performance	of	North	America	GCB	(for	additional information	on	North	America	GCB's	cards	portfolios,	including	delinquency and	net	credit	loss	rates,	see	"Credit	Card	Trends"	below).

As	shown	in	the	chart	above,	the	90+	days	past	due	delinquency	rate increased	quarter-over-quarter	in	North	America	GCB,	primarily	due	to seasonality	in	both	cards	portfolios,	while	the	quarter-over-quarter	increase	in	the net	credit	loss	rate	was	primarily	driven	by	seasonality	in	Citi	retail	services.	The year-over-year	delinquency	and	net	credit	loss	rates	increased,	driven	by seasoning	in	both	cards	portfolios	as	well	as	an	increase	in	net	flow	rates	in	later delinquency	buckets	in	Citi	retail	services.

# legenda01.jpg cctlatam.jpg

Latin	America	GCB	operates	in	Mexico	through	Citibanamex,	one	of Mexico's	largest	banks,	and	provides	credit	cards,	consumer	mortgages, personal	loans	and	commercial	banking	products.	Latin	America	GCB	serves	a more	mass	market	segment	in	Mexico	and	focuses	on	developing	multi-product relationships	with	customers. As	shown	in	the	chart	above,	the	quarter-over-quarter	90+	days	past	due delinquency	rate	increased	in	Latin	America	GCB,	mostly	driven	by	seasonality in	the	cards	portfolio.	The	quarter-over-quarter	net	credit	loss	rate	decreased, primarily	reflecting	the	absence	of	an	episodic	charge-off	in	the	commercial portfolio	in	the	prior	quarter.	The	year-over-year	delinquency	and	net	credit	loss rates	increased,	driven	primarily	by	seasoning	of	the	cards	portfolio.

# legenda01.jpg

# cctapac.jpg

Asia	includes	GCB	activities	in	certain	EMEA	countries	for	all	periods	presented.

Asia	GCB	operates	in	17	countries	in	Asia	and	EMEA	and	provides	credit cards,	consumer	mortgages,	personal	loans	and	commercial	banking	products.

As	shown	in	the	chart	above,	the	90+	days	past	due	delinquency	rate	was largely	stable	in	Asia	GCB	quarter-over-quarter	and	year-over-year.	The	net credit	loss	rate	increased	quarter-over-quarter	and	year-over-year,	primarily driven	by	an	episodic	charge-off	in	the	commercial	portfolio	in	the	fourth	quarter of	2018.	Overall,	the	strong	credit	profiles	in	Asia	GCB's	target	customer segments	have	resulted	in	stable	portfolio	credit	quality.

For	additional	information	on	cost	of	credit,	loan	delinquency	and	other information	for	Citi's	consumer	loan	portfolios,	see	each	respective	business's results	of	operations	above	and	Note	14	to	the	Consolidated	Financial Statements.

# Credit	Card	Trends

The	following	charts	show	the	quarterly	trends	in	delinquencies	and	net	credit losses	for	total	GCB	cards,	North	America	Citi-branded	cards	and	Citi	retail services	portfolios	as	well	as	for	Citi's	Latin	America	and	Asia	Citi-branded cards	portfolios.

# North	America	Citi	Retail	Services

# ccnamretail.jpg

North	America	GCB's	Citi-branded	cards	portfolio	issues	proprietary	and co-branded	cards.	As	shown	in	the	chart	above,	the	90+	days	past	due delinquency	rate	in	Citi-branded	cards	increased	quarter-over-quarter	due	to seasonality,	and	was	relatively	stable	year-over-year.	The	net	credit	loss	rate	was relatively	stable	quarter-over-quarter,	while	the	net	credit	loss	rate	increased year-over-year	due	to	seasoning	of	the	portfolio	as	well	as	the	impact	of	higher asset	sales	in	the	prior	year.

Citi	retail	services	partners	directly	with	more	than	20	retailers	and	dealers to	offer	private	label	and	co-branded	consumer	and	commercial	cards.	Citi	retail services'	target	market	is	focused	on	select	industry	segments	such	as	home improvement,	specialty	retail,	consumer	electronics	and	fuel.	Citi	retail	services continually	evaluates	opportunities	to	add	partners	within	target	industries	that have	strong	loyalty,	lending	or	payment	programs	and	growth	potential. As	shown	in	the	chart	above,	Citi	retail	services'	90+	days	past	due delinquency	and	net	credit	loss	rates	increased	quarter-over-quarter,	driven	by seasonality	as	well	as	the	business	beginning	to	incur	losses	in	a	recently acquired	portfolio.	The	year-over-year	increase	in	the	delinquency	rate	was primarily	driven	by	seasoning	and	an	increase	in	net	flow	rates	in	later delinquency	buckets.	On	this	basis,	the	net	credit	loss	rate	modestly	decreased, as	the	impact	of	the	recently	acquired	portfolios	was	partially	offset	by	seasoning as	well	as	an	increase	in	net	flow	rates	in	later	delinquency	buckets.

# Latin	America	Citi-Branded	Cards

Latin	America	GCB	issues	proprietary	and	co-branded	cards.	As	shown	in the	chart	above,	the	quarter-over-quarter	90+	days	past	due	delinquency	rate increased,	primarily	driven	by	seasonality,	while	the	net	credit	loss	rate decreased	also	driven	by	seasonality.	Year-over-year	the	delinquency	and	net credit	loss	rates	increased	primarily	due	to	seasoning	of	the	portfolio.

# North	America	Cards	FICO	Distribution

# Asia	Citi-Branded	Cards(1)

# legenda01.jpg ccapac.jpg

Asia	GCB	issues	proprietary	and	co-branded	cards.	As	shown	in	the	chart above,	the	90+	days	past	due	delinquency	rate	remained	broadly	stable	quarter- over-quarter	and	year-over-year,	driven	by	the	mature	and	well-diversified	cards portfolios.	The	net	credit	loss	rate	decreased	quarter-over-quarter,	as	the	prior quarter	reflected	a	higher	rate	due	to	the	conversion	of	an	acquired	portfolio	in Australia,	while	the	net	credit	loss	rate	was	broadly	stable	year-over-year. For	additional	information	on	cost	of	credit,	delinquency	and	other information	for	Citi's	cards	portfolios,	see	each	respective	business's	results	of operations	above	and	Note	14	to	the	Consolidated	Financial	Statements.

The	following	tables	show	the	current	FICO	score	distributions	for	Citi's	North America	Citi-branded	cards	and	Citi	retail	services	portfolios	based	on	end-of- period	receivables.	FICO	scores	are	updated	monthly	for	substantially	all	of	the portfolio	and	on	a	quarterly	basis	for	the	remaining	portfolio.

# Citi-Branded

| FICO	distribution | Dec	31,	2018 | Sept.	30,<br>2018 | Dec	31,	2017 |
| :--- | :--- | :--- | :--- |
| \t\t&gt;\t760 | 43% | 42% | 42% |
| \t\t\t680–760 | 40 | 41 | 41 |
| \t\t&lt;\t680 | 17 | 17 | 17 |
| Total | 100% | 100% | 100% |

# Citi	Retail	Services

| FICO	distribution | Dec	31,	2018 | 2018 | Dec	31,	2017 |
| :--- | :--- | :--- | :--- |
| \t\t\t&gt;\t760 | 25% | 24% | 24% |
| \t\t\t680–760 | 42 | 43 | 43 |
| \t\t&lt;\t680 | 33 | 33 | 33 |
| Total | 100% | 100% | 100% |

Both	the	Citi-branded	cards'	and	Citi	retail	services'	cards	FICO distributions	remained	stable	as	of	year-end	2018.

For	additional	information	on	FICO	scores,	see	Note	14	to	the Consolidated	Financial	Statements.

# Additional	Consumer	Credit	Details

# Consumer	Loan	Delinquency	Amounts	and	Ratios

| amounts	in	billions | 2018 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Global\tConsumer\tBanking(3)(4) |  |  |  |  |  |  |  |
| Total | $315.2 | $2,619 | $2,478 | $2,293 | $2,902 | $2,762 | $2,540 |
| Ratio |  | 0.83% | 0.80% | 0.79% | 0.92% | 0.89% | 0.87% |
| Retail\tbanking |  |  |  |  |  |  |  |
| Total | $145.7 | $485 | $515 | $474 | $790 | $822 | $726 |
| Ratio |  | 0.33% | 0.35% | 0.35% | 0.54% | 0.57% | 0.54% |
| North\tAmerica | 56.8 | 180 | 199 | 181 | 282 | 306 | 214 |
| Ratio |  | 0.32% | 0.36% | 0.33% | 0.50% | 0.55% | 0.39% |
| Latin\tAmerica | 19.7 | 127 | 130 | 136 | 201 | 195 | 185 |
| Ratio |  | 0.64% | 0.65% | 0.76% | 1.02% | 0.98% | 1.03% |
| Asia(5) | 69.2 | 178 | 186 | 157 | 307 | 321 | 327 |
| Ratio |  | 0.26% | 0.27% | 0.25% | 0.44% | 0.46% | 0.52% |
| Cards |  |  |  |  |  |  |  |
| Total | $169.5 | $2,134 | $1,963 | $1,819 | $2,112 | $1,940 | $1,814 |
| Ratio |  | 1.26% | 1.19% | 1.17% | 1.25% | 1.18% | 1.17% |
| North\tAmerica—Citi-branded | 91.8 | 812 | 768 | 748 | 755 | 698 | 688 |
| Ratio |  | 0.88% | 0.85% | 0.87% | 0.82% | 0.77% | 0.80% |
| North\tAmerica—Citi\tretail\tservices | 52.7 | 952 | 845 | 761 | 932 | 830 | 777 |
| Ratio |  | 1.81% | 1.72% | 1.61% | 1.77% | 1.69% | 1.64% |
| Latin\tAmerica | 5.7 | 171 | 151 | 130 | 170 | 153 | 125 |
| Ratio |  | 3.00% | 2.80% | 2.71% | 2.98% | 2.83% | 2.60% |
| Asia(5) | 19.3 | 199 | 199 | 180 | 255 | 259 | 224 |
| Ratio |  | 1.03% | 1.01% | 1.03% | 1.32% | 1.31% | 1.28% |
| Corporate/Other—Consumer(6) |  |  |  |  |  |  |  |
| Total | $15.3 | $382 | $557 | $834 | $362 | $542 | $735 |
| Ratio |  | 2.62% | 2.57% | 2.62% | 2.48% | 2.50% | 2.31% |
| International | — | — | 43 | 94 | — | 40 | 49 |
| Ratio |  | —% | 2.69% | 3.92% | —% | 2.50% | 2.04% |
| North\tAmerica | 15.3 | 382 | 514 | 740 | 362 | 502 | 686 |
| Ratio |  | 2.62% | 2.56% | 2.52% | 2.48% | 2.50% | 2.33% |
| Total\tCitigroup | $330.5 | $3,001 | $3,035 | $3,127 | $3,264 | $3,304 | $3,275 |
| Ratio |  | 0.91% | 0.91% | 0.97% | 0.99% | 1.00% | 1.01% |

(1) End-of-period	(EOP)	loans	include	interest	and	fees	on	credit	cards.

(2) The	ratios	of	90+	days	past	due	and	30–89	days	past	due	are	calculated	based	on	EOP	loans,	net	of	unearned	income.

(3) The	90+	days	past	due	balances	for	North	America—Citi-branded	and	North	America—Citi	retail	services	are	generally	still	accruing	interest.	Citigroup's	policy	is	generally	to	accrue	interest	on credit	card	loans	until	180	days	past	due,	unless	notification	of	bankruptcy	filing	has	been	received	earlier.

(4) The	loans	90+	days	past	due	and	30–89	days	past	due	and	related	ratios	for 	North	America	GCB	exclude	U.S.	mortgage	loans	that	are	guaranteed	by	U.S.	government-sponsored	agencies	since the	potential	loss	predominantly	resides	within	the	U.S.	agencies.	The	amounts	excluded	for	loans	90+	days	past	due	and	(EOP	loans)	were	$201	million	($0.6	billion),	$298	million	($0.7	billion) and	$327	million	($0.7	billion)	at	December	31,	2018,	2017	and	2016,	respectively.	The	amounts	excluded	for	loans	30–89	days	past	due	(EOP	loans	have	the	same	adjustment	as	above)	were $78	million,	$88	million	and	$70	million	at	December	31,	2018,	2017	and	2016,	respectively.

(5) Asia	includes	delinquencies	and	loans	in	certain	EMEA	countries	for	all	periods	presented.

(6) The	loans	90+	days	and	30–89	days	past	due	and	related	ratios	exclude	U.S.	mortgage	loans	that	are	guaranteed	by	U.S.	government-sponsored	agencies	since	the	potential	loss	predominantly resides	within	the	U.S.	agencies.	The	amounts	excluded	for	loans	90+	days	past	due	and	(EOP	loans)	were	$0.3	billion	($.07	billion),	$0.6	billion	($1.1	billion)	and	$0.9	billion	($1.4	billion)	at December	31,	2018,	2017	and	2016,	respectively.	The	amounts	excluded	for	loans	30–89	days	past	due	and	(EOP	loans	have	the	same	adjustment	as	above)	were	$0.1	billion,	$0.1	billion	and $0.2	billion	at	December	31,	2018,	2017	and	2016,	respectively.

# Consumer	Loan	Net	Credit	Losses	and	Ratios

|  | Average<br>loans(1) |  | Net	credit	losses(2)(3) |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars,\texcept\taverage\tloan\tamounts\tin\tbillions | 2018 | 2018 | 2017 | 2016 |
| Global\tConsumer\tBanking |  |  |  |  |
| Total | $306.2 | $6,920 | $6,562 | $5,610 |
| Ratio |  | 2.26% | 2.21% | 2.01% |
| Retail\tbanking |  |  |  |  |
| Total | $146.0 | $949 | $1,023 | $1,007 |
| Ratio |  | 0.65% | 0.72% | 0.72% |
| North\tAmerica | 56.0 | $138 | $194 | $205 |
| Ratio |  | 0.25% | 0.35% | 0.38% |
| Latin\tAmerica | 20.3 | $567 | $584 | $541 |
| Ratio |  | 2.79% | 2.92% | 2.85% |
| Asia(4) | 69.7 | $244 | $245 | $261 |
| Ratio |  | 0.35% | 0.37% | 0.39% |
| Cards |  |  |  |  |
| Total | $160.2 | $5,971 | $5,539 | $4,603 |
| Ratio |  | 3.72% | 3.60% | 3.30% |
| North\tAmerica—Citi-branded | 87.5 | $2,602 | $2,447 | $1,909 |
| Ratio |  | 2.97% | 2.90% | 2.61% |
| North\tAmerica—Retail\tservices | 48.3 | $2,357 | $2,155 | $1,805 |
| Ratio |  | 4.88% | 4.73% | 4.12% |
| Latin\tAmerica | 5.5 | $586 | $533 | $499 |
| Ratio |  | 10.65% | 10.06% | 9.78% |
| Asia(4) | 18.9 | $426 | $404 | $390 |
| Ratio |  | 2.25% | 2.17% | 2.24% |
| Corporate/Other—Consumer(3) |  |  |  |  |
| Total | $18.7 | $24 | $156 | $438 |
| Ratio |  | 0.14% | 0.57% | 1.06% |
| International | 0.7 | $42 | $82 | $269 |
| Ratio |  | 6.00% | 4.32% | 5.17% |
| North\tAmerica | 18.0 | $(18) | $74 | $169 |
| Ratio |  | NM | 0.29% | 0.47% |
| Other(5) | — | $— | $(21) | $— |
| Total\tCitigroup | $324.9 | $6,944 | $6,697 | $6,048 |
| Ratio |  | 2.14% | 2.07% | 1.88% |

(1) Average	loans	include	interest	and	fees	on	credit	cards.

(2) The	ratios	of	net	credit	losses	are	calculated	based	on	average	loans,	net	of	unearned	income.

(3) As	a	result	of	Citigroup's	entry	into	agreements	in	2016	to	sell	its	Argentina	and	Brazil	consumer	banking	businesses,	these	businesses	were	classified	as	HFS	at	the	end	of	the	fourth	quarter	of 2016.	Loans	HFS	are	excluded	from	this	table	as	they	are	recorded	in	Other	assets.	In	addition,	as	a	result	of	HFS	accounting	treatment,	approximately	$128	million	and	$42	million	of	net	credit losses	(NCLs)	were	recorded	as	a	reduction	in	revenue	(Other	revenue)	during	2017	and	2016,	respectively.	Accordingly,	these	NCLs	are	not	included	in	this	table.	The	sales	of	the	Argentina and	Brazil	consumer	banking	businesses	were	completed	in	2017.

(4) Asia	includes	average	loans	and	NCLs	in	certain	 EMEA	countries	for	all	periods	presented.

(5) 2017	NCLs	reflected	a	recovery	related	to	legacy	assets.

# Loan	Maturities	and	Fixed/Variable	Pricing

# U.S.	Consumer	Mortgages

|  |  | Greater |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Due | than\t1\tyear | Greater |  |
| In\tmillions\tof\tdollars\tat\tyear-\nend\t2018 | within\n1\tyear | but\twithin\n5\tyears | than\t5\nyears | Total |
| U.S.\tconsumer\tmortgage\nloan\tportfolio |  |  |  |  |
| Residential\tfirst\tmortgages | $74 | $509 | $47,897 | $48,480 |
| Home\tequity\tloans | 36 | 584 | 11,027 | 11,647 |
| Total | $110 | $1,093 | $58,924 | $60,127 |
| Fixed/variable\tpricing\tof |  |  |  |  |
| U.S.\tconsumer\tmortgage |  |  |  |  |
| loans\twith\tmaturities\tdue |  |  |  |  |
| after\tone\tyear |  |  |  |  |
| Loans\tat\tfixed\tinterest\trates |  | $934 | $37,503 |  |
| Loans\tat\tfloating\tor\nadjustable\tinterest\trates |  | 159 | 21,421 |  |
| Total |  | $1,093 | $58,924 |  |

# Corporate	Credit

Consistent	with	its	overall	strategy,	Citi's	corporate	clients	are	typically	large, multinational	corporations	that	value	the	depth	and	breadth	of	Citi's	global network.	Citi	aims	to	establish	relationships	with	these	clients	that	encompass multiple	products,	consistent	with	client	needs,	including	cash	management	and trade	services,	foreign	exchange,	lending,	capital	markets	and	M&A	advisory.

# Corporate	Credit	Portfolio

The	following	table	presents	Citi's	corporate	credit	portfolio	within	ICG (excluding	private	bank),	before	consideration	of	collateral	or	hedges,	by remaining	tenor	for	the	periods	indicated:

|  |  | At	December	31,	2018 | At	December	31,	2018 |  |  | At	September	30,	2018 | At	September	30,	2018 |  |  | At	December	31,	2017 | At	December	31,	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars\nDirect\toutstandings\n(on-balance\tsheet)(1) | Due\nwithin\n1\tyear\n$128 | Greater\nthan\t1\tyear\nbut\twithin\n5\tyears\n$110 | Greater\nthan\n5\tyears\n$20 | Total\nexposure\n$258 | Due\nwithin\n1\tyear\n$131 | Greater\nthan\t1\tyear\nbut\twithin\n5\tyears\n$103 | Greater\nthan\n5\tyears\n$20 | Total\nexposure\n$254 | Due\nwithin\n1\tyear\n$127 | Greater\nthan\t1\tyear\nbut\twithin\n5\tyears\n$96 | Greater\nthan\n5\tyears\n$22 | Total\nexposure\n$245 |
| Unfunded\tlending |  |  |  |  |  |  |  |  |  |  |  |  |
| commitments |  |  |  |  |  |  |  |  |  |  |  |  |
| (off-balance\tsheet)(2) | 106 | 245 | 19 | 370 | 115 | 253 | 25 | 393 | 111 | 222 | 20 | 353 |
| Total\texposure | $234 | $355 | $39 | $628 | $246 | $356 | $45 | $647 | $238 | $318 | $42 | $598 |

(1) Includes	drawn	loans,	overdrafts,	bankers'	acceptances	and	leases.

(2) Includes	unused	commitments	to	lend,	letters	of	credit	and	financial	guarantees.

# Portfolio	Mix—Geography,	Counterparty	and	Industry

Citi's	corporate	credit	portfolio	is	diverse	across	geography	and	counterparty. The	following	table	shows	the	percentage	of	this	portfolio	by	region	based	on Citi's	internal	management	geography:

|  | December	31,<br>2018 | September	30,<br>2018 | December	31,<br>2017 |
| :--- | :--- | :--- | :--- |
| North\tAmerica | 55% | 55% | 54% |
| EMEA | 27 | 27 | 27 |
| Asia | 11 | 11 | 12 |
| Latin\tAmerica | 7 | 7 | 7 |
| Total | 100% | 100% | 100% |

The	maintenance	of	accurate	and	consistent	risk	ratings	across	the	corporate credit	portfolio	facilitates	the	comparison	of	credit	exposure	across	all	lines	of business,	geographic	regions	and	products.	Counterparty	risk	ratings	reflect	an estimated	probability	of	default	for	a	counterparty	and	are	derived	primarily through	the	use	of	validated	statistical	models,	scorecard	models	and	external agency	ratings	(under	defined	circumstances),	in	combination	with	consideration of	factors	specific	to	the	obligor	or	market,	such	as	management	experience, competitive	position,	regulatory	environment	and	commodity	prices.	Facility risk	ratings	are	assigned	that	reflect	the	probability	of	default	of	the	obligor	and factors	that	affect	the	loss-given-default	of	the	facility,	such	as	support	or collateral.	Internal	obligor	ratings	that	generally	correspond	to

BBB	and	above	are	considered	investment	grade,	while	those	below	are considered	non-investment	grade.

Citigroup	has	also	incorporated	environmental	factors	such	as	climate	risk assessment	and	reporting	criteria	for	certain	obligors,	as	necessary.	Factors evaluated	include	consideration	of	climate	risk	to	an	obligor's	business	and physical	assets	and,	when	relevant,	consideration	of	cost-effective	options	to reduce	greenhouse	gas	emissions.

The	following	table	presents	the	corporate	credit	portfolio	by	facility	risk rating	as	a	percentage	of	the	total	corporate	credit	portfolio:

|  |  | Total	exposure |  |
| :--- | :--- | :--- | :--- |
|  | December\t31,\n2018 | September\t30,\n2018 | December\t31,\n2017 |
| AAA/AA/A | 49% | 48% | 49% |
| BBB | 34 | 34 | 34 |
| BB/B | 16 | 17 | 16 |
| CCC\tor\tbelow | 1 | 1 | 1 |
| Total | 100% | 100% | 100% |

Note:	Total	exposure	includes	direct	outstandings	and	unfunded	lending	commitments.

Citi's	corporate	credit	portfolio	is	also	diversified	by	industry.	The following	table	shows	the	allocation	of	Citi's	total	corporate	credit	portfolio	by industry:

|  | December	31,<br>2018 | September	30,<br>2018 | December	31,<br>2017 |
| :--- | :--- | :--- | :--- |
| Transportation\tand\n\tindustrial | 21% | 21% | 22% |
| Consumer\tretail\nand\thealth | 16 | 16 | 16 |
| Technology,\tmedia\nand\ttelecom | 13 | 14 | 12 |
| Power,\tchemicals,\n\tmetals\tand\tmining | 10 | 11 | 10 |
| Banks/broker- |  |  |  |
| dealers/finance |  |  |  |
| companies |  |  |  |
|  | 8 | 8 | 8 |
| Real\testate | 8 | 8 | 8 |
| Energy\tand\ncommodities | 8 | 8 | 8 |
| Public\tsector | 5 | 5 | 5 |
| Insurance\tand\tspecial\npurpose\tentities | 4 | 4 | 5 |
| Hedge\tfunds | 4 | 4 | 4 |
| Other\tindustries | 3 | 1 | 2 |
| Total | 100% | 100% | 100% |

# Credit	Risk	Mitigation

As	part	of	its	overall	risk	management	activities,	Citigroup	uses	credit derivatives	and	other	risk	mitigants	to	hedge	portions	of	the	credit	risk	in	its corporate	credit	portfolio,	in	addition	to	outright	asset	sales.	The	results	of	the mark-to-market	and	any	realized	gains	or	losses	on	credit	derivatives	are reflected	primarily	in	Other	revenue	in	the	Consolidated	Statement	of	Income. At	December	31,	2018,	September	30,	2018	and	December	31,	2017,	$30.8 billion,	$26.9	billion	and	$16.3	billion,	respectively,	of	the	corporate	credit portfolio	was	economically	hedged.	Citigroup's	expected	loss	model	used	in	the calculation	of	its	loan	loss	reserve	does	not	include	the	favorable	impact	of credit	derivatives	and	other	mitigants	that	are	marked	to	market.	In	addition,	the reported	amounts	of	direct	outstandings	and	unfunded	lending	commitments	in the	tables	above	do	not	reflect	the	impact	of	these	hedging	transactions.	The credit	protection	was	economically	hedging	underlying	corporate	credit	portfolio exposures	with	the	following	risk	rating	distribution:

# Rating	of	Hedged	Exposure

|  | December	31,<br>2018 | September	30,<br>2018 | December	31,<br>2017 |
| :--- | :--- | :--- | :--- |
| AAA/AA/A | 35% | 34% | 23% |
| BBB | 50 | 47 | 43 |
| BB/B | 14 | 17 | 31 |
| CCC\tor\tbelow | 1 | 2 | 3 |
| Total | 100% | 100% | 100% |

The	credit	protection	was	economically	hedging	underlying	corporate	credit portfolio	exposures	with	the	following	industry	distribution:

# Industry	of	Hedged	Exposure

|  | December	31,<br>2018 | September	30,<br>2018 | December	31,<br>2017 |
| :--- | :--- | :--- | :--- |
| Transportation\tand\nindustrial | 23% | 25% | 27% |
| Technology,\tmedia\nand\ttelecom | 17 | 15 | 12 |
| Consumer\tretail\tand\nhealth | 16 | 14 | 10 |
| Power,\tchemicals,\nmetals\tand\tmining | 15 | 14 | 14 |
| Energy\tand\ncommodities | 11 | 11 | 15 |
| Insurance\tand\tspecial\npurpose\tentities | 6 | 4 | 2 |
| Banks/broker- |  |  |  |
| dealers/finance |  |  |  |
| companies | 4 | 5 | 6 |
| Public\tsector | 3 | 7 | 12 |
| Real\testate | 4 | 4 | 1 |
| Other\tindustries | 1 | 1 | 1 |
| Total | 100% | 100% | 100% |

# Loan	Maturities	and	Fixed/Variable	Pricing	of	Corporate

# Loans

| In	millions	of	dollars	at<br>December	31,	2018 | Due<br>within<br>1	year | Over	1<br>year<br>but<br>within<br>5	years | Over	5<br>years | Total |
| :--- | :--- | :--- | :--- | :--- |
| Corporate\tloans |  |  |  |  |
| In\tU.S.\toffices |  |  |  |  |
| Commercial\tand\nindustrial\tloans | $19,935 | $20,599 | $11,529 | $52,063 |
| Financial\tinstitutions | 18,550 | 19,169 | 10,728 | 48,447 |
| Mortgage\tand\treal\testate | 19,193 | 19,832 | 11,099 | 50,124 |
| Installment,\trevolving\ncredit\tand\tother | 12,730 | 13,155 | 7,362 | 33,247 |
| Lease\tfinancing | 546 | 566 | 317 | 1,429 |
| In\toffices\toutside\tthe\nU.S. | 109,497 | 51,280 | 8,444 | 169,221 |
| Total\tcorporate\tloans | $180,451 | $124,601 | $49,479 | $354,531 |
| Fixed/variable |  |  |  |  |
| pricing\tof\tcorporate |  |  |  |  |
| loans\twith |  |  |  |  |
| maturities\tdue\tafter |  |  |  |  |
| one\tyear(1) |  |  |  |  |
| Loans\tat\tfixed\ninterest\trates |  | $23,779 | $16,595 |  |
| Loans\tat\tfloating\tor |  |  |  |  |
| adjustable\tinterest |  |  |  |  |
| rates |  | 100,822 | 32,884 |  |
| Total |  | $124,601 | $49,479 |  |

(1) Based	on	contractual	terms.	Repricing	characteristics	may	effectively be	modified	from	time	to	time	using	derivative	contracts.	See	Note	22

to	the	Consolidated	Financial	Statements.

# Additional	Consumer	and	Corporate	Credit	Details

# Loans	Outstanding

| In	millions	of	dollars | 2018 | 2017 | 2016 | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Consumer\tloans |  |  |  |  |  |
| In\tU.S.\toffices |  |  |  |  |  |
| Mortgage\tand\treal\testate(1) | $60,127 | $65,467 | $72,957 | $80,281 | $96,533 |
| Installment,\trevolving\tcredit\tand\tother | 3,398 | 3,398 | 3,395 | 3,480 | 14,450 |
| Cards | 143,788 | 139,006 | 132,654 | 112,800 | 112,982 |
| Commercial\tand\tindustrial | 8,256 | 7,840 | 7,159 | 6,407 | 5,895 |
| Total | $215,569 | $215,711 | $216,165 | $202,968 | $229,860 |
| In\toffices\toutside\tthe\tU.S. |  |  |  |  |  |
| Mortgage\tand\treal\testate(1) | $43,379 | $44,081 | $42,803 | $47,062 | $54,462 |
| Installment,\trevolving\tcredit\tand\tother | 27,609 | 26,556 | 24,887 | 29,480 | 31,128 |
| Cards | 25,400 | 26,257 | 23,783 | 27,342 | 32,032 |
| Commercial\tand\tindustrial | 17,773 | 20,238 | 16,568 | 17,410 | 18,294 |
| Lease\tfinancing | 49 | 76 | 81 | 362 | 546 |
| Total |  |  |  |  |  |
|  | $114,210 | $117,208 | $108,122 | $121,656 | $136,462 |
| Total\tconsumer\tloans | $329,779 | $332,919 | $324,287 | $324,624 | $366,322 |
| Unearned\tincome(2) | 708 | 737 | 776 | 830 | (679) |
| Consumer\tloans,\tnet\tof\tunearned\tincome | $330,487 | $333,656 | $325,063 | $325,454 | $365,643 |
| Corporate\tloans |  |  |  |  |  |
| In\tU.S.\toffices |  |  |  |  |  |
| Commercial\tand\tindustrial | $52,063 | $51,319 | $49,586 | $46,011 | $39,542 |
| Financial\tinstitutions | 48,447 | 39,128 | 35,517 | 36,425 | 36,324 |
| Mortgage\tand\treal\testate(1) | 50,124 | 44,683 | 38,691 | 32,623 | 27,959 |
| Installment,\trevolving\tcredit\tand\tother | 33,247 | 33,181 | 34,501 | 33,423 | 29,246 |
| Lease\tfinancing | 1,429 | 1,470 | 1,518 | 1,780 | 1,758 |
| Total |  |  |  |  |  |
|  | $185,310 | $169,781 | $159,813 | $150,262 | $134,829 |
| In\toffices\toutside\tthe\tU.S. |  |  |  |  |  |
| Commercial\tand\tindustrial | $94,701 | $93,750 | $81,882 | $82,689 | $83,506 |
| Financial\tinstitutions | 36,837 | 35,273 | 26,886 | 28,704 | 33,269 |
| Mortgage\tand\treal\testate(1) | 7,376 | 7,309 | 5,363 | 5,106 | 6,031 |
| Installment,\trevolving\tcredit\tand\tother | 25,684 | 22,638 | 19,965 | 20,853 | 19,259 |
| Lease\tfinancing | 103 | 190 | 251 | 303 | 419 |
| Governments\tand\tofficial\tinstitutions | 4,520 | 5,200 | 5,850 | 4,911 | 2,236 |
| Total |  |  |  |  |  |
|  | $169,221 | $164,360 | $140,197 | $142,566 | $144,720 |
| Total\tcorporate\tloans | $354,531 | $334,141 | $300,010 | $292,828 | $279,549 |
| Unearned\tincome(3) | (822) | (763) | (704) | (665) | (557) |
| Corporate\tloans,\tnet\tof\tunearned\tincome | $353,709 | $333,378 | $299,306 | $292,163 | $278,992 |
| Total\tloans—net\tof\tunearned\tincome | $684,196 | $667,034 | $624,369 | $617,617 | $644,635 |
| Allowance\tfor\tloan\tlosses—on\tdrawn\texposures | (12,315) | (12,355) | (12,060) | (12,626) | (15,994) |
| Total\tloans—net\tof\tunearned\tincome\nand\tallowance\tfor\tcredit\tlosses | $671,881 | $654,679 | $612,309 | $604,991 | $628,641 |
| Allowance\tfor\tloan\tlosses\tas\ta\tpercentage\tof\ttotal\tloans—\nnet\tof\tunearned\tincome(4) | 1.81% | 1.86% | 1.94% | 2.06% | 2.50% |
| Allowance\tfor\tconsumer\tloan\tlosses\tas\ta\tpercentage\tof\ntotal\tconsumer\tloans—net\tof\tunearned\tincome(4) | 3.01% | 2.96% | 2.88% | 3.02% | 3.71% |
| Allowance\tfor\tcorporate\tloan\tlosses\tas\ta\tpercentage\tof\ntotal\tcorporate\tloans—net\tof\tunearned\tincome(4) | 0.67% | 0.76% | 0.91% | 0.97% | 0.90% |

(1) Loans	secured	primarily	by	real	estate.

(2) Unearned	income	on	consumer	loans	primarily	represents	unamortized	origination	fees,	costs,	premiums	and	discounts.	Prior	to	December	31,	2015,	these	items	were	more	than	offset	by	prepaid interest	on	loans	outstanding	issued	by	OneMain	Financial.	The	sale	of	OneMain	Financial	was	completed	in	2015.

(3) Unearned	income	on	corporate	loans	primarily	represents	interest	received	in	advance,	but	not	yet	earned	on	loans	originated	on	a	discount	basis.

(4) All	periods	exclude	loans	that	are	carried	at	fair	value.

# Details	of	Credit	Loss	Experience

| In	millions	of	dollars | 2018 | 2017 | 2016 | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Allowance\tfor\tloan\tlosses\tat\tbeginning\tof\tperiod | $12,355 | $12,060 | $12,626 | $15,994 | $19,648 |
| Provision\tfor\tloan\tlosses |  |  |  |  |  |
| Consumer | $7,288 | $7,363 | $6,321 | $6,228 | $6,699 |
| Corporate | 66 | 140 | 428 | 880 | 129 |
| Total |  |  |  |  |  |
|  | $7,354 | $7,503 | $6,749 | $7,108 | $6,828 |
| Gross\tcredit\tlosses |  |  |  |  |  |
| Consumer |  |  |  |  |  |
| In\tU.S.\toffices | $5,989 | $5,736 | $4,970 | $5,500 | $6,780 |
| In\toffices\toutside\tthe\tU.S. | 2,405 | 2,447 | 2,672 | 3,192 | 3,874 |
| Corporate |  |  |  |  |  |
| Commercial\tand\tindustrial,\tand\tother |  |  |  |  |  |
| In\tU.S.\toffices | 103 | 151 | 274 | 112 | 66 |
| In\toffices\toutside\tthe\tU.S. | 154 | 331 | 256 | 182 | 310 |
| Loans\tto\tfinancial\tinstitutions |  |  |  |  |  |
| In\tU.S.\toffices | 3 | 3 | 5 | — | 2 |
| In\toffices\toutside\tthe\tU.S. | 7 | 1 | 5 | 4 | 13 |
| Mortgage\tand\treal\testate |  |  |  |  |  |
| In\tU.S\toffices | 2 | 2 | 34 | 8 | 8 |
| In\toffices\toutside\tthe\tU.S. | 2 | 2 | 6 | 43 | 55 |
| Total |  |  |  |  |  |
|  | $8,665 | $8,673 | $8,222 | $9,041 | $11,108 |
| Credit\trecoveries(1) |  |  |  |  |  |
| Consumer |  |  |  |  |  |
| In\tU.S.\toffices | $922 | $903 | $980 | $975 | $1,122 |
| In\toffices\toutside\tthe\tU.S. | 528 | 583 | 614 | 659 | 853 |
| Corporate |  |  |  |  |  |
| Commercial\tand\tindustrial,\tand\tother |  |  |  |  |  |
| In\tU.S.\toffices | 37 | 20 | 23 | 22 | 64 |
| In\toffices\toutside\tthe\tU.S. | 52 | 86 | 41 | 67 | 84 |
| Loans\tto\tfinancial\tinstitutions |  |  |  |  |  |
| In\tU.S.\toffices | — | 1 | 1 | 7 | 1 |
| In\toffices\toutside\tthe\tU.S. | 3 | 1 | 1 | 2 | 11 |
| Mortgage\tand\treal\testate |  |  |  |  |  |
| In\tU.S.\toffices | 6 | 2 | 1 | 7 | — |
| In\toffices\toutside\tthe\tU.S. | 4 | 1 | — | — | — |
| Total |  |  |  |  |  |
|  | $1,552 | $1,597 | $1,661 | $1,739 | $2,135 |
| Net\tcredit\tlosses |  |  |  |  |  |
| In\tU.S.\toffices | $5,132 | $4,966 | $4,278 | $4,609 | $5,669 |
| In\toffices\toutside\tthe\tU.S. | 1,981 | 2,110 | 2,283 | 2,693 | 3,304 |
| Total | $7,113 | $7,076 | $6,561 | $7,302 | $8,973 |
| Other—net(2)(3)(4)(5)(6)(7)(8) | $(281) | $(132) | $(754) | $(3,174) | $(1,509) |
| Allowance\tfor\tloan\tlosses\tat\tend\tof\tperiod | $12,315 | $12,355 | $12,060 | $12,626 | $15,994 |
| Allowance\tfor\tloan\tlosses\tas\ta\tpercentage\tof\ttotal\tloans(9) | 1.81% | 1.86% | 1.94% | 2.06% | 2.50% |
| Allowance\tfor\tunfunded\tlending\tcommitments(8)(10) | $1,367 | $1,258 | $1,418 | $1,402 | $1,063 |
| Total\tallowance\tfor\tloan\tlosses\tand\tunfunded\tlending\tcommitments | $13,682 | $13,613 | $13,478 | $14,028 | $17,057 |
| Net\tconsumer\tcredit\tlosses | $6,944 | $6,697 | $6,048 | $7,058 | $8,679 |
| As\ta\tpercentage\tof\taverage\tconsumer\tloans | 2.14% | 2.07% | 1.88% | 2.08% | 2.31% |
| Net\tcorporate\tcredit\tlosses | $169 | $379 | $513 | $244 | $294 |

| As	a	percentage	of	average	corporate	loans | 0.05% | 0.12% | 0.17% | 0.08% | 0.10% |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Allowance\tby\ttype(11) |  |  |  |  |  |
| Consumer | $9,950 | $9,869 | $9,358 | $9,835 | $13,547 |
| Corporate | 2,365 | 2,486 | 2,702 | 2,791 | 2,447 |
| Total\tCitigroup | $12,315 | $12,355 | $12,060 | $12,626 | $15,994 |

(1) Recoveries	have	been	reduced	by	certain	collection	costs	that	are	incurred	only	if	collection	efforts	are	successful.

(2) Includes	all	adjustments	to	the	allowance	for	credit	losses,	such	as	changes	in	the	allowance	from	acquisitions,	dispositions,	securitizations,	FX	translation,	purchase	accounting	adjustments,	etc.

(3) 2018	includes	reductions	of	approximately	$201	million	related	to	the	sale	or	transfer	to	HFS	of	various	loan	portfolios,	which	includes	approximately	$91	million	related	to	the	transfer	of various	real	estate	loan	portfolios	to	HFS.	Additionally,	2018	includes	a	reduction	of	approximately	$60	million	related	to	FX	translation.

(4) 2017	includes	reductions	of	approximately	$261	million	related	to	the	sale	or	transfer	to	HFS	of	various	loan	portfolios,	which	includes	approximately	$106	million	related	to	the	transfer	of various	real	estate	loan	portfolios	to	HFS.	Additionally,	2017	includes	an	increase	of	approximately	$115	million	related	to	FX	translation.

(5) 2016	includes	reductions	of	approximately	$574	million	related	to	the	sale	or	transfer	to	HFS	of	various	loan	portfolios,	which	includes	approximately	$106	million	related	to	the	transfer	of various	real	estate	loan	portfolios	to	HFS.	Additionally,	2016	includes	a	reduction	of	approximately	$199	million	related	to	FX	translation.

(6) 2015	includes	reductions	of	approximately	$2.4	billion	related	to	the	sale	or	transfer	to	HFS	of	various	loan	portfolios,	which	includes	approximately	$1.5	billion	related	to	the	transfer	of	various real	estate	loan	portfolios	to	HFS.	Additionally,	2015	includes	a	reduction	of	approximately	$474	million	related	to	FX	translation.

(7) 2014	includes	reductions	of	approximately	$1.1	billion	related	to	the	sale	or	transfer	to	HFS	of	various	loan	portfolios,	which	includes	approximately	$411	million	related	to	the	transfer	of various	real	estate	loan	portfolios	to	HFS,	approximately	$204	million	related	to	the	transfer	to	HFS	of	a	business	in	Greece,	approximately	$177	million	related	to	the	transfer	to	HFS	of	a business	in	Spain,	approximately	$29	million	related	to	the	transfer	to	HFS	of	a	business	in	Honduras,	and	approximately	$108	million	related	to	the	transfer	to	HFS	of	various	EMEA	loan portfolios.	Additionally,	2014	includes	a	reduction	of	approximately	$463	million	related	to	FX	translation.

(8) 2015	includes	a	reclassification	of	$271	million	of	Allowance	for	loan	losses	to	allowance	for	unfunded	lending	commitments,	included	in	the	Other	line	item.	This	reclassification	reflects	the	re- attribution	of	$271	million	in	the	allowance	for	credit	losses	between	the	funded	and	unfunded	portions	of	the	corporate	credit	portfolios	and	does	not	reflect	a	change	in	the	underlying	credit performance	of	these	portfolios.

(10) Represents	additional	credit	reserves	recorded	as	Other	liabilities	on	the	Consolidated	Balance	Sheet.

(11) Allowance	for	loan	losses	represents	management's	best	estimate	of	probable	losses	inherent	in	the	portfolio,	as	well	as	probable	losses	related	to	large	individually	evaluated	impaired	loans	and troubled	debt	restructurings.	See	"Significant	Accounting	Policies	and	Significant	Estimates"	and	Note	1	to	the	Consolidated	Financial	Statements	below.	Attribution	of	the	allowance	is	made for	analytical	purposes	only	and	the	entire	allowance	is	available	to	absorb	probable	credit	losses	inherent	in	the	overall	portfolio.

# Allowance	for	Loan	Losses

The	following	tables	detail	information	on	Citi's	allowance	for	loan	losses,	loans	and	coverage	ratios:

|  |  | December	31,	2018 |  |
| :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars | Allowance\tfor\nloan\tlosses | Loans,\tnet\tof\nunearned\tincome | Allowance\tas\ta\npercentage\tof\tloans(1) |
| North\tAmerica\tcards(2) | $6.5 | $144.6 | 4.5% |
| North\tAmerica\tmortgages(3) | 0.4 | 58.9 | 0.7 |
| North\tAmerica\tother | 0.3 | 13.2 | 2.3 |
| International\tcards | 1.4 | 24.9 | 5.6 |
| International\tother(4) | 1.3 | 88.9 | 1.5 |
| Total\tconsumer | $9.9 | $330.5 | 3.0% |
| Total\tcorporate | 2.4 | 353.7 | 0.7 |
| Total\tCitigroup | $12.3 | $684.2 | 1.8% |

(1) Allowance	as	a	percentage	of	loans	excludes	loans	that	are	carried	at	fair	value.

(2) Includes	both	Citi-branded	cards	and	Citi	retail	services.	The	$6.5	billion	of	loan	loss	reserves	represented	approximately	16	months	of	coincident	net	credit	loss	coverage.

(3) Of	the	$0.4	billion,	nearly	all	of	it	was	allocated	to	North	America	mortgages	in	Corporate/Other,	including	$0.1	billion	and	$0.3	billion	determined	in	accordance	with	ASC	450-20	and	ASC 310-10-35	(troubled	debt	restructurings),	respectively.	Of	the	$58.9	billion	in	loans,	approximately	$56.3	billion	and	$2.5	billion	of	the	loans	were	evaluated	in	accordance	with	ASC	450-20	and ASC	310-10-35	(troubled	debt	restructurings),	respectively.	For	additional	information,	see	Note	15	to	the	Consolidated	Financial	Statements.

(4) Includes	mortgages	and	other	retail	loans.

| In	billions	of	dollars | Allowance	for<br>loan	losses | Loans,	net	of<br>unearned	income | Allowance	as	a<br>percentage	of	loans(1) |
| :--- | :--- | :--- | :--- |
| North\tAmerica\tcards(2) | $6.1 | $139.7 | 4.4% |
| North\tAmerica\tmortgages(3) | 0.7 | 64.2 | 1.1 |
| North\tAmerica\tother | 0.3 | 13.0 | 2.3 |
| International\tcards | 1.3 | 25.7 | 5.1 |
| International\tother(4) | 1.5 | 91.1 | 1.6 |
| Total\tconsumer | $9.9 | $333.7 | 3.0% |
| Total\tcorporate | 2.5 | 333.3 | 0.8 |
| Total\tCitigroup | $12.4 | $667.0 | 1.9% |

(3) Of	the	$0.7	billion,	approximately	$0.6	billion	was	allocated	to	North	America	mortgages	in	Corporate/Other.	Of	the	$0.7	billion,	approximately	$0.2	billion	and	$0.5	billion	were	determined	in accordance	with	ASC	450-20	and	ASC	310-10-35	(troubled	debt	restructurings),	respectively.	Of	the	$64.2	billion	in	loans,	approximately	$60.4	billion	and	$3.7	billion	of	the	loans	were evaluated	in	accordance	with	ASC	450-20	and	ASC	310-10-35	(troubled	debt	restructurings),	respectively.	For	additional	information,	see	Note	15	to	the	Consolidated	Financial	Statements.

# Non-Accrual	Loans	and	Assets	and	Renegotiated	Loans

There	is	a	certain	amount	of	overlap	among	non-accrual	loans	and	assets	and renegotiated	loans.	The	following	summary	provides	a	general	description	of each	category.

# Non-Accrual	Loans	and	Assets:

•Corporate	and	consumer	(including	commercial	banking)	non-accrual	status is	based	on	the	determination	that	payment	of	interest	or	principal	is doubtful.

•A	corporate	loan	may	be	classified	as	non-accrual	and	still	be	performing under	the	terms	of	the	loan	structure.	Non-accrual	loans	may	still	be	current on	interest	payments.	Approximately	55%,	57%	and	74%	of	Citi's	corporate non-accrual	loans	were	performing	at	December	31,	2018,	September	30, 2018	and	December	31,	2017,	respectively.

•Consumer	non-accrual	status	is	generally	based	on	aging,	i.e.,	the	borrower has	fallen	behind	on	payments.

•Consumer	mortgage	loans,	other	than	Federal	Housing	Administration (FHA)	insured	loans,	are	classified	as	non-accrual	within	60	days	of notification	that	the	borrower	has	filed	for	bankruptcy.	In	addition,	home equity	loans	are	classified	as	non-accrual	if	the	related	residential	first mortgage	loan	is	90	days	or	more	past	due.

•North	America	Citi-branded	cards	and	Citi	retail	services	are	not	included because,	under	industry	standards,	credit	card	loans	accrue	interest	until such	loans	are	charged	off,	which	typically	occurs	at	180	days	of contractual	delinquency.

# Renegotiated	Loans:

•Includes	both	corporate	and	consumer	loans	whose	terms	have	been modified	in	a	troubled	debt	restructuring	(TDR). •Includes	both	accrual	and	non-accrual TDRs.

# Non-Accrual	Loans

The	table	below	summarizes	Citigroup's	non-accrual	loans	as	of	the	periods indicated.	Non-accrual	loans	may	still	be	current	on	interest	payments.	In situations	where	Citi	reasonably	expects	that	only	a	portion	of	the	principal	owed

will	ultimately	be	collected,	all	payments	received	are	reflected	as	a	reduction	of principal	and	not	as	interest	income.	For	all	other	non-accrual	loans,	cash	interest receipts	are	generally	recorded	as	revenue.

| In	millions	of	dollars | 2018 | 2017 | 2016 | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Corporate\tnon-accrual\tloans(1)(2) |  |  |  |  |  |
| North\tAmerica | $483 | $784 | $984 | $818 | $321 |
| EMEA | 375 | 849 | 904 | 347 | 285 |
| Latin\tAmerica | 230 | 280 | 379 | 303 | 417 |
| Asia | 223 | 29 | 154 | 128 | 179 |
| Total\tcorporate\tnon-accrual\tloans | $1,311 | $1,942 | $2,421 | $1,596 | $1,202 |
| Consumer\tnon-accrual\tloans(1)(3) |  |  |  |  |  |
| North\tAmerica | $1,241 | $1,650 | $2,160 | $2,515 | $4,411 |
| Latin\tAmerica | 715 | 756 | 711 | 874 | 1,188 |
| Asia(4) | 270 | 284 | 287 | 269 | 306 |
| Total\tconsumer\tnon-accrual\tloans | $2,226 | $2,690 | $3,158 | $3,658 | $5,905 |
| Total\tnon-accrual\tloans | $3,537 | $4,632 | $5,579 | $5,254 | $7,107 |

(2) The	2016	increase	in	corporate	non-accrual	loans	was	primarily	related	to	Citi's	 North	America	and	EMEA	energy	and	energy-related	corporate	credit	exposure.

(3) The	2015	decline	in	consumer	non-accrual	loans	includes	the	impact	related	to	the	transfer	of	approximately	$8	billion	of	mortgage	loans	to	Loans	HFS	(included	within 	Other	assets).

(4) Asia	includes	balances	in	certain	EMEA	countries	for	all	periods	presented.

The	changes	in	Citigroup's	non-accrual	loans	were	as	follows:

|  |  | Year	ended |  |  | Year	ended |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | December\t31,\t2018 |  |  | December\t31,\t2017 |  |
| In\tmillions\tof\tdollars | Corporate | Consumer | Total | Corporate | Consumer | Total |
| Non-accrual\tloans\tat\tbeginning\tof\tperiod | $1,942 | $2,690 | $4,632 | $2,421 | $3,158 | $5,579 |
| Additions | 2,108 | 3,148 | 5,256 | 1,347 | 3,508 | 4,855 |
| Sales\tand\ttransfers\tto\tHFS | (119) | (268) | (387) | (134) | (379) | (513) |
| Returned\tto\tperforming | (127) | (629) | (756) | (47) | (634) | (681) |
| Paydowns/settlements | (2,282) | (1,052) | (3,334) | (1,400) | (1,163) | (2,563) |
| Charge-offs | (196) | (1,634) | (1,830) | (144) | (1,869) | (2,013) |
| Other | (15) | (29) | (44) | (101) | 69 | (32) |
| Ending\tbalance | $1,311 | $2,226 | $3,537 | $1,942 | $2,690 | $4,632 |

# Non-Accrual	Assets

The	table	below	summarizes	Citigroup's	other	real	estate	owned	(OREO)	assets	as	of	the	periods	indicated.	This	represents	the	carrying	value	of	all	real	estate	property acquired	by	foreclosure	or	other	legal	proceedings	when	Citi	has	taken	possession	of	the	collateral:

| In	millions	of	dollars | 2018 | 2017 | 2016 | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| OREO(1) |  |  |  |  |  |
| North\tAmerica | $64 | $89 | $161 | $166 | $196 |
| EMEA | 1 | 2 | — | 1 | 7 |
| Latin\tAmerica | 12 | 35 | 18 | 38 | 47 |
| Asia | 22 | 18 | 7 | 4 | 10 |
| Total\tOREO | $99 | $144 | $186 | $209 | $260 |
| Non-accrual\tassets |  |  |  |  |  |
| Corporate\tnon-accrual\tloans | $1,311 | $1,942 | $2,421 | $1,596 | $1,202 |
| Consumer\tnon-accrual\tloans(2) | 2,226 | 2,690 | 3,158 | 3,658 | 5,905 |
| Non-accrual\tloans\t(NAL) | $3,537 | $4,632 | $5,579 | $5,254 | $7,107 |
| OREO | $99 | $144 | $186 | $209 | $260 |
| Non-accrual\tassets\t(NAA) | $3,636 | $4,776 | $5,765 | $5,463 | $7,367 |
| NAL\tas\ta\tpercentage\tof\ttotal\tloans | 0.52% | 0.69% | 0.89% | 0.85% | 1.10% |
| NAA\tas\ta\tpercentage\tof\ttotal\tassets | 0.19 | 0.26 | 0.32 | 0.32 | 0.40 |
| Allowance\tfor\tloan\tlosses\tas\ta\tpercentage\tof\tNAL(3) | 348 | 267 | 216 | 240 | 225 |

(1) Reflects	a	decrease	of	$130	million	related	to	the	adoption	of	ASU	2014-14	in	2014,	which	requires	certain	government	guaranteed	mortgage	loans	to	be	recognized	as	separate	other	receivables upon	foreclosure.	Prior	periods	have	not	been	restated.

(3) The	allowance	for	loan	losses	includes	the	allowance	for	Citi's	credit	card	portfolios	and	purchased	distressed	loans,	while	the	non-accrual	loans	exclude	credit	card	balances	(with	the	exception of	certain	international	portfolios)	and	purchased	distressed	loans	as	these	continue	to	accrue	interest	until	charge-off.

# Forgone	Interest	Revenue	on	Loans(1)

# The	following	table	presents	Citi's	loans	modified	in	TDRs:

(1) Includes	$466	million	and	$715	million	of	non-accrual	loans	included	in	the	non-accrual loans	table	above	at	December	31,	2018	and	2017,	respectively.	The	remaining	loans	are accruing	interest.

(2) In	addition	to	modifications	reflected	as	TDRs	at	December	31,	2018	and	2017,	Citi	also modified	$0	million	and	$51	million	in	offices	in	the	U.S.,	and	$2	million	and	$95	million in	offices	outside	of	the	U.S.,	respectively,	of	commercial	loans	risk	rated	"Substandard Non-Performing"	or	worse	(asset	category	defined	by	banking	regulators).	These modifications	were	not	considered	TDRs	because	the	modifications	did	not	involve	a concession.

(3) Includes	$1,015	million	and	$1,376	million	of	non-accrual	loans	included	in	the	non-

accrual	loans	table	above	at	December	31,	2018	and	2017,	respectively.	The	remaining loans	are	accruing	interest.

(4) Includes	$17	million	and	$26	million	of	commercial	real	estate	loans	at	December	31, 2018	and	2017,	respectively.

(6) Reduction	in	2018	includes	$919	million	related	to	TDRs	sold	or	transferred	to	HFS.

# LIQUIDITY	RISK

Adequate	and	diverse	sources	of	funding	and	liquidity	are	essential	to	Citi's businesses.		Funding	and	liquidity	risks	arise	from	several	factors,	many	of which	are	mostly	or	entirely	outside	Citi's	control,	such	as	disruptions	in	the financial	markets,	changes	in	key	funding	sources,	credit	spreads,	changes	in Citi's	credit	ratings	and	geopolitical	and	macroeconomic	conditions.	For additional	information,	see	"Risk	Factors"	above.

Citi's	funding	and	liquidity	objectives	are	aimed	at	(i)	funding	its	existing asset	base,	(ii)	growing	its	core	businesses,	(iii)	maintaining	sufficient	liquidity, structured	appropriately,	so	that	Citi	can	operate	under	a	variety	of	adverse circumstances,	including	potential	Company-specific	and/or	market	liquidity events	in	varying	durations	and	severity,	and	(iv)	satisfying	regulatory requirements,	including,	among	other	things,	those	related	to	resolution	planning (for	additional	information,	see	"Resolution	Plan"	and	"Total	Loss-Absorbing Capacity	(TLAC)"	below).	Citigroup's	primary	liquidity	objectives	are established	by	entity,	and	in	aggregate,	across	two	major	categories:

•Citibank	(including	Citibank	Europe	plc,	Citibank	Singapore	Ltd.	and Citibank	(Hong	Kong)	Ltd.);	and •the	non-bank	and	other,	which	includes	the	parent	holding	company (Citigroup),	Citi's	primary	intermediate	holding	company	(Citicorp	LLC), Citi's	broker-dealer	subsidiaries	(including	Citigroup	Global	Markets	Inc., Citigroup	Global	Markets	Ltd.	and	Citigroup	Global	Markets	Japan	Inc.) and	other	bank	and	non-bank	subsidiaries	that	are	consolidated	into Citigroup	(including	Citibanamex).

At	an	aggregate	level,	Citigroup's	goal	is	to	maintain	sufficient	funding	in amount	and	tenor	to	fully	fund	customer	assets	and	to	provide	an	appropriate amount	of	cash	and	high-quality	liquid	assets	(as	discussed	below),	even	in	times of	stress.	The	liquidity	risk	management	framework	provides	that	in	addition	to the	aggregate	requirements,	certain	entities	be	self-sufficient	or	net	providers	of liquidity,	including	in	conditions	established	under	their	designated	stress	tests. Citi's	primary	sources	of	funding	include	(i)	deposits	via	Citi's	bank subsidiaries,	which	are	Citi's	most	stable	and	lowest	cost	source	of	long-term funding,	(ii)	long-term	debt	(primarily	senior	and	subordinated	debt)	primarily issued	at	the	parent	and	certain	bank	subsidiaries,	and	(iii)	stockholders'	equity. These	sources	may	be	supplemented	by	short-term	borrowings,	primarily	in	the form	of	secured	funding	transactions.

As	referenced	above,	Citi	works	to	ensure	that	the	tenor	of	these	funding sources	is	sufficiently	long	in	relation	to	the

tenor	of	its	asset	base.	The	goal	of	Citi's	asset/liability	management	is	to	ensure that	there	is	excess	liquidity	and	tenor	in	the	liability	structure	relative	to	the liquidity	profile	of	the	assets.	This	reduces	the	risk	that	liabilities	will	become due	before	asset	maturities	or	monetizations	through	sale.	This	excess	liquidity	is held	primarily	in	the	form	of	high-quality	liquid	assets	(HQLA),	as	set	forth	in the	table	below.

Citi's	Treasurer	has	overall	responsibility	for	management	of	Citi's	HQLA. Citi's	liquidity	is	managed	via	a	centralized	treasury	model	by	Corporate Treasury,	in	conjunction	with	regional	and	in-country	treasurers.	Pursuant	to	this approach,	Citi's	HQLA	are	managed	with	emphasis	on	asset-liability management	and	entity-level	liquidity	adequacy	throughout	Citi.

Citi's	Chief	Risk	Officer	is	responsible	for	the	overall	liquidity	risk	profile of	Citi.	The	Chief	Risk	Officer	and	Citi's	CFO	co-chair	Citi's	Asset	Liability Management	Committee	(ALCO),	which	includes	Citi's	Treasurer	and	other senior	executives.	ALCO	sets	the	strategy	of	the	liquidity	portfolio	and	monitors its	performance.	Significant	changes	to	portfolio	asset	allocations	need	to	be approved	by	ALCO.

# Liquidity	Monitoring	and	Measurement

# Stress	Testing

Liquidity	stress	testing	is	performed	for	each	of	Citi's	major	entities,	operating subsidiaries	and/or	countries.	Stress	testing	and	scenario	analyses	are	intended	to quantify	the	potential	impact	of	an	adverse	liquidity	event	on	the	balance	sheet and	liquidity	position,	and	to	identify	viable	funding	alternatives	that	can	be utilized.	These	scenarios	include	assumptions	about	significant	changes	in	key funding	sources,	market	triggers	(such	as	credit	ratings),	potential	uses	of funding	and	geopolitical	and	macroeconomic	conditions.	These	conditions include	expected	and	stressed	market	conditions	as	well	as	Company-specific events.

Liquidity	stress	tests	are	performed	to	ascertain	potential	mismatches between	liquidity	sources	and	uses	over	a	variety	of	time	horizons	and	over different	stressed	conditions.	Liquidity	limits	are	set	accordingly.	To	monitor	the liquidity	of	an	entity,	these	stress	tests	and	potential	mismatches	are	calculated with	varying	frequencies,	with	several	tests	performed	daily.

Given	the	range	of	potential	stresses,	Citi	maintains	contingency	funding plans	on	a	consolidated	basis	and	for	individual	entities.	These	plans	specify	a wide	range	of	readily	available	actions	for	a	variety	of	adverse	market	conditions or	idiosyncratic	stresses.

# High-Quality	Liquid	Assets	(HQLA)

|  |  | Citibank |  |  | Non-bank	and	Other |  |  | Total |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars | Dec.\t31,\t2018 | Sept.\t30,\t2018 | Dec.\t31,\t2017 | Dec.\t31,\t2018 | Sept.\t30,\t2018 | Dec.\t31,\t2017 | Dec.\t31,\t2018 | Sept.\t30,\t2018 | Dec.\t31,\t2017 |
| Available\tcash | $97.1 | $105.1 | $94.3 | $27.6 | $35.1 | $30.9 | $124.7 | $140.2 | $125.2 |
| U.S.\tsovereign | 103.2 | 102.2 | 113.2 | 24.0 | 29.7 | 27.9 | 127.2 | 131.9 | 141.1 |
| U.S.\tagency/agency\tMBS | 60.0 | 56.4 | 80.8 | 5.8 | 6.5 | 0.5 | 65.8 | 62.9 | 81.3 |
| Foreign\tgovernment\tdebt(1) | 76.8 | 74.9 | 80.5 | 6.3 | 9.6 | 16.4 | 83.2 | 84.5 | 96.9 |
| Other\tinvestment\tgrade | 1.5 | 0.2 | 0.7 | 1.3 | 1.1 | 1.2 | 2.8 | 1.3 | 1.9 |
| Total\tHQLA\t(AVG) | $338.6 | $338.8 | $369.5 | $65.1 | $82.0 | $76.9 | $403.7 | $420.8 | $446.4 |

Note:	The	amounts	set	forth	in	the	table	above	are	presented	on	an	average	basis.	For	securities,	the	amounts	represent	the	liquidity	value	that	potentially	could	be	realized	and,	therefore,	exclude	any securities	that	are	encumbered	and	incorporate	any	haircuts	that	would	be	required	for	securities	financing	transactions.

(1) Foreign	government	debt	includes	securities	issued	or	guaranteed	by	foreign	sovereigns,	agencies	and	multilateral	development	banks.	Foreign	government	debt	securities	are	held	largely	to support	local	liquidity	requirements	and	Citi's	local	franchises	and	principally	include	government	bonds	from	Hong	Kong,	Singapore,	Korea,	Taiwan,	India,	Mexico	and	Brazil.

The	table	above	includes	average	amounts	of	HQLA	held	at	Citigroup's operating	entities	that	are	eligible	for	inclusion	in	the	calculation	of	Citigroup's consolidated	LCR,	pursuant	to	the	U.S.	LCR	rules.	These	amounts	include	the HQLA	needed	to	meet	the	minimum	requirements	at	these	entities	and	any amounts	in	excess	of	these	minimums	that	are	assumed	to	be	transferable	to Citigroup.	While	available	liquidity	resources	at	operating	entities	remained largely	unchanged,	the	amount	of	HQLA	included	in	the	table	above	declined both	year-over-year	and	quarter-over-quarter	as	less	HQLA	in	the	operating entities	was	eligible	for	inclusion	in	the	consolidated	metric.	Quarter-over- quarter,	the	decline	in	HQLA	was	also	driven	by	balance	sheet	optimization	as Citi	deployed	cash	to	fund	loan	growth	and	reduce	debt	levels.

Citi's	HQLA	does	not	include	Citi's	available	borrowing	capacity	from	the Federal	Home	Loan	Banks	(FHLBs)	of	which	Citi	is	a	member,	which	was approximately	$29	billion	as	of	December	31,	2018	(unchanged	from	September 30,	2018	and	compared	to	$10	billion	as	of	December	31,	2017)	and	maintained by	eligible	collateral	pledged	to	such	banks.	The	HQLA	also	does	not	include Citi's	borrowing	capacity	at	the	U.S.	Federal	Reserve	Bank	discount	window	or other	central	banks,	which	would	be	in	addition	to	the	resources	noted	above. In	general,	Citi's	liquidity	is	fungible	across	legal	entities	within	its	bank group.	Citi's	bank	subsidiaries,	including	Citibank,	can	lend	to	the	Citi	parent and	broker-dealer	entities	in	accordance	with	Section	23A	of	the	Federal Reserve	Act.	As	of	December	31,	2018,	the	capacity	available	for	lending	to these	entities	under	Section	23A	was	approximately	$15	billion,	unchanged	from both	September	30,	2018	and	December	31,	2017,	subject	to	certain	eligible non-cash	collateral	requirements.

# Short-Term	Liquidity	Measurement:	Liquidity	Coverage	Ratio	(LCR)

In	addition	to	internal	liquidity	stress	metrics	that	Citi	has	developed	for	a	30- day	stress	scenario,	Citi	also	monitors	its	liquidity	by	reference	to	the	LCR,	as calculated	pursuant	to	the	U.S.	LCR	rules.

Generally,	the	LCR	is	designed	to	ensure	that	banks	maintain	an	adequate level	of	HQLA	to	meet	liquidity	needs	under	an	acute	30-day	stress	scenario. The	LCR	is	calculated	by	dividing	HQLA	by	estimated	net	outflows	over	a stressed	30-day	period,	with	the	net	outflows	determined	by	applying	prescribed outflow	factors	to	various	categories	of	liabilities,	such	as	deposits,	unsecured and	secured	wholesale	borrowings,	unused	lending	commitments	and derivatives-related	exposures,	partially	offset	by	inflows	from	assets	maturing within	30	days.	Banks	are	required	to	calculate	an	add-on	to	address	potential maturity	mismatches	between	contractual	cash	outflows	and	inflows	within	the 30-day	period	in	determining	the	total	amount	of	net	outflows.	The	minimum LCR	requirement	is	100%.

The	table	below	details	the	components	of	Citi's	LCR	calculation	and HQLA	in	excess	of	net	outflows	for	the	periods	indicated:

| In	billions	of	dollars | Dec.	31,	2018 | Sept.	30,	2018 | Dec.	31,	2017 |
| :--- | :--- | :--- | :--- |
| HQLA | $403.7 | $420.8 | $446.4 |
| Net\toutflows | 334.8 | 350.8 | 364.3 |
| LCR | 121% | 120% | 123% |
| HQLA\tin\texcess\tof\tnet\toutflows | $68.9 | $70.0 | $82.1 |

Note:	The	amounts	are	presented	on	an	average	basis.

Citi's	LCR	decreased	year-over-year,	driven	by	a	decline	in	average	HQLA, partially	offset	by	a	decline	in	modeled	net	outflows.	Quarter-over-quarter,	Citi's LCR	increased	slightly,	as	a	decline	in	modeled	net	outflows	more	than	offset the	decline	in	average	HQLA	(see	"High-Quality	Liquid	Assets"	above).

# Long-Term	Liquidity	Measurement:	Net	Stable	Funding	Ratio	(NSFR)

In	2016,	the	Federal	Reserve	Board,	the	FDIC	and	the	OCC	issued	a	proposed rule	to	implement	the	Basel	III	NSFR	requirement.

The	U.S.-proposed	NSFR	is	largely	consistent	with	the	Basel	Committee's final	NSFR	rules.	In	general,	the	NSFR	assesses	the	availability	of	a	bank's stable	funding	against	a	required	level.	A	bank's	available	stable	funding	would include	portions	of	equity,	deposits	and	long-term	debt,	while	its	required	stable funding	would	be	based	on	the	liquidity	characteristics	and	encumbrance	period of	its	assets,	derivatives	and	commitments.	Prescribed	factors	would	be	required to	be	applied	to	the	various	categories	of	asset	and	liabilities	classes.	The	ratio	of available	stable	funding	to	required	stable	funding	would	be	required	to	be greater	than	100%.	While	Citi	believes	that	it	is	compliant	with	the	proposed U.S.	NSFR	rules	as	of	December	31,	2018,	it	will	need	to	evaluate	a	final version	of	the	rules,	which	are	expected	to	be	released	in	2019.	Citi	expects	that the	NSFR	final	rules	implementation	period	will	be	communicated	along	with the	final	version	of	the	rules.

As	part	of	its	funding	and	liquidity	objectives,	Citi	seeks	to	fund	its	existing	asset base	appropriately	as	well	as	maintain	sufficient	liquidity	to	grow	its	GCB	and ICG	businesses,	including	its	loan	portfolio.	Citi	maintains	a	diversified portfolio	of	loans	to	its	consumer	and	institutional	clients.	The	table	below details	the	average	loans,	by	business	and/or	segment,	and	the	total	end-of-period loans	for	each	of	the	periods	indicated:

| In	billions	of	dollars | Dec.	31,<br>2018 | Sept.	30,<br>2018 | Dec.	31,<br>2017 |
| :--- | :--- | :--- | :--- |
| Global\tConsumer\tBanking |  |  |  |
| North\tAmerica | $195.7 | $192.8 | $189.7 |
| Latin\tAmerica | 25.1 | 26.3 | 25.7 |
| Asia(1) | 87.6 | 87.7 | 87.9 |
| Total | $308.4 | $306.8 | $303.3 |
| Institutional\tClients\tGroup |  |  |  |
| Corporate\tlending | $130.0 | $130.9 | $124.9 |
| Treasury\tand\ttrade\tsolutions\t(TTS) | 77.0 | 76.9 | 77.0 |
| Private\tbank | 94.7 | 92.8 | 85.9 |
| Markets\tand\tsecurities\tservices\tand\tother | 49.3 | 45.6 | 40.4 |
| Total | $351.0 | $346.2 | $328.2 |
| Total\tCorporate/Other | $16.1 | $17.3 | $22.5 |
| Total\tCitigroup\tloans\t(AVG) | $675.5 | $670.3 | $654.0 |
| Total\tCitigroup\tloans\t(EOP) | $684.2 | $674.9 | $667.0 |

(1) Includes	loans	in	certain	EMEA	countries	for	all	periods	presented.

Loans	increased	3%	year-over-year	and	1%	quarter-over-quarter	in	the fourth	quarter,	on	both	an	end-of-period	as	well	as	on	an	average	basis.

Excluding	the	impact	of	FX	translation,	average	loans	increased	4%	year- over-year,	driven	by	6%	aggregate	across	GCB	and	ICG.	Within	GCB,	average loans	grew	3%,	with	growth	across	all	regions	and	businesses,	with	particular strength	in	North	America	GCB	driven	by	Citi-branded	cards	and	Citi	retail services,	including	the	impact	of	the	L.L.Bean	card	portfolio	acquisition. Average	ICG	loans	increased	8%	year-over-year,	with	continued	growth across	businesses.	Corporate	lending	and	private	bank	loan	growth	remained strong	on	a	year-over-year	basis,	with	corporate	lending	unchanged	quarter-over- quarter	due	to	the	episodic	nature	of	repayments	relative	to	originations.	TTS loans	grew	year-over-year,	however	growth	moderated	to	2%,	despite	continued strong	origination	volumes,	as	Citi	utilized	its	distribution	capabilities	to optimize	the	balance	sheet	and	drive	returns.	Finally,	strong	year-over-year Markets	and	securities	services	loan	growth	was	driven	by	Community Reinvestment	Act	lending	activities	as	well	as	residential	warehouse	lending. Average	Corporate/Other	loans	continued	to	decline	(down	32%),	driven	by the	wind-down	of	legacy	assets.

# Deposits

The	table	below	details	the	average	deposits,	by	business	and/or	segment,	and the	total	end-of-period	deposits	for	each	of	the	periods	indicated:

| In	billions	of	dollars | Dec.	31,<br>2018 | Sept.	30,<br>2018 | Dec.	31,<br>2017 |
| :--- | :--- | :--- | :--- |
| Global\tConsumer\tBanking |  |  |  |
| North\tAmerica | $180.6 | $180.2 | $182.7 |
| Latin\tAmerica | 28.2 | 29.4 | 27.8 |
| Asia(1) | 97.7 | 97.6 | 96.0 |
| Total | $306.5 | $307.2 | $306.5 |
| Institutional\tClients\tGroup |  |  |  |
| Treasury\tand\ttrade\tsolutions\t(TTS) | $470.8 | $456.7 | $444.5 |
| Banking\tex-TTS | 128.4 | 124.6 | 126.9 |
| Markets\tand\tsecurities\tservices | 86.7 | 86.7 | 82.9 |
| Total | $685.9 | $668.0 | $654.4 |
| Total\tCorporate/Other | $13.3 | $10.6 | $12.4 |
| Total\tCitigroup\tdeposits\t(AVG) | $1,005.7 | $985.7 | $973.3 |
| Total\tCitigroup\tdeposits\t(EOP) | $1,013.2 | $1,005.2 | $959.8 |

(1) Includes	deposits	in	certain	EMEA	countries	for	all	periods	presented.

End-of-period	deposits	increased	6%	year-over-year	and	1%	quarter-over- quarter.	On	an	average	basis,	deposits	increased	3%	year-over-year	and	2% quarter-over-quarter.

Excluding	the	impact	of	FX	translation,	average	deposits	increased	5% year-over-year.	In	GCB,	deposits	increased	1%,	as	strong	growth	in	Asia	GCB and	Latin	America	GCB	more	than	offset	a	1%	decline	in	North	America	GCB, as	clients	transferred	cash	into	investment	accounts.

In	ICG,	deposits	increased	6%,	primarily	driven	by	continued	high-quality deposit	growth	in	TTS.

# Long-Term	Debt

Long-term	debt	(generally	defined	as	debt	with	original	maturities	of	one	year	or more)	represents	the	most	significant	component	of	Citi's	funding	for	the	parent entities	and	is	a	supplementary	source	of	funding	for	the	bank	entities.

Long-term	debt	is	an	important	funding	source	due	in	part	to	its	multi-year contractual	maturity	structure.	The	weighted-average	maturity	of	unsecured long-term	debt	issued	by	Citigroup	and	its	affiliates	(including	Citibank)	with	a remaining	life	greater	than	one	year	was	approximately	6.8	years	as	of December	31,	2018,	a	slight	decline	from	6.9	years	as	of	September	30,	2018 and	unchanged	from	the	prior	year.

Citi's	long-term	debt	outstanding	at	the	parent	company	includes	senior	and subordinated	debt	and	what	Citi	refers	to	as	customer-related	debt,	consisting	of structured	notes,	such	as	equity-	and	credit-linked	notes,	as	well	as	non- structured	notes.	Citi's	issuance	of	customer-related	debt	is	generally	driven	by customer	demand	and	supplements	benchmark	debt	issuance	as	a	source	of funding	for	Citi's	non-bank	entities.

Citi's	long-term	debt	at	the	bank	also	includes	benchmark	senior	debt,	FHLB advances	and	securitizations.

# Long-Term	Debt	Outstanding

The	following	table	details	Citi's	end-of-period	total	long-term	debt	outstanding for	each	of	the	dates	indicated:

| In	billions	of	dollars | Dec.	31,<br>2018 | Sept.	30,<br>2018 | Dec.	31,<br>2017 |
| :--- | :--- | :--- | :--- |
| Parent\tand\tother(1) |  |  |  |
| Benchmark\tdebt: |  |  |  |
| Senior\tdebt | $104.6 | $107.2 | $109.8 |
| Subordinated\tdebt | 24.5 | 25.1 | 26.9 |
| Trust\tpreferred | 1.7 | 1.7 | 1.7 |
| Customer-related\tdebt | 37.1 | 35.4 | 30.7 |
| Local\tcountry\tand\tother(2) | 2.9 | 3.8 | 1.8 |
| Total\tparent\tand\tother | $170.8 | $173.2 | $170.9 |
| Bank |  |  |  |
| FHLB\tborrowings | $10.5 | $10.5 | $19.3 |
| Securitizations(3) | 28.4 | 27.4 | 30.3 |
| CBNA\tbenchmark\tsenior\tdebt | 18.8 | 21.0 | 12.5 |
| Local\tcountry\tand\tother(2) | 3.5 | 3.2 | 3.7 |
| Total\tbank | $61.2 | $62.1 | $65.8 |
| Total\tlong-term\tdebt | $232.0 | $235.3 | $236.7 |

Note:	Amounts	represent	the	current	value	of	long-term	debt	on	Citi's	Consolidated	Balance Sheet	which,	for	certain	debt	instruments,	includes	consideration	of	fair	value,	hedging	impacts and	unamortized	discounts	and	premiums.

(1) "Parent	and	other"	includes	long-term	debt	issued	to	third	parties	by	the	parent	holding company	(Citigroup)	and	Citi's	non-bank	subsidiaries	(including	broker-dealer subsidiaries)	that	are	consolidated	into	Citigroup.	As	of	December	31,	2018,	"parent	and other"	included	$27.0	billion	of	long-term	debt	issued	by	Citi's	broker-dealer	subsidiaries.

(2) Local	country	debt	includes	debt	issued	by	Citi's	affiliates	in	support	of	their	local operations.

(3) Predominantly	credit	card	securitizations,	primarily	backed	by	Citi-branded	credit	card receivables.

Citi's	total	long-term	debt	outstanding	decreased	both	year-over-year	and quarter-over-quarter.	The	decrease	year-over-year	was	primarily	driven	by	a decline	in	long-term	debt	at	the	bank,	as	declines	in	FHLB	advances	more	than offset	an	increase	in	unsecured	senior	benchmark	debt.	At	the	parent,	long-term debt	remained	largely	unchanged	year-over-year,	as	declines	in	unsecured benchmark	debt	were	largely	offset	by	increases	in	customer-related	debt. Quarter-over-quarter,	the	decrease	was	driven	primarily	by	declines	in	unsecured senior	debt	at	the	parent	and	the	bank.

As	part	of	its	liability	management,	Citi	has	considered,	and	may	continue to	consider,	opportunities	to	repurchase	its	long-term	debt	pursuant	to	open market	purchases,	tender	offers	or	other	means.	Such	repurchases	help	reduce Citi's	overall	funding	costs.	During	2018,	Citi	repurchased	an	aggregate	of approximately	$5.4	billion	of	its	outstanding	long-term	debt,	including	early redemptions	of	FHLB	advances.

# Long-Term	Debt	Issuances	and	Maturities

The	table	below	details	Citi's	long-term	debt	issuances	and	maturities	(including	repurchases	and	redemptions)	during	the	periods	presented:

|  | 2018 | 2018 | 2017 | 2017 | 2016 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars | Maturities | Issuances | Maturities | Issuances | Maturities | Issuances |
| Parent\tand\tother |  |  |  |  |  |  |
| Benchmark\tdebt: |  |  |  |  |  |  |
| Senior\tdebt | $18.5 | $14.8 | $14.1 | $21.6 | $14.9 | $26.0 |
| Subordinated\tdebt | 2.9 | 0.6 | 1.6 | 1.3 | 3.2 | 4.0 |
| Customer-related\tdebt | 6.6 | 16.9 | 7.6 | 12.3 | 10.2 | 10.5 |
| Local\tcountry\tand\tother | 1.2 | 2.3 | 1.2 | 0.1 | 2.1 | 2.2 |
| Total\tparent\tand\tother | $29.2 | $34.6 | $24.5 | $35.3 | $30.4 | $42.7 |
| Bank |  |  |  |  |  |  |
| FHLB\tborrowings | $15.8 | $7.9 | $7.8 | $5.5 | $10.5 | $14.3 |
| Securitizations | 8.6 | 6.8 | 5.3 | 12.2 | 10.7 | 3.3 |
| CBNA\tbenchmark\tsenior\tdebt | 2.3 | 8.5 | — | 12.6 | — | — |
| Local\tcountry\tand\tother | 2.2 | 2.9 | 3.4 | 2.4 | 3.9 | 3.4 |
| Total\tbank | $28.9 | $26.1 | $16.5 | $32.7 | $25.1 | $21.0 |
| Total | $58.1 | $60.7 | $41.0 | $68.0 | $55.5 | $63.7 |

The	table	below	shows	Citi's	aggregate	long-term	debt	maturities	(including	repurchases	and	redemptions)	in	2018,	as	well	as	its	aggregate	expected	annual	long-term debt	maturities	as	of	December	31,	2018:

|  |  |  |  | Maturities |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total |
| Parent\tand\tother |  |  |  |  |  |  |  |  |
| Benchmark\tdebt: |  |  |  |  |  |  |  |  |
| Senior\tdebt | $18.5 | $14.1 | $8.8 | $14.1 | $8.1 | $12.5 | $46.9 | $104.6 |
| Subordinated\tdebt | 2.9 | — | — | — | 0.7 | 1.1 | 22.6 | 24.5 |
| Trust\tpreferred | — | — | — | — | — | — | 1.7 | 1.7 |
| Customer-related\tdebt | 6.6 | 3.7 | 6.8 | 3.4 | 2.6 | 2.8 | 17.8 | 37.1 |
| Local\tcountry\tand\tother | 1.2 | 2.0 | 0.1 | 0.2 | 0.1 | — | 0.7 | 2.9 |
| Total\tparent\tand\tother | $29.2 | $19.8 | $15.7 | $17.7 | $11.5 | $16.4 | $89.7 | $170.8 |
| Bank |  |  |  |  |  |  |  |  |
| FHLB\tborrowings | $15.8 | $5.6 | $4.9 | $— | $— | $— | $— | $10.5 |
| Securitizations | 8.6 | 7.9 | 6.0 | 5.7 | 2.2 | 2.5 | 4.0 | 28.4 |
| CBNA\tbenchmark\tsenior\tdebt | 2.3 | 4.7 | 8.7 | 5.0 | — | — | 0.3 | 18.8 |
| Local\tcountry\tand\tother | 2.2 | 0.6 | 2.0 | 0.2 | 0.4 | 0.1 | 0.4 | 3.5 |
| Total\tbank | $28.9 | $18.8 | $21.6 | $10.9 | $2.6 | $2.6 | $4.7 | $61.2 |
| Total\tlong-term\tdebt | $58.1 | $38.6 | $37.3 | $28.6 | $14.1 | $19.0 | $94.4 | $232.0 |

# Resolution	Plan

Citi	is	required	under	Title	I	of	the	Dodd-Frank	Wall	Street	Reform	and Consumer	Protection	Act	of	2010	(Dodd-Frank	Act)	and	the	rules	promulgated by	the	FDIC	and	FRB	to	periodically	submit	a	plan	for	Citi's	rapid	and	orderly resolution	under	the	U.S.	Bankruptcy	Code	in	the	event	of	material	financial distress	or	failure.	For	additional	information	on	Citi's	resolution	plan submissions,	see	"Risk	Factors—Strategic	Risks"	above.	Citigroup's	preferred resolution	strategy	is	"single	point	of	entry"	under	the	U.S.	Bankruptcy	Code. Under	Citi's	resolution	plan,	only	Citigroup,	the	parent	holding	company, would	enter	into	bankruptcy,	while	Citigroup's	material	legal	entities	(as	defined in	the	public	section	of	its	2017	resolution	plan,	which	can	be	found	on	the FRB's	and	FDIC's	websites)	would	remain	operational	and	outside	of	any resolution	or	insolvency	proceedings.	Citigroup	believes	its	resolution	plan	has been	designed	to	minimize	the	risk	of	systemic	impact	to	the	U.S.	and	global financial	systems,	while	maximizing	the	value	of	the	bankruptcy	estate	for	the benefit	of	Citigroup's	creditors,	including	its	unsecured	long-term	debt	holders. In	addition,	in	line	with	the	Federal	Reserve's	final	total	loss-absorbing	capacity (TLAC)	rule,	Citigroup	believes	it	has	developed	the	resolution	plan	so	that Citigroup's	shareholders	and	unsecured	creditors—including	its	unsecured	long- term	debt	holders—bear	any	losses	resulting	from	Citigroup's	bankruptcy. Accordingly,	any	value	realized	by	holders	of	its	unsecured	long-term	debt	may not	be	sufficient	to	repay	the	amounts	owed	to	such	debt	holders	in	the	event	of	a bankruptcy	or	other	resolution	proceeding	of	Citigroup.

The	FDIC	has	also	indicated	that	it	was	developing	a	single	point	of	entry strategy	to	implement	its	resolution	authority	under	Title	II	of	the	Dodd-Frank Act.

In	response	to	feedback	received	from	the	Federal	Reserve	and	FDIC	on Citigroup's	2015	resolution	plan,	Citigroup	took	the	following	actions	in connection	with	its	2017	resolution	plan	submission:

(i) Citicorp	LLC	(Citicorp),	an	existing	wholly	owned	subsidiary	of Citigroup,	was	established	as	an	intermediate	holding	company	(an	IHC) for	certain	of	Citigroup's	operating	material	legal	entities;

(ii) Citigroup	executed	an	inter-affiliate	agreement	with	Citicorp,	Citigroup's operating	material	legal	entities	and	certain	other	affiliated	entities pursuant	to	which	Citicorp	is	required	to	provide	liquidity	and	capital support	to	Citigroup's	operating	material	legal	entities	in	the	event Citigroup	were	to	enter	bankruptcy	proceedings	(Citi	Support Agreement);

(iii) pursuant	to	the	Citi	Support Agreement:

•Citigroup	made	an	initial	contribution	of	assets,	including	certain high-quality	liquid	assets	and	inter-affiliate	loans	(Contributable Assets),	to	Citicorp,	and	Citicorp	became	the	business	as	usual funding	vehicle	for	Citigroup's	operating	material	legal	entities; •Citigroup	will	be	obligated	to	continue	to	transfer	Contributable Assets	to	Citicorp	over	time,	subject

to	certain	amounts	retained	by	Citigroup	to,	among	other	things, meet	Citigroup's	near-term	cash	needs;

•in	the	event	of	a	Citigroup	bankruptcy,	Citigroup	will	be	required	to contribute	most	of	its	remaining	assets	to	Citicorp;	and

(iv) the	obligations	of	both	Citigroup	and	Citicorp	under	the	Citi	Support Agreement,	as	well	as	the	Contributable	Assets,	are	secured	pursuant	to	a security	agreement.

The	Citi	Support	Agreement	provides	two	mechanisms,	besides	Citicorp's issuing	of	dividends	to	Citigroup,	pursuant	to	which	Citicorp	will	be	required	to transfer	cash	to	Citigroup	during	business	as	usual	so	that	Citigroup	can	fund	its debt	service	as	well	as	other	operating	needs:	(i)	one	or	more	funding	notes issued	by	Citicorp	to	Citigroup	and	(ii)	a	committed	line	of	credit	under	which Citicorp	may	make	loans	to	Citigroup.

# Total	Loss-Absorbing	Capacity	(TLAC)

In	2016,	the	Federal	Reserve	Board	imposed	minimum	external	TLAC	and	long- term	debt	(LTD)	requirements	on	U.S.	global	systemically	important	bank holding	companies	(GSIBs),	including	Citi,	effective	as	of	January	1,	2019.	As	a result,	U.S.	GSIBs	will	be	required	to	maintain	minimum	levels	of	TLAC	and eligible	LTD,	each	set	by	reference	to	the	GSIB's	consolidated	risk-weighted assets	(RWA)	and	total	leverage	exposure,	as	described	further	below.	The intended	purpose	of	the	requirements	is	to	facilitate	the	orderly	resolution	of	U.S. GSIBs	under	the	U.S.	Bankruptcy	Code	and	Title	II	of	the	Dodd-Frank	Act.	Citi believes	it	exceeded	the	minimum	TLAC	and	LTD	requirements	as	of December,	31,	2018.	For	additional	information,	see	"Risk	Factors— Compliance,	Conduct	and	Legal	Risks"	above.

# Minimum	TLAC	Requirements

The	minimum	TLAC	requirement	is	the	greater	of	(i)	18%	of	the	GSIB's	RWA plus	the	then-applicable	RWA-based	TLAC	buffer	(see	below)	and	(ii)	7.5%	of the	GSIB's	total	leverage	exposure	plus	a	leveraged-based	TLAC	buffer	of	2% (i.e.,	9.5%).

The	RWA-based	TLAC	buffer	equals	the	2.5%	capital	conservation	buffer, plus	any	applicable	countercyclical	capital	buffer	(currently	0%),	plus	the GSIB's	capital	surcharge	as	determined	under	method	1	of	the	GSIB	surcharge rule	(2.0%	for	Citi	for	2019).	Accordingly,	Citi	estimates	its	total	current minimum	TLAC	requirement	is	22.5%	of	RWA	for	2019.

# Minimum	Eligible	LTD	Requirements

The	minimum	LTD	requirement	is	the	greater	of	(i)	6%	of	the	GSIB's	RWA plus	its	capital	surcharge	as	determined	under	method	2	of	the	GSIB	surcharge rule	(3.0%	for	Citi	for	2019),	for	a	total	current	requirement	of	9%	of	RWA	for Citi,	and	(ii)	4.5%	of	the	GSIB's	total	leverage	exposure.

For	additional	discussion	of	the	method	1	and	method	2	GSIB	capital surcharge	methodologies,	see	"Capital	Resources—Current	Regulatory	Capital Standards"	above.

# Secured	Funding	Transactions	and	Short-Term	Borrowings

Citi	supplements	its	primary	sources	of	funding	with	short-term	borrowings. Short-term	borrowings	generally	include	(i)	secured	funding	transactions (securities	loaned	or	sold	under	agreements	to	repurchase,	or	repos)	and	(ii)	to	a lesser	extent,	short-term	borrowings	consisting	of	commercial	paper	and borrowings	from	the	FHLB	and	other	market	participants	(see	Note	17	to	the Consolidated	Financial	Statements	for	further	information	on	Citigroup's	and	its affiliates'	outstanding	short-term	borrowings).

Outside	of	secured	funding	transactions,	Citi's	short-term	borrowings decreased	both	year-over-year	(27%	decrease)	and	quarter-over-quarter	(4% decrease),	driven	primarily	by	Citi's	continued	efforts	to	optimize	its	funding profile.

# Secured	Funding

Secured	funding	is	primarily	accessed	through	Citi's	broker-dealer	subsidiaries to	efficiently	fund	both	(i)	secured	lending	activity	and	(ii)	a	portion	of	the securities	inventory	held	in	the	context	of	market	making	and	customer activities.	Citi	also	executes	a	smaller	portion	of	its	secured	funding	transactions through	its	bank	entities,	which	is	typically	collateralized	by	foreign	government debt	securities.	Generally,	daily	changes	in	the	level	of	Citi's	secured	funding are	primarily	due	to	fluctuations	in	secured	lending	activity	in	the	matched	book (as	described	below)	and	securities	inventory.

Secured	funding	of	$178	billion	as	of	December	31,	2018	increased	14% from	the	prior	year	and	1%	from	the	prior	quarter.	Excluding	the	impact	of	FX translation,	secured	funding	increased	17%	from	the	prior	year	and	2%	from	the prior	quarter,	both	driven	by	normal	business	activity.	Average	balances	for secured	funding	were	$177	billion	for	the	quarter	ended	December	31,	2018. The	portion	of	secured	funding	in	the	broker-dealer	subsidiaries	that	funds secured	lending	is	commonly	referred	to	as	"matched	book"	activity.	The majority	of	this	activity	is	secured	by	high-quality	liquid	securities	such	as	U.S. Treasury	securities,	U.S.	agency	securities	and	foreign	government	debt securities.	Other	secured	funding	is	secured	by	less-liquid	securities,	including equity	securities,	corporate	bonds	and	asset-backed	securities.	The	tenor	of	Citi's matched	book	liabilities	is	generally	equal	to	or	longer	than	the	tenor	of	the corresponding	matched	book	assets.

The	remainder	of	the	secured	funding	activity	in	the	broker-dealer subsidiaries	serves	to	fund	securities	inventory	held	in	the	context	of	market making	and	customer	activities.	To	maintain	reliable	funding	under	a	wide	range of	market	conditions,	including	under	periods	of	stress,	Citi	manages	these activities	by	taking	into	consideration	the	quality	of	the	underlying	collateral	and stipulating	financing	tenor.	The	weighted	average	maturity	of	Citi's	secured funding	of	less-liquid	securities	inventory	was	greater	than	110	days	as	of December	31,	2018.

Citi	manages	the	risks	in	its	secured	funding	by	conducting	daily	stress	tests to	account	for	changes	in	capacity,	tenors,	haircut,	collateral	profile	and	client actions.	Additionally,	Citi	maintains	counterparty	diversification	by	establishing concentration	triggers	and	assessing	counterparty	reliability	and	stability	under stress.	Citi	generally	sources	secured	funding	from	more	than	150 counterparties.

# Overall	Short-Term	Borrowings

The	following	table	contains	the	year-end,	average	and	maximum	month-end	amounts	for	the	following	respective	short-term	borrowings	categories	at	the	end	of	each of	the	three	prior	years:

|  | Federal	funds	purchased	and	securities | Federal	funds	purchased	and	securities | Federal	funds	purchased	and	securities |  |  | Short-term	borrowings(1) | Short-term	borrowings(1) |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | agreements\tto\trepurchase | sold\tunder |  | Commercial\tpaper(2) | Commercial\tpaper(2) |  | Other\tshort-term\tborrowings (3) | Other\tshort-term\tborrowings (3) |  |
| In\tbillions\tof\tdollars | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 |
| Amounts\toutstanding\tat\tyear\tend | $177.8 | $156.3 | $141.8 | $13.2 | $9.9 | $10.0 | $19.1 | $34.5 | $20.7 |
| Average\toutstanding\tduring\tthe\tyear(4)(5) | 172.1 | 157.7 | 158.1 | 11.8 | 10.0 | 10.0 | 26.5 | 23.2 | 14.8 |
| Maximum\tmonth-end\toutstanding | 191.2 | 163.0 | 171.7 | 13.2 | 10.1 | 10.2 | 34.0 | 34.5 | 20.9 |
| Weighted-average\tinterest\trate |  |  |  |  |  |  |  |  |  |
| During\tthe\tyear(4)(5)(6) | 2.84% | 1.69% | 1.21% | 2.19% | 1.27% | 0.80% | 4.17% | 2.81% | 2.32% |
| At\tyear\tend(7) |  |  |  | 1.95 | 1.28 | 0.79 | 2.99 | 1.62 | 1.39 |

(1) Original	maturities	of	less	than	one	year.

(2) Substantially	all	commercial	paper	outstanding	was	issued	by	certain	Citibank	entities	for	the	periods	presented.

(3) Other	short-term	borrowings	include	borrowings	from	the	FHLB	and	other	market	participants.

(4) Interest	rates	and	amounts	include	the	effects	of	risk	management	activities	associated	with	the	respective	liability	categories.

(5) Average	volumes	of	securities	sold	under	agreements	to	repurchase	are	reported	net	pursuant	to	ASC	210-20-45;	average	rates	exclude	the	impact	of	ASC	210-20-45.

(6) Average	rates	reflect	prevailing	local	interest	rates,	including	inflationary	effects	and	monetary	correction	in	certain	countries.

(7) Based	on	contractual	rates	at	respective	year	ends;	non-interest-bearing	accounts	are	excluded	from	the	weighted	average	interest	rate	calculated	at	year	end.

# Credit	Ratings

Citigroup's	funding	and	liquidity,	funding	capacity,	ability	to	access	capital markets	and	other	sources	of	funds,	the	cost	of	these	funds	and	its	ability	to maintain	certain	deposits	are	partially	dependent	on	its	credit	ratings. The	table	below	shows	the	ratings	for	Citigroup	and	Citibank	as	of December	31,	2018.	While	not	included	in	the	table	below,	the	long-	and	short- term	ratings	of	Citigroup	Global	Markets	Holding	Inc.	(CGMHI)	were	BBB+/A- 2	at	Standard	&	Poor's	and	A/F1	at	Fitch	as	of	December	31,	2018.

# Recent	Credit	Ratings	Developments

On	November	29,	2018,	Moody's	placed	the	long-term	ratings	of	Citigroup	and Citibank,	N.A.	on	"Review	for	Possible	Upgrade."	Over	the	course	of	the	review period,	Moody's	will	assess,	among	other	things,	Citi's	ability	to	achieve	its medium-term	efficiency	and	profitability	targets	while	maintaining	strong governance	and	risk	controls.

On	February	21,	2019,	Moody's	upgraded	the	ratings	for	long-term	debt, deposits	and	counterparty	risk	of	Citigroup	and	certain	of	its	subsidiaries,	as well	as	the	baseline	credit	assessment	(BCA)	of	Citibank,	N.A.	In	addition, Moody's	affirmed	all	short-term	ratings	and	assessments	of	Citigroup	and	those subsidiaries.	The	ratings	outlook	was	changed	to	"Stable"	from	"Review	for Possible	Upgrade."

# Potential	Impacts	of	Ratings	Downgrades

Ratings	downgrades	by	Moody's,	Fitch	or	S&P	could	negatively	impact Citigroup's	and/or	Citibank's	funding	and	liquidity	due	to	reduced	funding capacity,	including	derivative	triggers,	which	could	take	the	form	of	cash obligations	and	collateral	requirements.

The	following	information	is	provided	for	the	purpose	of	analyzing	the potential	funding	and	liquidity	impact	to	Citigroup	and	Citibank	of	a hypothetical,	simultaneous

ratings	downgrade	across	all	three	major	rating	agencies.	This	analysis	is	subject to	certain	estimates,	estimation	methodologies,	judgments	and	uncertainties. Uncertainties	include	potential	ratings	limitations	that	certain	entities	may	have with	respect	to	permissible	counterparties,	as	well	as	general	subjective counterparty	behavior.	For	example,	certain	corporate	customers	and	markets counterparties	could	re-evaluate	their	business	relationships	with	Citi	and	limit transactions	in	certain	contracts	or	market	instruments	with	Citi.	Changes	in counterparty	behavior	could	impact	Citi's	funding	and	liquidity,	as	well	as	the results	of	operations	of	certain	of	its	businesses.	The	actual	impact	to	Citigroup or	Citibank	is	unpredictable	and	may	differ	materially	from	the	potential	funding and	liquidity	impacts	described	below.	For	additional	information	on	the	impact of	credit	rating	changes

on	Citi	and	its	applicable	subsidiaries,	see	"Risk	Factors—Liquidity	Risks" above.

# 	Citigroup	Inc.	and	Citibank—Potential	Derivative	Triggers

As	of	December	31,	2018,	Citi	estimates	that	a	hypothetical	one-notch downgrade	of	the	senior	debt/long-term	rating	of	Citigroup	Inc.	across	all	three major	rating	agencies	could	impact	Citigroup's	funding	and	liquidity	due	to derivative	triggers	by	approximately	$0.2	billion,	compared	to	$0.4	billion	as	of September	30,	2018.	Other	funding	sources,	such	as	secured	financing transactions	and	other	margin	requirements,	for	which	there	are	no	explicit triggers,	could	also	be	adversely	affected.

As	of	December	31,	2018,	Citi	estimates	that	a	hypothetical	one-notch downgrade	of	the	senior	debt/long-term	rating	of	Citibank	across	all	three	major rating	agencies	could	impact	Citibank's	funding	and	liquidity	by	approximately $0.5	billion,	compared	to	$1.2	billion	as	of	September	30,	2018.

In	total,	Citi	estimates	that	a	one-notch	downgrade	of	Citigroup	and Citibank,	across	all	three	major	rating	agencies,	could	result	in	increased aggregate	cash	obligations	and	collateral	requirements	of	approximately	$0.7 billion,	compared	to	$1.6	billion	as	of	September	30,	2018	(see	also	Note	22	to the	Consolidated	Financial	Statements).	As	detailed	under	"High-Quality	Liquid Assets"	above,	the	liquidity	resources	that	are	eligible	for	inclusion	in	the calculation	of	Citi's	consolidated	HQLA	were	approximately	$339	billion	for Citibank	and	$65	billion	for	Citi's	non-bank	and	other	entities,	for	a	total	of approximately	$404	billion	as	of	December	31,	2018.	These	liquidity	resources are	available	in	part	as	a	contingency	for	the	potential	events	described	above. In	addition,	a	broad	range	of	mitigating	actions	are	currently	included	in Citigroup's	and	Citibank's	contingency	funding	plans.	For	Citigroup,	these mitigating	factors	include,	but	are	not	limited	to,	accessing	surplus	funding capacity	from	existing	clients,	tailoring	levels	of	secured	lending	and	adjusting the	size	of	select	trading	books	and	collateralized	borrowings	from	certain Citibank	subsidiaries.	Mitigating	actions	available	to	Citibank	include,	but	are not	limited	to,

selling	or	financing	highly	liquid	government	securities,	tailoring	levels	of secured	lending,	adjusting	the	size	of	select	trading	assets,	reducing	loan originations	and	renewals,	raising	additional	deposits	or	borrowing	from	the FHLB	or	central	banks.	Citi	believes	these	mitigating	actions	could	substantially reduce	the	funding	and	liquidity	risk,	if	any,	of	the	potential	downgrades described	above.

# Citibank—Additional	Potential	Impacts

In	addition	to	the	above	derivative	triggers,	Citi	believes	that	a	potential downgrade	of	Citibank's	senior	debt/long-term	rating	across	any	of	the	three major	rating	agencies	could	also	have	an	adverse	impact	on	the	commercial paper/short-term	rating	of	Citibank.	As	of	December	31,	2018,	Citibank	had liquidity	commitments	of	approximately	$13.2	billion	to	consolidated	asset- backed	commercial	paper	conduits,	compared	to	$12.1	billion	as	of	September 30,	2018	(as	referenced	in	Note	21	to	the	Consolidated	Financial	Statements). In	addition	to	the	above-referenced	liquidity	resources	of	certain	Citibank entities,	Citibank	could	reduce	the	funding	and	liquidity	risk,	if	any,	of	the potential	downgrades	described	above	through	mitigating	actions,	including repricing	or	reducing	certain	commitments	to	commercial	paper	conduits.	In	the event	of	the	potential	downgrades	described	above,	Citi	believes	that	certain corporate	customers	could	re-evaluate	their	deposit	relationships	with	Citibank. This	re-evaluation	could	result	in	clients	adjusting	their	discretionary	deposit levels	or	changing	their	depository	institution,	which	could	potentially	reduce certain	deposit	levels	at	Citibank.	However,	Citi	could	choose	to	adjust	pricing, offer	alternative	deposit	products	to	its	existing	customers	or	seek	to	attract deposits	from	new	customers,	in	addition	to	the	mitigating	actions	referenced above.

# MARKET	RISK

Market	risk	is	the	potential	for	losses	arising	from	changes	in	the	value	of	Citi's assets	and	liabilities	resulting	from	changes	in	market	variables	such	as	interest rates,	foreign	exchange	rates,	equity	prices,	commodity	prices	and	credit	spreads, as	well	as	their	implied	volatilities.	Market	risk	emanates	from	both	Citi's trading	and	non-trading	portfolios.	For	additional	information	on	market	risk,	see "Risk	Factors"	above.

Each	business	is	required	to	establish,	with	approval	from	Citi's	market	risk management,	a	market	risk	limit	framework	for	identified	risk	factors	that clearly	defines	approved	risk	profiles	and	is	within	the	parameters	of	Citi's overall	risk	appetite.	These	limits	are	monitored	by	the	Risk	organization,	Citi's country	and	business	Asset	and	Liability	Committees	and	the	Citigroup	Asset and	Liability	Committee.	In	all	cases,	the	businesses	are	ultimately	responsible for	the	market	risks	taken	and	for	remaining	within	their	defined	limits.

# Market	Risk	of	Non-Trading	Portfolios

Market	risk	from	non-trading	portfolios	stems	from	the	potential	impact	of changes	in	interest	rates	and	foreign	exchange	rates	on	Citi's	net	interest revenues,	the	changes	in	Accumulated	other	comprehensive	income	(loss) (AOCI)	from	its	debt	securities	portfolios	and	capital	invested	in	foreign currencies.

# Net	Interest	Revenue	at	Risk

Net	interest	revenue,	for	interest	rate	exposure	purposes,	is	the	difference between	the	yield	earned	on	the	non-trading	portfolio	assets	(including	customer loans)	and	the	rate	paid	on	the	liabilities	(including	customer	deposits	or company	borrowings).	Net	interest	revenue	is	affected	by	changes	in	the	level	of interest	rates,	as	well	as	the	amounts	and	mix	of	assets	and	liabilities,	and	the timing	of	contractual	and	assumed	repricing	of	assets	and	liabilities	to	reflect market	rates.

Citi's	principal	measure	of	risk	to	net	interest	revenue	is	interest	rate exposure	(IRE).	IRE	measures	the	change	in	expected	net	interest	revenue	in each	currency	resulting	solely	from	unanticipated	changes	in	forward	interest rates.

Citi's	estimated	IRE	incorporates	various	assumptions	including prepayment	rates	on	loans,	customer	behavior	and	the	impact	of	pricing decisions.	For	example,	in	rising	interest	rate	scenarios,	portions	of	the	deposit portfolio	may	be	assumed	to	experience	rate	increases	that	are	less	than	the change	in	market	interest	rates.		In	declining	interest	rate	scenarios,	it	is	assumed that	mortgage	portfolios	experience	higher	prepayment	rates.	IRE	assumes	that businesses	and/or	Citi	Treasury	make	no	additional	changes	in	balances	or positioning	in	response	to	the	unanticipated	rate	changes.

In	order	to	manage	changes	in	interest	rates	effectively,	Citi	may	modify pricing	on	new	customer	loans	and	deposits,	purchase	fixed-rate	securities,	issue debt	that	is	either	fixed	or	floating	or	enter	into	derivative	transactions	that	have the	opposite	risk	exposures.	Citi	regularly	assesses	the	viability	of	these	and other	strategies	to	reduce	its	interest	rate	risks	and

implements	such	strategies	when	it	believes	those	actions	are	prudent. Citi	manages	interest	rate	risk	as	a	consolidated	Company-wide	position. Citi's	client-facing	businesses	create	interest	rate	sensitive	positions,	including loans	and	deposits,	as	part	of	their	ongoing	activities.	Citi	Treasury	aggregates these	risk	positions	and	manages	them	centrally.	Operating	within	established limits,	Citi	Treasury	makes	positioning	decisions	and	uses	tools,	such	as	Citi's investment	securities	portfolio,	company-issued	debt	and	interest	rate derivatives,	to	target	the	desired	risk	profile.	Changes	in	Citi's	interest	rate	risk position	reflect	the	accumulated	changes	in	all	non-trading	assets	and	liabilities, with	potentially	large	and	offsetting	impacts,	as	well	as	in	Citi	Treasury's positioning	decisions.

Citigroup	employs	additional	measurements,	including	stress	testing	the impact	of	non-linear	interest	rate	movements	on	the	value	of	the	balance	sheet; the	analysis	of	portfolio	duration	and	volatility,	particularly	as	they	relate	to mortgage	loans	and	mortgage-backed	securities,	and	the	potential	impact	of	the change	in	the	spread	between	different	market	indices.

# Interest	Rate	Risk	of	Investment	Portfolios—Impact on	AOCI

Citi	also	measures	the	potential	impacts	of	changes	in	interest	rates	on	the	value of	its	AOCI,	which	can	in	turn	impact	Citi's	common	equity	and	tangible common	equity.		This	will	impact	Citi's	Common	Equity	Tier	1	and	other regulatory	capital	ratios.	Citi's	goal	is	to	benefit	from	an	increase	in	the	market level	of	interest	rates,	while	limiting	the	impact	of	changes	in	AOCI	on	its regulatory	capital	position.

AOCI	at	risk	is	managed	as	part	of	the	Company-wide	interest	rate	risk position.	AOCI	at	risk	considers	potential	changes	in	AOCI	(and	the corresponding	impact	on	the	Common	Equity	Tier	1	Capital	ratio)	relative	to Citi's	capital	generation	capacity.

The	following	table	shows	the	estimated	impact	to	Citi's	net	interest	revenue,	AOCI	and	the	Common	Equity	Tier	1	Capital	ratio,	each	assuming	an	unanticipated parallel	instantaneous	100	bps	increase	in	interest	rates:

| In	millions	of	dollars,	except	as	otherwise	noted | Dec.	31,	2018 | Sept.	30,	2018 | Dec.	31,	2017 |
| :--- | :--- | :--- | :--- |
| Estimated\tannualized\timpact\tto\tnet\tinterest\trevenue |  |  |  |
| U.S.\tdollar(1) | $758 | $879 | $1,471 |
| All\tother\tcurrencies | 661 | 649 | 598 |
| Total | $1,419 | $1,528 | $2,069 |
| As\ta\tpercentage\tof\taverage\tinterest-earning\tassets | 0.08% | 0.09% | 0.12% |
| Estimated\tinitial\timpact\tto\tAOCI\t(after-tax)(2)(3) | $(3,920) | $(4,597) | $(4,853) |
| Estimated\tinitial\timpact\ton\tCommon\tEquity\tTier\t1\tCapital\tratio\t(bps) (3) | (28) | (31) | (35) |

(1) Certain	trading-oriented	businesses	within	Citi	have	accrual-accounted	positions	that	are	excluded	from	the	estimated	impact	to	net	interest	revenue	in	the	table,	since	these	exposures	are managed	economically	in	combination	with	mark-to-market	positions.	The	U.S.	dollar	interest	rate	exposure	associated	with	these	businesses	was	$(242)	million	for	a	100	bps	instantaneous increase	in	interest	rates	as	of	December	31,	2018.

(2) Includes	the	effect	of	changes	in	interest	rates	on	AOCI	related	to	investment	securities,	cash	flow	hedges	and	pension	liability	adjustments.

(3) Results	as	of	December	31,	2017	reflect	the	impact	of	Tax	Reform,	including	the	lower	expected	effective	tax	rate	and	the	impact	to	Citi's	DTA	position.

The	2018	decrease	in	the	estimated	impact	to	net	interest	revenue	primarily reflected	changes	in	Citi's	balance	sheet	composition,	including	increased sensitivity	in	deposits	combined	with	loan	growth,	and	Citi	Treasury	positioning. The	2018	changes	in	the	estimated	impact	to	AOCI	and	the	Common	Equity	Tier 1	Capital	ratio	primarily	reflected	the	impact	of	the	composition	of	Citi Treasury's	investment	and	derivatives	portfolio.

In	the	event	of	an	unanticipated	parallel	instantaneous	100	bps	increase	in interest	rates,	Citi	expects	that	the	negative	impact	to	AOCI	would	be	offset	in shareholders'	equity

through	the	combination	of	expected	incremental	net	interest	revenue	and	the expected	recovery	of	the	impact	on	AOCI	through	accretion	of	Citi's	investment portfolio	over	a	period	of	time.	As	of	December	31,	2018,	Citi	expects	that	the negative	$3.9	billion	impact	to	AOCI	in	such	a	scenario	could	potentially	be offset	over	approximately	18	months.

The	following	table	shows	the	estimated	impact	to	Citi's	net	interest revenue,	AOCI	and	the	Common	Equity	Tier	1	Capital	ratio	under	four	different changes	in	interest	rate	scenarios	for	the	U.S.	dollar	and	Citi's	other	currencies.

| In	millions	of	dollars,	except	as	otherwise	noted | Scenario	1 | Scenario	2 | Scenario	3 | Scenario	4 |
| :--- | :--- | :--- | :--- | :--- |
| Overnight\trate\tchange\t(bps) | 100 | 100 | — | — |
| 10-year\trate\tchange\t(bps) | 100 | — | 100 | (100) |
| Estimated\tannualized\timpact\tto\tnet\tinterest\trevenue |  |  |  |  |
| U.S.\tdollar | $758 | $755 | $40 | $(52) |
| All\tother\tcurrencies | 661 | 585 | 37 | (36) |
| Total | $1,419 | $1,340 | $77 | $(88) |
| Estimated\tinitial\timpact\tto\tAOCI\t(after-tax)(1) | $(3,920) | $(2,405) | $(1,746) | $1,252 |
| Estimated\tinitial\timpact\tto\tCommon\tEquity\tTier\t1\tCapital\tratio\t(bps) | (28) | (16) | (14) | 9 |

Note:	Each	scenario	assumes	that	the	rate	change	will	occur	instantaneously.	Changes	in	interest	rates	for	maturities	between	the	overnight	rate	and	the	10-year	rate	are	interpolated.

As	shown	in	the	table	above,	the	magnitude	of	the	impact	to	Citi's	net interest	revenue	and	AOCI	is	greater	under	scenario	2	as	compared	to	scenario	3. This	is	because	the	combination	of	changes	to	Citi's	investment	portfolio, partially	offset	by	changes	related	to	Citi's	pension	liabilities,	results	in	a	net position	that	is	more	sensitive	to	rates	at	shorter-	and	intermediate-term maturities.

# Changes	in	Foreign	Exchange	Rates—Impacts	on	AOCI and	Capital

As	of	December	31,	2018,	Citi	estimates	that	an	unanticipated	parallel instantaneous	5%	appreciation	of	the	U.S.	dollar	against	all	of	the	other currencies	in	which	Citi	has	invested	capital	could	reduce	Citi's	tangible common	equity	(TCE)	by	approximately	$1.4	billion,	or	1.0%,	as	a	result	of changes	to	Citi's	foreign	currency	translation	adjustment	in	AOCI,	net	of	hedges. This	impact	would	be	primarily	due	to	changes	in	the	value	of	the	Mexican	peso, the	Euro	and	the	Australian	dollar.

The	effect	of	Citi's	ongoing	management	strategies	with	respect	to	changes in	foreign	exchange	rates	and	the	impact	of	these	changes	on	Citi's	TCE	and Common	Equity	Tier	1	Capital	ratio	are	shown	in	the	table	below.	For	additional information	on	the	changes	in	AOCI,	see	Note	19	to	the	Consolidated	Financial Statements.

This	impact	is	also	before	any	mitigating	actions	Citi	may	take,	including ongoing	management	of	its	foreign	currency	translation	exposure.	Specifically, as	currency	movements	change	the	value	of	Citi's	net	investments	in	foreign currency-denominated	capital,	these	movements	also	change	the	value	of	Citi's risk-weighted	assets	denominated	in	those	currencies.	This,	coupled	with	Citi's foreign	currency	hedging	strategies,	such	as	foreign	currency	borrowings, foreign	currency	forwards	and	other	currency	hedging	instruments,	lessens	the impact	of	foreign	currency	movements	on	Citi's	Common	Equity	Tier	1	Capital ratio.	Changes	in	these	hedging	strategies,	as	well	as	hedging	costs,	divestitures and	tax	impacts,	can	further	affect	the	actual	impact	of	changes	in	foreign exchange	rates	on	Citi's	capital	as	compared	to	an	unanticipated	parallel	shock, as	described	above.

| In	millions	of	dollars,	except	as	otherwise	noted | Dec.	31,	2018 | Sept.	30,	2018 | Dec.	31,	2017 |
| :--- | :--- | :--- | :--- |
| Change\tin\tFX\tspot\trate(1) | (1.6)% | (0.2)% | (1.2)% |
| Change\tin\tTCE\tdue\tto\tFX\ttranslation,\tnet\tof\thedges | $(491) | $(354) | $(498) |
| As\ta\tpercentage\tof\tTCE | (0.3)% | (0.2)% | (0.3)% |
| Estimated\timpact\tto\tCommon\tEquity\tTier\t1\tCapital\tratio\t(on\ta\tfully\timplemented\tbasis)\tdue\n\t\tto\tchanges\tin\tFX\ttranslation,\tnet\tof\thedges\t(bps) | (1) | — | (5) |

(1) FX	spot	rate	change	is	a	weighted	average	based	upon	Citi's	quarterly	average	GAAP	capital	exposure	to	foreign	countries.

# Interest	Revenue/Expense	and	Net	Interest	Margin

| In	millions	of	dollars,	except	as	otherwise	noted | 2018 |  | 2017 |  | 2016 |  | Change<br>	2018	vs.	2017 |  | Change<br>	2017	vs.	2016 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Interest\trevenue(1) | $71,082 |  | $62,075 |  | $58,450 |  | 15% |  | 6\t% |  |
| Interest\texpense(2) | 24,266 |  | 16,518 |  | 12,512 |  | 47 |  | 32 |  |
| Net\tinterest\trevenue | $46,816 |  | $45,557 |  | $45,938 |  | 3% |  | (1)% |  |
| Interest\trevenue—average\trate | 4.08% |  | 3.71% |  | 3.67% |  | 37 | bps | 4 | bps |
| Interest\texpense—average\trate | 1.77 |  | 1.28 |  | 1.03 |  | 49 | bps | 25 | bps |
| Net\tinterest\tmargin(3) | 2.69 |  | 2.73 |  | 2.88 |  | (4) | bps | (15) | bps |
| Interest\trate\tbenchmarks |  |  |  |  |  |  |  |  |  |  |
| Two-year\tU.S.\tTreasury\tnote—average\trate | 2.53% |  | 1.40% |  | 0.83% |  | 113 | bps | 57 | bps |
| 10-year\tU.S.\tTreasury\tnote—average\trate | 2.91 |  | 2.33 |  | 1.83 |  | 58 | bps | 50 | bps |
| 10-year\tvs.\ttwo-year\tspread | 38 | bps | 93 | bps | 100 | bps |  |  |  |  |

Note:	All	interest	expense	amounts	include	FDIC	insurance	assessments,	as	well	as	similar	deposit	insurance	assessments	outside	of	the	U.S.	As	of	the	fourth	quarter	of	2018,	Citi's	FDIC	surcharge was	eliminated	(approximately	$130	million	per	quarter).

(2) Interest	expense	associated	with	certain	hybrid	financial	instruments,	which	are	classified	as	Long-term	debt	and	accounted	for	at	fair	value,	is	reported	together with	any	changes	in	fair	value	as	part	of	 Principal	transactions	in	the	Consolidated	Statements	of	Income	and	is	therefore	not	reflected	in Interest	expense	in	the table	above.

(3) Citi's	net	interest	margin	(NIM)	is	calculated	by	dividing	net	interest	revenue	by	average	interest-earning	assets.

Citi's	net	interest	revenue	in	the	fourth	quarter	of	2018	increased	5%	to	$11.9 billion	($12.0	billion	on	a	taxable	equivalent	basis)	versus	the	prior-year	period. Excluding	the	impact	of	FX	translation,	net	interest	revenue	increased	8%,	or approximately	$0.9	billion.	This	increase	was	primarily	due	to	higher	net	interest revenue	($11.7	billion,	up	approximately	14%	or	$1.4	billion)	from	Citi's	core accrual	activities,	which	is	mainly	generated	by	its	deposit	and	lending businesses.	The	increase	in	core	accrual	net	interest	revenue	was	partially	offset by	lower	trading-related	net	interest	revenue	($0.1	billion,	down	approximately 83%	or	$0.4	billion),	largely	due	to	higher	wholesale	funding	costs,	and	lower net	interest	revenue	associated	with	the	wind-down	of	legacy	assets	in Corporate/Other	($0.1	billion,	down	approximately	45%	or

$0.1	billion).	The	increase	in	core	accrual	net	interest	revenue	was	mainly	driven by	the	deployment	of	cash	into	better	yielding	assets,	including	loans,	an improved	loan	mix	and	higher	interest	rates,	as	well	as	the	impact	of	elimination of	the	FDIC	surcharge.	As	previously	disclosed,	in	2016,	the	FDIC	commenced imposing	a	surcharge	on	depository	institutions,	including	Citibank,	to	increase the	deposit	insurance	fund	reserve	ratio	until	it	reached	1.35%,	which	occurred as	of	the	end	of	the	third	quarter	of	2018.

Citi's	net	interest	revenue	for	the	full	year	increased	3%	to	$46.6	billion ($46.8	billion	on	a	taxable	equivalent	basis)	versus	the	prior	year.	Excluding	the impact	of	FX	translation,	Citi's	net	interest	revenue	increased	by	approximately $2.0	billion,	as	higher	core	accrual	net	interest	revenue

(approximately	$44.1	billion,	up	10%	or	$4.1	billion)	was	offset	by	lower trading-related	net	interest	revenue	(approximately	$1.0	billion,	down	62%	or $1.7	billion),	largely	driven	by	higher	wholesale	funding	costs,	and	lower	net interest	revenue	associated	with	legacy	assets	in	Corporate/Other	(approximately $0.8	billion,	down	38%	or	$0.5	billion).	The	increase	in	core	accrual	net	interest revenue	was	primarily	due	to	loan	growth,	an	improved	loan	mix,	and	higher interest	rates.

Citi's	NIM	was	2.71%	on	a	taxable	equivalent	basis	in	the	fourth	quarter	of 2018,	an	increase	of	1	basis	point	(bp)	from	the	third	quarter	of	2018,	driven primarily	by	the	increase	in	core	accrual	net	interest	revenue,	and	the	impact	of the	elimination	of	the	FDIC	surcharge,	partially	offset	by	lower	trading-related NIM.	Citi's	core	accrual	NIM	was	3.72%,	an	increase	of	12	bps	from	the	third quarter	of	2018,	primarily	driven	by	the	deployment	of	cash	into	better	yielding assets,	including	loans,	an	improved	loan	mix	and	higher	interest	rates,	as	well	as the	impact	of	elimination	of	the	FDIC	surcharge.	On	a	full-year	basis,	Citi's NIM	was	2.69%	on	a	taxable	equivalent	basis,	compared	to	2.73%	in	2017,	a decrease	of	4	bps.	Citi's	full-year	core	accrual	NIM	was	3.61%,	an	increase	of 13	bps	from	the	prior	year,	primarily	driven	by	loan	growth,	an	improved	loan mix	and	higher	interest	rates.	(Citi's	core	accrual	net	interest	revenue	and	core accrual	NIM	are	non-GAAP	financial	measures.	Citi	believes	the	presentation	of its	net	interest	revenue	and	NIM	on	a	core	accrual	basis	provides	a	meaningful depiction	for	investors	of	the	underlying	fundamentals	of	its	businesses).

# Additional	Interest	Rate	Details

# Average	Balances	and	Interest	Rates—Assets(1)(2)(3)

# Taxable	Equivalent	Basis

|  |  | Average	volume |  |  | Interest	revenue |  |  | %	Average	rate |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars,\texcept\trates | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 |
| Assets |  |  |  |  |  |  |  |  |  |
| Deposits\twith\tbanks(4) | $177,294 | $169,385 | $131,925 | $2,203 | $1,635 | $971 | 1.24% | 0.97% | 0.74% |
| Federal\tfunds\tsold\tand\tsecurities |  |  |  |  |  |  |  |  |  |
| borrowed\tor\tpurchased\tunder |  |  |  |  |  |  |  |  |  |
| agreements\tto\tresell(5) |  |  |  |  |  |  |  |  |  |
| In\tU.S.\toffices | $149,879 | $141,308 | $147,940 | $3,818 | $1,922 | $1,483 | 2.55% | 1.36% | 1.00% |
| In\toffices\toutside\tthe\tU.S.(4) | 117,695 | 106,606 | 85,142 | 1,674 | 1,327 | 1,060 | 1.42 | 1.24 | 1.24 |
| Total | $267,574 | $247,914 | $233,082 | $5,492 | $3,249 | $2,543 | 2.05% | 1.31% | 1.09% |
| Trading\taccount\tassets(6)(7) |  |  |  |  |  |  |  |  |  |
| In\tU.S.\toffices | $94,065 | $99,755 | $105,774 | $3,706 | $3,531 | $3,791 | 3.94% | 3.54% | 3.58% |
| In\toffices\toutside\tthe\tU.S.(4) | 115,601 | 104,197 | 98,832 | 2,615 | 2,117 | 2,095 | 2.26 | 2.03 | 2.12 |
| Total | $209,666 | $203,952 | $204,606 | $6,321 | $5,648 | $5,886 | 3.01% | 2.77% | 2.88% |
| Investments |  |  |  |  |  |  |  |  |  |
| In\tU.S.\toffices |  |  |  |  |  |  |  |  |  |
| Taxable | $228,686 | $226,227 | $225,764 | $5,331 | $4,450 | $3,980 | 2.33% | 1.97% | 1.76% |
| Exempt\tfrom\tU.S.\tincome\ttax | 17,199 | 18,152 | 19,079 | 706 | 775 | 693 | 4.10 | 4.27 | 3.63 |
| In\toffices\toutside\tthe\tU.S.(4) | 104,033 | 106,040 | 106,159 | 3,600 | 3,309 | 3,157 | 3.46 | 3.12 | 2.97 |
| Total | $349,918 | $350,419 | $351,002 | $9,637 | $8,534 | $7,830 | 2.75% | 2.44% | 2.23% |
| Loans\t(net\tof\tunearned\tincome)(8) |  |  |  |  |  |  |  |  |  |
| In\tU.S.\toffices | $385,350 | $371,711 | $360,751 | $28,627 | $25,944 | $24,240 | 7.43% | 6.98% | 6.72% |
| In\toffices\toutside\tthe\tU.S.(4) | 285,505 | 267,774 | 262,715 | 17,129 | 15,904 | 15,951 | 6.00 | 5.94 | 6.07 |
| Total | $670,855 | $639,485 | $623,466 | $45,756 | $41,848 | $40,191 | 6.82% | 6.54% | 6.45% |
| Other\tinterest-earning\tassets(9) | $67,269 | $60,626 | $50,003 | $1,673 | $1,161 | $1,029 | 2.49% | 1.92% | 2.06% |
| Total\tinterest-earning\tassets | $1,742,576 | $1,671,781 | $1,594,084 | $71,082 | $62,075 | $58,450 | 4.08% | 3.71% | 3.67% |
| Non-interest-earning\tassets(6) | $177,654 | $203,657 | $214,641 |  |  |  |  |  |  |
| Total\tassets | $1,920,230 | $1,875,438 | $1,808,725 |  |  |  |  |  |  |

(2) Interest	rates	and	amounts	include	the	effects	of	risk	management	activities	associated	with	the	respective	asset	categories.

(3) Monthly	or	quarterly	averages	have	been	used	by	certain	subsidiaries	where	daily	averages	are	unavailable.

(4) Average	rates	reflect	prevailing	local	interest	rates,	including	inflationary	effects	and	monetary	corrections	in	certain	countries.

(5) Average	volumes	of	securities	borrowed	or	purchased	under	agreements	to	resell	are	reported	net	pursuant	to	ASC	210-20-45.	However, Interest	revenue	excludes	the	impact	of	ASC	210-20-45.

(6) The	fair	value	carrying	amounts	of	derivative	contracts	are	reported	net,	pursuant	to	ASC	815-10-45,	in

Non-interest-earning	assets	and	Other	non-interest-bearing	liabilities.

(7) Interest	expense	on	Trading	account	liabilities	of	ICG	is	reported	as	a	reduction	of	Interest	revenue.	Interest	revenue	and	Interest	expense	on	cash	collateral	positions	are	reported	in	interest	on Trading	account	assets	and	Trading	account	liabilities,	respectively.

(8) Includes	cash-basis	loans.

(9) Includes	brokerage	receivables.

# Average	Balances	and	Interest	Rates—Liabilities	and	Equity,	and	Net	Interest	Revenue(1)(2)(3)

|  |  | Average	volume |  |  | Interest	expense |  |  | %	Average	rate |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars,\texcept\trates | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 |
| Liabilities |  |  |  |  |  |  |  |  |  |
| Deposits |  |  |  |  |  |  |  |  |  |
| In\tU.S.\toffices(4) | $338,060 | $313,094 | $288,817 | $4,500 | $2,530 | $1,630 | 1.33% | 0.81% | 0.56% |
| In\toffices\toutside\tthe\tU.S.(5) | 453,793 | 436,949 | 429,608 | 5,116 | 4,057 | 3,670 | 1.13 | 0.93 | 0.85 |
| Total | $791,853 | $750,043 | $718,425 | $9,616 | $6,587 | $5,300 | 1.21% | 0.88% | 0.74% |
| Federal\tfunds\tpurchased\tand |  |  |  |  |  |  |  |  |  |
| securities\tloaned\tor\tsold\tunder |  |  |  |  |  |  |  |  |  |
| agreements\tto\trepurchase(6) |  |  |  |  |  |  |  |  |  |
| In\tU.S.\toffices | $102,843 | $96,258 | $100,472 | $3,320 | $1,574 | $1,024 | 3.23% | 1.64% | 1.02% |
| In\toffices\toutside\tthe\tU.S.(5) | 69,264 | 61,434 | 57,588 | 1,569 | 1,087 | 888 | 2.27 | 1.77 | 1.54 |
| Total | $172,107 | $157,692 | $158,060 | $4,889 | $2,661 | $1,912 | 2.84% | 1.69% | 1.21% |
| Trading\taccount\tliabilities(7)(8) |  |  |  |  |  |  |  |  |  |
| In\tU.S.\toffices | $37,305 | $33,399 | $29,481 | $612 | $380 | $242 | 1.64% | 1.14% | 0.82% |
| In\toffices\toutside\tthe\tU.S.(5) | 58,919 | 57,149 | 44,669 | 389 | 258 | 168 | 0.66 | 0.45 | 0.38 |
| Total | $96,224 | $90,548 | $74,150 | $1,001 | $638 | $410 | 1.04% | 0.70% | 0.55% |
| Short-term\tborrowings(9) |  |  |  |  |  |  |  |  |  |
| In\tU.S.\toffices | $85,009 | $74,825 | $61,015 | $1,885 | $684 | $203 | 2.22% | 0.91% | 0.33% |
| In\toffices\toutside\tthe\tU.S.(5) | 23,402 | 22,837 | 19,184 | 324 | 375 | 274 | 1.38 | 1.64 | 1.43 |
| Total | $108,411 | $97,662 | $80,199 | $2,209 | $1,059 | $477 | 2.04% | 1.08% | 0.59% |
| Long-term\tdebt(10) |  |  |  |  |  |  |  |  |  |
| In\tU.S.\toffices | $197,933 | $192,079 | $175,342 | $6,386 | $5,382 | $4,180 | 3.23% | 2.80% | 2.38% |
| In\toffices\toutside\tthe\tU.S.(5) | 4,895 | 4,615 | 6,426 | 165 | 191 | 233 | 3.37 | 4.14 | 3.63 |
| Total | $202,828 | $196,694 | $181,768 | $6,551 | $5,573 | $4,413 | 3.23% | 2.83% | 2.43% |
| Total\tinterest-bearing\tliabilities | $1,371,423 | $1,292,639 | $1,212,602 | $24,266 | $16,518 | $12,512 | 1.77% | 1.28% | 1.03% |
| Demand\tdeposits\tin\tU.S.\toffices | $33,398 | $37,824 | $38,120 |  |  |  |  |  |  |
| Other\tnon-interest-bearing\tliabilities(7) | 315,862 | 316,129 | 328,538 |  |  |  |  |  |  |
| Total\tliabilities | $1,720,683 | $1,646,592 | $1,579,260 |  |  |  |  |  |  |
| Citigroup\tstockholders'\tequity | $198,681 | $227,849 | $228,346 |  |  |  |  |  |  |
| Noncontrolling\tinterests | 866 | 997 | 1,119 |  |  |  |  |  |  |
| Total\tequity | $199,547 | $228,846 | $229,465 |  |  |  |  |  |  |
| Total\tliabilities\tand\tstockholders'\nequity | $1,920,230 | $1,875,438 | $1,808,725 |  |  |  |  |  |  |
| Net\tinterest\trevenue\tas\ta\tpercentage\nof\taverage\tinterest-earning\tassets(11) |  |  |  |  |  |  |  |  |  |
| In\tU.S.\toffices | $992,543 | $970,439 | $944,891 | $28,157 | $27,551 | $27,929 | 2.84% | 2.84% | 2.96% |
| In\toffices\toutside\tthe\tU.S.(5) | 750,033 | 701,342 | 649,193 | 18,659 | 18,006 | 18,009 | 2.49 | 2.57 | 2.77 |
| Total | $1,742,576 | $1,671,781 | $1,594,084 | $46,816 | $45,557 | $45,938 | 2.69% | 2.73% | 2.88% |

(4) Consists	of	other	time	deposits	and	savings	deposits.	Savings	deposits	are	made	up	of	insured	money	market	accounts,	NOW	accounts	and	other	savings	deposits.	The	interest	expense	on savings	deposits	includes	FDIC	deposit	insurance	assessments.

(6) Average	volumes	of	securities	sold	under	agreements	to	repurchase	are	reported	net	pursuant	to	ASC	210-20-45.	However, Interest	expense	excludes	the	impact	of	ASC	210-20-45.

(7) The	fair	value	carrying	amounts	of	derivative	contracts	are	reported	net,	pursuant	to	ASC	815-10-45,	in Non-interest-earning	assets	and	Other	non-interest-bearing	liabilities.

(9) Includes	brokerage	payables.

(10) Excludes	hybrid	financial	instruments	and	beneficial	interests	in	consolidated	VIEs	that	are	classified	as	 Long-term	debt,	as	the	changes	in	fair	value	for	these	obligations	are	recorded	in Principal	transactions.

(11) Includes	allocations	for	capital	and	funding	costs	based	on	the	location	of	the	asset.

# Analysis	of	Changes	in	Interest	Revenue(1)(2)(3)

|  | 2018	vs.	2017 | 2018	vs.	2017 | 2018	vs.	2017 | 2017	vs.	2016 | 2017	vs.	2016 | 2017	vs.	2016 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Increase\t(decrease)\ndue\tto\tchange\tin: |  | Increase\t(decrease)\ndue\tto\tchange\tin: | Increase\t(decrease)\ndue\tto\tchange\tin: |  |
| In\tmillions\tof\tdollars | Average\nvolume | Average\nrate | Net\nchange | Average\nvolume | Average\nrate | Net\nchange |
| Deposits\twith\tbanks(4) | $79 | $489 | $568 | $317 | $347 | $664 |
| Federal\tfunds\tsold\tand\tsecurities\tborrowed\tor\n\t\tpurchased\tunder\tagreements\tto\tresell |  |  |  |  |  |  |
| In\tU.S.\toffices | $123 | $1,773 | $1,896 | $(69) | $508 | $439 |
| In\toffices\toutside\tthe\tU.S.(4) | 146 | 201 | 347 | 267 | — | 267 |
| Total | $269 | $1,974 | $2,243 | $198 | $508 | $706 |
| Trading\taccount\tassets(5) |  |  |  |  |  |  |
| In\tU.S.\toffices | $(209) | $384 | $175 | $(214) | $(46) | $(260) |
| In\toffices\toutside\tthe\tU.S.(4) | 245 | 253 | 498 | 111 | (89) | 22 |
| Total | $36 | $637 | $673 | $(103) | $(135) | $(238) |
| Investments(1) |  |  |  |  |  |  |
| In\tU.S.\toffices | $32 | $780 | $812 | $(9) | $561 | $552 |
| In\toffices\toutside\tthe\tU.S.(4) | (64) | 355 | 291 | (4) | 156 | 152 |
| Total | $(32) | $1,135 | $1,103 | $(13) | $717 | $704 |
| Loans\t(net\tof\tunearned\tincome)(6) |  |  |  |  |  |  |
| In\tU.S.\toffices | $974 | $1,709 | $2,683 | $749 | $955 | $1,704 |
| In\toffices\toutside\tthe\tU.S.(4) | 1,062 | 163 | 1,225 | 304 | (351) | (47) |
| Total | $2,036 | $1,872 | $3,908 | $1,053 | $604 | $1,657 |
| Other\tinterest-earning\tassets(7) | $137 | $375 | $512 | $207 | $(75) | $132 |
| Total\tinterest\trevenue | $2,525 | $6,482 | $9,007 | $1,659 | $1,966 | $3,625 |

(1) The	taxable	equivalent	adjustment	is	related	to	the	tax-exempt	bond	portfolio	based	on	the	U.S.	federal	statutory	tax	rates	of	21%	in	2018	and	35%	in	2017	and	2016,	and	is	included	in	this presentation.

(2) Rate/volume	variance	is	allocated	based	on	the	percentage	relationship	of	changes	in	volume	and	changes	in	rate	to	the	total	net	change.

(3) Detailed	average	volume,	Interest	revenue	and	Interest	expense	exclude	Discontinued	operations.	See	Note	2	to	the	Consolidated	Financial	Statements.

(4) Changes	in	average	rates	reflect	changes	in	prevailing	local	interest	rates,	including	inflationary	effects	and	monetary	corrections	in	certain	countries.

# Analysis	of	Changes	in	Interest	Expense	and	Net	Interest	Revenue(1)(2)(3)

|  | 2018	vs.	2017 | 2018	vs.	2017 | 2018	vs.	2017 | 2017	vs.	2016 | 2017	vs.	2016 | 2017	vs.	2016 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Increase\t(decrease)\ndue\tto\tchange\tin: | Increase\t(decrease)\ndue\tto\tchange\tin: |  | Increase\t(decrease)\ndue\tto\tchange\tin: | Increase\t(decrease)\ndue\tto\tchange\tin: |  |
| In\tmillions\tof\tdollars | Average\nvolume | Average\nrate | Net\nchange | Average\nvolume | Average\nrate | Net\nchange |
| Deposits |  |  |  |  |  |  |
| In\tU.S.\toffices | $216 | $1,754 | $1,970 | $147 | $753 | $900 |
| In\toffices\toutside\tthe\tU.S.(4) | 162 | 897 | 1,059 | 64 | 323 | 387 |
| Total | $378 | $2,651 | $3,029 | $211 | $1,076 | $1,287 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\n\t\tsold\tunder\tagreements\tto\trepurchase |  |  |  |  |  |  |
| In\tU.S.\toffices | $115 | $1,631 | $1,746 | $(45) | $595 | $550 |
| In\toffices\toutside\tthe\tU.S.(4) | 151 | 331 | 482 | 62 | 137 | 199 |
| Total | $266 | $1,962 | $2,228 | $17 | $732 | $749 |
| Trading\taccount\tliabilities(5) |  |  |  |  |  |  |
| In\tU.S.\toffices | $49 | $183 | $232 | $35 | $103 | $138 |
| In\toffices\toutside\tthe\tU.S.(4) | 8 | 123 | 131 | 52 | 38 | 90 |
| Total | $57 | $306 | $363 | $87 | $141 | $228 |
| Short-term\tborrowings(6) |  |  |  |  |  |  |
| In\tU.S.\toffices | $105 | $1,096 | $1,201 | $55 | $426 | $481 |
| In\toffices\toutside\tthe\tU.S.(4) | 9 | (60) | (51) | 57 | 44 | 101 |
| Total | $114 | $1,036 | $1,150 | $112 | $470 | $582 |
| Long-term\tdebt |  |  |  |  |  |  |
| In\tU.S.\toffices | $168 | $836 | $1,004 | $424 | $778 | $1,202 |
| In\toffices\toutside\tthe\tU.S.(4) | 11 | (37) | (26) | (72) | 30 | (42) |
| Total | $179 | $799 | $978 | $352 | $808 | $1,160 |
| Total\tinterest\texpense | $994 | $6,754 | $7,748 | $779 | $3,227 | $4,006 |
| Net\tinterest\trevenue | $1,531 | $(272) | $1,259 | $880 | $(1,261) | $(381) |

(1) The	taxable	equivalent	adjustment	is	related	to	the	tax-exempt	bond	portfolio	based	on	the	U.S.	federal	statutory	tax	rate	of	21%	in	2018	and	35%	in	2017	and	2016,	and	is	included	in	this presentation.

# Market	Risk	of	Trading	Portfolios

Trading	portfolios	include	positions	resulting	from	market	making	activities, hedges	of	certain	available-for-sale	(AFS)	debt	securities,	the	CVA	relating	to derivative	counterparties	and	all	associated	hedges,	fair	value	option	loans, hedges	to	the	loan	portfolio	within	capital	markets	origination	within	ICG. The	market	risk	of	Citi's	trading	portfolios	is	monitored	using	a combination	of	quantitative	and	qualitative	measures,	including,	but	not	limited to:

•factor	sensitivities; •value	at	risk	(VAR); and •stress	testing.

approval,	permitted	product	lists,	and	pre-trade	approval	for	larger,	more complex	and	less	liquid	transactions.

The	following	chart	of	total	daily	trading-related	revenue	(loss)	captures trading	volatility	and	shows	the	number	of	days	in	which	revenues	for	Citi's trading	businesses	fell	within	particular	ranges.	Trading-related	revenue	includes trading,	net	interest	and	other	revenue	associated	with	Citi's	trading	businesses. It	excludes	DVA,	FVA	and	CVA	adjustments	incurred	due	to	changes	in	the credit	quality	of	counterparties,	as	well	as	any	associated	hedges	to	that	CVA.	In addition,	it	excludes	fees	and	other	revenue	associated	with	capital	markets origination	activities.	Trading-related	revenues	are	driven	by	both	customer flows	and	the	changes	in	valuation	of	the	trading	inventory.	As	shown	in	the chart,	positive	trading-related	revenue	was	achieved	for	98.1%	of	the	trading days	in	2018.

Each	trading	portfolio	across	Citi's	businesses	has	its	own	market	risk	limit framework	encompassing	these	measures	and	other	controls,	including	trading mandates,	new	product

# Daily	Trading-Related	Revenue	(Loss)(1)—	Twelve	Months	ended	December	31,	2018

# In	millions	of	dollars

# varchart2018.jpg

(1) Reflects	the	effects	of	asymmetrical	accounting	for	economic	hedges	of	certain	AFS	debt	securities.	Specifically,	the	change	in	the	fair	value	of	hedging	derivatives	is	included	in revenue,	while	the	offsetting	change	in	the	fair	value	of	hedged	AFS	debt	securities	is	included	in	AOCI	and	not	reflected	above.

	Trading-related

# Factor	Sensitivities

Factor	sensitivities	are	expressed	as	the	change	in	the	value	of	a	position	for	a defined	change	in	a	market	risk	factor,	such	as	a	change	in	the	value	of	a	U.S. Treasury	bill	for	a	one-basis-point	change	in	interest	rates.	Citi's	market	risk management,	within	the	Risk	organization,	works	to	ensure	that	factor sensitivities	are	calculated,	monitored	and	limited	for	all	material	risks	taken	in the	trading	portfolios.

# Value	at	Risk	(VAR)

VAR	estimates,	at	a	99%	confidence	level,	the	potential	decline	in	the	value	of	a position	or	a	portfolio	under	normal	market	conditions	assuming	a	one-day holding	period.	VAR	statistics,	which	are	based	on	historical	data,	can	be materially	different	across	firms	due	to	differences	in	portfolio	composition, differences	in	VAR	methodologies	and	differences	in	model	parameters.	As	a result,	Citi	believes	VAR	statistics	can	be	used	more	effectively	as	indicators	of trends	in	risk-taking	within	a	firm,	rather	than	as	a	basis	for	inferring	differences in	risk-taking	across	firms.

Citi	uses	a	single,	independently	approved	Monte	Carlo	simulation	VAR model	(see	"VAR	Model	Review	and	Validation"	below),	which	has	been designed	to	capture	material	risk	sensitivities	(such	as	first-	and	second-order sensitivities	of	positions	to	changes	in	market	prices)	of	various	asset	classes/risk types	(such	as	interest	rate,	credit	spread,	foreign	exchange,	equity	and commodity	risks).	Citi's	VAR	includes	positions	which	are	measured	at	fair value;	it	does	not	include	investment	securities	classified	as	AFS	or

HTM.	For	information	on	these	securities,	see	Note	13	to	the	Consolidated Financial	Statements.

Citi	believes	its	VAR	model	is	conservatively	calibrated	to	incorporate	fat- tail	scaling	and	the	greater	of	short-term	(approximately	the	most	recent	month) and	long-term	(three	years)	market	volatility.	The	Monte	Carlo	simulation involves	approximately	450,000	market	factors,	making	use	of	approximately 350,000	time	series,	with	sensitivities	updated	daily,	volatility	parameters updated	intra-month	and	correlation	parameters	updated	monthly.	The conservative	features	of	the	VAR	calibration	contribute	an	approximate	20% add-on	to	what	would	be	a	VAR	estimated	under	the	assumption	of	stable	and perfectly,	normally	distributed	markets.

As	shown	in	the	table	below,	Citi's	average	trading	VAR	modestly decreased	in	2018	compared	to	the	prior	year,	mainly	due	to	a	minor	reduction	in average	credit	spreads,	partially	offset	by	a	minor	increase	in	interest	rate exposure	within	ICG.	Additionally,	among	secondary	factors	with	limited contribution	to	Citi's	average	VAR,	equity	risk	increased	mainly	due	to	exposure changes	in	the	Equities	business,	partially	offset	by	a	modest	decrease	in commodity	exposures	within	ICG.	The	decrease	in	Citi's	average	trading	and credit	portfolio	VAR	from	2018	was	in	line	with	the	decrease	in	average	trading VAR,	as	the	average	incremental	impact	of	the	credit	portfolio	was	unchanged.

# Year-end	and	Average	Trading	VAR	and	Trading	and	Credit	Portfolio	VAR

| In	millions	of	dollars | December	31,	2018 | 2018	Average | December	31,	2017 | 2017	Average |
| :--- | :--- | :--- | :--- | :--- |
| Interest\trate | $48 | $60 | $69 | $58 |
| Credit\tspread | 55 | 47 | 54 | 48 |
| Covariance\tadjustment(1) | (23) | (24) | (25) | (20) |
| Fully\tdiversified\tinterest\trate\tand\tcredit\tspread(2) | $80 | $83 | $98 | $86 |
| Foreign\texchange | 18 | 25 | 25 | 25 |
| Equity | 25 | 22 | 17 | 15 |
| Commodity | 23 | 19 | 17 | 22 |
| Covariance\tadjustment(1) | (66) | (67) | (63) | (64) |
| Total\ttrading\tVAR—all\tmarket\trisk\tfactors,\tincluding\tgeneral\tand\tspecific\trisk\t(excluding\ncredit\tportfolios)(2) | $80 | $82 | $94 | $84 |
| Specific\trisk-only\tcomponent(3) | $4 | $4 | $— | $1 |
| Total\ttrading\tVAR—general\tmarket\trisk\tfactors\tonly\t(excluding\tcredit\tportfolios) | $76 | $78 | $94 | $83 |
| Incremental\timpact\tof\tthe\tcredit\tportfolio(4) | $18 | $10 | $11 | $10 |
| Total\ttrading\tand\tcredit\tportfolio\tVAR | $98 | $92 | $105 | $94 |

(1) Covariance	adjustment	(also	known	as	diversification	benefit)	equals	the	difference	between	the	total	VAR	and	the	sum	of	the	VARs	tied	to	each	individual	risk	type.	The	benefit	reflects	the	fact that	the	risks	within	each	and	across	risk	types	are	not	perfectly	correlated	and,	consequently,	the	total	VAR	on	a	given	day	will	be	lower	than	the	sum	of	the	VARs	relating	to	each	individual	risk type.	The	determination	of	the	primary	drivers	of	changes	to	the	covariance	adjustment	is	made	by	an	examination	of	the	impact	of	both	model	parameter	and	position	changes.

(2) The	total	trading	VAR	includes	mark-to-market	and	certain	fair	value	option	trading	positions	in	 ICG,	with	the	exception	of	hedges	to	the	loan	portfolio,	fair	value	option	loans	and	all	CVA exposures.	Available-for-sale	and	accrual	exposures	are	not	included.

(3) The	specific	risk-only	component	represents	the	level	of	equity	and	fixed	income	issuer-specific	risk	embedded	in	VAR.

(4) The	credit	portfolio	is	composed	of	mark-to-market	positions	associated	with	non-trading	business	units,	the	CVA	relating	to	derivative	counterparties	and	all	associated	CVA	hedges.	FVA	and DVA	are	not	included.	The	credit	portfolio	also	includes	hedges	to	the	loan	portfolio,	fair	value	option	loans	and	hedges	within	capital	markets	origination	in	ICG.

The	table	below	provides	the	range	of	market	factor	VARs	associated	with	Citi's	total	trading	VAR,	inclusive	of	specific	risk:

|  | 2018 | 2018 | 2017 |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Low | High | Low | High |
| Interest\trate | $34 | $89 | $29 | $97 |
| Credit\tspread | 38 | 64 | 38 | 63 |
| Fully\tdiversified\tinterest\trate\tand\tcredit\tspread | $59 | $118 | $59 | $109 |
| Foreign\texchange | 13 | 44 | 16 | 49 |
| Equity | 15 | 33 | 6 | 27 |
| Commodity | 13 | 27 | 13 | 31 |
| Total\ttrading | $56 | $120 | $58 | $116 |
| Total\ttrading\tand\tcredit\tportfolio | 66 | 124 | 67 | 123 |

Note:	No	covariance	adjustment	can	be	inferred	as	the	high	and	low	for	each	market	factor	will	be	from	different	close-of-business	dates.

The	following	table	provides	the	VAR	for	ICG,	excluding	the	CVA	relating to	derivative	counterparties,	hedges	of	CVA,	fair	value	option	loans	and	hedges to	the	loan	portfolio:

# VAR	Model	Review	and	Validation

Generally,	Citi's	VAR	review	and	model	validation	process	entails	reviewing	the model	framework,	major	assumptions	and	implementation	of	the	mathematical algorithm.	In	addition,	as	part	of	the	model	validation	process,	product	specific back-testing	on	portfolios	is	periodically	completed	and	reviewed	with	Citi's U.S.	banking	regulators.	Furthermore,	Regulatory	VAR	back-testing	(as described	below)	is	performed	against	buy-and-hold	profit	and	loss	on	a	monthly basis	for	multiple	sub-portfolios	across	the	organization	(trading	desk	level,	ICG business	segment	and	Citigroup)	and	the	results	are	shared	with	U.S.	banking regulators.

Significant	VAR	model	and	assumption	changes	must	be	independently validated	within	Citi's	risk	management	organization.	This	validation	process includes	a	review	by	model	validation	group	within	Citi's	Model	Risk Management.	In	the	event	of	significant	model	changes,	parallel	model	runs	are undertaken	prior	to	implementation.	In	addition,	significant	model	and assumption	changes	are	subject	to	the	periodic	reviews	and	approval	by	Citi's U.S.	banking	regulators.

Citi	uses	the	same	independently	validated	VAR	model	for	both	Regulatory VAR	and	Risk	Management	VAR	(i.e.,	total	trading	and	total	trading	and	credit portfolios	VARs)	and,	as	such,	the	model	review	and	validation	process	for	both purposes	is	as	described	above.

Regulatory	VAR,	which	is	calculated	in	accordance	with	Basel	III,	differs from	Risk	Management	VAR	due	to	the	fact	that	certain	positions	included	in Risk	Management	VAR	are	not	eligible	for	market	risk	treatment	in	Regulatory VAR.	The

composition	of	Risk	Management	VAR	is	discussed	under	"Value	at	Risk" above.	The	applicability	of	the	VAR	model	for	positions	eligible	for	market	risk treatment	under	U.S.	regulatory	capital	rules	is	periodically	reviewed	and approved	by	Citi's	U.S.	banking	regulators.

In	accordance	with	Basel	III,	Regulatory	VAR	includes	all	trading	book- covered	positions	and	all	foreign	exchange	and	commodity	exposures.	Pursuant to	Basel	III,	Regulatory	VAR	excludes	positions	that	fail	to	meet	the	intent	and ability	to	trade	requirements	and	are	therefore	classified	as	non-trading	book	and categories	of	exposures	that	are	specifically	excluded	as	covered	positions. Regulatory	VAR	excludes	CVA	on	derivative	instruments	and	DVA	on	Citi's own	fair	value	option	liabilities.	CVA	hedges	are	excluded	from	Regulatory VAR	and	included	in	credit	risk-weighted	assets	as	computed	under	the Advanced	Approaches	for	determining	risk-weighted	assets.

# Regulatory	VAR	Back-Testing

In	accordance	with	Basel	III,	Citi	is	required	to	perform	back-testing	to	evaluate the	effectiveness	of	its	Regulatory	VAR	model.	Regulatory	VAR	back-testing	is the	process	in	which	the	daily	one-day	VAR,	at	a	99%	confidence	interval,	is compared	to	the	buy-and-hold	profit	and	loss	(i.e.,	the	profit	and	loss	impact	if the	portfolio	is	held	constant	at	the	end	of	the	day	and	re-priced	the	following day).	Buy-and-hold	profit	and	loss	represents	the	daily	mark-to-market	profit	and loss	attributable	to	price	movements	in	covered	positions	from	the	close	of	the previous	business	day.	Buy-and-hold	profit	and	loss	excludes	realized	trading revenue,	net	interest,	fees	and	commissions,	intra-day	trading	profit	and	loss	and changes	in	reserves.

Based	on	a	99%	confidence	level,	Citi	would	expect	two	to	three	days	in any	one	year	where	buy-and-hold	losses	exceeded	the	Regulatory	VAR.	Given the	conservative	calibration	of	Citi's	VAR	model	(as	a	result	of	taking	the greater	of	short-	and	long-term	volatilities	and	fat-tail	scaling	of	volatilities),	Citi would	expect	fewer	exceptions	under	normal	and	stable	market	conditions. Periods	of	unstable	market	conditions	could	increase	the	number	of	back-testing exceptions.

The	following	graph	shows	the	daily	buy-and-hold	profit	and	loss	associated with	Citi's	covered	positions	compared	to

Citi's	one-day	Regulatory	VAR	during	2018.	As	of	December	31,	2018,	there was	one	back-testing	exception	observed	for	Citi's	Regulatory	VAR	for	the	prior 12	months,	due	to	market	moves	triggered	by	political	events	in	Italy.

The	difference	between	the	49.8%	of	days	with	buy-and-hold	gains	for Regulatory	VAR	back-testing	and	the	98.1%	of	days	with	trading,	net	interest and	other	revenue	associated	with	Citi's	trading	businesses,	shown	in	the histogram	of	daily	trading-related	revenue	below,	reflects,	among	other	things, that	a	significant	portion	of	Citi's	trading-related	revenue	is	not	generated	from daily	price	movements	on	these	positions	and	exposures,	as	well	as	differences	in the	portfolio	composition	of	Regulatory	VAR	and	Risk	Management	VAR.

# Regulatory	Trading	VAR	and	Associated	Buy-and-Hold	Profit	and	Loss (1)—12	Months	ended	December	31,	2018

# a2018buyandholdhistograma01.jpg

(1) Buy-and-hold	profit	and	loss,	as	defined	by	the	banking	regulators	under	Basel	III,	represents	the	daily	mark-to-market	revenue	movement	attributable	to	the	trading	position	from	the	close	of the	previous	business	day.	Buy-and-hold	profit	and	loss	excludes	realized	trading	revenue	and	net	interest	intra-day	trading	profit	and	loss	on	new	and	terminated	trades,	as	well	as	changes	in reserves.	Therefore,	it	is	not	comparable	to	the	trading-related	revenue	presented	in	the	chart	of	daily	trading-related	revenue	above.

Citi	performs	market	risk	stress	testing	on	a	regular	basis	to	estimate	the	impact of	extreme	market	movements.	It	is	performed	on	individual	positions	and trading	portfolios,	as	well	as	in	aggregate,	inclusive	of	multiple	trading portfolios.	Citi's	market	risk	management,	after	consultations	with	the businesses,	develops	both	systemic	and	specific	stress	scenarios,	reviews	the output	of	periodic	stress	testing	exercises,	and	uses	the	information	to	assess	the ongoing	appropriateness	of	exposure	levels	and	limits.	Citi	uses	two complementary	approaches	to	market	risk	stress	testing	across	all	major	risk factors	(i.e.,	equity,	foreign	exchange,	commodity,	interest	rate	and	credit spreads):	top-down	systemic	stresses	and	bottom-up	business-specific	stresses. Systemic	stresses	are	designed	to	quantify	the	potential	impact	of	extreme market	movements	on	an	institution-wide	basis,	and	are	constructed	using	both historical	periods	of	market	stress	and	projections	of	adverse	economic scenarios.	Business-specific	stresses	are	designed	to	probe	the	risks	of	particular portfolios	and	market	segments,	especially	those	risks	that	are	not	fully	captured in	VAR	and	systemic	stresses.

The	systemic	stress	scenarios	and	business-specific	stress	scenarios	at	Citi are	used	in	several	reports	reviewed	by	senior	management	and	also	to	calculate internal	risk	capital	for	trading	market	risk.	In	general,	changes	in	market	values are	defined	over	a	one-year	horizon.	For	the	most	liquid	positions	and	market factors,	changes	in	market	values	are	defined	over	a	shorter	two-month	horizon. The	limited	set	of	positions	and	market	factors	whose	market	value	changes	are defined	over	a	two-month	horizon	are	those	that	in	management's	judgment	have historically	remained	very	liquid	during	financial	crises,	even	as	the	trading liquidity	of	most	other	positions	and	market	factors	materially	declined.

# OPERATIONAL	RISK

Operational	risk	is	the	risk	of	loss	resulting	from	inadequate	or	failed	internal processes,	systems	or	human	factors,	or	from	external	events.	It	includes	risk	of failing	to	comply	with	applicable	laws	and	regulations,	but	excludes	strategic risk.	Operational	risk	includes	the	reputation	and	franchise	risk	associated	with business	practices	or	market	conduct	in	which	Citi	is	involved,	as	well	as compliance,	conduct	and	legal	risks.

Operational	risk	is	inherent	in	Citi's	global	business	activities,	as	well	as related	support	functions,	and	can	result	in	losses	arising	from	events	associated with	the	following,	among	others:

•fraud,	theft	and	unauthorized	activity; •employment	practices	and	workplace environment;

•clients,	products	and	business	practices;

•physical	assets	and	infrastructure;

•execution,	delivery	and	process	management.

Citi	manages	operational	risk	consistent	with	the	overall	framework described	in	"Managing	Global	Risk—Overview"	above.	The	Company's	goal is	to	keep	operational	risk	at	appropriate	levels	relative	to	the	characteristics	of Citi's	businesses,	the	markets	in	which	it	operates,	its	capital	and	liquidity	and the	competitive,	economic	and	regulatory	environment.

To	anticipate,	mitigate	and	control	operational	risk,	Citi	has	established policies	and	a	global	framework	for	assessing,	monitoring	and	communicating operational	risks	and	the	overall	operating	effectiveness	of	the	internal	control environment	across	Citigroup.	As	part	of	this	framework,	Citi	has	defined	its operational	risk	appetite	and	has	established	a	manager's	control	assessment (MCA)	process	(a	process	through	which	managers	at	Citi	identify,	monitor, measure,	report	on	and	manage	risks	and	the	related	controls)	to	help	managers self-assess	significant	operational	risks	and	key	controls	and	identify	and	address weaknesses	in	the	design	and/or	operating	effectiveness	of	internal	controls	that mitigate	significant	operational	risks.

Each	major	business	segment	must	implement	an	operational	risk	process consistent	with	the	requirements	of	this	framework.	The	process	for	operational risk	management	includes	the	following	steps:

•identify	and	assess	key	operational risks;

•design	controls	to	mitigate	identified	risks;

•establish	key	risk indicators;

•implement	a	process	for	early	problem	recognition	and	timely escalation;

•produce	comprehensive	operational	risk	reporting;

•ensure	that	sufficient	resources	are	available	to	actively	improve	the operational	risk	environment	and	mitigate	emerging	risks.

As	new	products	and	business	activities	are	developed,	processes	are designed,	modified	or	sourced	through	alternative	means	and	operational	risks are	considered.

An	Operational	Risk	Management	Committee	has	been	established	to provide	oversight	for	operational	risk	across	Citigroup	and	to	provide	a	forum	to assess	Citi's	operational	risk	profile	and	ensure	actions	are	taken	so	that	Citi's operational	risk	exposure	is	actively	managed	consistent	with	Citi's	risk	appetite. The	Committee	seeks	to	ensure	that	these	actions	address	the	root	causes	that persistently	lead	to	operational	risk	losses	and	create	lasting	solutions	to minimize	these	losses.	Members	include	Citi's	Chief	Risk	Officer	and	Citi's Head	of	Operational	Risk	and	senior	members	of	their	organizations.	These members	cover	multiple	dimensions	of	risk	management	and	include	business and	regional	Chief	Risk	Officers	and	senior	operational	risk	managers.

In	addition,	risk	management,	including	Operational	Risk	Management, works	proactively	with	the	businesses	and	other	independent	control	functions	to embed	a	strong	operational	risk	management	culture	and	framework	across	Citi. Operational	Risk	Management	engages	with	the	businesses	to	ensure	effective implementation	of	the	Operational	Risk	Management	framework	by	focusing	on (i)	identification,	analysis	and	assessment	of	operational	risks,	(ii)	effective challenge	of	key	control	issues	and	operational	risks	and	(iii)	anticipation	and mitigation	of	operational	risk	events.

Information	about	the	businesses'	operational	risk,	historical	operational risk	losses	and	the	control	environment	is	reported	by	each	major	business segment	and	functional	area.	The	information	is	summarized	and	reported	to senior	management,	as	well	as	to	the	Audit	Committee	of	Citi's	Board	of Directors.

Operational	risk	is	measured	and	assessed	through	risk	capital.	Projected operational	risk	losses	under	stress	scenarios	are	also	required	as	part	of	the Federal	Reserve	Board's	CCAR	process.

For	additional	information	on	Citi's	operational	risks,	see	"Risk	Factors— Operational	Risk"	above.

# Cybersecurity	Risk

Cybersecurity	risk	is	the	business	risk	associated	with	the	threat	posed	by	a cyber	attack,	cyber	breach	or	the	failure	to	protect	Citi's	most	vital	business information	assets	or	operations,	resulting	in	a	financial	or	reputational	loss (for additional	information,	see	the	operational	systems	and	cybersecurity	risk	factors in	"Risk	Factors—Operational	Risks"	above).	With	an	evolving	threat landscape,	ever	increasing	sophistication	of	cybersecurity	attacks	and	use	of	new technologies	to	conduct	financial	transactions,	Citi	and	its	clients,	customers	and third	parties	are	and	will	continue	to	be	at	risk	for	cyber	attacks	and	information security	incidents.	Citi	recognizes	the	significance	of	these	risks	and,	therefore, employs	an	intelligence-led	strategy	to	prevent,	detect,	respond	to,	and	recover from	cyber	attacks.	Further,	Citi	actively	participates	in	financial	industry,

government,	and	cross-sector	knowledge	sharing	groups	to	enhance	individual and	collective	cyber	resilience.

Citi's	technology	and	cybersecurity	risk	management	program	is	built	on three	lines	of	defense.	Citi's	first	line	of	defense	includes	its	Information Protection	Directorate	and

Global	Information	Security	group,	which	provides	frontline	business, operational	and	technical	controls	and	capabilities	to	protect	against cybersecurity	risks,	and	to	respond	to	cyber	incidents	and	data	breaches.	Citi manages	these	threats	through	state-of-the-art	Fusion	Centers,	which	serve	as central	command	for	monitoring	and	coordinating	responses	to	cyber	threats. The	enterprise	information	security	team	is	responsible	for	infrastructure	defense and	security	controls,	performing	vulnerability	assessments	and	third-party information	security	assessments,	employee	awareness	and	training	programs, and	security	incident	management,	in	each	case	working	in	coordination	with	a network	of	information	security	officers	that	are	embedded	within	the	businesses and	functions	on	a	global	basis.

Citi's	Operational	Risk	Management-Technology	and	Cyber	(ORM-T/C)	and Independent	Compliance	Risk	Management-Technology	and	Information Security	(ICRM-T)	groups	serve	as	the	second	line	of	defense,	and	actively evaluate,	anticipate	and	challenge	Citi's	risk	mitigation	practices	and capabilities.	Internal	audit	serves	as	the	third	line	of	defense	and	independently provides	assurance	on	how	effectively	the	organization	as	a	whole	manages cybersecurity	risk.	Citi's	Information	Security	Risk	Operating	Committee (ISROC)	has	overall	responsibility	for	information	security	across	Citi,	and facilitates	communication,	discussion,	escalation	and	management	of	cyber	risks across	these	functions.

Citi	seeks	to	proactively	identify	and	remediate	technology	and cybersecurity	risks	before	they	materialize	as	incidents	that	negatively	affect business	operations.	Accordingly,	the	ORM-T/C	team	independently	challenges and	monitors	capabilities	in	accordance	with	Citi's	defined	Technology	and Cyber	Risk	Appetite	statements.	To	address	evolving	cybersecurity	risks	and corresponding	regulations,	ORM-T/C	also	monitors	cyber	legal	and	regulatory requirements,	defines	and	identifies	emerging	risks,	executes	strategic	cyber threat	assessments,	performs	new	products	and	initiative	reviews,	performs	data management	risk	oversight,	and	conducts	cyber	risk	assurance	reviews	(inclusive of	third-party	assessments).	In	addition,	ORM-T/C	employs	and	develops	tools and	metrics	that	are	both	tailored	to	cybersecurity	and	technology,	and	aligned with	Citi's	overall	operational	risk	management	framework	to	effectively	track, identify	and	manage	risk.

# COMPLIANCE	RISK

Compliance	risk	is	the	risk	to	current	or	projected	financial	condition	and resilience	arising	from	violations	of	laws	or	regulations,	or	from nonconformance	with	prescribed	practices,	internal	policies	and	procedures,	or ethical	standards.	This	risk	exposes	a	bank	to	fines,	civil	money	penalties, payment	of	damages,	and	the	voiding	of	contracts.	Compliance	risk	is	not limited	to	risk	from	failure	to	comply	with	consumer	protection	laws;	it encompasses	the	risk	of	noncompliance	with	all	laws	and	regulations,	as	well	as prudent	ethical	standards	and	contractual	obligations.	It	also	includes	the exposure	to	litigation	(known	as	legal	risk)	from	all	aspects	of	banking, traditional	and	nontraditional.

Compliance	risk	spans	across	all	risk	types	in	Citi's	risk	governance framework	and	the	risk	categories	outlined	in	the	Governance,	Risk,	Compliance (GRC)	taxonomy.	Citi	seeks	to	operate	with	integrity,	maintain	strong	ethical standards,	and	adhere	to	applicable	policies,	regulatory	and	legal	requirements. Citi	must	maintain	and	execute	a	proactive	Compliance	Risk	Management (CRM)	Framework	that	is	designed	to	change	the	way	in	which	compliance	risk is	managed	across	Citi,	with	a	view	to	fundamentally	strengthen	the	compliance risk	management	culture	across	the	lines	of	defense,	taking	into	account	Citi's risk	governance	framework	and	regulatory	requirements.	Independent Compliance	Risk	Management's	(ICRM)	primary	objectives	are	to:

•Establish,	manage	and	oversee	the	execution	of	the	CRM	Framework	that facilitates	enterprise-wide	compliance	with	local,	national	or	cross-border laws,	rules	or	regulations,	Citi's	internal	policies,	standards	and	procedures and	relevant	standards	of	conduct;

•Support	Citi's	operations	by	assisting	in	the	management	of	compliance	risk across	products,	business	lines,	functions	and	geographies,	supported	by globally	consistent	systems	and	processes;	and •Drive	and	embed	a	risk	culture	of	compliance,	control	and	ethical	conduct throughout	Citi.

To	anticipate,	control	and	mitigate	compliance	risk,	Citi	has	established	the CRM	Framework	to	achieve	standardization	and	centralization	of	methodologies and	processes,	and	to	enable	more	consistent	and	comprehensive	execution	of compliance	risk	management.

Citi	has	a	commitment,	as	well	as	an	obligation,	to	identify,	assess,	and mitigate	compliance	risks	associated	with	its	businesses	and	functions.	ICRM	is responsible	for	Citi's	CRM	Framework,	while	each	business	and	global	control functions	are	responsible	for	managing	their	compliance	risks	and	ensure	they are	operating	within	the	Compliance	Risk	Appetite.

Citi	carries	out	its	objectives	and	fulfills	its	responsibilities	through	the integrated	CRM	Framework,	which	is	based	upon	four	components:	(i) governance	and	organization;	(ii)	compliance	risk	ethics	and	conduct	risk;	(iii) processes	and	activities;	and	(iv)	resources	and	capabilities.	To	achieve	this,	Citi follows	the	following	CRM	Framework	process	steps:

•Identifying	regulatory	changes	and	performing	the	impact	assessment,	as well	as	capturing	and	monitoring	adherence	to	existing	regulatory requirements.

•Establishing,	maintaining	and	adhering	to	policies,	standards	and	procedures for	the	management	of	compliance	risk,	in	accordance	with	policy governance	requirements.

•Developing	and	providing	training	to	support	the	effective	execution	of roles	and	responsibilities	related	to	the	identification,	control,	reporting	and escalation	of	matters	related	to	compliance	risks. •Self-assessment	(e.g.,	Managers	Control	Assessment)	of	compliance risk.

•ICRM	and	other	independent	control	functions	are	responsible	for independently	assessing	the	management	of	compliance	risks. •Independently	testing	and	monitoring	that	Citi	is	operating	within	the Compliance	Risk	Appetite.	Identifying	instances	of	non-conformance	with Laws,	regulations,	rules	and	breaches	of	internal	policies. •Escalating	through	the	appropriate	channels,	which	may	include	governance forums,	the	results	of	monitoring,	testing,	reporting	or	other	oversight activities	that	may	represent	a	violation	of	law,	regulation,	policy	or	other significant	compliance	risk	and	take	reasonable	action	to	see	that	the	matter is	appropriately	identified,	tracked	and	resolved,	including	through	the issuance	of	corrective	action	plans	against	the	first	line	of	defense.

# REPUTATIONAL	RISK

Citi's	reputation	is	a	vital	asset	in	building	trust	with	its	stakeholders	and	Citi	is diligent	in	communicating	its	corporate	values	to	its	employees,	customers	and investors.		To	support	this,	Citi	has	defined	a	reputational	risk	appetite approach.	Under	this	approach,	each	major	business	segment	has	implemented	a risk	appetite	statement	and	related	key	indicators	to	monitor	and	address weaknesses	that	may	result	in	significant	reputational	risks.	The	approach requires	that	each	business	segment	or	region	escalate	significant	reputational risks	that	require	review	or	mitigation	through	its	business	practice	committee	or equivalent.

The	business	practices	committees	are	part	of	the	governance	infrastructure that	Citi	has	in	place	to	properly	review	business	activities,	sales	practices, product	design,	perceived	conflicts	of	interest	and	other	potential	franchise	or reputational	risks.	These	committees	may	also	raise	potential	franchise, reputational	or	systemic	risks	for	due	consideration	by	the	business	practices committee	at	the	corporate	level.	All	of	these	committees,	which	are	composed of	Citi's	most	senior	executives,	provide	the	guidance	necessary	for	Citi's business	practices	to	meet	the	highest	standards	of	professionalism,	integrity	and ethical	behavior	consistent	with	Citi's	mission	and	value	proposition. Further,	the	responsibility	for	maintaining	Citi's	reputation	is	shared	by	all employees,	who	are	guided	by	Citi's	code	of	conduct.	Employees	are	expected to	exercise	sound	judgment	and	common	sense	in	decision	and	action.	They	are also	expected	to	promptly	and	appropriately	escalate	all	issues	that	present potential	franchise,	reputational	and/or	systemic	risk.

# STRATEGIC	RISK

Citi	senior	management,	led	by	Citi's	CEO,	is	responsible	for	the	development and	execution	of	the	strategy	of	the	Company.	Significant	strategic	actions	are reviewed	and	approved	by,	or	notified	to,	the	Citigroup	and	Citibank	Boards	of Directors,	as	appropriate.	The	Citigroup	Board	of	Directors	holds	an	annual strategic	meeting	and	annual	regional	strategic	meetings,	and	receives	business presentations	at	its	regular	meetings,	in	order	to	monitor	management's execution	of

Citi's	strategy.	At	the	business	level,	business	heads	are	accountable	for	the interpretation	and	execution	of	the	Company-wide	strategy,	as	it	applies	to	their area,	including	decisions	on	new	business	and	product	entries.

The	management	of	strategic	risk	rests	upon	the	foundational	elements	that include	an	annual	financial	operating	plan	encompassing	all	businesses,	products and	geographies	and	defined	financial	and	operating	targets,	derived	from	the operating	plan,	which	can	be	monitored	throughout	the	year	in	order	to	assess strategic	and	operating	performance.	Strategic	risk	is	monitored	through	various mechanisms,	including	regular	updates	to	senior	management	and	the	Board	of Directors	on	performance	against	the	operating	plan,	quarterly	business	reviews between	the	Citi	CEO	and	business	and	regional	CEOs	in	which	the	performance and	risks	of	each	major	business	and	region	are	discussed,	ongoing	reporting	to senior	management	and	executive	management	scorecards.

# Potential	Exit	of	U.K.	from	EU

As	a	result	of	a	2016	U.K.	referendum,	Citi	has	reorganized	certain	U.K.	and	EU operations	and	implemented	contingency	plans	to	address	the	U.K.'s	potential exit	from	the	EU,	regardless	of	outcome.	In	addition,	Citi	has	established	a formal	program	with	senior	level	sponsorship	and	governance	to	deliver	a coordinated	response	to	the	U.K.'s	potential	exit.

Until	negotiations	are	finalized	and	an	agreement	is	ratified,	Citi	continues to	plan	for	a	"hard"	exit	scenario	as	of	March	29,	2019.	Citi's	strategy	focuses on	providing	continuity	of	services	to	its	EU	and	U.K.	clients	with	minimal disruption.	Consequently,	Citi	has	been	migrating	certain	business	activities	to alternative	legal	entities	and	branches	with	appropriate	regulatory	permissions	to carry	out	such	activity	and	establishing	required	capabilities	in	the	EU	and	U.K. Citi's	plans	for	a	U.K.	exit	from	the	EU	are	well	progressed	for	implementation and	primarily	cover:

•enhancement	of	Citi's	European	bank	in	Ireland	supported	by	its	substantial European	branch	network	to	ensure	business	continuity	for	its	EU	clients; •conversion	of	Citi's	banking	subsidiary	in	Germany	into	Citi's	EU investment	firm	to	support	broker-dealer	activities	with	EU	clients;

•establishment	of	a	new	U.K.	consumer	bank	to	focus	on	servicing	consumer business	clients	in	the	U.K.;	and

•amendments	to	existing	U.K.	legal	entities	or	branches,	where	required,	to ensure	continuity	of	services	to	U.K.	and	non-EU	clients.

Citi	continues	to	work	closely	with	clients,	regulators	and	other	relevant stakeholders	in	execution	of	its	plans	to	prepare	for	the	U.K.'s	potential	exit from	the	EU.	In	addition,	Citi	continues	to	monitor	macroeconomic	scenarios and	market	events	and	has	been	undertaking	stress	testing	to	assess	potential impacts	on	its	businesses.	For	additional	information,	see	"Risk	Factors— Strategic	Risk"	above.

# LIBOR	Transition	Risk

Citi	recognizes	that	discontinuance	of	LIBOR,	or	any	other	IBOR-based	rate, presents	significant	risks	and	challenges	that	could	have	an	impact	on	its businesses	globally	(for	information	about	the	risks	to	Citi	from	discontinuation of	LIBOR	or	any	other	benchmark,	see	"Risk	Factors—Strategic	Risk"	above). Accordingly,	in	2018,	Citi	established	a	LIBOR	governance	and	implementation program	that	includes	senior	management	involvement.	Citi's	Asset	and Liability	Committee	oversees	the	program,	and	includes	reporting	to	the Citigroup	Board	of	Directors.	The	program	operates	globally	across	Citi's businesses	and	functions.	In	addition,	Citi	has	developed	an	initial	set	of	LIBOR transition	action	plans	and	associated	roadmap	under	nine	key	workstreams: transition	strategy	and	risk	management;	customer	management;	internal communications	and	training;	financial	exposures	and	risk	management; regulatory	and	industry	engagement;	operations	and	technology;	finance,	tax	and treasury;	legal	and	contract	management;	and	product	management.	Citi	has	also been	participating	in	a	number	of	working	groups	formed	by	global	regulators, including	the	Alternative	Reference	Rates	Committee	convened	by	the	Federal Reserve	Board.	These	working	groups	have	been	established	to	promote	and advance	development	of	alternative	reference	rates	and	to	identify	and	address potential	challenges	from	any	transition	to	such	rates.

# Country	Risk

# Top	25	Country	Exposures

The	following	table	presents	Citi's	top	25	exposures	by country	(excluding	the	U.S.)	as	of	December	31,	2018.	The	total	exposure	as	of December	31,	2018	to	the	top	25	countries	disclosed	below,	in	combination	with the	U.S.,	would	represent	approximately	96%	of	Citi's	exposure	to	all	countries. For	purposes	of	the	table,	loan	amounts	are	reflected	in	the	country	where the	loan	is	booked,	which	is	generally	based	on	the	domicile	of	the	borrower. For	example,	a	loan	to	a	Chinese	subsidiary	of	a	Switzerland-based	corporation will	generally	be	categorized	as	a	loan	in	China.	In	addition,	Citi	has	developed regional	booking	centers	in	certain	countries,

most	significantly	in	the	United	Kingdom	(U.K.)	and	Ireland,	in	order	to	more efficiently	serve	its	corporate	customers.	As	an	example,	with	respect	to	the U.K.,	only	27%	of	corporate

loans	presented	in	the	table	below	are	to	U.K.	domiciled entities	(27%	for	unfunded	commitments),	with	the	balance	of the	loans	predominately	to	European	domiciled	counterparties. Approximately	83%	of	the	total	U.K.	funded	loans	and	91%	of the	total	U.K.	unfunded	commitments	were	investment	grade as	of	December	31,	2018.	Trading	account	assets	and	investment	securities	are generally	categorized	based	on	the	domicile	of	the	issuer	of	the	security	of	the underlying	reference	entity.	For	additional	information	on	the	assets	included	in the	table,	see	the	footnotes	to	the	table	below.

| In	billions	of	U.S.<br>dollars | ICG<br>loans(1) | GCB<br>loans | Other<br>funded(2) | Unfunded(3) | Net	MTM	on<br>derivatives/repos(4) | Total<br>hedges	(on<br>loans	and<br>CVA) | Investment<br>securities(5) | Trading<br>account<br>assets(6) | Total<br>as	of<br>4Q18 | Total<br>as	of<br>3Q18 | Total<br>as	of<br>4Q17 | Total	as	a<br>%	of	Citi	as<br>of	4Q18 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| United\tKingdom | $40.4 | $— | $4.7 | $56.5 | $12.8 | $(3.7) | $4.0 | $(3.1) | $111.6 | $123.7 | $113.2 | 6.9% |
| Mexico | 9.5 | 25.3 | 0.3 | 7.1 | 0.8 | (0.6) | 12.4 | 4.8 | 59.6 | 61.9 | 58.4 | 3.7 |
| Hong\tKong | 16.5 | 12.6 | 0.8 | 8.4 | 2.4 | (0.2) | 7.1 | 0.5 | 48.1 | 45.9 | 42.2 | 3.0 |
| Singapore | 12.8 | 12.4 | 0.3 | 4.7 | 1.3 | (0.2) | 7.8 | 1.6 | 40.7 | 41.0 | 41.4 | 2.5 |
| Korea | 1.9 | 18.6 | 0.2 | 3.0 | 1.2 | (0.5) | 8.6 | 0.8 | 33.8 | 33.7 | 35.3 | 2.1 |
| Ireland | 13.7 | — | 1.4 | 17.8 | 0.4 | — | — | 0.4 | 33.7 | 31.1 | 31.9 | 2.1 |
| India | 4.4 | 7.0 | 0.6 | 4.9 | 2.4 | (0.8) | 9.7 | 2.0 | 30.2 | 27.2 | 30.3 | 1.9 |
| Brazil | 12.7 | — | — | 2.7 | 4.6 | (1.0) | 3.3 | 3.7 | 26.0 | 25.9 | 24.7 | 1.6 |
| Australia | 5.5 | 9.9 | 0.1 | 6.3 | 1.4 | (0.4) | 1.5 | (0.8) | 23.5 | 24.1 | 25.2 | 1.5 |
| China | 5.9 | 4.6 | 0.4 | 1.6 | 1.0 | (0.5) | 4.7 | 0.3 | 18.0 | 18.8 | 19.4 | 1.1 |
| Japan | 2.7 | — | 0.1 | 2.6 | 3.4 | (1.3) | 5.8 | 4.3 | 17.6 | 18.4 | 17.7 | 1.1 |
| Taiwan | 4.7 | 9.0 | 0.1 | 1.0 | 0.3 | (0.1) | 1.5 | 0.9 | 17.4 | 17.8 | 17.3 | 1.1 |
| Germany | 0.2 | — | — | 4.5 | 3.5 | (3.6) | 8.9 | 3.9 | 17.4 | 19.7 | 19.1 | 1.1 |
| Canada | 2.2 | 0.6 | 0.3 | 6.9 | 2.6 | (0.3) | 3.1 | 0.6 | 16.0 | 16.4 | 16.3 | 1.0 |
| Poland | 3.7 | 1.9 | 0.1 | 3.6 | 0.1 | (0.1) | 3.7 | 0.2 | 13.2 | 14.4 | 14.0 | 0.8 |
| Jersey | 6.9 | — | 0.3 | 3.2 | — | — | — | — | 10.4 | 10.3 | 4.8 | 0.6 |
| Malaysia | 1.8 | 4.7 | 0.3 | 1.2 | 0.1 | (0.1) | 1.6 | 0.4 | 10.0 | 9.6 | 10.0 | 0.6 |
| United\tArab\nEmirates | 4.6 | 1.5 | 0.1 | 3.3 | 0.2 | (0.1) | — | — | 9.6 | 9.8 | 7.0 | 0.6 |
| Thailand | 0.8 | 2.6 | 0.1 | 1.5 | 0.1 | — | 1.7 | 0.6 | 7.4 | 7.2 | 7.4 | 0.5 |
| Indonesia | 2.5 | 1.0 | — | 1.5 | — | (0.1) | 1.2 | 0.2 | 6.3 | 5.8 | 6.3 | 0.4 |
| Philippines | 0.7 | 1.3 | 0.1 | 0.4 | 0.9 | (0.1) | 1.5 | 0.5 | 5.3 | 4.9 | 3.8 | 0.3 |
| Luxembourg | 0.1 | — | — | — | 0.4 | (0.3) | 4.1 | 0.6 | 4.9 | 5.1 | 5.4 | 0.3 |
| Russia | 1.6 | 0.8 | — | 1.1 | 0.8 | (0.1) | 0.6 | (0.2) | 4.6 | 4.1 | 6.6 | 0.3 |
| South\tAfrica | 1.7 | — | — | 1.2 | 0.2 | (0.1) | 1.4 | 0.1 | 4.5 | 5.0 | 4.3 | 0.3 |
| Italy | 0.2 | — | — | 2.2 | 4.5 | (4.4) | 0.1 | 1.1 | 3.7 | 3.7 | 3.8 | 0.2 |
|  |  |  |  |  |  |  |  |  |  |  | Total | 35.6% |

(1) ICG	loans	reflect	funded	corporate	loans	and	private	bank	loans,	net	of	unearned	income.	As	of	December	31,	2018,	private	bank	loans	in	the	table	above	totaled	$24.6	billion,	concentrated	in Hong	Kong	($7.3	billion),	Singapore	($6.4	billion)	and	the	U.K.	($5.9	billion).

(2) Other	funded	includes	other	direct	exposure	such	as	accounts	receivable,	loans	HFS,	other	loans	in Corporate/Other	and	investments	accounted	for	under	the	equity method.

(3) Unfunded	exposure	includes	unfunded	corporate	lending	commitments,	letters	of	credit	and	other	contingencies.

(4) Net	mark-to-market	counterparty	risk	on	OTC	derivatives	and	securities	lending/borrowing	transactions	(repos).	Exposures	are	shown	net	of	collateral	and	inclusive	of	CVA.	Includes	margin loans.

(5) Investment	securities	include	securities	available-for-sale,	recorded	at	fair	market	value,	and	securities	held-to-maturity,	recorded	at	historical	cost.

(6) Trading	account	assets	are	shown	on	a	net	basis	and	include	issuer	risk	on	cash	products	and	derivative	exposure	where	the	underlying	reference	entity/issuer	is	located	in	that	country.

# Venezuela

Citi	continues	to	monitor	the	political	and	economic	environment	and uncertainties	in	Venezuela.	As	of	December	31,	2018,	Citi's	net	investment	in	its on-shore	Venezuelan	operations	was	approximately	$40	million.	In	addition,	in early	2015,	the	Central	Bank	of	Venezuela	(BCV)	sold	gold	held	at	the	Bank	of England	to	a	Citi	entity	in	the	U.K.,	giving	Citi	ownership	and	full	legal	title	to the	gold	for	$1.6	billion.	Simultaneously,	the	BCV	entered	into	forward	purchase agreements	(collectively,	the	Agreements)	with	Citi,	requiring	the	BCV	to purchase	the	same	quantity	of	gold	from	Citi	on	predetermined	dates.	The	next such	date	will	be	in	March	2019	at	which	time	the	BCV	will	be	required	to purchase	a	significant	amount	of	gold	from	Citi	under	the	terms	of	the Agreements.	Citi	believes	it	is	protected	against	market	and	credit	risk	related	to the	Agreements.	The	Agreements	were	accounted	for	as	a	financing	on	Citi's books	under	ASC	470-40.

# FFIEC—Cross-Border	Claims	on	Third	Parties	and	Local	Country	Assets

Citi's	cross-border	disclosures	are	based	on	the	country	exposure	bank regulatory	reporting	guidelines	of	the	Federal	Financial	Institutions	Examination Council	(FFIEC).	The	following	summarizes	some	of	the	FFIEC	key	reporting guidelines:

•Amounts	are	based	on	the	domicile	of	the	ultimate	obligor,	counterparty, collateral	(only	including	qualifying	liquid	collateral),	issuer	or	guarantor, as	applicable	(e.g.,	a	security	recorded	by	a	Citi	U.S.	entity	but	issued	by	the U.K.	government	is	considered	U.K.	exposure;	a	loan	recorded	by	a	Citi Mexico	entity	to	a	customer	domiciled	in	Mexico	where	the	underlying collateral	is	held	in	Germany	is	considered	German	exposure). •Amounts	do	not	consider	the	benefit	of	collateral	received	for	secured financing	transactions	(i.e.,	repurchase	agreements,	reverse	repurchase agreements	and	securities	loaned	and	borrowed)	and	are	reported	based	on notional	amounts.

•Netting	of	derivative	receivables	and	payables,	reported	at	fair	value,	is permitted,	but	only	under	a	legally	binding	netting	agreement	with	the	same specific	counterparty,	and	does	not	include	the	benefit	of	margin	received	or hedges.

•Credit	default	swaps	(CDS)	are	included	based	on	the	gross	notional	amount sold	and	purchased	and	do	not	include	any	offsetting	CDS	on	the	same underlying	entity.

•Loans	are	reported	without	the	benefit	of hedges.

Given	the	requirements	noted	above,	Citi's	FFIEC	cross-border	exposures and	total	outstandings	tend	to	fluctuate,	in	some	cases,	significantly,	from	period to	period.	As	an	example,	because	total	outstandings	under	FFIEC	guidelines	do not	include	the	benefit	of	margin	or	hedges,	market	volatility	in	interest	rates, foreign	exchange	rates	and	credit	spreads	may	cause	significant	fluctuations	in the	level	of	total	outstandings,	all	else	being	equal.

# The	tables	below	show	each	country	whose	total	outstandings	exceeded	0.75%	of	total	Citigroup	assets:

# Cross-border	claims	on	third	parties	and	local	country	assets

|  |  |  |  |  | Cross-border	claims	on	third	parties	and	local	country	assets | Cross-border	claims	on	third	parties	and	local	country	assets | Cross-border	claims	on	third	parties	and	local	country	assets |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tU.S.\ndollars | Banks\n(a) | Public\n(a) | NBFIs(1)\t(a) | Other\t(corporate\nand\thouseholds)\t(a) | Trading\nassets(2)\t(included\nin\t(a)) | Short-term\nclaims(2)\t(included\nin\t(a)) | Total\noutstanding(3)\t(sum\nof\t(a)) | Commitments\n\tand\nguarantees(4) | Credit\nderivatives\npurchased(5) | Credit\nderivatives\nsold(5) |
| United\nKingdom | $14.6 | $24.3 | $35.7 | $21.6 | $12.3 | $67.8 | $96.2 | $25.1 | $74.3 | $76.4 |
| Cayman\nIslands | — | — | 81.6 | 9.2 | 5.4 | 62.5 | 90.8 | 5.0 | — | — |
| Japan | 31.4 | 28.8 | 8.4 | 7.8 | 13.6 | 40.7 | 76.4 | 4.0 | 19.9 | 18.3 |
| Mexico | 2.4 | 24.0 | 7.4 | 35.8 | 6.0 | 29.1 | 69.6 | 20.2 | 7.3 | 7.6 |
| Germany | 6.3 | 46.4 | 7.5 | 7.6 | 6.6 | 50.4 | 67.8 | 10.7 | 51.3 | 50.2 |
| France | 12.4 | 8.5 | 30.7 | 5.6 | 9.1 | 49.5 | 57.2 | 30.7 | 59.9 | 58.5 |
| Korea\tSouth | 1.5 | 17.8 | 3.0 | 22.6 | 1.8 | 33.2 | 44.9 | 12.1 | 12.2 | 12.2 |
| Singapore | 1.4 | 22.5 | 4.4 | 13.4 | 1.7 | 31.5 | 41.7 | 11.4 | 1.9 | 1.9 |
| India | 3.3 | 12.7 | 3.3 | 15.3 | 4.3 | 22.5 | 34.6 | 9.7 | 2.5 | 2.0 |
| Hong\tKong | 0.9 | 11.2 | 3.2 | 16.9 | 3.9 | 27.5 | 32.2 | 14.6 | 2.2 | 2.2 |
| China | 5.0 | 11.3 | 3.0 | 12.3 | 4.5 | 20.6 | 31.6 | 4.2 | 15.6 | 14.6 |
| Australia | 3.1 | 7.8 | 4.8 | 13.4 | 7.1 | 14.4 | 29.1 | 12.1 | 10.6 | 10.5 |
| Brazil | 3.8 | 10.4 | 1.4 | 10.9 | 5.0 | 16.8 | 26.5 | 2.6 | 8.4 | 8.1 |
| Taiwan | 0.7 | 7.4 | 3.2 | 12.6 | 1.6 | 18.7 | 23.9 | 13.0 | 0.1 | 0.1 |
| Netherlands | 6.8 | 9.0 | 3.2 | 4.7 | 3.7 | 14.7 | 23.7 | 8.6 | 28.4 | 28.3 |
| Canada | 3.2 | 4.0 | 9.9 | 5.2 | 2.8 | 15.5 | 22.3 | 13.8 | 5.3 | 6.2 |
| Switzerland | 1.4 | 13.9 | 1.1 | 3.6 | 1.6 | 5.1 | 20.0 | 6.0 | 19.7 | 19.6 |
| Italy | 3.4 | 11.0 | 0.8 | 1.6 | 7.9 | 10.5 | 16.8 | 2.5 | 51.3 | 51.5 |

|  |  |  |  | Other | Trading | Short-term |  | Commitments |  | Credit |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\nU.S.\tdollars | Banks\t(a) | Public\t(a) NBFIs(1)\t(a) | Public\t(a) NBFIs(1)\t(a) | (corporate\nand\thouseholds)\t(a) | assets(2)\t(included claims(2)\t(included\nin\t(a)) | in\t(a)) | Total\toutstanding(3)\n(sum\tof\t(a)) | \tand\nguarantees(4) | Credit\tderivatives\npurchased(5) | derivatives\nsold(5) |
| United\nKingdom | $15.4 | $23.0 | $33.9 | $19.7 | $13.5 | $62.7 | $92.0 | $31.3 | $74.9 | $77.1 |
| Cayman\tIslands | — | — | 62.9 | 8.5 | 4.3 | 45.3 | 71.4 | 4.4 | — | — |
| Germany | 7.1 | 38.3 | 8.9 | 11.7 | 10.2 | 45.5 | 66.0 | 12.4 | 54.6 | 54.1 |
| Japan | 25.4 | 26.4 | 5.4 | 8.5 | 13.3 | 49.6 | 65.7 | 6.3 | 22.9 | 22.3 |
| Mexico | 6.0 | 18.5 | 7.9 | 33.0 | 4.7 | 42.8 | 65.4 | 19.6 | 6.4 | 6.2 |
| France | 12.6 | 5.1 | 20.9 | 6.3 | 8.7 | 37.4 | 44.9 | 23.9 | 59.8 | 60.6 |
| South\tKorea | 2.8 | 15.8 | 1.9 | 24.4 | 1.4 | 38.5 | 44.9 | 17.3 | 14.4 | 12.4 |
| Singapore | 1.9 | 22.4 | 4.3 | 14.7 | 0.4 | 33.2 | 43.3 | 11.5 | 1.8 | 1.8 |
| India | 6.0 | 12.7 | 4.4 | 16.0 | 5.6 | 25.8 | 39.1 | 9.3 | 2.5 | 2.1 |
| Australia | 4.7 | 8.1 | 4.7 | 14.2 | 7.3 | 18.6 | 31.7 | 13.3 | 13.2 | 13.3 |
| China | 5.2 | 9.2 | 3.2 | 13.8 | 3.6 | 24.5 | 31.4 | 4.5 | 14.2 | 14.5 |
| Hong\tKong | 0.7 | 9.8 | 3.0 | 15.8 | 5.0 | 23.6 | 29.3 | 13.5 | 2.5 | 2.3 |
| Brazil | 3.7 | 11.4 | 0.9 | 10.6 | 5.5 | 17.3 | 26.6 | 2.2 | 10.6 | 9.6 |
| Netherlands | 7.2 | 9.5 | 4.7 | 6.1 | 4.1 | 15.9 | 27.5 | 10.5 | 27.3 | 27.8 |
| Taiwan | 0.9 | 6.1 | 2.2 | 13.3 | 2.7 | 16.9 | 22.5 | 14.0 | 0.1 | 0.1 |
| Canada | 4.2 | 4.7 | 7.6 | 5.0 | 2.9 | 11.1 | 21.5 | 14.0 | 5.4 | 6.2 |
| Switzerland | 1.5 | 13.6 | 1.3 | 4.3 | 1.7 | 17.2 | 20.7 | 5.8 | 19.3 | 19.4 |
| Italy | 3.2 | 11.3 | 0.6 | 1.3 | 7.5 | 9.4 | 16.4 | 2.8 | 59.6 | 58.4 |

(1) Non-bank	financial	institutions.

(2) Included	in	total	outstanding.

(3) Total	outstanding	includes	cross-border	claims	on	third	parties,	as	well	as	local	country	assets.	Cross-border	claims	on	third	parties	include	cross-border	loans,	securities,	deposits	with	banks	and other	monetary	assets,	as	well	as	net	revaluation	gains	on	foreign	exchange	and	derivative	products.

(4) Commitments	(not	included	in	total	outstanding)	include	legally	binding	cross-border	letters	of	credit	and	other	commitments	and	contingencies	as	defined	by	the	FFIEC	guidelines.	The	FFIEC definition	of	commitments	includes	commitments	to	local	residents	to	be	funded	with	local	currency	liabilities	originated	within	the	country.

(5) Credit	Default	Swaps	(CDS)	are	not	included	in	total	outstanding.

# SIGNIFICANT	ACCOUNTING	POLICIES	AND	SIGNIFICANT	ESTIMATES

This	section	contains	a	summary	of	Citi's	most	significant	accounting	policies and	accounting	standards	that	have	been	issued,	but	are	not	yet	effective.	Note	1 to	the	Consolidated	Financial	Statements	contains	a	summary	of	Citigroup's significant	accounting	policies,	including	a	discussion	of	recently	adopted accounting	pronouncements.	These	policies,	as	well	as	estimates	made	by management,	are	integral	to	the	presentation	of	Citi's	results	of	operations	and financial	condition.	While	all	of	these	policies	require	a	certain	level	of management	judgment	and	estimates,	this	section	highlights	and	discusses	the significant	accounting	policies	that	require	management	to	make	highly	difficult, complex	or	subjective	judgments	and	estimates	at	times	regarding	matters	that are	inherently	uncertain	and	susceptible	to	change	(see	also	"Risk	Factors— Operational	Risks"	above).	Management	has	discussed	each	of	these	significant accounting	policies,	the	related	estimates	and	its	judgments	with	the	Audit Committee	of	the	Citigroup	Board	of	Directors.

# Valuations	of	Financial	Instruments

Citigroup	holds	debt	and	equity	securities,	derivatives,	retained	interests	in securitizations,	investments	in	private	equity	and	other	financial	instruments.

# Substantially	all	of

these	assets	and	liabilities	are	reflected	at	fair	value	on	Citi's Consolidated	Balance	Sheet.

Citi	purchases	securities	under	agreements	to	resell	(reverse	repos)	and	sells securities	under	agreements

to	repurchase	(repos),	a	majority	of	which	are	carried	at fair	value.	In	addition,	certain	loans,	short-term	borrowings, long-term	debt	and	deposits,	as	well	as	certain	securities borrowed	and	loaned	positions	that	are	collateralized	with cash,	are	carried	at	fair	value.	Citigroup	holds	its	investments,	trading	assets	and liabilities,	and	resale	and	repurchase	agreements	on	the	Consolidated	Balance Sheet	to	meet	customer	needs	and	to	manage	liquidity	needs,	interest	rate	risks and	private	equity	investing.

When	available,	Citi	generally	uses	quoted	market	prices	to	determine	fair value	and	classifies	such	items	within	Level	1	of	the	fair	value	hierarchy established	under	ASC	820-10,	Fair	Value	Measurement.	If	quoted	market prices	are	not	available,	fair	value	is	based	upon	internally	developed	valuation models	that	use,	where	possible,	current	market-based	or	independently	sourced market	parameters,	such	as	interest	rates,	currency	rates	and	option	volatilities. Such	models	are	often	based	on	a	discounted	cash	flow	analysis.	In	addition, items	valued	using	such	internally	generated	valuation	techniques	are	classified according	to	the	lowest	level	input	or	value	driver	that	is	significant	to	the valuation.	Thus,	an	item	may	be	classified	under	the	fair	value	hierarchy	as Level	3	even	though	there	may	be	some	significant	inputs	that	are	readily observable.

Citi	is	required	to	exercise	subjective	judgments	relating	to	the	applicability and	functionality	of	internal	valuation	models,	the	significance	of	inputs	or	value drivers	to	the	valuation	of	an	instrument	and	the	degree	of	illiquidity	and subsequent	lack	of	observability	in	certain	markets.	These

judgments	have	the	potential	to	impact	the	Company's	financial	performance	for instruments	where	the	changes	in	fair	value	are	recognized	in	either	the Consolidated	Statement	of	Income	or	in	AOCI.

Moreover,	for	certain	investments,	decreases	in	fair	value	are	only recognized	in	earnings	in	the	Consolidated	Statement	of	Income	if	such decreases	are	judged	to	be	an	other-than-temporary	impairment	(OTTI). Adjudicating	the	temporary	nature	of	fair	value	impairments	is	also	inherently judgmental.

The	fair	value	of	financial	instruments	incorporates	the	effects	of	Citi's	own credit	risk	and	the	market	view	of	counterparty	credit	risk,	the	quantification	of which	is	also	complex	and	judgmental.	For	additional	information	on	Citi's	fair value	analysis,	see	Notes	1,	6,	24	and	25	to	the	Consolidated	Financial Statements.

# Allowance	for	Credit	Losses

Management	provides	reserves	for	an	estimate	of	probable	losses	inherent	in	the funded	loan	portfolio	and	in	unfunded	loan	commitments	and	standby	letters	of credit	on	the	Consolidated	Balance	Sheet	in	the	Allowance	for	loan	losses	and	in

# Other	liabilities,	respectively.

Estimates	of	these	probable	losses	are	based	upon	(i)	Citigroup's	internal system	of	credit-risk	ratings	that	are	analogous	to	the	risk	ratings	of	the	major credit	rating	agencies	and	(ii)	historical	default	and	loss	data,	including	rating agency	information	regarding	default	rates	from	1983	to	2017	and	internal	data dating	to	the	early	1970s	on	severity	of	losses	in	the	event	of	default. Adjustments	may	be	made	to	this	data,	including	(i)	statistically	calculated estimates	to	cover	the	historical	fluctuation	of	the	default	rates	over	the	credit cycle,	the	historical	variability	of	loss	severity	among	defaulted	loans	and	the degree	to	which	there	are	large	obligor	concentrations	in	the	global	portfolio	and (ii)	adjustments	made	for	specifically	known	items,	such	as	current environmental	factors	and	credit	trends.

In	addition,	representatives	from	both	the	risk	management	and	finance staffs	who	cover	business	areas	with	delinquency-managed	portfolios	containing smaller	balance	homogeneous	loans	present	their	recommended	reserve	balances based	upon	leading	credit	indicators,	including	loan	delinquencies	and	changes in	portfolio	size,	as	well	as	economic	trends,	including	housing	prices, unemployment	and	GDP.	This	methodology	is	applied	separately	for	each individual	product	within	each	geographic	region	in	which	these	portfolios	exist.

This	evaluation	process	is	subject	to	numerous	estimates	and	judgments. The	frequency	of	default,	risk	ratings,	loss	recovery	rates,	the	size	and	diversity of	individual	large	credits	and	the	ability	of	borrowers	with	foreign	currency obligations	to	obtain	the	foreign	currency	necessary	for	orderly	debt	servicing, among	other	things,	are	all	taken	into	account	during	this	review.	Changes	in these	estimates	could	have	a	direct	impact	on	Citi's	credit	costs	and	the allowance	in	any	period.

For	a	further	description	of	the	loan	loss	reserve	and	related	accounts,	see Notes	1	and	15	to	the	Consolidated	Financial	Statements.

# Goodwill

Citi	tests	goodwill	for	impairment	annually	on	July	1	(the	annual	test)	and interim	assessments	between	annual	tests	if	an	event	occurs	or	circumstances change	that	would	more-likely-than-not	reduce	the	fair	value	of	a	reporting	unit below	its	carrying	amount,	such	as	a	significant	adverse	change	in	the	business climate,	a	decision	to	sell	or	dispose	of	all	or	a	significant	portion	of	a	reporting unit	or	a	significant	decline	in	Citi's	stock	price.	During	2018,	the	annual	test was	performed,	which	resulted	in	no	goodwill	impairment	as	described	in	Note 16	to	the	Consolidated	Financial	Statements.

As	of	December	31,	2018,	Citigroup's	activities	are	conducted	through	the Global	Consumer	Banking	and	Institutional	Clients	Group	business	segments and	Corporate/Other.	Goodwill	impairment	testing	is	performed	at	the	level below	the	business	segment	(referred	to	as	a	reporting	unit).

Citi	utilizes	allocated	equity	as	a	proxy	for	the	carrying	value	of	its reporting	units	for	purposes	of	goodwill	impairment	testing.	The	allocated	equity in	the	reporting	units	is	determined	based	on	the	capital	the	business	would require	if	it	were	operating	as	a	standalone	entity,	incorporating	sufficient	capital to	be	in	compliance	with	both	current	and	expected	regulatory	capital requirements,	including	capital	for	specifically	identified	goodwill	and	intangible assets.	The	capital	allocated	to	the	businesses	is	incorporated	into	the	annual budget	process,	which	is	approved	by	Citi's	Board	of	Directors.

Goodwill	impairment	testing	involves	management	judgment,	requiring	an assessment	of	whether	the	carrying	value	of	the	reporting	unit	can	be	supported by	the	fair	value	of	the	reporting	unit	using	widely	accepted	valuation techniques,	such	as	the	market	approach	(earnings	multiples	and/or	transaction multiples)	and/or	the	income	approach	(discounted	cash	flow	(DCF)	method).	In applying	these	methodologies,	Citi	utilizes	a	number	of	factors,	including	actual operating	results,	future	business	plans,	economic	projections	and	market	data. Similar	to	2017,	Citigroup	engaged	an	independent	valuation	specialist	in 2018	to	assist	in	Citi's	valuation	for	all	the	reporting	units	with	goodwill balances,	employing	both	the	market	approach	and	the	DCF	method.	The resulting	fair	values	were	relatively	consistent	and	appropriate	weighting	was given	to	outputs	from	both	methods.

The	DCF	method	utilized	at	the	time	of	each	impairment	test	used	discount rates	that	Citi	believes	adequately	reflected	the	risk	and	uncertainty	in	the financial	markets	in	the	internally	generated	cash	flow	projections.	The	DCF method	employs	a	capital	asset	pricing	model	in	estimating	the	discount	rate. Since	none	of	the	Company's	reporting	units	are	publicly	traded,	individual reporting	unit	fair	value	determinations	cannot	be	directly	correlated	to Citigroup's	common	stock	price.	The	sum	of	the	fair	values	of	the

reporting	units	exceeded	the	overall	market	capitalization	of	Citi	as	of	July	1, 2018.	However,	Citi	believes	that	it	is	not	meaningful	to	reconcile	the	sum	of	the fair	values	of	the	Company's	reporting	units	to	its	market	capitalization	due	to several	factors.	The	market	capitalization	of	Citigroup	reflects	the	execution	risk in	a	transaction	involving	Citigroup	due	to	its	size.	However,	the	individual reporting	units'	fair	values	are	not	subject	to	the	same	level	of	execution	risk	nor a	business	model	that	is	perceived	to	be	as	complex.	In	addition,	the	market capitalization	of	Citigroup	does	not	include	consideration	of	the	individual reporting	unit's	control	premium.

See	Notes	1	and	16	to	the	Consolidated	Financial	Statements	for	additional information	on	goodwill,	including	the	changes	in	the	goodwill	balance	year- over-year	and	the	reporting	units'	goodwill	balances	as	of	December	31,	2018.

# Income	Taxes

Citi	is	subject	to	the	income	tax	laws	of	the	U.S.,	its	states	and	local municipalities	and	the	non-U.S.	jurisdictions	in	which	Citi	operates.	These	tax laws	are	complex	and	are	subject	to	differing	interpretations	by	the	taxpayer	and the	relevant	governmental	taxing	authorities.	Disputes	over	interpretations	of	the tax	laws	may	be	subject	to	review	and	adjudication	by	the	court	systems	of	the various	tax	jurisdictions	or	may	be	settled	with	the	taxing	authority	upon	audit. In	establishing	a	provision	for	income	tax	expense,	Citi	must	make judgments	and	interpretations	about	the	application	of	these	inherently	complex tax	laws.	Citi	must	also	make	estimates	about	when	in	the	future	certain	items will	affect	taxable	income	in	the	various	tax	jurisdictions,	both	domestic	and foreign.	Deferred	taxes	are	recorded	for	the	future	consequences	of	events	that have	been	recognized	in	the	financial	statements	or	tax	returns,	based	upon enacted	tax	laws	and	rates.	Deferred	tax	assets	(DTAs)	are	recognized	subject	to management's	judgment	that	realization	is	more-likely-than-not.

On	December	22,	2017,	the	President	signed	the	Tax	Cuts	and	Jobs	Act (Tax	Reform),	reflecting	changes	to	U.S.	corporate	taxation,	including	a	lower statutory	tax	rate	of	21%,	a	quasi-territorial	regime	and	a	deemed	repatriation	of all	accumulated	earnings	and	profits	of	foreign	subsidiaries.	The	new	law	was generally	effective	January	1,	2018.

Citi	recorded	a	one-time,	non-cash	charge	to	continuing	operations	of	$22.6 billion	in	the	fourth	quarter	of	2017,	composed	of	(i)	a	$12.4	billion remeasurement	due	to	the	reduction	of	the	U.S.	corporate	tax	rate	and	the	change to	a	"quasi-territorial	tax	system,"	(ii)	a	$7.9	billion	valuation	allowance	against Citi's	FTC	carry-forwards	and	its	U.S.	residual	DTAs	related	to	its	non-U.S. branches	and	(iii)	a	$2.3	billion	reduction	in	Citi's	FTC	carry-forwards	related	to the	deemed	repatriation	of	undistributed	earnings	of	non-U.S.	subsidiaries.	Of this	one-time	charge,	$16.4	billion	was	considered	provisional	pursuant	to	Staff Accounting	Bulletin	(SAB)	118.

Citi	completed	its	accounting	for	Tax	Reform	under	SAB	118	during	the fourth	quarter	of	2018	and	recorded	a	one-time,	non-cash	tax	benefit	of	$94 million	in	Corporate/Other,	related	to	amounts	that	were	considered	provisional pursuant	to	SAB	118.

The	table	below	details	the	fourth	quarter	of	2018	changes	to	Citi's provisional	impact	from	Tax	Reform.

# Provisional	Impact	of	Tax	Reform

| In	billions	of	dollars | Provisional	amounts<br>included	in	the<br>2017	Form	10-K | SAB	118	impact	to	fourth	quarter	of<br>2018<br>tax	provision |
| :--- | :--- | :--- |
| Quasi-territorial\ttax\tsystem | $6.2 | $0.2 |
| Valuation\tallowance | 7.9 | (1.2) |
| Deemed\trepatriation | 2.3 | 0.9 |
| Total\tof\tprovisional\titems | $16.4 | $(0.1) |

Citi	has	an	overall	domestic	loss	(ODL)	of	approximately	$47	billion.	An ODL	allows	a	company	to	recharacterize	domestic	income	as	income	from sources	outside	the	U.S.,	which	enables	a	taxpayer	to	use	FTC	carry-forwards and	FTCs	generated	in	future	years,	assuming	the	generation	of	sufficient	U.S. taxed	income.	The	change	in	Tax	Reform	to	allow	a	taxpayer	to	elect	to recharacterize	up	to	100%	of	its	domestic	source	income	as	non-U.S.	source income	(up	from	50%)	is	not	expected	to	materially	impact	the	valuation allowance.

As	a	result	of	Tax	Reform,	beginning	in	2018,	Citi	is	taxed	on	income generated	by	its	U.S.	operations	at	a	federal	tax	rate	of	21%.	The	effect	on	its state	tax	rate	is	dependent	upon	how	and	when	the	individual	states	choose	to	or automatically	adopt	the	various	new	provisions	of	the	U.S.	Internal	Revenue Code.

Citi's	non-U.S.	branches	and	subsidiaries	are	subject	to	tax	at	their	local	tax rates.	While	non-U.S.	branches	continue	to	be	subject	to	U.S.	taxation,	Citi expects	no	material	residual	U.S.	tax	on	such	earnings	since	its	overall	non-U.S. branch	tax	rate	is	in	excess	of	21%.	With	respect	to	non-U.S.	subsidiaries, dividends	from	these	subsidiaries	will	be	excluded	from	U.S.	taxation.	While	the majority	of	Citi's	non-U.S.	subsidiary	earnings	are	classified	as	Global Intangible	Low	Taxed	Income	(GILTI),	Citi	similarly	expects	no	material residual	U.S.	tax	on	such	earnings	based	on	its	non-U.S.	subsidiaries'	local	tax rates,	which	exceed,	on	average,	the	GILTI	tax	rate.	Finally,	Citi	does	not	expect the	Base	Erosion	Anti-Abuse	Tax	(BEAT)	to	affect	its	tax	provision.	For additional	information	on	the	BEAT,	see	"Risk	Factors—Strategic	Risks"	above.

At	December	31,	2018,	Citi	had	net	DTAs	of	$22.9	billion.	In	the	fourth	quarter of	2018,	Citi's	DTAs	decreased	$0.1	billion,	driven	primarily	by	gains	in	AOCI. On	a	full-year	basis,	Citi's	DTAs	increased	$0.4	billion	from	$22.5	billion	at December	31,	2017.	The	increase	in	total	DTAs	year-over-year	was	primarily due	to	the	accounting	change	for	Intra-Entity	Transfers	of	Assets	under	ASU 2016-16.

Citi's	total	valuation	allowance	at	December	31,	2018	was	$9.3	billion,	a decrease	of	$0.1	billion	from	$9.4	billion	at	December	31,	2017.	The	decrease was	driven	by	a	reduction	due	to	the	SAB	118	adjustment,	partially	offset	by	the 2018	change	in	DTAs	relating	to	Citi's	non-U.S.	branches.

Citi's	valuation	allowance	of	$6.0	billion	against	FTC	carry-forwards increased	by	$0.3	billion	in	2018.	The	increase	primarily	relates	to	its	non-U.S. branches,	partially	offset	by	SAB	118	adjustments.	Citi	expects	that	the	absolute amount	will	increase	in	future	years	as	it	generates	additional	FTCs	relating	to the	higher	overall	local	tax	rate	of	its	non-U.S.	branches,	reduced	by	the statutory	expiration	of	FTC	carry-forwards.	With	respect	to	the	portion	of	the valuation	allowance	established	on	Citi's	FTC	carry-forwards	that	are	available for	use	in	the	general	basket,	changes	in	the	amount	of	earnings	from	sources outside	the	U.S.	could	alter	the	amount	of	valuation	allowance	that	is	eventually needed	against	such	FTCs.

Recognized	FTCs	comprised	approximately	$6.8	billion	of	Citi's	DTAs	as of	December	31,	2018,	compared	to	approximately	$7.6	billion	as	of	December 31,	2017.	The	decrease	in	FTCs	year-over-year	was	primarily	due	to	adjustments under	SAB	118	and	current-year	usage.	The	FTC	carry-forward	periods represent	the	most	time-sensitive	component	of	Citi's	DTAs.

Citi	believes	the	U.S.	federal	and	New	York	State	and	City	net	operating loss	carry-forward	period	of	20	years	provides	enough	time	to	fully	utilize	the net	DTAs	pertaining	to	the	existing	net	operating	loss	carry-forwards.	This	is	due to	Citi's	forecast	of	sufficient	U.S.	taxable	income	and	the	continued	taxation	of Citi's	non-U.S.	income	by	New	York	State	and	City.	Although	realization	is	not assured,	Citi	believes	that	the	realization	of	the	recognized	net	DTAs	of

$22.9	billion	at	December	31,	2018	is	more-likely-than-not,	based	upon management's	expectations	as	to	future	taxable	income	in	the	jurisdictions	in which	the	DTAs	arise,	as	well	as	available	tax	planning	strategies	(as	defined	in ASC	Topic	740,	Income	Taxes).	Citi	has	concluded	that	it	has	the	necessary positive	evidence	to	support	the	realization	of	its	net	DTAs	after	taking	its valuation	allowances	into	consideration.

For	additional	information	on	Citi's	income	taxes,	including	its	income	tax provision,	tax	assets	and	liabilities	and	a	tabular	summary	of	Citi's	net	DTAs balance	as	of	December	31,	2018	(including	the	FTCs	and	applicable	expiration dates	of	the	FTCs),	see	Note	9	to	the	Consolidated	Financial	Statements.	For additional	discussion	of	the	potential	impact	to	Citi's	DTAs	that	could	arise	from Tax	Reform,	see	"Risk	Factors—Strategic	Risks"	above.

# 2017	Impact	of	Tax	Reform

The	table	below	discloses	the	as-reported	GAAP	results	for	2018	and	2017,	as	well	as	the	2017	adjusted	results	excluding	the	one-time	2017	impact	of	Tax	Reform.	The table	below	does	not	reflect	any	adjustment	to	2018	results.

| In	millions	of	dollars,	except	per	share	amounts	and	as<br>otherwise	noted | 2018<br>as	reported(1) | 2017<br>as	reported | 2017	one-time<br>impact	of<br>Tax	Reform |  | 2017<br>adjusted	results(2) | $	Change | 2018	increase	(decrease)<br>vs.	2017	ex-Tax	Reform<br>%	Change |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tincome\t(loss) | $18,045 | $(6,798) | $(22,594) |  | $15,796 | $2,249 | 14\t% |
| Diluted\tearnings\tper\tshare: |  |  |  |  |  |  |  |
| \t\tIncome\t(loss)\tfrom\tcontinuing\toperations | 6.69 | (2.94) | (8.31) |  | 5.37 | 1.32 | 25 |
| \t\tNet\tincome\t(loss) | 6.68 | (2.98) | (8.31) |  | 5.33 | 1.35 | 25 |
| \t\tEffective\ttax\trate | 22.8% | 129.1\t% | (9,930) | bps | 29.8% |  | (700) |
| \t\tGlobal\tConsumer\tBanking—Net\tincome | $5,755 | $3,869 | $(750) |  | $4,619 | $1,136 | 25\t% |
| \t\tNorth\tAmerica\tGCB—Net\tincome | 3,340 | 1,991 | (750) |  | 2,741 | 599 | 22 |
| \t\tInstitutional\tClients\tGroup—Net\tincome | 12,183 | 9,009 | (2,000) |  | 11,009 | 1,174 | 11 |
| \t\tCorporate/Other—Net\tincome\t(loss) | 107 | (19,676) | (19,844) |  | 168 | (61) | (36) |
| Performance\tand\tother\tmetrics: |  |  |  |  |  |  |  |
| \t\tReturn\ton\taverage\tassets | 0.94% | (0.36)% | (120) | bps | 0.84% |  | 10 |
| \t\tReturn\ton\taverage\tcommon\tstockholders'\tequity | 9.4 | (3.9) | (1,090) |  | 7.0 |  | 240 |
| \t\tReturn\ton\taverage\ttotal\tstockholders'\tequity | 9.1 | (3.0) | (1,000) |  | 7.0 |  | 210 |
| \t\tReturn\ton\taverage\ttangible\tcommon\tequity | 11.0 | (4.6) | (1,270) |  | 8.1 |  | 290 |
| \t\tDividend\tpayout\tratio | 23.1 | (32.2) | (5,020) |  | 18.0 |  | 510 |
| \t\tTotal\tpayout\tratio | 109.1 | (213.9) | (33,140) |  | 117.5 |  | 840 |

(1) 2018	includes	the	one-time	benefit	of	$94	million,	due	to	the	finalization	of	the	provisional	component	of	the	impact	based	on	Citi's	analysis	as	well	as	additional	guidance	received	from	the	U.S. Treasury	Department	related	to	Tax	Reform,	which	impacted	the	tax	line	within	Corporate/Other.

(2) 2017	excludes	the	one-time	impact	of	Tax	Reform.

# Litigation	Accruals

See	the	discussion	in	Note	27	to	the	Consolidated	Financial	Statements	for information	regarding	Citi's	policies	on	establishing	accruals	for	litigation	and regulatory	contingencies.

# FUTURE	APPLICATION	OF	ACCOUNTING	STANDARDS

# Accounting	for	Financial	Instruments—Credit	Losses

In	June	2016,	the	Financial	Accounting	Standards	Board	(FASB)	issued	ASU No.	2016-13,	Financial	Instruments—Credit	Losses	(Topic	326).	The	ASU introduces	a	new	credit	loss	methodology,	the	Current	Expected	Credit	Losses (CECL)	methodology,	which	requires	earlier	recognition	of	credit	losses,	while also	providing	additional	transparency	about	credit	risk.

The	CECL	methodology	utilizes	a	lifetime	"expected	credit	loss" measurement	objective	for	the	recognition	of	credit	losses	for	loans,	held-to- maturity	debt	securities	and	other	receivables	measured	at	amortized	cost	at	the time	the	financial	asset	is	originated	or	acquired.	The	allowance	for	credit	losses is	adjusted	each	period	for	changes	in	expected	lifetime	credit	losses.	This methodology	replaces	the	multiple	existing	impairment	methods	in	current GAAP,	which	generally	require	that	a	loss	be	incurred	before	it	is	recognized. Within	the	life	cycle	of	a	loan	or	other	financial	asset,	the	ASU	will	generally result	in	the	earlier	recognition	of	the	provision	for	credit	losses	and	the	related allowance	for	credit	losses	than	current	practice.	For	available-for-sale	debt securities	that	Citi	intends	to	hold	and	where	fair	value	is	less	than	cost,	credit- related	impairment,	if	any,	will	be	recognized	through	an	allowance	for	credit losses	and	adjusted	each	period	for	changes	in	credit	risk.

The	CECL	methodology	represents	a	significant	change	from	existing GAAP	and	may	result	in	material	changes	to	the	Company's	accounting	for financial	instruments.	The	Company	is	evaluating	the	effect	that	ASU	2016-13 will	have	on	its	Consolidated	Financial	Statements	and	related	disclosures.	The impact	of	the	ASU	will	depend	upon	the	state	of	the	economy,	forecasted macroeconomic	conditions	and	Citi's	portfolios	at	the	date	of	adoption.	Based	on a	preliminary	analysis	performed	in	the	fourth	quarter	of	2018	and	forecasts	of macroeconomic	conditions	and	exposures	at	that	time,	the	overall	impact	was estimated	to	be	an	approximate	10%	to	20%	increase	in	expected	credit	loss reserves.	The	ASU	will	be	effective	for	Citi	as	of	January	1,	2020.	This	increase would	be	reflected	as	a	decrease	to	opening	Retained	earnings,	net	of	income taxes,	at	January	1,	2020.

Implementation	efforts	are	underway,	including	model	development, fulfillment	of	additional	data	needs	for	new	disclosures	and	reporting requirements,	and	drafting	of	accounting	policies.	Substantial	progress	has	been made	in	model	development.	Model	validations	and	user	acceptance	testing commenced	in	the	first	quarter	of	2019,	with	parallel	runs	to	begin	in	the	third quarter	of	2019.	The	Company	intends	to	utilize	a	single	macroeconomic scenario	in	estimating	expected	credit	losses.	Reasonable	and	supportable forecast	periods	and	methods	to	revert	to	historical	averages	to	arrive	at	lifetime expected	credit	losses	vary	by	product.

For	additional	information	on	regulatory	capital	treatment,	see	"Capital Resources—Regulatory	Capital	Treatment—Implementation	and	Transition	of the	Current	Expected	Credit	Losses	(CECL)	Methodology"	above.

# Lease	Accounting

In	February	2016,	the	FASB	issued	ASU	No.	2016-02,	Leases	(Topic	842), which	is	intended	to	increase	transparency	and	comparability	of	accounting	for lease	transactions.	The	ASU	will	require	lessees	to	recognize	leases	on	the balance	sheet	as	right-of-use	assets	and	lease	liabilities	and	will	require	both quantitative	and	qualitative	disclosures	regarding	key	information	about	leasing arrangements.	Lessor	accounting	is	largely	unchanged.	On	January	1,	2019,	the Company	adopted	the	guidance	prospectively	with	a	cumulative	adjustment	to Retained	earnings.	At	adoption,	Citi	recognized	a	lease	liability	and	a corresponding	right-of-use	asset,	related	to	its	future	minimum	lease commitments	of	approximately	$4.4	billion.	Additionally,	the	Company recorded	a	$155	million	increase	in	Retained	earnings	due	to	the	cumulative effect	of	recognizing	previously	deferred	gains	on	sale/leaseback	transactions.

# Subsequent	Measurement	of	Goodwill

In	January	2017,	the	FASB	issued	ASU	No.	2017-04,	Intangibles—Goodwill and	Other	(Topic	350):	Simplifying	the	Test	for	Goodwill	Impairment.	The	ASU simplifies	the	subsequent	measurement	of	goodwill	impairment	by	eliminating the	requirement	to	calculate	the	implied	fair	value	of	goodwill	(i.e.,	the	current Step	2	of	the	goodwill	impairment	test)	to	measure	a	goodwill	impairment charge.	Under	the	ASU,	the	impairment	test	is	the	comparison	of	the	fair	value	of a	reporting	unit	with	its	carrying	amount	(the	current	Step	1),	with	the impairment	charge	being	the	deficit	in	fair	value	but	not	exceeding	the	total amount	of	goodwill	allocated	to	that	reporting	unit.	The	simplified	one-step impairment	test	applies	to	all	reporting	units	(including	those	with	zero	or negative	carrying	amounts).

The	ASU	will	be	effective	for	Citi	as	of	January	1,	2020.	The	impact	of	the ASU	will	depend	upon	the	performance	of	Citi's	reporting	units	and	the	market conditions	impacting	the	fair	value	of	each	reporting	unit	going	forward.

See	Note	1	to	the	Consolidated	Financial	Statements	for	a	discussion	of "Accounting	Changes."

# DISCLOSURE	CONTROLS	AND	PROCEDURES

Citi's	disclosure	controls	and	procedures	are	designed	to	ensure	that	information required	to	be	disclosed	under	the	Securities	Exchange	Act	of	1934,	as	amended, is	recorded,	processed,	summarized	and	reported	within	the	time	periods specified	in	the	SEC's	rules	and	forms,	including	without	limitation	that information	required	to	be	disclosed	by	Citi	in	its	SEC	filings	is	accumulated and	communicated	to	management,	including	the	Chief	Executive	Officer	(CEO) and	Chief	Financial	Officer	(CFO),	as	appropriate,	to	allow	for	timely	decisions regarding	required	disclosure.

Citi's	Disclosure	Committee	assists	the	CEO	and	CFO	in	their responsibilities	to	design,	establish,	maintain	and	evaluate	the	effectiveness	of Citi's	disclosure	controls	and	procedures.	The	Disclosure	Committee	is responsible	for,	among	other	things,	the	oversight,	maintenance	and implementation	of	the	disclosure	controls	and	procedures,	subject	to	the supervision	and	oversight	of	the	CEO	and	CFO.

Citi's	management,	with	the	participation	of	its	CEO	and	CFO,	has evaluated	the	effectiveness	of	Citigroup's	disclosure	controls	and	procedures	(as defined	in	Rule	13a-15(e)	under	the	Securities	Exchange	Act	of	1934)	as	of December	31,	2018	and,	based	on	that	evaluation,	the	CEO	and	CFO	have concluded	that	at	that	date	Citigroup's	disclosure	controls	and	procedures	were effective.

# MANAGEMENT'S	ANNUAL	REPORT	ON	INTERNAL	CONTROL	OVER	FINANCIAL	REPORTING

Citi's	management	is	responsible	for	establishing	and	maintaining	adequate internal	control	over	financial	reporting.	Citi's	internal	control	over	financial reporting	is	designed	to	provide	reasonable	assurance	regarding	the	reliability	of its	financial	reporting	and	the	preparation	of	financial	statements	for	external reporting	purposes	in	accordance	with	U.S.	generally	accepted	accounting principles.	Citi's	internal	control	over	financial	reporting	includes	those	policies and	procedures	that	(i)	pertain	to	the	maintenance	of	records	that	in	reasonable detail	accurately	and	fairly	reflect	the	transactions	and	dispositions	of	Citi's assets,	(ii)	provide	reasonable	assurance	that	transactions	are	recorded	as necessary	to	permit	preparation	of	financial	statements	in	accordance	with generally	accepted	accounting	principles	and	that	Citi's	receipts	and expenditures	are	made	only	in	accordance	with	authorizations	of	Citi's management	and	directors	and	(iii)	provide	reasonable	assurance	regarding prevention	or	timely	detection	of	unauthorized	acquisition,	use	or	disposition	of Citi's	assets	that	could	have	a	material	effect	on	its	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting may	not	prevent	or	detect	all	misstatements.	Also,	projections	of	any	evaluation of	effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may become	inadequate	because	of	changes	in	conditions	or	that	the	degree	of compliance	with	the	policies	or	procedures	may	deteriorate.	In	addition,	given Citi's	large	size,	complex	operations	and	global	footprint,	lapses	or	deficiencies in	internal	controls	may	occur	from	time	to	time.

Citi's	management	assessed	the	effectiveness	of	Citigroup's	internal	control over	financial	reporting	as	of	December	31,	2018	based	on	the	criteria	set	forth by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission (COSO)	in	Internal	Control-Integrated	Framework	(2013).	Based	on	this assessment,	management	believes	that,	as	of	December	31,	2018,	Citi's	internal control	over	financial	reporting	was	effective.	In	addition,	there	were	no	changes in	Citi's	internal	control	over	financial	reporting	during	the	fiscal	quarter	ended December	31,	2018	that	materially	affected,	or	are	reasonably	likely	to materially	affect,	Citi's	internal	control	over	financial	reporting.

The	effectiveness	of	Citi's	internal	control	over	financial	reporting	as	of December	31,	2018	has	been	audited	by	KPMG	LLP,	Citi's	independent registered	public	accounting	firm,	as	stated	in	their	report	below,	which expressed	an	unqualified	opinion	on	the	effectiveness	of	Citi's	internal	control over	financial	reporting	as	of	December	31,	2018.

# FORWARD-LOOKING	STATEMENTS

Certain	statements	in	this	Form	10-K,	including	but	not	limited	to	statements included	within	the	Management's	Discussion	and	Analysis	of	Financial Condition	and	Results	of	Operations,	are	"forward-looking	statements"	within the	meaning	of	the	rules	and	regulations	of	the	U.S.	Securities	and	Exchange Commission	(SEC).	In	addition,	Citigroup	also	may	make	forward-looking statements	in	its	other	documents	filed	or	furnished	with	the	SEC	and	its management	may	make	forward-looking	statements	orally	to	analysts,	investors, representatives	of	the	media	and	others.

Generally,	forward-looking	statements	are	not	based	on	historical	facts,	but instead	represent	Citigroup's	and	its	management's	beliefs	regarding	future events.	Such	statements	may	be	identified	by	words	such	as	believe,	expect, anticipate,	intend,	estimate,	may	increase,	may	fluctuate,	target,	illustrate,	and similar	expressions	or	future	or	conditional	verbs	such	as	will,	should,	would	and could.

Such	statements	are	based	on	management's	current	expectations	and	are subject	to	risks,	uncertainties	and	changes	in	circumstances.	Actual	results	and capital	and	other	financial	conditions	may	differ	materially	from	those	included in	these	statements	due	to	a	variety	of	factors,	including,	without	limitation,	(i) the	precautionary	statements	included	within	each	individual	business's discussion	and	analysis	of	its	results	of	operations	and	(ii)	the	factors	listed	and described	under	"Risk	Factors"	above.

Any	forward-looking	statements	made	by	or	on	behalf	of	Citigroup	speak only	as	to	the	date	they	are	made	and	Citi	does	not	undertake	to	update	forward- looking	statements	to	reflect	the	impact	of	circumstances	or	events	that	arise after	the	date	the	forward-looking	statements	were	made.

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM—

# INTERNAL	CONTROL	OVER	FINANCIAL	REPORTING

kpmgpic.jpg

The	Board	of	Directors	and	Stockholders Citigroup	Inc.:

# Opinion	on	Internal	Control	Over	Financial	Reporting

We	have	audited	Citigroup	Inc.	and	subsidiaries'	(the	"Company")	internal control	over	financial	reporting	as	of	December	31,	2018,	based	on	criteria established	in	Internal	Control	-	Integrated	Framework	(2013)	issued	by	the Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.	In	our opinion,	the	Company	maintained,	in	all	material	respects,	effective	internal control	over	financial	reporting	as	of	December	31,	2018,	based	on	criteria established	in	Internal	Control	-	Integrated	Framework	(2013)	issued	by	the Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission. We	also	have	audited,	in	accordance	with	the	standards	of	the	Public Company	Accounting	Oversight	Board	(United	States)	("PCAOB"),	the consolidated	balance	sheet	of	the	Company	as	of	December	31,	2018	and	2017, the	related	consolidated	statements	of	income,	comprehensive	income, stockholders'	equity,	and	cash	flows	for	each	of	the	years	in	the	three-year	period ended	December	31,	2018,	and	the	related	notes	(collectively,	the	"consolidated financial	statements"),	and	our	report	dated	February	22,	2019	expressed	an unqualified	opinion	on	those	consolidated	financial	statements.

# Basis	for	Opinion

The	Company's	management	is	responsible	for	maintaining	effective	internal control	over	financial	reporting	and	for	its	assessment	of	the	effectiveness	of internal	control	over	financial	reporting,	included	in	the	accompanying management's	annual	report	on	internal	control	over	financial	reporting.	Our responsibility	is	to	express	an	opinion	on	the	Company's	internal	control	over financial	reporting	based	on	our	audit.	We	are	a	public	accounting	firm registered	with	the	PCAOB	and	are	required	to	be	independent	with	respect	to the	Company	in	accordance	with	the	U.S.	federal	securities	laws	and	the applicable	rules	and	regulations	of	the	Securities	and	Exchange	Commission	and the	PCAOB.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	PCAOB. Those	standards	require	that	we	plan	and	perform	the	audit	to	obtain	reasonable assurance	about	whether	effective	internal	control	over	financial	reporting	was maintained	in	all	material	respects.	Our	audit	of	internal	control	over	financial reporting	included	obtaining	an	understanding	of	internal	control	over	financial reporting,	assessing	the	risk	that	a	material	weakness	exists,	and	testing	and evaluating	the	design	and	operating	effectiveness	of	internal	control	based	on	the assessed	risk.	Our	audit	also	included	performing	such	other	procedures	as	we considered	necessary	in	the	circumstances.	We	believe	that	our	audit	provides	a reasonable	basis	for	our	opinion.

# Definition	and	Limitations	of	Internal	Control	Over Financial	Reporting

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and the	preparation	of	financial	statements	for	external	purposes	in	accordance	with generally	accepted	accounting	principles.	A	company's	internal	control	over financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the transactions	and	dispositions	of	the	assets	of	the	company;	(2)	provide reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit preparation	of	financial	statements	in	accordance	with	generally	accepted accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are being	made	only	in	accordance	with	authorizations	of	management	and	directors of	the	company;	and	(3)	provide	reasonable	assurance	regarding	prevention	or timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	the company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance with	the	policies	or	procedures	may	deteriorate.

# /s/	KPMG	LLP

New	York,	New	York

# CONSOLIDATED	FINANCIAL	STATEMENTS

kpmgpica04.jpg

# Opinion	on	the	Consolidated	Financial	Statements

We	have	audited	the	accompanying	consolidated	balance	sheet	of	Citigroup	Inc. and	subsidiaries	(the	"Company")	as	of	December	31,	2018	and	2017,	and	the related	consolidated	statements	of	income,	comprehensive	income,	changes	in stockholders'	equity	and	cash	flows	for	each	of	the	years	in	the	three-year	period ended	December	31,	2018,	and	the	related	notes	(collectively,	the	"consolidated financial	statements").	In	our	opinion,	the	consolidated	financial	statements present	fairly,	in	all	material	respects,	the	financial	position	of	the	Company	as of	December	31,	2018	and	2017,	and	the	results	of	its	operations	and	its	cash flows	for	each	of	the	years	in	the	three-year	period	ended	December	31,	2018,	in conformity	with	U.S.	generally	accepted	accounting	principles.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public Company	Accounting	Oversight	Board	(United	States)	("PCAOB"),	the Company's	internal	control	over	financial	reporting	as	of	December	31,	2018, based	on	criteria	established	in	Internal	Control-Integrated	Framework	(2013) issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway Commission,	and	our	report	dated	February	22,	2019	expressed	an	unqualified opinion	on	the	effectiveness	of	the	Company's	internal	control	over	financial reporting.

These	consolidated	financial	statements	are	the	responsibility	of	the	Company's management.	Our	responsibility	is	to	express	an	opinion	on	these	consolidated financial	statements	based	on	our	audits.	We	are	a	public	accounting	firm registered	with	the	PCAOB	and	are	required	to	be	independent	with	respect	to the	Company	in	accordance	with	the	U.S.	federal	securities	laws	and	the applicable	rules	and	regulations	of	the	Securities	and	Exchange	Commission	and the	PCAOB.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	PCAOB. Those	standards	require	that	we	plan	and	perform	the	audit	to	obtain	reasonable assurance	about	whether	the	consolidated	financial	statements	are	free	of material	misstatement,	whether	due	to	error	or	fraud.	Our	audits	included performing	procedures	to	assess	the	risks	of	material	misstatement	of	the consolidated	financial	statements,	whether	due	to	error	or	fraud,	and	performing procedures	that	respond	to	those	risks.	Such	procedures	included	examining,	on	a test	basis,	evidence	supporting	the	amounts	and	disclosures	in	the	consolidated financial	statements.	Our	audits	also	included	evaluating	the	accounting principles	used	and	significant	estimates	made	by	management,	as	well	as evaluating	the	overall	presentation	of	the	consolidated	financial	statements.	We believe	that	our	audits	provide	a	reasonable	basis	for	our	opinion.

We	have	served	as	the	Company's	auditor	since	1969.

# FINANCIAL	STATEMENTS	AND	NOTES	TABLE	OF	CONTENTS

| CONSOLIDATED	FINANCIAL	STATEMENTS |  |
| :--- | :--- |
| Consolidated\tStatement\tof\tIncome—\nFor\tthe\tYears\tEnded\tDecember\t31,\t2018,\t2017\tand\t2016 | 124 |
| Consolidated\tStatement\tof\tComprehensive\tIncome—\nFor\tthe\tYears\tEnded\tDecember\t31,\t2018,\t2017\tand\t2016 | 125 |
| Consolidated\tBalance\tSheet—December\t31,\t2018\tand\t2017 | 126 |
| Consolidated\tStatement\tof\tChanges\tin\tStockholders'\tEquity—For\tthe\tYears\nEnded\tDecember\t31,\t2018,\t2017\tand\t2016 | 128 |
| Consolidated\tStatement\tof\tCash\tFlows—\nFor\tthe\tYears\tEnded\tDecember\t31,\t2018,\t2017\tand\t2016 | 130 |
| NOTES\tTO\tCONSOLIDATED\tFINANCIAL\tSTATEMENTS |  |
| Note\t1—Summary\tof\tSignificant\tAccounting\tPolicies | 132 |
| Note\t2—Discontinued\tOperations\tand\tSignificant\tDisposals | 144 |
| Note\t3—Business\tSegments | 146 |
| Note\t4—Interest\tRevenue\tand\tExpense | 147 |
| Note\t5—Commissions\tand\tFees;\tAdministration\tand\tOther\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tFiduciary\tFees | 148 |
| Note\t6—Principal\tTransactions | 151 |
| Note\t7—Incentive\tPlans | 152 |
| Note\t8—Retirement\tBenefits | 156 |
| Note\t9—Income\tTaxes | 168 |
| Note\t10—Earnings\tper\tShare | 172 |
| Note\t11—Federal\tFunds,\tSecurities\tBorrowed,\tLoaned\tand\nSubject\tto\tRepurchase\tAgreements | 173 |
| Note\t12—Brokerage\tReceivables\tand\tBrokerage\tPayables | 177 |
| Note\t13—Investments | 178 |
| Note\t14—Loans | 191 |
| Note\t15—Allowance\tfor\tCredit\tLosses | 203 |

| Note	16—Goodwill	and	Intangible	Assets | 206 |
| :--- | :--- |
| Note\t17—Debt | 208 |
| Note\t18—Regulatory\tCapital | 210 |
| Note\t19—Changes\tin\tAccumulated\tOther\tComprehensive\nIncome\t(Loss)\t(AOCI) | 211 |
| Note\t20—Preferred\tStock | 214 |
| Note\t21—Securitizations\tand\tVariable\tInterest\tEntities | 216 |
| Note\t22—Derivatives\tActivities | 228 |
| Note\t23—Concentrations\tof\tCredit\tRisk | 243 |
| Note\t24—Fair\tValue\tMeasurement | 244 |
| Note\t25—Fair\tValue\tElections | 265 |
| Note\t26—Pledged\tAssets,\tCollateral,\tGuarantees\tand\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tCommitments | 269 |
| Note\t27—Contingencies | 276 |
| Note\t28—Condensed\tConsolidating\tFinancial\tStatements | 283 |
| Note\t29—Selected\tQuarterly\tFinancial\tData\t(Unaudited) | 292 |

# CONSOLIDATED	STATEMENT	OF	INCOME										Citigroup	Inc.	and	Subsidiaries

| In	millions	of	dollars,	except	per	share	amounts | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Revenues(1) |  |  |  |
| Interest\trevenue | $70,828 | $61,579 | $57,988 |
| Interest\texpense | 24,266 | 16,518 | 12,512 |
| Net\tinterest\trevenue | $46,562 | $45,061 | $45,476 |
| Commissions\tand\tfees | $11,857 | $12,707 | $11,678 |
| Principal\ttransactions | 9,062 | 9,475 | 7,857 |
| Administration\tand\tother\tfiduciary\tfees | 3,580 | 3,584 | 3,294 |
| Realized\tgains\ton\tsales\tof\tinvestments,\tnet | 421 | 778 | 949 |
| Impairment\tlosses\ton\tinvestments |  |  |  |
| Gross\timpairment\tlosses | (132) | (63) | (620) |
| Net\timpairment\tlosses\trecognized\tin\tearnings | $(132) | $(63) | $(620) |
| Other\trevenue | $1,504 | $902 | $2,163 |
| Total\tnon-interest\trevenues | $26,292 | $27,383 | $25,321 |
| Total\trevenues,\tnet\tof\tinterest\texpense | $72,854 | $72,444 | $70,797 |
| Provisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\tclaims |  |  |  |
| Provision\tfor\tloan\tlosses | $7,354 | $7,503 | $6,749 |
| Policyholder\tbenefits\tand\tclaims | 101 | 109 | 204 |
| Provision\t(release)\tfor\tunfunded\tlending\tcommitments | 113 | (161) | 29 |
| Total\tprovisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\tclaims | $7,568 | $7,451 | $6,982 |
| Operating\texpenses(1) |  |  |  |
| Compensation\tand\tbenefits | $21,154 | $21,181 | $20,970 |
| Premises\tand\tequipment | 2,324 | 2,453 | 2,542 |
| Technology/communication | 7,193 | 6,909 | 6,701 |
| Advertising\tand\tmarketing | 1,545 | 1,608 | 1,632 |
| Other\toperating | 9,625 | 10,081 | 10,493 |
| Total\toperating\texpenses | $41,841 | $42,232 | $42,338 |
| Income\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | $23,445 | $22,761 | $21,477 |
| Provision\tfor\tincome\ttaxes | 5,357 | 29,388 | 6,444 |
| Income\t(loss)\tfrom\tcontinuing\toperations | $18,088 | $(6,627) | $15,033 |
| Discontinued\toperations |  |  |  |
| Loss\tfrom\tdiscontinued\toperations | $(26) | $(104) | $(80) |
| Provision\t(benefit)\tfor\tincome\ttaxes | (18) | 7 | (22) |
| Loss\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes | $(8) | $(111) | $(58) |
| Net\tincome\t(loss)\tbefore\tattribution\tof\tnoncontrolling\tinterests | $18,080 | $(6,738) | $14,975 |
| Noncontrolling\tinterests | 35 | 60 | 63 |
| Citigroup's\tnet\tincome\t(loss) | $18,045 | $(6,798) | $14,912 |
| Basic\tearnings\tper\tshare(2) |  |  |  |
| Income\t(loss)\tfrom\tcontinuing\toperations | $6.69 | $(2.94) | $4.74 |
| Loss\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes | — | (0.04) | (0.02) |
| Net\tincome\t(loss) | $6.69 | $(2.98) | $4.72 |
| Weighted\taverage\tcommon\tshares\toutstanding\t(in\tmillions) | 2,493.3 | 2,698.5 | 2,888.1 |

# Citigroup	Inc.	and	Subsidiaries

# CONSOLIDATED	STATEMENT	OF	INCOME	(Continued)

| In	millions	of	dollars,	except	per	share	amounts | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Diluted\tearnings\tper\tshare(2) |  |  |  |
| Income\t(loss)\tfrom\tcontinuing\toperations | $6.69 | $(2.94) | $4.74 |
| Income\t(loss)\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes | — | (0.04) | (0.02) |
| Net\tincome\t(loss) | $6.68 | $(2.98) | $4.72 |
| Adjusted\tweighted\taverage\tcommon\tshares\toutstanding |  |  |  |
| \t\t(in\tmillions) | 2,494.8 | 2,698.5 | 2,888.3 |

(1) Certain	prior-period	revenue	and	expense	lines	and	totals	were	reclassified	to	conform	to	the	current	period's	presentation.	See	Notes	1	and 3	to	the	Consolidated	Financial	Statements.

(2) Due	to	rounding,	earnings	per	share	on	continuing	operations	and	discontinued	operations	may	not	sum	to	earnings	per	share	on	net	income.

The	Notes	to	the	Consolidated	Financial	Statements	are	an	integral	part	of	these	Consolidated	Financial	Statements.

# CONSOLIDATED	STATEMENT	OF	COMPREHENSIVE	INCOME

|  |  | Years	ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 | 2016 |
| Citigroup's\tnet\tincome\t(loss) | $18,045 | $(6,798) | $14,912 |
| Add:\tCitigroup's\tother\tcomprehensive\tincome\t(loss) |  |  |  |
| Net\tchange\tin\tunrealized\tgains\tand\tlosses\ton\tinvestment\tsecurities,\tnet\tof\ttaxes(1)(4) | $(1,089) | $(863) | $108 |
| Net\tchange\tin\tdebt\tvaluation\tadjustment\t(DVA),\tnet\tof\ttaxes(1) | 1,113 | (569) | (337) |
| Net\tchange\tin\tcash\tflow\thedges,\tnet\tof\ttaxes | (30) | (138) | 57 |
| Benefit\tplans\tliability\tadjustment,\tnet\tof\ttaxes(2) | (74) | (1,019) | (48) |
| Net\tchange\tin\tforeign\tcurrency\ttranslation\tadjustment,\tnet\tof\ttaxes\tand\thedges | (2,362) | (202) | (2,802) |
| Net\tchange\tin\texcluded\tcomponent\tof\tfair\tvalue\thedges,\tnet\tof\ttaxes |  |  |  |
|  | (57) | — | — |
| Citigroup's\ttotal\tother\tcomprehensive\tincome\t(loss)(3)\nCitigroup's\ttotal\tcomprehensive\tincome\t(loss) | $(2,499) | $(2,791) | $(3,022) |
|  | $15,546 | $(9,589) | $11,890 |
| Add:\tOther\tcomprehensive\tincome\t(loss)\tattributable\tto\tnoncontrolling\tinterests | $(43) | $114 | $(56) |
| Add:\tNet\tincome\tattributable\tto\tnoncontrolling\tinterests | 35 | 60 | 63 |
| Total\tcomprehensive\tincome\t(loss) | $15,538 | $(9,415) | $11,897 |

(1)				See	Note	1	to	the	Consolidated	Financial	Statements.

(3) Includes	the	impact	of	ASU	2018-02,	adopted	in	2017.	See	Note	1	to	the	Consolidated	Financial	Statements.

(4) For	the	year	ended	December	31,	2018,	amount	represents	the	net	change	in	unrealized	gains	and	losses	on	available-for-sale	(AFS)	debt	securities.	Effective	January	1,	2018,	the	AFS	category is	eliminated	for	equity	securities	under	ASU	2016-01.

# CONSOLIDATED	BALANCE	SHEET

|  | December	31, |  |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 |
| Assets |  |  |
| Cash\tand\tdue\tfrom\tbanks\t(including\tsegregated\tcash\tand\tother\tdeposits) | $23,645 | $23,775 |
| Deposits\twith\tbanks | 164,460 | 156,741 |
| Federal\tfunds\tsold\tand\tsecurities\tborrowed\tand\tpurchased\tunder\tagreements\tto\tresell\t(including\t$147,701\tand\t$132,949\tas\tof\nDecember\t31,\t2018\tand\t2017,\trespectively,\tat\tfair\tvalue) | 270,684 | 232,478 |
| Brokerage\treceivables | 35,450 | 38,384 |
| Trading\taccount\tassets\t(including\t$112,932\tand\t$99,460\tpledged\tto\tcreditors\tat\tDecember\t31,\t2018\tand\t2017,\trespectively) | 256,117 | 252,790 |
| Investments: |  |  |
| \t\tAvailable-for-sale\tdebt\tsecurities\t(including\t$9,289\tand\t$9,493\tpledged\tto\tcreditors\tas\tof\tDecember\t31,\t2018\tand\t2017,\nrespectively) | 288,038 | 290,725 |
| Held-to-maturity\tdebt\tsecurities\t(including\t$971\tand\t$435\tpledged\tto\tcreditors\tas\tof\tDecember\t31,\t2018\tand\t2017,\trespectively) | 63,357 | 53,320 |
| Equity\tsecurities\t(including\t$1,109\tand\t$1,395\tat\tfair\tvalue\tas\tof\tDecember\t31,\t2018\tand\t2017,\trespectively,\tof\twhich\t$189\twas\navailable\tfor\tsale\tas\tof\tDecember\t31,\t2017) | 7,212 | 8,245 |
| Total\tinvestments | $358,607 | $352,290 |
| Loans: |  |  |
| Consumer\t(including\t$20\tand\t$25\tas\tof\tDecember\t31,\t2018\tand\t2017,\trespectively,\tat\tfair\tvalue) | 330,487 | 333,656 |
| Corporate\t(including\t$3,203\tand\t$4,349\tas\tof\tDecember\t31,\t2018\tand\t2017,\trespectively,\tat\tfair\tvalue) | 353,709 | 333,378 |
| Loans,\tnet\tof\tunearned\tincome | $684,196 | $667,034 |
| Allowance\tfor\tloan\tlosses | (12,315) | (12,355) |
| Total\tloans,\tnet | $671,881 | $654,679 |
| Goodwill | 22,046 | 22,256 |
| Intangible\tassets\t(including\tMSRs\tof\t$584\tand\t$558\tas\tof\tDecember\t31,\t2018\tand\t2017,\n\t\trespectively,\tat\tfair\tvalue) | 5,220 | 5,146 |
| Other\tassets\t(including\t$20,788\tand\t$18,559\tas\tof\tDecember\t31,\t2018\tand\t2017,\trespectively,\n\t\tat\tfair\tvalue) | 109,273 | 103,926 |
| Total\tassets | $1,917,383 | $1,842,465 |

The	following	table	presents	certain	assets	of	consolidated	variable	interest	entities	(VIEs),	which	are	included	in	the	Consolidated	Balance	Sheet	above.	The	assets in	the	table	below	include	those	assets	that	can	only	be	used	to	settle	obligations	of	consolidated	VIEs,	presented	on	the	following	page,	and	are	in	excess	of	those obligations.	Additionally,	the	assets	in	the	table	below	include	third-party	assets	of	consolidated	VIEs	only	and	exclude	intercompany	balances	that	eliminate	in consolidation.

|  | December	31, |  |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 |
| Assets\tof\tconsolidated\tVIEs\tto\tbe\tused\tto\tsettle\tobligations\tof\tconsolidated\tVIEs |  |  |
| Cash\tand\tdue\tfrom\tbanks | $270 | $52 |
| Trading\taccount\tassets | 917 | 1,129 |
| Investments | 1,796 | 2,498 |
| Loans,\tnet\tof\tunearned\tincome |  |  |
| Consumer | 49,403 | 54,656 |
| Corporate | 19,259 | 19,835 |
| Loans,\tnet\tof\tunearned\tincome | $68,662 | $74,491 |
| Allowance\tfor\tloan\tlosses | (1,852) | (1,930) |
| Total\tloans,\tnet | $66,810 | $72,561 |
| Other\tassets | 151 | 154 |
| Total\tassets\tof\tconsolidated\tVIEs\tto\tbe\tused\tto\tsettle\tobligations\tof\tconsolidated\tVIEs | $69,944 | $76,394 |

Statement	continues	on	the	next	page.

# (Continued)

|  | December	31, |  |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars,\texcept\tshares\tand\tper\tshare\tamounts | 2018 | 2017 |
| Liabilities |  |  |
| Non-interest-bearing\tdeposits\tin\tU.S.\toffices | $105,836 | $126,880 |
|  | 361,573 | 318,613 |
| Non-interest-bearing\tdeposits\tin\toffices\toutside\tthe\tU.S. | 80,648 | 87,440 |
| fair\tvalue) | 465,113 | 426,889 |
| Total\tdeposits | $1,013,170 | $959,822 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tand\tsold\tunder\tagreements\tto\trepurchase\t(including\t$44,510\tand\t$40,638\tas\tof\nDecember\t31,\t2018\tand\t2017,\trespectively,\tat\tfair\tvalue) | 177,768 | 156,277 |
| Brokerage\tpayables | 64,571 | 61,342 |
| Trading\taccount\tliabilities | 144,305 | 125,170 |
| Short-term\tborrowings\t(including\t$4,483\tand\t$4,627\tas\tof\tDecember\t31,\t2018\tand\t2017,\trespectively,\n\t\tat\tfair\tvalue) | 32,346 | 44,452 |
| Long-term\tdebt\t(including\t$38,229\tand\t$31,392\tas\tof\tDecember\t31,\t2018\tand\t2017,\trespectively,\n\t\tat\tfair\tvalue) | 231,999 | 236,709 |
| Other\tliabilities\t(including\t$15,906\tand\t$13,961\tas\tof\tDecember\t31,\t2018\tand\t2017,\trespectively,\n\t\tat\tfair\tvalue) | 56,150 | 57,021 |
| Total\tliabilities | $1,720,309 | $1,640,793 |
| Stockholders'\tequity |  |  |
| of\tDecember\t31,\t2017,\tat\taggregate\tliquidation\tvalue | $18,460 | $19,253 |
| 3,099,523,273\tas\tof\tDecember\t31,\t2017 | 31 | 31 |
| Additional\tpaid-in\tcapital | 107,922 | 108,008 |
| Retained\tearnings | 151,347 | 138,425 |
| Treasury\tstock,\tat\tcost:\t731,099,833\tshares\tas\tof\tDecember\t31,\t2018\tand\t529,614,728\tshares\tas\tof\n\t\t\t\tDecember\t31,\t2017 | (44,370) | (30,309) |
| Accumulated\tother\tcomprehensive\tincome\t(loss)\t(AOCI) | (37,170) | (34,668) |
| Total\tCitigroup\tstockholders'\tequity | $196,220 | $200,740 |
| Noncontrolling\tinterest | 854 | 932 |
| Total\tequity | $197,074 | $201,672 |
| Total\tliabilities\tand\tequity | $1,917,383 | $1,842,465 |

The	following	table	presents	certain	liabilities	of	consolidated	VIEs,	which	are	included	in	the	Consolidated	Balance	Sheet	above.	The	liabilities	in	the	table	below include	third-party	liabilities	of	consolidated	VIEs	only	and	exclude	intercompany	balances	that	eliminate	in	consolidation.	The	liabilities	also	exclude	amounts	where creditors	or	beneficial	interest	holders	have	recourse	to	the	general	credit	of	Citigroup.

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 |
| Liabilities\tof\tconsolidated\tVIEs\tfor\twhich\tcreditors\tor\tbeneficial\tinterest\tholders\tdo\tnot\thave\trecourse\tto\tthe\tgeneral\tcredit\nof\tCitigroup |  |  |
| Short-term\tborrowings | $13,134 | $10,142 |
| Long-term\tdebt | 28,514 | 30,492 |
| Other\tliabilities | 697 | 611 |
| Total\tliabilities\tof\tconsolidated\tVIEs\tfor\twhich\tcreditors\tor\tbeneficial\tinterest\tholders\tdo\tnot\thave\trecourse\tto\tthe\tgeneral\ncredit\tof\tCitigroup | $42,345 | $41,245 |

# CONSOLIDATED	STATEMENT	OF	CHANGES	IN	STOCKHOLDERS'	EQUITY

# Years	ended	December	31,

|  |  | Amounts |  |  | Shares |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars,\texcept\tshares\tin\tthousands | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 |
| Preferred\tstock\tat\taggregate\tliquidation\tvalue |  |  |  |  |  |  |
| Balance,\tbeginning\tof\tyear | $19,253 | $19,253 | $16,718 | 770 | 770 | 669 |
| Issuance\tof\tpreferred\tstock | — | — | 2,535 | — | — | 101 |
| Redemption\tof\tpreferred\tstock | (793) | — | — | (32) | — | — |
| Balance,\tend\tof\tperiod | $18,460 | $19,253 | $19,253 | 738 | 770 | 770 |
| Common\tstock\tand\tadditional\tpaid-in\tcapital |  |  |  |  |  |  |
| Balance,\tbeginning\tof\tyear | $108,039 | $108,073 | $108,319 | 3,099,523 | 3,099,482 | 3,099,482 |
| Employee\tbenefit\tplans | (94) | (27) | (251) | 44 | 41 | — |
| Preferred\tstock\tissuance\texpense | — | — | (37) | — | — | — |
| Other | 8 | (7) | 42 | — | — | — |
| Balance,\tend\tof\tperiod | $107,953 | $108,039 | $108,073 | 3,099,567 | 3,099,523 | 3,099,482 |
| Retained\tearnings |  |  |  |  |  |  |
| Balance,\tbeginning\tof\tyear | $138,425 | $146,477 | $133,841 |  |  |  |
| Adjustment\tto\topening\tbalance,\tnet\tof\ttaxes(1) | (84) | (660) | 15 |  |  |  |
| Adjusted\tbalance,\tbeginning\tof\tperiod | $138,341 | $145,817 | $133,856 |  |  |  |
| Citigroup's\tnet\tincome\t(loss) | 18,045 | (6,798) | 14,912 |  |  |  |
| Common\tdividends(2) | (3,865) | (2,595) | (1,214) |  |  |  |
| Preferred\tdividends | (1,174) | (1,213) | (1,077) |  |  |  |
| Impact\tof\tTax\tReform\trelated\tto\tAOCI\treclassification(3) | — | 3,304 | — |  |  |  |
| Other(4) | — | (90) | — |  |  |  |
| Balance,\tend\tof\tperiod | $151,347 | $138,425 | $146,477 |  |  |  |
| Treasury\tstock,\tat\tcost |  |  |  |  |  |  |
| Balance,\tbeginning\tof\tyear | $(30,309) | $(16,302) | $(7,677) | (529,615) | (327,090) | (146,203) |
| Employee\tbenefit\tplans(5) | 484 | 531 | 826 | 10,557 | 11,651 | 14,256 |
| Treasury\tstock\tacquired(6) | (14,545) | (14,538) | (9,451) | (212,042) | (214,176) | (195,143) |
| Balance,\tend\tof\tperiod | $(44,370) | $(30,309) | $(16,302) | (731,100) | (529,615) | (327,090) |
| Citigroup's\taccumulated\tother\tcomprehensive\tincome\t(loss) |  |  |  |  |  |  |
| Balance,\tbeginning\tof\tyear | $(34,668) | $(32,381) | $(29,344) |  |  |  |
| Adjustment\tto\topening\tbalance,\tnet\tof\ttaxes(1) | (3) | 504 | (15) |  |  |  |
| Adjusted\tbalance,\tbeginning\tof\tperiod | $(34,671) | $(31,877) | $(29,359) |  |  |  |
| Citigroup's\ttotal\tother\tcomprehensive\tincome\t(loss)(3) | (2,499) | (2,791) | (3,022) |  |  |  |
| Balance,\tend\tof\tperiod | $(37,170) | $(34,668) | $(32,381) |  |  |  |
| Total\tCitigroup\tcommon\tstockholders'\tequity | $177,760 | $181,487 | $205,867 | 2,368,467 | 2,569,908 | 2,772,392 |
| Total\tCitigroup\tstockholders'\tequity | $196,220 | $200,740 | $225,120 |  |  |  |
| Noncontrolling\tinterests |  |  |  |  |  |  |
| Balance,\tbeginning\tof\tyear | $932 | $1,023 | $1,235 |  |  |  |
| Transactions\tbetween\tnoncontrolling-interest\tshareholders\tand\tthe\trelated\nconsolidated\tsubsidiary | — | (28) | (11) |  |  |  |
| Transactions\tbetween\tCitigroup\tand\tthe\tnoncontrolling-interest\tshareholders | (50) | (121) | (130) |  |  |  |
| Net\tincome\tattributable\tto\tnoncontrolling-interest\tshareholders | 35 | 60 | 63 |  |  |  |
| Dividends\tpaid\tto\tnoncontrolling-interest\tshareholders | (38) | (44) | (42) |  |  |  |
| Other\tcomprehensive\tincome\t(loss)\tattributable\tto\n\t\t\tnoncontrolling-interest\tshareholders | (43) | 114 | (56) |  |  |  |
| Other | 18 | (72) | (36) |  |  |  |
| Net\tchange\tin\tnoncontrolling\tinterests | $(78) | $(91) | $(212) |  |  |  |
| Balance,\tend\tof\tperiod | $854 | $932 | $1,023 |  |  |  |
| Total\tequity | $197,074 | $201,672 | $226,143 |  |  |  |

(1) See	Note	1	to	the	Consolidated	Financial	Statements	for	additional	details.

(2) Common	dividends	declared	were	$0.32	per	share	in	the	first	and	second	quarters	and	 $0.45	per	share	in	the	third	and	fourth	quarters	of	2018;	$0.16	per	share	in	the	first	and	second	quarters	and $0.32	per	share	in	the	third	and	fourth	quarters	of	2017;	and	$0.05	in	the	first	and	second	quarters	and	 $0.16	per	share	in	the	third	and	fourth	quarters	of	2016.

(3) Includes	the	impact	of	ASU	2018-02,	which	transferred	those	amounts	from	AOCI	to	 Retained	earnings.	See	Notes	1	and	19	to	the	Consolidated	Financial	Statements.

(4) Includes	the	impact	of	ASU	No.	2016-09,	Compensation—Stock	Compensation	(Topic	718):	Improvements	to	Employee	Share-Based	Payment	Accounting .	See	Note	1	to	the	Consolidated Financial	Statements.

(5) Includes	treasury	stock	related	to	(i)	certain	activity	on	employee	stock	option	program	exercises,	where	the	employee	delivers	existing	shares	to	cover	the	option	exercise,	or	(ii)	under	Citi's employee-restricted	or	deferred-stock	programs,	where	shares	are	withheld	to	satisfy	tax	requirements.

(6) For	2018,	2017,	and	2016,	primarily	consists	of	open	market	purchases	under	Citi's	Board	of	Directors-approved	common	stock	repurchase	program.

# CONSOLIDATED	STATEMENT	OF	CASH	FLOWS

|  | Years	ended	December	31, | Years	ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 | 2016 |
| Cash\tflows\tfrom\toperating\tactivities\tof\tcontinuing\toperations |  |  |  |
| Net\tincome\t(loss)\tbefore\tattribution\tof\tnoncontrolling\tinterests | $18,080 | $(6,738) | $14,975 |
| Net\tincome\tattributable\tto\tnoncontrolling\tinterests | 35 | 60 | 63 |
| Citigroup's\tnet\tincome\t(loss) | $18,045 | $(6,798) | $14,912 |
| Loss\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes | (8) | (111) | (58) |
| Income\t(loss)\tfrom\tcontinuing\toperations—excluding\tnoncontrolling\tinterests | $18,053 | $(6,687) | $14,970 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tnet\tcash\tprovided\tby\toperating\tactivities\tof\tcontinuing\toperations |  |  |  |
| Net\tgains\ton\tsignificant\tdisposals(1) | (247) | (602) | (404) |
| Depreciation\tand\tamortization | 3,754 | 3,659 | 3,720 |
| Deferred\ttax\tprovision(2) | (51) | 24,877 | 1,459 |
| Provision\tfor\tloan\tlosses | 7,354 | 7,503 | 6,749 |
| Realized\tgains\tfrom\tsales\tof\tinvestments | (421) | (778) | (948) |
| Net\timpairment\tlosses\ton\tinvestments,\tgoodwill\tand\tintangible\tassets | 132 | 91 | 621 |
| Change\tin\ttrading\taccount\tassets | (3,469) | (7,038) | (3,092) |
| Change\tin\ttrading\taccount\tliabilities | 19,135 | (15,375) | 21,409 |
| Change\tin\tbrokerage\treceivables,\tnet\tof\tbrokerage\tpayables | 6,163 | (5,307) | 2,226 |
| Change\tin\tloans\tHFS | 770 | 247 | 6,603 |
| Change\tin\tother\tassets | (5,791) | (3,364) | (6,676) |
| Change\tin\tother\tliabilities | (871) | (3,044) | 96 |
| Other,\tnet | (7,559) | (2,956) | 7,000 |
| Total\tadjustments | $18,899 | $(2,087) | $38,763 |
| Net\tcash\tprovided\tby\t(used\tin)\toperating\tactivities\tof\tcontinuing\toperations | $36,952 | $(8,774) | $53,733 |
| Cash\tflows\tfrom\tinvesting\tactivities\tof\tcontinuing\toperations |  |  |  |
| \t\t\tChange\tin\tfederal\tfunds\tsold\tand\tsecurities\tborrowed\tor\tpurchased\tunder\tagreements\tto\tresell | $(38,206) | $4,335 | $(17,138) |
| \t\t\tChange\tin\tloans | (29,002) | (58,062) | (39,761) |
| \t\t\tProceeds\tfrom\tsales\tand\tsecuritizations\tof\tloans | 4,549 | 8,365 | 18,140 |
| \t\t\tPurchases\tof\tinvestments | (186,987) | (185,740) | (211,402) |
| \t\t\tProceeds\tfrom\tsales\tof\tinvestments(3) | 61,491 | 107,368 | 132,183 |
| \t\t\tProceeds\tfrom\tmaturities\tof\tinvestments | 118,104 | 84,369 | 65,525 |
| \t\t\tProceeds\tfrom\tsignificant\tdisposals(1) | 314 | 3,411 | 265 |
| \t\t\tCapital\texpenditures\ton\tpremises\tand\tequipment\tand\tcapitalized\tsoftware | (3,774) | (3,361) | (2,756) |
| \t\t\tProceeds\tfrom\tsales\tof\tpremises\tand\tequipment,\tsubsidiaries\tand\taffiliates\n\t\t\t\t\t\tand\trepossessed\tassets | 212 | 377 | 667 |
| \t\t\tOther,\tnet | 181 | 187 | 142 |
| Net\tcash\tused\tin\tinvesting\tactivities\tof\tcontinuing\toperations | $(73,118) | $(38,751) | $(54,135) |
| Cash\tflows\tfrom\tfinancing\tactivities\tof\tcontinuing\toperations |  |  |  |
| \t\t\tDividends\tpaid | $(5,020) | $(3,797) | $(2,287) |
| \t\t\tIssuance\t(redemption)\tof\tpreferred\tstock | (793) | — | 2,498 |
| \t\t\tTreasury\tstock\tacquired | (14,433) | (14,541) | (9,290) |
| \t\t\tStock\ttendered\tfor\tpayment\tof\twithholding\ttaxes | (482) | (405) | (316) |
| \t\t\tChange\tin\tfederal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\tagreements\tto\trepurchase | 21,491 | 14,456 | (4,675) |
| \t\t\tIssuance\tof\tlong-term\tdebt | 60,655 | 67,960 | 63,806 |
| \t\t\tPayments\tand\tredemptions\tof\tlong-term\tdebt | (58,132) | (40,986) | (55,460) |
| \t\t\tChange\tin\tdeposits | 53,348 | 30,416 | 24,394 |
| \t\t\tChange\tin\tshort-term\tborrowings | (12,106) | 13,751 | 9,622 |

|  |  | Years	ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 | 2016 |
| Net\tcash\tprovided\tby\tfinancing\tactivities\tof\tcontinuing\toperations | $44,528 | $66,854 | $28,292 |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | $(773) | $693 | $(493) |
| Change\tin\tcash,\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks(4) | $7,589 | $20,022 | $27,397 |
| Cash,\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\tbeginning\tof\tperiod(4) | 180,516 | 160,494 | 133,097 |
| Cash,\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\tend\tof\tperiod(4) | $188,105 | $180,516 | $160,494 |
| Cash\tand\tdue\tfrom\tbanks | $23,645 | $23,775 | $23,043 |
| Deposits\twith\tbanks | $164,460 | $156,741 | $137,451 |
| Cash,\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\tend\tof\tperiod | $188,105 | $180,516 | $160,494 |
| Supplemental\tdisclosure\tof\tcash\tflow\tinformation\tfor\tcontinuing\toperations |  |  |  |
| Cash\tpaid\tduring\tthe\tyear\tfor\tincome\ttaxes | $4,313 | $2,083 | $4,359 |
| Cash\tpaid\tduring\tthe\tyear\tfor\tinterest | 22,963 | 15,675 | 12,067 |
| Non-cash\tinvesting\tactivities |  |  |  |
| Transfers\tto\tloans\tHFS\tfrom\tloans | $4,200 | $5,900 | $13,900 |
| Transfers\tto\tOREO\tand\tother\trepossessed\tassets | 151 | 113 | 165 |

(1) See	Note	2	to	the	Consolidated	Financial	Statements	for	further	information	on	significant	disposals.

(2) Includes	the	full	impact	of	the	$22.6	billion	non-cash	charge	related	to	the	Tax	Cuts	and	Jobs	Act	(Tax	Reform)	in	2017.	See	Notes	1	and	9	to	the	Consolidated	Financial	Statements	for	further information.

(3) Proceeds	for	2016	include	approximately	$3.3	billion	from	the	sale	of	Citi's	investment	in	China	Guangfa	Bank.

(4) Includes	the	impact	of	ASU	2016-18,	Restricted	Cash.	See	Notes	1	and	26	to	the	Consolidated	Financial	Statements.

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# 1.	SUMMARY	OF	SIGNIFICANT	ACCOUNTING	POLICIES

Throughout	these	Notes,	"Citigroup,"	"Citi"	and	the	"Company"	refer	to Citigroup	Inc.	and	its	consolidated	subsidiaries.

Certain	reclassifications	have	been	made	to	the	prior	periods'	financial statements	and	Notes	to	conform	to	the	current	period's	presentation.

# Principles	of	Consolidation

The	Consolidated	Financial	Statements	include	the	accounts	of	Citigroup	and	its subsidiaries	prepared	in	accordance	with	U.S.	generally	accepted	accounting principles	(GAAP).	The	Company	consolidates	subsidiaries	in	which	it	holds, directly	or	indirectly,	more	than	50%	of	the	voting	rights	or	where	it	exercises control.	Entities	where	the	Company	holds	20%	to	50%	of	the	voting	rights and/or	has	the	ability	to	exercise	significant	influence,	other	than	investments	of designated	venture	capital	subsidiaries	or	investments	accounted	for	at	fair	value under	the	fair	value	option,	are	accounted	for	under	the	equity	method,	and	the pro	rata	share	of	their	income	(loss)	is	included	in	Other	revenue.	Income	from investments	in	less-than-20%-owned	companies	is	recognized	when	dividends are	received.	As	discussed	in	more	detail	in	Note	21	to	the	Consolidated Financial	Statements,	Citigroup	also	consolidates	entities	deemed	to	be	variable interest	entities	when	Citigroup	is	determined	to	be	the	primary	beneficiary. Gains	and	losses	on	the	disposition	of	branches,	subsidiaries,	affiliates,	buildings and	other	investments	are	included	in	Other	revenue.

# Citibank

Citibank,	N.A.	(Citibank)	is	a	commercial	bank	and	wholly	owned	subsidiary	of Citigroup.	Citibank's	principal	offerings	include	consumer	finance,	mortgage lending	and	retail	banking	(including	commercial	banking)	products	and services;	investment	banking,	cash	management	and	trade	finance;	and	private banking	products	and	services.

# Variable	Interest	Entities	(VIEs)

An	entity	is	a	variable	interest	entity	(VIE)	if	it	meets	either	of	the	criteria outlined	in	Accounting	Standards	Codification	(ASC)	Topic	810,	Consolidation, which	are	(i)	the	entity	has	equity	that	is	insufficient	to	permit	the	entity	to finance	its	activities	without	additional	subordinated	financial	support	from	other parties,	or	(ii)	the	entity	has	equity	investors	that	cannot	make	significant decisions	about	the	entity's	operations	or	that	do	not	absorb	their	proportionate share	of	the	entity's	expected	losses	or	expected	returns.

The	Company	consolidates	a	VIE	when	it	has	both	the	power	to	direct	the activities	that	most	significantly	impact	the	VIE's	economic	performance	and	a right	to	receive	benefits	or	the	obligation	to	absorb	losses	of	the	entity	that	could be	potentially	significant	to	the	VIE	(that	is,	Citi	is	the	primary	beneficiary).	In addition	to	variable	interests	held	in

consolidated	VIEs,	the	Company	has	variable	interests	in	other	VIEs	that	are	not consolidated	because	the	Company	is	not	the	primary	beneficiary.

All	unconsolidated	VIEs	are	monitored	by	the	Company	to	assess	whether any	events	have	occurred	to	cause	its	primary	beneficiary	status	to	change.

All	entities	not	deemed	to	be	VIEs	with	which	the	Company	has involvement	are	evaluated	for	consolidation	under	other	subtopics	of	ASC	810. See	Note	21	to	the	Consolidated	Financial	Statements	for	more	detailed information.

# Foreign	Currency	Translation

Assets	and	liabilities	of	Citi's	foreign	operations	are	translated	from	their respective	functional	currencies	into	U.S.	dollars	using	period-end	spot	foreign exchange	rates.	The	effects	of	those	translation	adjustments	are	reported	in Accumulated	other	comprehensive	income	(loss),	a	component	of	stockholders' equity,	net	of	any	related	hedge	and	tax	effects,	until	realized	upon	sale	or substantial	liquidation	of	the	foreign	operation,	at	which	point	such	amounts related	to	the	foreign	entity	are	reclassified	into	earnings.	Revenues	and	expenses of	Citi's	foreign	operations	are	translated	monthly	from	their	respective functional	currencies	into	U.S.	dollars	at	amounts	that	approximate	weighted average	exchange	rates.

For	transactions	that	are	denominated	in	a	currency	other	than	the	functional currency,	including	transactions	denominated	in	the	local	currencies	of	foreign operations	that	use	the	U.S.	dollar	as	their	functional	currency,	the	effects	of changes	in	exchange	rates	are	primarily	included	in	Principal	transactions,	along with	the	related	effects	of	any	economic	hedges.	Instruments	used	to	hedge foreign	currency	exposures	include	foreign	currency	forward,	option	and	swap contracts	and,	in	certain	instances,	designated	issues	of	non-U.S.	dollar	debt. Foreign	operations	in	countries	with	highly	inflationary	economies	designate	the U.S.	dollar	as	their	functional	currency,	with	the	effects	of	changes	in	exchange rates	primarily	included	in	Other	revenue.

# Investment	Securities

Investments	include	fixed	income	and	equity	securities.	Fixed	income instruments	include	bonds,	notes	and	redeemable	preferred	stocks,	as	well	as certain	loan-backed	and	structured	securities	that	are	subject	to	prepayment	risk. Equity	securities	include	common	and	nonredeemable	preferred	stock. Fixed	income	securities	are	classified	and	accounted	for	as	follows:

•Fixed	income	securities	classified	as	"held-to-maturity"	are	securities	that the	Company	has	both	the	ability	and	the	intent	to	hold	until	maturity	and are	carried	at	amortized	cost.	Interest	income	on	such	securities	is	included in	Interest	revenue.

•Fixed	income	securities	classified	as	"available-for-sale"	are	carried	at	fair value	with	changes	in	fair	value

reported	in	Accumulated	other	comprehensive	income	(loss),	a	component of	stockholders'	equity,	net	of	applicable	income	taxes	and	hedges.	Interest income	on	such	securities	is	included	in	Interest	revenue.

Prior	to	January	1,	2018,	equity	securities	were	classified	and	accounted	for	as follows:

•Marketable	equity	securities	classified	as	"available-for-sale"	were	carried	at fair	value	with	changes	in	fair	value	reported	in	Accumulated	other comprehensive	income	(loss),	a	component	of	stockholders'	equity,	net	of applicable	income	taxes	and	hedges.	Dividend	income	on	such	securities was	included	in	Interest	revenue.

•Certain	investments	in	non-marketable	equity	securities	and	certain investments	that	would	otherwise	have	been	accounted	for	using	the	equity method	were	carried	at	fair	value,	since	the	Company	elected	to	apply	fair value	accounting.	Changes	in	fair	value	of	such	investments	were	recorded in	earnings.

•Certain	non-marketable	equity	securities	were	carried	at cost.

As	of	January	1,	2018,	equity	securities	are	classified	and	accounted	for	as follows:

•Marketable	equity	securities	are	measured	at	fair	value	with	changes	in	fair value	recognized	in	earnings.	The	available-for-sale	category	was	eliminated for	equity	securities.

•Non-marketable	equity	securities	are	measured	at	fair	value	with	changes	in fair	value	recognized	in	earnings	unless	(i)	the	measurement	alternative	is elected	or	(ii)	the	investment	represents	Federal	Reserve	Bank	and	Federal Home	Loan	Bank	stock	or	certain	exchange	seats	that	continue	to	be	carried at	cost.	Non-marketable	equity	securities	under	the	measurement	alternative are	carried	at	cost	plus	or	minus	changes	resulting	from	observed	prices	for orderly	transactions	for	the	identical	or	a	similar	investment	of	the	same issuer.

•Certain	investments	that	would	otherwise	have	been	accounted	for	using	the equity	method	are	carried	at	fair	value	with	changes	in	fair	value	recognized in	earnings,	since	the	Company	elected	to	apply	fair	value	accounting.

For	investments	in	fixed	income	securities	classified	as	held-to-maturity	or available-for-sale,	the	accrual	of	interest	income	is	suspended	for	investments that	are	in	default	or	for	which	it	is	likely	that	future	interest	payments	will	not	be made	as	scheduled.

Investment	securities	not	measured	at	fair	value	through	earnings,	such	as securities	held	in	HTM,	AFS	or	under	the	new	measurement	alternative,	are subject	to	evaluation	for	impairment	as	described	in	Note	13	to	the	Consolidated Financial	Statements.	Realized	gains	and	losses	on	sales	of	investments	are included	in	earnings,	primarily	on	a	specific	identification	basis.

The	Company	uses	a	number	of	valuation	techniques	for	investments carried	at	fair	value,	which	are	described	in	Note	24	to	the	Consolidated Financial	Statements.

# Trading	Account	Assets	and	Liabilities

Trading	account	assets	include	debt	and	marketable	equity	securities, derivatives	in	a	receivable	position,	residual	interests	in	securitizations	and physical	commodities	inventory.	In	addition,	as	described	in	Note	25	to	the Consolidated	Financial	Statements,	certain	assets	that	Citigroup	has	elected	to carry	at	fair	value	under	the	fair	value	option,	such	as	loans	and	purchased guarantees,	are	also	included	in	Trading	account	assets.

Trading	account	liabilities	include	securities	sold,	not	yet	purchased	(short positions)	and	derivatives	in	a	net	payable	position,	as	well	as	certain	liabilities that	Citigroup	has	elected	to	carry	at	fair	value	(as	described	in	Note	25	to	the Consolidated	Financial	Statements).

Other	than	physical	commodities	inventory,	all	trading	account	assets	and liabilities	are	carried	at	fair	value.	Revenues	generated	from	trading	assets	and trading	liabilities	are	generally	reported	in	Principal	transactions	and	include realized	gains	and	losses	as	well	as	unrealized	gains	and	losses	resulting	from changes	in	the	fair	value	of	such	instruments.	Interest	income	on	trading	assets	is recorded	in	Interest	revenue	reduced	by	interest	expense	on	trading	liabilities. Physical	commodities	inventory	is	carried	at	the	lower	of	cost	or	market with	related	losses	reported	in	Principal	transactions.	Realized	gains	and	losses on	sales	of	commodities	inventory	are	included	in	Principal	transactions. Investments	in	unallocated	precious	metals	accounts	(gold,	silver,	platinum	and palladium)	are	accounted	for	as	hybrid	instruments	containing	a	debt	host contract	and	an	embedded	non-financial	derivative	instrument	indexed	to	the price	of	the	relevant	precious	metal.	The	embedded	derivative	instrument	is separated	from	the	debt	host	contract	and	accounted	for	at	fair	value.	The	debt host	contract	is	carried	at	fair	value	under	the	fair	value	option,	as	described	in Note	25	to	the	Consolidated	Financial	Statements.

Derivatives	used	for	trading	purposes	include	interest	rate,	currency,	equity, credit	and	commodity	swap	agreements,	options,	caps	and	floors,	warrants,	and financial	and	commodity	futures	and	forward	contracts.	Derivative	asset	and liability	positions	are	presented	net	by	counterparty	on	the	Consolidated	Balance Sheet	when	a	valid	master	netting	agreement	exists	and	the	other	conditions	set out	in	ASC	Topic	210-20,	Balance	Sheet—Offsetting,	are	met.	See	Note	22	to the	Consolidated	Financial	Statements.

The	Company	uses	a	number	of	techniques	to	determine	the	fair	value	of trading	assets	and	liabilities,	which	are	described	in	Note	24	to	the	Consolidated Financial	Statements.

# Securities	Borrowed	and	Securities	Loaned

Securities	borrowing	and	lending	transactions	do	not	constitute	a	sale	of	the underlying	securities	for	accounting	purposes	and	are	treated	as	collateralized financing	transactions.	Such	transactions	are	recorded	at	the	amount	of	proceeds advanced	or	received	plus	accrued	interest.	As	described	in	Note	25	to	the Consolidated	Financial	Statements,	the	Company	has	elected	to	apply	fair	value accounting	to	a	number	of	securities	borrowing	and	lending	transactions.	Fees paid	or	received	for	all	securities	lending	and	borrowing	transactions	are recorded	in	Interest	expense	or	Interest	revenue	at	the	contractually	specified rate.

The	Company	monitors	the	fair	value	of	securities	borrowed	or	loaned	on	a daily	basis	and	obtains	or	posts	additional	collateral	in	order	to	maintain contractual	margin	protection.

As	described	in	Note	24	to	the	Consolidated	Financial	Statements,	the Company	uses	a	discounted	cash	flow	technique	to	determine	the	fair	value	of securities	lending	and	borrowing	transactions.

# Repurchase	and	Resale	Agreements

Securities	sold	under	agreements	to	repurchase	(repos)	and	securities	purchased under	agreements	to	resell	(reverse	repos)	do	not	constitute	a	sale	(or	purchase) of	the	underlying	securities	for	accounting	purposes	and	are	treated	as collateralized	financing	transactions.	As	described	in	Note	25	to	the Consolidated	Financial	Statements,	the	Company	has	elected	to	apply	fair	value accounting	to	the	majority	of	such	transactions,	with	changes	in	fair	value reported	in	earnings.	Any	transactions	for	which	fair	value	accounting	has	not been	elected	are	recorded	at	the	amount	of	cash	advanced	or	received	plus accrued	interest.	Irrespective	of	whether	the	Company	has	elected	fair	value accounting,	interest	paid	or	received	on	all	repo	and	reverse	repo	transactions	is recorded	in	Interest	expense	or	Interest	revenue	at	the	contractually	specified rate.

Where	the	conditions	of	ASC	210-20-45-11,	Balance	Sheet—Offsetting: Repurchase	and	Reverse	Repurchase	Agreements,	are	met,	repos	and	reverse repos	are	presented	net	on	the	Consolidated	Balance	Sheet.

The	Company's	policy	is	to	take	possession	of	securities	purchased	under reverse	repurchase	agreements.	The	Company	monitors	the	fair	value	of securities	subject	to	repurchase	or	resale	on	a	daily	basis	and	obtains	or	posts additional	collateral	in	order	to	maintain	contractual	margin	protection. As	described	in	Note	24	to	the	Consolidated	Financial	Statements,	the Company	uses	a	discounted	cash	flow	technique	to	determine	the	fair	value	of repo	and	reverse	repo	transactions.

Loans	are	reported	at	their	outstanding	principal	balances	net	of	any	unearned income	and	unamortized	deferred	fees	and	costs	except	that	credit	card receivable	balances	also	include	accrued	interest	and	fees.	Loan	origination	fees and	certain	direct	origination	costs	are	generally	deferred	and

recognized	as	adjustments	to	income	over	the	lives	of	the	related	loans. As	described	in	Note	25	to	the	Consolidated	Financial	Statements,	Citi	has elected	fair	value	accounting	for	certain	loans.	Such	loans	are	carried	at	fair value	with	changes	in	fair	value	reported	in	earnings.	Interest	income	on	such loans	is	recorded	in	Interest	revenue	at	the	contractually	specified	rate.

Loans	that	are	held-for-investment	are	classified	as	Loans,	net	of	unearned income	on	the	Consolidated	Balance	Sheet,	and	the	related	cash	flows	are included	within	the	cash	flows	from	investing	activities	category	in	the Consolidated	Statement	of	Cash	Flows	on	the	line	Change	in	loans.	However, when	the	initial	intent	for	holding	a	loan	has	changed	from	held-for-investment to	HFS,	the	loan	is	reclassified	to	HFS,	but	the	related	cash	flows	continue	to	be reported	in	cash	flows	from	investing	activities	in	the	Consolidated	Statement	of Cash	Flows	on	the	line	Proceeds	from	sales	and	securitizations	of	loans.

# Consumer	Loans

Consumer	loans	represent	loans	and	leases	managed	primarily	by	the	Global Consumer	Banking	(GCB)	businesses	and	Corporate/Other.

# Consumer	Non-accrual	and	Re-aging	Policies

As	a	general	rule,	interest	accrual	ceases	for	installment	and	real	estate	(both open-	and	closed-end)	loans	when	payments	are	90	days	contractually	past	due. For	credit	cards	and	other	unsecured	revolving	loans,	however,	Citi	generally accrues	interest	until	payments	are	180	days	past	due.	As	a	result	of	OCC guidance,	home	equity	loans	in	regulated	bank	entities	are	classified	as	non- accrual	if	the	related	residential	first	mortgage	is	90	days	or	more	past	due.	Also as	a	result	of	OCC	guidance,	mortgage	loans	in	regulated	bank	entities	are classified	as	non-accrual	within	60	days	of	notification	that	the	borrower	has filed	for	bankruptcy,	other	than	FHA-insured	loans.	Commercial	banking	loans are	placed	on	a	cash	(non-accrual)	basis	when	it	is	determined,	based	on	actual experience	and	a	forward-looking	assessment	of	the	collectability	of	the	loan	in full,	that	the	payment	of	interest	or	principal	is	doubtful	or	when	interest	or principal	is	90	days	past	due.

Loans	that	have	been	modified	to	grant	a	concession	to	a	borrower	in financial	difficulty	may	not	be	accruing	interest	at	the	time	of	the	modification. The	policy	for	returning	such	modified	loans	to	accrual	status	varies	by	product and/or	region.	In	most	cases,	a	minimum	number	of	payments	(ranging	from	one to	six)	is	required,	while	in	other	cases	the	loan	is	never	returned	to	accrual status.	For	regulated	bank	entities,	such	modified	loans	are	returned	to	accrual status	if	a	credit	evaluation	at	the	time	of,	or	subsequent	to,	the	modification indicates	the	borrower	is	able	to	meet	the	restructured	terms,	and	the	borrower	is current	and	has	demonstrated	a	reasonable	period	of	sustained	payment performance	(minimum	six	months	of	consecutive	payments).

For	U.S.	consumer	loans,	generally	one	of	the	conditions	to	qualify	for modification	is	that	a	minimum

number	of	payments	(typically	ranging	from	one	to	three)	must	be	made.	Upon modification,	the	loan	is	re-aged	to	current	status.	However,	re-aging	practices for	certain	open-ended	consumer	loans,	such	as	credit	cards,	are	governed	by Federal	Financial	Institutions	Examination	Council	(FFIEC)	guidelines.	For open-ended	consumer	loans	subject	to	FFIEC	guidelines,	one	of	the	conditions for	the	loan	to	be	re-aged	to	current	status	is	that	at	least	three	consecutive minimum	monthly	payments,	or	the	equivalent	amount,	must	be	received.	In addition,	under	FFIEC	guidelines,	the	number	of	times	that	such	a	loan	can	be re-aged	is	subject	to	limitations	(generally	once	in	12	months	and	twice	in	five years).	Furthermore,	Federal	Housing	Administration	(FHA)	and	Department	of Veterans	Affairs	(VA)	loans	may	only	be	modified	under	those	respective agencies'	guidelines,	and	payments	are	not	always	required	in	order	to	re-age	a modified	loan	to	current.

# Consumer	Charge-Off	Policies

Citi's	charge-off	policies	follow	the	general	guidelines	below:

•Unsecured	installment	loans	are	charged	off	at	120	days	contractually	past due.

•Unsecured	revolving	loans	and	credit	card	loans	are	charged	off	at	180	days contractually	past	due.

•Loans	secured	with	non-real	estate	collateral	are	written	down	to	the

estimated	value	of	the	collateral,	less	costs	to	sell,	at	120	days	contractually past	due.

•Real	estate-secured	loans	are	written	down	to	the	estimated	value	of	the property,	less	costs	to	sell,	at	180	days	contractually	past	due.

•Real	estate-secured	loans	are	charged	off	no	later	than	180	days contractually	past	due	if	a	decision	has	been	made	not	to	foreclose	on	the loans.

•Unsecured	loans	in	bankruptcy	are	charged	off	within	60	days	of notification	of	filing	by	the	bankruptcy	court	or	in	accordance	with	Citi's charge-off	policy,	whichever	occurs	earlier.

•Real	estate-secured	loans	in	bankruptcy,	other	than	FHA-insured	loans,	are written	down	to	the	estimated	value	of	the	property,	less	costs	to	sell,	within 60	days	of	notification	that	the	borrower	has	filed	for	bankruptcy	or	in accordance	with	Citi's	charge-off	policy,	whichever	is	earlier. •Commercial	banking	loans	are	written	down	to	the	extent	that	principal	is judged	to	be	uncollectable.

# Corporate	Loans

Corporate	loans	represent	loans	and	leases	managed	by	Institutional	Clients Group	(ICG).	Corporate	loans	are	identified	as	impaired	and	placed	on	a	cash (non-accrual)	basis	when	it	is	determined,	based	on	actual	experience	and	a forward-looking	assessment	of	the	collectability	of	the	loan	in	full,	that	the payment	of	interest	or	principal	is	doubtful	or	when	interest	or	principal	is	90 days	past	due,	except	when	the	loan	is	well	collateralized	and	in	the	process	of collection.	Any	interest	accrued	on	impaired	corporate	loans	and	leases	is reversed	at	90	days	past	due	and	charged

against	current	earnings,	and	interest	is	thereafter	included	in	earnings	only	to	the extent	actually	received	in	cash.	When	there	is	doubt	regarding	the	ultimate collectability	of	principal,	all	cash	receipts	are	thereafter	applied	to	reduce	the recorded	investment	in	the	loan.

Impaired	corporate	loans	and	leases	are	written	down	to	the	extent	that principal	is	deemed	to	be	uncollectable.	Impaired	collateral-dependent	loans	and leases,	where	repayment	is	expected	to	be	provided	solely	by	the	sale	of	the underlying	collateral	and	there	are	no	other	available	and	reliable	sources	of repayment,	are	written	down	to	the	lower	of	carrying	value	or	collateral	value. Cash-basis	loans	are	returned	to	accrual	status	when	all	contractual	principal	and interest	amounts	are	reasonably	assured	of	repayment	and	there	is	a	sustained period	of	repayment	performance	in	accordance	with	the	contractual	terms.

# Loans	Held-for-Sale

Corporate	and	consumer	loans	that	have	been	identified	for	sale	are	classified	as loans	HFS	and	included	in	Other	assets.	The	practice	of	Citi's	U.S.	prime mortgage	business	has	been	to	sell	substantially	all	of	its	conforming	loans.	As such,	U.S.	prime	mortgage	conforming	loans	are	classified	as	HFS	and	the	fair value	option	is	elected	at	origination,	with	changes	in	fair	value	recorded	in Other	revenue.	With	the	exception	of	those	loans	for	which	the	fair	value	option has	been	elected,	HFS	loans	are	accounted	for	at	the	lower	of	cost	or	market value,	with	any	write-downs	or	subsequent	recoveries	charged	to	Other	revenue. The	related	cash	flows	are	classified	in	the	Consolidated	Statement	of	Cash Flows	in	the	cash	flows	from	operating	activities	category	on	the	line	Change	in loans	held-for-sale.

Allowance	for	loan	losses	represents	management's	best	estimate	of	probable losses	inherent	in	the	portfolio,	including	probable	losses	related	to	large individually	evaluated	impaired	loans	and	troubled	debt	restructurings.

Attribution	of	the	allowance	is	made	for	analytical	purposes	only,	and	the	entire allowance	is	available	to	absorb	probable	loan	losses	inherent	in	the	overall portfolio.	Additions	to	the	allowance	are	made	through	the	Provision	for	loan losses.	Loan	losses	are	deducted	from	the	allowance	and	subsequent	recoveries are	added.	Assets	received	in	exchange	for	loan	claims	in	a	restructuring	are initially	recorded	at	fair	value,	with	any	gain	or	loss	reflected	as	a	recovery	or charge-off	in	the	provision.

For	consumer	loans,	each	portfolio	of	non-modified	smaller-balance homogeneous	loans	is	independently	evaluated	for	impairment	by	product	type (e.g.,	residential	mortgage,	credit	card,	etc.)	in	accordance	with	ASC	450, Contingencies.	The	allowance	for	loan	losses	attributed	to	these	loans	is established	via	a	process	that	estimates	the	probable	losses	inherent	in	the specific	portfolio.	This	process	includes	migration	analysis,	in	which	historical delinquency	and	credit	loss	experience	is	applied	to	the	current	aging	of	the portfolio,	together	with	analyses	that

reflect	current	and	anticipated	economic	conditions,	including	changes	in housing	prices	and	unemployment	trends.	Citi's	allowance	for	loan	losses	under ASC	450	only	considers	contractual	principal	amounts	due,	except	for	credit	card loans,	where	estimated	loss	amounts	related	to	accrued	interest	receivable	are also	included.

Management	also	considers	overall	portfolio	indicators,	including	historical credit	losses,	delinquent,	non-performing	and	classified	loans,	trends	in	volumes and	terms	of	loans,	an	evaluation	of	overall	credit	quality,	the	credit	process, including	lending	policies	and	procedures,	and	economic,	geographical,	product and	other	environmental	factors.

Separate	valuation	allowances	are	determined	for	impaired	smaller-balance homogeneous	loans	whose	terms	have	been	modified	in	a	troubled	debt restructuring	(TDR).	Long-term	modification	programs,	and	short-term	(less than	12	months)	modifications	that	provide	concessions	(such	as	interest	rate reductions)	to	borrowers	in	financial	difficulty,	are	reported	as	TDRs.	In addition,	loan	modifications	that	involve	a	trial	period	are	reported	as	TDRs	at the	start	of	the	trial	period.	The	allowance	for	loan	losses	for	TDRs	is	determined in	accordance	with	ASC	310-10-35,	Receivables—Subsequent	Measurement, considering	all	available	evidence,	including,	as	appropriate,	the	present	value	of the	expected	future	cash	flows	discounted	at	the	loan's	original	contractual effective	rate,	the	secondary	market	value	of	the	loan	and	the	fair	value	of collateral	less	disposal	costs.	These	expected	cash	flows	incorporate	modification program	default	rate	assumptions.	The	original	contractual	effective	rate	for credit	card	loans	is	the	pre-modification	rate,	which	may	include	interest	rate increases	under	the	original	contractual	agreement	with	the	borrower. Valuation	allowances	for	commercial	banking	loans,	which	are	classifiably managed	consumer	loans,	are	determined	in	the	same	manner	as	for	corporate loans	and	are	described	in	more	detail	in	the	following	section.	Generally,	an asset-specific	component	is	calculated	under	ASC	310-10-35	on	an	individual basis	for	larger-balance,	non-homogeneous	loans	that	are	considered	impaired, and	the	allowance	for	the	remainder	of	the	classifiably	managed	consumer	loan portfolio	is	calculated	under	ASC	450	using	a	statistical	methodology	that	may be	supplemented	by	management	adjustment.

In	the	corporate	portfolios,	the	Allowance	for	loan	losses	includes	an	asset- specific	component	and	a	statistically	based	component.	The	asset-specific component	is	calculated	under	ASC	310-10-35	for	larger-balance,	non- homogeneous	loans	that	are	considered	impaired.	An	asset-specific	allowance	is established	when	the	discounted	cash	flows,	collateral	value	(less	disposal	costs) or	observable	market	price	of	the	impaired	loan	are	lower	than	its	carrying value.	This	allowance	considers	the	borrower's	overall	financial	condition, resources	and	payment	record,	the	prospects	for	support	from	any	financially responsible	guarantors	(discussed	further	below)	and,	if	appropriate,	the realizable	value	of	any	collateral.	The	asset-specific	component	of	the	allowance for	smaller-balance	impaired

loans	is	calculated	on	a	pool	basis	considering	historical	loss	experience. The	allowance	for	the	remainder	of	the	loan	portfolio	is	determined	under ASC	450	using	a	statistical	methodology,	supplemented	by	management judgment.	The	statistical	analysis	considers	the	portfolio's	size,	remaining	tenor and	credit	quality	as	measured	by	internal	risk	ratings	assigned	to	individual credit	facilities,	which	reflect	probability	of	default	and	loss	given	default.	The statistical	analysis	considers	historical	default	rates	and	historical	loss	severity	in the	event	of	default,	including	historical	average	levels	and	historical	variability. The	result	is	an	estimated	range	for	inherent	losses.	The	best	estimate	within	the range	is	then	determined	by	management's	quantitative	and	qualitative assessment	of	current	conditions,	including	general	economic	conditions, specific	industry	and	geographic	trends	and	internal	factors	including	portfolio concentrations,	trends	in	internal	credit	quality	indicators	and	current	and	past underwriting	standards.

For	both	the	asset-specific	and	the	statistically	based	components	of	the Allowance	for	loan	losses,	management	may	incorporate	guarantor	support.	The financial	wherewithal	of	the	guarantor	is	evaluated,	as	applicable,	based	on	net worth,	cash	flow	statements	and	personal	or	company	financial	statements, which	are	updated	and	reviewed	at	least	annually.	Citi	seeks	performance	on guarantee	arrangements	in	the	normal	course	of	business.	Seeking	performance entails	obtaining	satisfactory	cooperation	from	the	guarantor	or	borrower	in	the specific	situation.	This	regular	cooperation	is	indicative	of	pursuit	and	successful enforcement	of	the	guarantee;	the	exposure	is	reduced	without	the	expense	and burden	of	pursuing	a	legal	remedy.	A	guarantor's	reputation	and	willingness	to work	with	Citigroup	are	evaluated	based	on	the	historical	experience	with	the guarantor	and	the	knowledge	of	the	marketplace.	In	the	rare	event	that	the guarantor	is	unwilling	or	unable	to	perform	or	facilitate	borrower	cooperation, Citi	pursues	a	legal	remedy;	however,	enforcing	a	guarantee	via	legal	action against	the	guarantor	is	not	the	primary	means	of	resolving	a	troubled	loan situation	and	rarely	occurs.	If	Citi	does	not	pursue	a	legal	remedy,	it	is	because Citi	does	not	believe	that	the	guarantor	has	the	financial	wherewithal	to	perform regardless	of	legal	action	or	because	there	are	legal	limitations	on simultaneously	pursuing	guarantors	and	foreclosure.	A	guarantor's	reputation does	not	impact	Citi's	decision	or	ability	to	seek	performance	under	the guarantee.

In	cases	where	a	guarantee	is	a	factor	in	the	assessment	of	loan	losses,	it	is included	via	adjustment	to	the	loan's	internal	risk	rating,	which	in	turn	is	the basis	for	the	adjustment	to	the	statistically	based	component	of	the	Allowance	for loan	losses.	To	date,	it	is	only	in	rare	circumstances	that	an	impaired	commercial loan	or	commercial	real	estate	loan	is	carried	at	a	value	in	excess	of	the appraised	value	due	to	a	guarantee.

When	Citi's	monitoring	of	the	loan	indicates	that	the	guarantor's wherewithal	to	pay	is	uncertain	or	has	deteriorated,	there	is	either	no	change	in the	risk	rating,	because	the	guarantor's	credit	support	was	never	initially	factored in,	or	the	risk	rating	is	adjusted	to	reflect	that

uncertainty	or	deterioration.	Accordingly,	a	guarantor's	ultimate	failure	to perform	or	a	lack	of	legal	enforcement	of	the	guarantee	does	not	materially impact	the	allowance	for	loan	losses,	as	there	is	typically	no	further	significant adjustment	of	the	loan's	risk	rating	at	that	time.	Where	Citi	is	not	seeking performance	under	the	guarantee	contract,	it	provides	for	loan	losses	as	if	the loans	were	non-performing	and	not	guaranteed.

# Reserve	Estimates	and	Policies

Management	provides	reserves	for	an	estimate	of	probable	losses	inherent	in	the funded	loan	portfolio	on	the	Consolidated	Balance	Sheet	in	the	form	of	an allowance	for	loan	losses.	These	reserves	are	established	in	accordance	with Citigroup's	credit	reserve	policies,	as	approved	by	the	Audit	Committee	of	the Citigroup	Board	of	Directors.	Citi's	Chief	Risk	Officer	and	Chief	Financial Officer	review	the	adequacy	of	the	credit	loss	reserves	each	quarter	with representatives	from	the	risk	management	and	finance	staffs	for	each	applicable business	area.	Applicable	business	areas	include	those	having	classifiably managed	portfolios,	where	internal	credit-risk	ratings	are	assigned	(primarily ICG	and	GCB)	or	modified	consumer	loans,	where	concessions	were	granted	due to	the	borrowers'	financial	difficulties.

The	aforementioned	representatives	for	these	business	areas	present recommended	reserve	balances	for	their	funded	and	unfunded	lending	portfolios along	with	supporting	quantitative	and	qualitative	data	discussed	below:

Estimated	probable	losses	for	non-performing,	non-homogeneous	exposures within	a	business	line's	classifiably	managed	portfolio	and	impaired	smaller- balance	homogeneous	loans	whose	terms	have	been	modified	due	to	the borrowers'	financial	difficulties,	where	it	was	determined	that	a	concession	was granted	to	the	borrower.	Consideration	may	be	given	to	the	following,	as appropriate,	when	determining	this	estimate:	(i)	the	present	value	of	expected future	cash	flows	discounted	at	the	loan's	original	effective	rate,	(ii)	the borrower's	overall	financial	condition,	resources	and	payment	record	and	(iii) the	prospects	for	support	from	financially	responsible	guarantors	or	the realizable	value	of	any	collateral.	In	the	determination	of	the	allowance	for	loan losses	for	TDRs,	management	considers	a	combination	of	historical	re-default rates,	the	current	economic	environment	and	the	nature	of	the	modification program	when	forecasting	expected	cash	flows.	When	impairment	is	measured based	on	the	present	value	of	expected	future	cash	flows,	the	entire	change	in present	value	is	recorded	in	Provision	for	loan	losses.

Statistically	calculated	losses	inherent	in	the	classifiably	managed	portfolio	for performing	and	de	minimis	non-performing	exposures.	The	calculation	is	based on	(i)	Citi's	internal	system	of	credit-risk	ratings,	which	are	analogous	to	the	risk ratings	of	the	major	rating	agencies,	and	(ii)	historical	default	and	loss	data, including	rating	agency	information	regarding	default	rates	from	1983	to	2017 and	internal	data	dating	to	the	early	1970s	on	severity	of	losses	in	the	event	of default.	Adjustments	may	be	made	to	this

data.	Such	adjustments	include	(i)	statistically	calculated	estimates	to	cover	the historical	fluctuation	of	the	default	rates	over	the	credit	cycle,	the	historical variability	of	loss	severity	among	defaulted	loans	and	the	degree	to	which	there are	large	obligor	concentrations	in	the	global	portfolio	and	(ii)	adjustments	made for	specific	known	items,	such	as	current	environmental	factors	and	credit trends.

In	addition,	representatives	from	each	of	the	risk	management	and	finance staffs	that	cover	business	areas	with	delinquency-managed	portfolios	containing smaller-balance	homogeneous	loans	present	their	recommended	reserve balances	based	on	leading	credit	indicators,	including	loan	delinquencies	and changes	in	portfolio	size	as	well	as	economic	trends,	including	current	and	future housing	prices,	unemployment,	length	of	time	in	foreclosure,	costs	to	sell	and GDP.	This	methodology	is	applied	separately	for	each	individual	product	within each	geographic	region	in	which	these	portfolios	exist.

This	evaluation	process	is	subject	to	numerous	estimates	and	judgments. The	frequency	of	default,	risk	ratings,	loss	recovery	rates,	the	size	and	diversity of	individual	large	credits	and	the	ability	of	borrowers	with	foreign	currency obligations	to	obtain	the	foreign	currency	necessary	for	orderly	debt	servicing, among	other	things,	are	all	taken	into	account	during	this	review.	Changes	in these	estimates	could	have	a	direct	impact	on	the	credit	costs	in	any	period	and could	result	in	a	change	in	the	allowance.

# Allowance	for	Unfunded	Lending	Commitments

A	similar	approach	to	the	allowance	for	loan	losses	is	used	for	calculating	a reserve	for	the	expected	losses	related	to	unfunded	lending	commitments	and standby	letters	of	credit.	This	reserve	is	classified	on	the	balance	sheet	in	Other liabilities.	Changes	to	the	allowance	for	unfunded	lending	commitments	are recorded	in	Provision	for	unfunded	lending	commitments.

# Mortgage	Servicing	Rights	(MSRs)

Mortgage	servicing	rights	(MSRs)	are	recognized	as	intangible	assets	when purchased	or	when	the	Company	sells	or	securitizes	loans	acquired	through purchase	or	origination	and	retains	the	right	to	service	the	loans.	Mortgage servicing	rights	are	accounted	for	at	fair	value,	with	changes	in	value	recorded	in Other	revenue	in	the	Company's	Consolidated	Statement	of	Income.

For	additional	information	on	the	Company's	MSRs,	see	Notes	16	and	21	to the	Consolidated	Financial	Statements.

Goodwill	represents	the	excess	of	acquisition	cost	over	the	fair	value	of	net tangible	and	intangible	assets	acquired	in	a	business	combination.	Goodwill	is subject	to	annual	impairment	testing	and	between	annual	tests	if	an	event	occurs or	circumstances	change	that	would	more-likely-than-not	reduce	the	fair	value	of a	reporting	unit	below	its	carrying	amount.

Under	ASC	Topic	350,	Intangibles—Goodwill	and	Other,	the	Company	has an	option	to	assess	qualitative	factors	to	determine	if	it	is	necessary	to	perform the	goodwill

impairment	test.	If,	after	assessing	the	totality	of	events	or	circumstances,	the Company	determines	that	it	is	not	more-likely-than-not	that	the	fair	value	of	a reporting	unit	is	less	than	its	carrying	amount,	no	further	testing	is	necessary.	If, however,	the	Company	determines	that	it	is	more-likely-than-not	that	the	fair value	of	a	reporting	unit	is	less	than	its	carrying	amount,	then	the	Company	must perform	the	first	step	of	the	two-step	goodwill	impairment	test.

The	Company	has	an	unconditional	option	to	bypass	the	qualitative assessment	for	any	reporting	unit	in	any	reporting	period	and	proceed	directly	to the	first	step	of	the	goodwill	impairment	test.

The	first	step	requires	a	comparison	of	the	fair	value	of	the	individual reporting	unit	to	its	carrying	value,	including	goodwill.	If	the	fair	value	of	the reporting	unit	is	in	excess	of	the	carrying	value,	the	related	goodwill	is considered	not	impaired	and	no	further	analysis	is	necessary.	If	the	carrying value	of	the	reporting	unit	exceeds	the	fair	value,	this	is	an	indication	of	potential impairment	and	the	second	step	of	testing	is	performed	to	measure	the	amount	of impairment,	if	any,	for	that	reporting	unit.

If	required,	the	second	step	involves	calculating	the	implied	fair	value	of goodwill	for	each	of	the	affected	reporting	units.	The	implied	fair	value	of goodwill	is	determined	in	the	same	manner	as	the	amount	of	goodwill	recognized in	a	business	combination,	which	is	the	excess	of	the	fair	value	of	the	reporting unit	determined	in	step	one	over	the	fair	value	of	the	net	assets	and	identifiable intangibles	as	if	the	reporting	unit	were	being	acquired.	If	the	amount	of	the goodwill	allocated	to	the	reporting	unit	exceeds	the	implied	fair	value	of	the goodwill	in	the	pro	forma	purchase	price	allocation,	an	impairment	charge	is recorded	for	the	excess.	A	recognized	impairment	charge	cannot	exceed	the amount	of	goodwill	allocated	to	a	reporting	unit	and	cannot	subsequently	be reversed	even	if	the	fair	value	of	the	reporting	unit	recovers.

Upon	any	business	disposition,	goodwill	is	allocated	to,	and	derecognized with,	the	disposed	business	based	on	the	ratio	of	the	fair	value	of	the	disposed business	to	the	fair	value	of	the	reporting	unit.

Additional	information	on	Citi's	goodwill	impairment	testing	can	be	found in	Note	16	to	the	Consolidated	Financial	Statements.

# Intangible	Assets

Intangible	assets—including	core	deposit	intangibles,	present	value	of	future profits,	purchased	credit	card	relationships,	credit	card	contract	related intangibles,	other	customer	relationships	and	other	intangible	assets,	but excluding	MSRs—are	amortized	over	their	estimated	useful	lives.	Intangible assets	that	are	deemed	to	have	indefinite	useful	lives,	primarily	trade	names,	are not	amortized	and	are	subject	to	annual	impairment	tests.	An	impairment	exists if	the	carrying	value	of	the	indefinite-lived	intangible	asset	exceeds	its	fair	value. For	other	intangible	assets	subject	to	amortization,	an	impairment	is	recognized if	the	carrying	amount	is	not	recoverable	and	exceeds	the	fair	value	of	the intangible	asset.

# Other	Assets	and	Other	Liabilities

Other	assets	include,	among	other	items,	loans	HFS,	deferred	tax	assets,	equity method	investments,	interest	and	fees	receivable,	premises	and	equipment (including	purchased	and	developed	software),	repossessed	assets	and	other receivables.	Other	liabilities	include,	among	other	items,	accrued	expenses	and other	payables,	deferred	tax	liabilities	and	reserves	for	legal	claims,	taxes, unfunded	lending	commitments,	repositioning	reserves	and	other	matters.

# Other	Real	Estate	Owned	and	Repossessed	Assets

Real	estate	or	other	assets	received	through	foreclosure	or	repossession	are generally	reported	in	Other	assets,	net	of	a	valuation	allowance	for	selling	costs and	subsequent	declines	in	fair	value.

# Securitizations

There	are	two	key	accounting	determinations	that	must	be	made	relating	to securitizations.	Citi	first	makes	a	determination	as	to	whether	the	securitization entity	must	be	consolidated.	Second,	it	determines	whether	the	transfer	of financial	assets	to	the	entity	is	considered	a	sale	under	GAAP.	If	the securitization	entity	is	a	VIE,	the	Company	consolidates	the	VIE	if	it	is	the primary	beneficiary	(as	discussed	in	"Variable	Interest	Entities"	above).	For	all other	securitization	entities	determined	not	to	be	VIEs	in	which	Citigroup participates,	consolidation	is	based	on	which	party	has	voting	control	of	the entity,	giving	consideration	to	removal	and	liquidation	rights	in	certain partnership	structures.	Only	securitization	entities	controlled	by	Citigroup	are consolidated.

Interests	in	the	securitized	and	sold	assets	may	be	retained	in	the	form	of subordinated	or	senior	interest-only	strips,	subordinated	tranches,	spread accounts	and	servicing	rights.	In	credit	card	securitizations,	the	Company	retains a	seller's	interest	in	the	credit	card	receivables	transferred	to	the	trusts,	which	is not	in	securitized	form.	In	the	case	of	consolidated	securitization	entities, including	the	credit	card	trusts,	these	retained	interests	are	not	reported	on	Citi's Consolidated	Balance	Sheet.	The	securitized	loans	remain	on the	balance	sheet.	Substantially	all	of	the	consumer	loans	sold	or	securitized through	non-consolidated	trusts	by	Citigroup	are	U.S.	prime	residential	mortgage loans.	Retained	interests	in	non-consolidated	mortgage	securitization	trusts	are classified	as	Trading	account	assets,	except	for	MSRs,	which	are	included	in Intangible	assets	on	Citigroup's	Consolidated	Balance	Sheet.

Short-term	borrowings	and	Long-term	debt	are	accounted	for	at	amortized	cost, except	where	the	Company	has	elected	to	report	the	debt	instruments,	including certain	structured	notes	at	fair	value,	or	the	debt	is	in	a	fair	value	hedging relationship.

# Transfers	of	Financial	Assets

For	a	transfer	of	financial	assets	to	be	considered	a	sale:	(i)	the	assets	must	be legally	isolated	from	the	Company,	even

in	bankruptcy	or	other	receivership,	(ii)	the	purchaser	must	have	the	right	to pledge	or	sell	the	assets	transferred	(or,	if	the	purchaser	is	an	entity	whose	sole purpose	is	to	engage	in	securitization	and	asset-backed	financing	activities through	the	issuance	of	beneficial	interests	and	that	entity	is	constrained	from pledging	the	assets	it	receives,	each	beneficial	interest	holder	must	have	the	right to	sell	or	pledge	their	beneficial	interests)	and	(iii)	the	Company	may	not	have an	option	or	obligation	to	reacquire	the	assets.

If	these	sale	requirements	are	met,	the	assets	are	removed	from	the Company's	Consolidated	Balance	Sheet.	If	the	conditions	for	sale	are	not	met, the	transfer	is	considered	to	be	a	secured	borrowing,	the	assets	remain	on	the Consolidated	Balance	Sheet	and	the	sale	proceeds	are	recognized	as	the Company's	liability.	A	legal	opinion	on	a	sale	generally	is	obtained	for	complex transactions	or	where	the	Company	has	continuing	involvement	with	assets transferred	or	with	the	securitization	entity.	For	a	transfer	to	be	eligible	for	sale accounting,	that	opinion	must	state	that	the	asset	transfer	would	be	considered	a sale	and	that	the	assets	transferred	would	not	be	consolidated	with	the Company's	other	assets	in	the	event	of	the	Company's	insolvency. For	a	transfer	of	a	portion	of	a	financial	asset	to	be	considered	a	sale,	the portion	transferred	must	meet	the	definition	of	a	participating	interest.	A participating	interest	must	represent	a	pro	rata	ownership	in	an	entire	financial asset;	all	cash	flows	must	be	divided	proportionately,	with	the	same	priority	of payment;	no	participating	interest	in	the	transferred	asset	may	be	subordinated	to the	interest	of	another	participating	interest	holder,	and	no	party	may	have	the right	to	pledge	or	exchange	the	entire	financial	asset	unless	all	participating interest	holders	agree.	Otherwise,	the	transfer	is	accounted	for	as	a	secured borrowing.

See	Note	21	to	the	Consolidated	Financial	Statements	for	further	discussion.

# Risk	Management	Activities—Derivatives	Used	for	Hedging	Purposes

The	Company	manages	its	exposures	to	market	movements	outside	of	its	trading activities	by	modifying	the	asset	and	liability	mix,	either	directly	or	through	the use	of	derivative	financial	products,	including	interest	rate	swaps,	futures, forwards	and	purchased	options,	as	well	as	foreign-exchange	contracts.	These end-user	derivatives	are	carried	at	fair	value	in	Trading	account	assets	and Trading	account	liabilities.

See	Note	22	to	the	Consolidated	Financial	Statements	for	a	further discussion	of	the	Company's	hedging	and	derivative	activities.

# Employee	Benefits	Expense

Employee	benefits	expense	includes	current	service	costs	of	pension	and	other postretirement	benefit	plans	(which	are	accrued	on	a	current	basis),	contributions and	unrestricted	awards	under	other	employee	plans,	the	amortization	of restricted	stock	awards	and	costs	of	other	employee	benefits. For	its	most	significant	pension	and	postretirement	benefit	plans	(Significant Plans),	Citigroup	measures	and	discloses	plan	obligations,	plan	assets	and periodic	plan	expense

quarterly,	instead	of	annually.	The	effect	of	remeasuring	the	Significant	Plan obligations	and	assets	by	updating	plan	actuarial	assumptions	on	a	quarterly basis	is	reflected	in	Accumulated	other	comprehensive	income	(loss)	and periodic	plan	expense.	All	other	plans	(All	Other	Plans)	are	remeasured annually.	See	Note	8	to	the	Consolidated	Financial	Statements.

# Stock-Based	Compensation

The	Company	recognizes	compensation	expense	related	to	stock	and	option awards	over	the	requisite	service	period,	generally	based	on	the	instruments' grant-date	fair	value,	reduced	by	actual	forfeitures	as	they	occur.	Compensation cost	related	to	awards	granted	to	employees	who	meet	certain	age	plus	years-of- service	requirements	(retirement-eligible	employees)	is	accrued	in	the	year	prior to	the	grant	date,	in	the	same	manner	as	the	accrual	for	cash	incentive compensation.	Certain	stock	awards	with	performance	conditions	or	certain clawback	provisions	are	subject	to	variable	accounting,	pursuant	to	which	the associated	compensation	expense	fluctuates	with	changes	in	Citigroup's	common stock	price.	See	Note	7	to	the	Consolidated	Financial	Statements.

The	Company	is	subject	to	the	income	tax	laws	of	the	U.S.	and	its	states	and municipalities,	as	well	as	the	non-U.S.	jurisdictions	in	which	it	operates.	These tax	laws	are	complex	and	may	be	subject	to	different	interpretations	by	the taxpayer	and	the	relevant	governmental	taxing	authorities.	In	establishing	a provision	for	income	tax	expense,	the	Company	must	make	judgments	and interpretations	about	these	tax	laws.	The	Company	must	also	make	estimates about	when	in	the	future	certain	items	will	affect	taxable	income	in	the	various tax	jurisdictions,	both	domestic	and	foreign.

Disputes	over	interpretations	of	the	tax	laws	may	be	subject	to	review	and adjudication	by	the	court	systems	of	the	various	tax	jurisdictions,	or	may	be settled	with	the	taxing	authority	upon	examination	or	audit.	The	Company	treats interest	and	penalties	on	income	taxes	as	a	component	of	Income	tax	expense.

Deferred	taxes	are	recorded	for	the	future	consequences	of	events	that	have been	recognized	in	financial	statements	or	tax	returns,	based	upon	enacted	tax laws	and	rates.	Deferred	tax	assets	are	recognized	subject	to	management's judgment	about	whether	realization	is	more-likely-than-not.	ASC	740,	Income Taxes,	sets	out	a	consistent	framework	to	determine	the	appropriate	level	of	tax reserves	to	maintain	for	uncertain	tax	positions.	This	interpretation	uses	a	two- step	approach	wherein	a	tax	benefit	is	recognized	if	a	position	is	more-likely- than-not	to	be	sustained.	The	amount	of	the	benefit	is	then	measured	to	be	the highest	tax	benefit	that	is	more	than	50%	likely	to	be	realized.	ASC	740	also sets	out	disclosure	requirements	to	enhance	transparency	of	an	entity's	tax reserves.

See	Note	9	to	the	Consolidated	Financial	Statements	for	a	further description	of	the	Company's	tax	provision	and	related	income	tax	assets	and liabilities.

# Commissions,	Underwriting	and	Principal	Transactions

Commissions	and	fees	revenues	are	recognized	in	income	when	earned. Underwriting	revenues	are	recognized	in	income	typically	at	the	closing	of	the transaction.	Principal	transactions	revenues	are	recognized	in	income	on	a	trade- date	basis.	See	Note	5	to	the	Consolidated	Financial	Statements	for	a	description of	the	Company's	revenue	recognition	policies	for	Commissions	and	fees,	and Note	6	to	the	Consolidated	Financial	Statements	for	details	of	Principal transactions	revenue.

# Earnings	per	Share

Earnings	per	share	(EPS)	is	computed	after	deducting	preferred	stock	dividends. The	Company	has	granted	restricted	and	deferred	share	awards	with	dividend rights	that	are	considered	to	be	participating	securities,	which	are	akin	to	a second	class	of	common	stock.	Accordingly,	a	portion	of	Citigroup's	earnings	is allocated	to	those	participating	securities	in	the	EPS	calculation.

Basic	earnings	per	share	is	computed	by	dividing	income	available	to common	stockholders	after	the	allocation	of	dividends	and	undistributed earnings	to	the	participating	securities	by	the	weighted	average	number	of common	shares	outstanding	for	the	period.	Diluted	earnings	per	share	reflects the	potential	dilution	that	could	occur	if	securities	or	other	contracts	to	issue common	stock	were	exercised.	It	is	computed	after	giving	consideration	to	the weighted	average	dilutive	effect	of	the	Company's	stock	options	and	warrants and	convertible	securities	and	after	the	allocation	of	earnings	to	the	participating securities.	Anti-dilutive	options	and	warrants	are	disregarded	in	the	EPS calculations.

# Use	of	Estimates

Management	must	make	estimates	and	assumptions	that	affect	the	Consolidated Financial	Statements	and	the	related	Notes	to	the	Consolidated	Financial Statements.	Such	estimates	are	used	in	connection	with	certain	fair	value measurements.	See	Note	24	to	the	Consolidated	Financial	Statements	for	further discussions	on	estimates	used	in	the	determination	of	fair	value.	Moreover, estimates	are	significant	in	determining	the	amounts	of	other-than-temporary impairments,	impairments	of	goodwill	and	other	intangible	assets,	provisions	for probable	losses	that	may	arise	from	credit-related	exposures	and	probable	and estimable	losses	related	to	litigation	and	regulatory	proceedings,	and	income taxes.	While	management	makes	its	best	judgment,	actual	amounts	or	results could	differ	from	those	estimates.

# Cash	Flows

Cash	equivalents	are	defined	as	those	amounts	included	in	Cash	and	due	from banks	and	predominately	all	of	Deposits	with	banks.	Cash	flows	from	risk management	activities	are	classified	in	the	same	category	as	the	related	assets and	liabilities.

# Related	Party	Transactions

The	Company	has	related	party	transactions	with	certain	of	its	subsidiaries	and affiliates.	These	transactions,	which	are	primarily	short-term	in	nature,	include cash	accounts,	collateralized	financing	transactions,	margin	accounts,	derivative transactions,	charges	for	operational	support	and	the	borrowing	and	lending	of funds,	and	are	entered	into	in	the	ordinary	course	of	business.

# ACCOUNTING	CHANGES

# SEC	Staff	Accounting	Bulletin	118

On	December	22,	2017,	the	SEC	issued	Staff	Accounting	Bulletin	(SAB)	118, which	set	forth	the	accounting	for	the	changes	in	tax	law	caused	by	the enactment	of	the	Tax	Cuts	and	Jobs	Act	(Tax	Reform).	SAB	118	provided guidance	where	the	accounting	under	ASC	740	was	incomplete	for	certain income	tax	effects	of	Tax	Reform,	at	the	time	of	the	issuance	of	an	entity's financial	statements	for	the	period	in	which	Tax	Reform	was	enacted	(provisional items).	Citi	disclosed	several	provisional	items	recorded	as	part	of	its	$22.6 billion	fourth	quarter	2017	charge	related	to	Tax	Reform.

Citi	completed	its	accounting	for	Tax	Reform	under	SAB	118	during	the fourth	quarter	of	2018	and	recorded	a	one-time,	non-cash	tax	benefit	of	$94 million	in	Corporate/Other	related	to	amounts	that	were	considered	provisional pursuant	to	SAB	118.	The	adjustments	related	to	the	provisional	amounts consisted	of	a	$1.2	billion	benefit	relating	to	a	reduction	of	the	valuation allowance	against	Citi's	FTC	carry-forwards	and	its	U.S.	residual	DTAs	related to	its	non-U.S.	branches,	offset	by	an	additional	$0.2	billion	charge	related	to	the impact	of	a	change	to	a	"quasi-territorial	tax	system"	and	an	additional	$0.9 billion	charge	related	to	the	impact	of	deemed	repatriation	of	undistributed earnings	of	non-U.S.	subsidiaries.

Also,	Citi	has	made	a	policy	election	to	account	for	taxes	on	GILTI	as incurred.

# Revenue	Recognition

In	May	2014,	the	Financial	Accounting	Standards	Board	(FASB)	issued Accounting	Standards	Update	(ASU)	2014-09,	Revenue	from	Contracts	with Customers	(Revenue	Recognition),	which	outlines	a	single	comprehensive model	for	entities	to	use	in	accounting	for	revenue	arising	from	contracts	with customers.	The	core	principle	of	the	revenue	model	is	that	an	entity	recognizes revenue	to	depict	the	transfer	of	promised	goods	or	services	to	customers	in	an amount	that	reflects	the	consideration	to	which	the	entity	expects	to	be	entitled	in exchange	for	those	goods	or	services.	The	ASU	defines	the	promised	good	or service	as	the	performance	obligation	under	the	contract.

While	the	guidance	replaces	most	existing	revenue	recognition	guidance	in GAAP,	the	ASU	is	not	applicable	to	financial	instruments	and,	therefore,	does not	impact	a	majority	of	the	Company's	revenues,	including	net	interest	income, loan	fees,	gains	on	sales	and	mark-to-market	accounting.

In	accordance	with	the	new	revenue	recognition	standard,	Citi	has	identified the	specific	performance	obligation	(promised	services)	associated	with	the contract	with	the	customer	and	has	determined	when	that	specific	performance obligation	has	been	satisfied,	which	may	be	at	a	point	in	time	or	over	time depending	on	how	the	performance	obligation	is	defined.	The	contracts	with customers	also	contain	the	transaction	price,	which	consists	of	fixed consideration	and/or	consideration	that	may	vary	(variable	consideration),	and	is defined	as	the	amount	of	consideration	an	entity	expects	to	be	entitled	to	when	or as	the	performance	obligation	is	satisfied,	excluding	amounts	collected	on	behalf of	third	parties	(including	transaction	taxes).	The	amounts	recognized	at	the point	in	time	the	performance	obligation	is	satisfied	may	differ	from	the	ultimate transaction	price	associated	with	that	performance	obligation	when	a	portion	of	it is	based	on	variable	consideration.	For	example,	some	consideration	is	based	on the	client's	month-end	balance	or	market	values	which	are	unknown	at	the	time the	contract	is	executed.	The	remaining	transaction	price	amount,	if	any,	will	be recognized	as	the	variable	consideration	becomes	determinable.	In	certain transactions,	the	performance	obligation	is	considered	satisfied	at	a	point	in	time in	the	future.	In	this	instance,	Citi	defers	revenue	on	the	balance	sheet	that	will only	be	recognized	upon	completion	of	the	performance	obligation.

The	new	revenue	recognition	standard	further	clarified	the	guidance	related to	reporting	revenue	gross	as	principal	versus	net	as	an	agent.	In	many	cases,	Citi outsources	a	component	of	its	performance	obligations	to	third	parties.	The Company	has	determined	that	it	acts	as	principal	in	the	majority	of	these transactions	and	therefore	presents	the	amounts	paid	to	these	third	parties	gross within	operating	expenses.

The	Company	has	retrospectively	adopted	this	standard	as	of	January	1, 2018	and	as	a	result	was	required	to	report	amounts	paid	to	third	parties	where Citi	is	principal	to	the	contract	within	Operating	expenses.	The	adoption	resulted in	an	increase	in	both	revenue	and	expenses	of	approximately	$1	billion	for	each of	the	years	ended	December	31,	2018	and	2017	with	similar	amounts	for	prior years.	Prior	to	adoption,	these	expense	amounts	were	reported	as	contra	revenue primarily	within	Commissions	and	fees	and	Administration	and	other	fiduciary fees	revenues.	Accordingly,	prior	periods	have	been	reclassified	to	conform	to the	new	presentation.

See	Note	5	to	the	Consolidated	Financial	Statements	for	a	description	of	the Company's	revenue	recognition	policies	for	Commissions	and	fees	and Administration	and	other	fiduciary	fees.

# Income	Tax	Impact	of	Intra-Entity	Transfers	of	Assets

In	October	2016,	the	FASB	issued	ASU	No.	2016-16,	Income	Taxes—Intra- Entity	Transfers	of	Assets	Other	Than	Inventory,	which	requires	an	entity	to recognize	the	income	tax	consequences	of	an	intra-entity	transfer	of	an	asset other	than	inventory	when	the	transfer	occurs.	The	ASU	was	effective	January	1, 2018	and	was	adopted	as	of	that	date.	The	impact	of	this	standard	was	an increase	of	DTAs	by

approximately	$300	million,	a	decrease	of	Retained	earnings	by	approximately $80	million	and	a	decrease	of	prepaid	tax	assets	by	approximately	$380	million.

# Clarifying	the	Definition	of	a	Business

In	January	2017,	the	FASB	issued	ASU	No.	2017-01,	Business	Combinations (Topic	805):	Clarifying	the	Definition	of	a	Business.	The	definition	of	a	business directly	and	indirectly	affects	many	areas	of	accounting	(e.g.,	acquisitions, disposals,	goodwill	and	consolidation).	The	ASU	narrows	the	definition	of	a business	by	introducing	a	quantitative	screen	as	the	first	step,	such	that	if substantially	all	of	the	fair	value	of	the	gross	assets	acquired	is	concentrated	in	a single	identifiable	asset	or	a	group	of	similar	identifiable	assets,	then	the	set	of transferred	assets	and	activities	is	not	a	business.	If	the	set	is	not	scoped	out from	the	quantitative	screen,	the	entity	then	evaluates	whether	the	set	meets	the requirement	that	a	business	include,	at	a	minimum,	an	input	and	a	substantive process	that	together	significantly	contribute	to	the	ability	to	create	outputs.

Citi	adopted	the	ASU	upon	its	effective	date	on	January	1,	2018, prospectively.	The	ongoing	impact	of	the	ASU	will	depend	upon	the	acquisition and	disposal	activities	of	Citi.	If	fewer	transactions	qualify	as	a	business,	there could	be	less	initial	recognition	of	Goodwill,	but	also	less	goodwill	allocated	to disposals.	There	was	no	impact	during	2018	from	the	adoption	of	this	ASU.

# Changes	in	Accounting	for	Pension	and	Postretirement	(Benefit)	Expense

In	March	2017,	the	FASB	issued	ASU	No.	2017-07,	Compensation—Retirement Benefits	(Topic	715):	Improving	the	Presentation	of	Net	Periodic	Pension	Cost and	Net	Periodic	Postretirement	Benefit	Cost,	which	changes	the	income statement	presentation	of	net	benefit	expense	and	requires	restating	the Company's	financial	statements	for	each	of	the	earlier	periods	presented	in	Citi's annual	and	interim	financial	statements.	The	change	in	presentation	was effective	for	annual	and	interim	periods	starting	January	1,	2018.	The	ASU requires	that	only	the	service	cost	component	of	net	benefit	expense	be	included in	Compensation	and	benefits	on	the	income	statement.	The	other	components	of net	benefit	expense	are	required	to	be	presented	outside	of	Compensation	and benefits	and	are	presented	in	Other	operating	expenses.	Since	both	of	these income	statement	line	items	are	part	of	Operating	expenses,	total	Operating expenses	and	Net	income	will	not	change.	This	change	in	presentation	did	not have	a	material	effect	on	Compensation	and	benefits	and	Other	operating

expenses	and	is	applied	prospectively.	The	components	of	the	net	benefit expense	are	currently	disclosed	in	Note	8	to	the	Consolidated	Financial Statements.

	The	new	standard	also	changes	the	components	of	net	benefit	expense	that are	eligible	for	capitalization	when	employee	costs	are	capitalized	in	connection with	various	activities,	such	as	internally	developed	software,	construction-in- progress	and	loan	origination	costs.	Prospectively	from	January	1,	2018,	only	the service	cost

component	of	net	benefit	expense	may	be	capitalized.		Existing	capitalized balances	are	not	affected.	This	change	in	amounts	eligible	for	capitalization	does not	have	a	material	effect	on	the	Company's	Consolidated	Financial	Statements and	related	disclosures.

# Pension	Accounting

In	August	2018,	the	FASB	issued	ASU	2018-14,	Defined Benefit	Plans	(Topic	715-20):	Disclosure	Framework	- Changes	to	the	Disclosure	Requirements	for	Defined

Benefit	Plans.	The	amendments	modify	certain	disclosure requirements	for	defined	benefit	plans	and	are	effective January	1,	2021,	with	early	adoption	permitted.	The Company	adopted	this	ASU	as	of	December	31,	2018	and the	adoption	of	this	standard	did	not	have	a	material	impact on	the	Company.

# Hedging

In	August	2017,	the	FASB	issued	ASU	No.	2017-12,	Targeted	Improvements	to Accounting	for	Hedging	Activities,	which	better	aligns	an	entity's	risk management	activities	and	financial	reporting	for	hedging	relationships	through changes	to	the	designation	and	measurement	guidance	for	qualifying	hedging relationships	and	the	presentation	of	hedge	results.	The	ASU	requires	the	change in	the	fair	value	of	the	hedging	instrument	to	be	presented	in	the	same	income statement	line	as	the	hedged	item	and	also	requires	expanded	disclosures.	Citi adopted	this	standard	on	January	1,	2018	and	transferred	approximately	$4 billion	of	pre-payable	mortgage-backed	securities	and	municipal	bonds	from held-to-maturity	(HTM)	into	available-for-sale	(AFS)	securities	classification	as permitted	as	a	one-time	transfer	upon	adoption	of	the	standard,	as	these	assets were	deemed	to	be	eligible	to	be	hedged	under	the	last-of-layer	hedge	strategy. The	impact	to	opening	Retained	earnings	was	immaterial.	See	Note	19	to	the Consolidated	Financial	Statements	for	more	information.

# Recognition	and	Measurement	of	Financial	Assets	and	Financial	Liabilities

In	January	2016,	the	FASB	issued	ASU	No.	2016-01,	Financial	Instruments— Overall	(Subtopic	825-10):	Recognition	and	Measurement	of	Financial	Assets and	Financial	Liabilities,	which	addresses	certain	aspects	of	recognition, measurement,	presentation	and	disclosure	of	financial	instruments.	In	February 2018,	the	FASB	issued	ASU	No.	2018-03,	Technical	Corrections	and Improvements	to	Financial	Instruments—Overall	(Subtopic	825-10),	to	clarify certain	provisions	in	ASU	2016-01.

The	ASUs	require	entities	to	present	separately	in	AOCI	the	portion	of	the total	change	in	the	fair	value	of	a	liability	resulting	from	a	change	in	the instrument-specific	credit	risk	when	the	entity	has	elected	to	measure	the liability	at	fair	value	in	accordance	with	the	fair	value	option	for	financial instruments.	The	ASUs	also	require	equity	investments	(except	those	accounted for	under	the	equity	method	of	accounting	or	those	that	result	in	consolidation	of the	investee)	to	be	measured	at	fair	value	with	changes	in	fair	value	recognized	in net	income,	thus	eliminating	the	AFS

category	for	equity	investments.	However,	Federal	Reserve	Bank	and	Federal Home	Loan	Bank	stock,	as	well	as	certain	exchange	seats,	will	continue	to	be presented	at	cost.	The	ASUs	also	provide	an	instrument-by-instrument	election to	measure	non-marketable	equity	investments	using	a	measurement	alternative. Under	the	measurement	alternative,	the	investment	is	carried	at	cost	plus	or minus	changes	resulting	from	observable	prices	in	orderly	transactions	for	the identical	or	a	similar	investment	of	the	same	issuer.	Equity	securities	under	the measurement	alternative	are	also	assessed	for	impairment.	Finally,	the	ASUs require	that	fair	value	disclosures	for	financial	instruments	not	measured	at	fair value	on	the	balance	sheet	be	presented	at	their	exit	prices	(e.g.,	held-for- investment	loans).

Citi	early	adopted	the	provisions	of	ASU	2016-01 related	to	presentation	of	the	change	in	fair	value	of	liabilities	for	which	the	fair value	option	was	elected,	related	to	changes	in	Citigroup's	own	credit	spreads	in Accumulated	other	comprehensive	income	(loss)	(AOCI)	effective	January	1, 2016.	Accordingly,	these	amounts	have	been	reflected	as	a	component	of	AOCI, whereas	these	amounts	were	previously	recognized	in	Citigroup's	revenues	and net	income.	The	impact	of	adopting	this	amendment	resulted	in	a	cumulative catch-up	reclassification	from	Retained	earnings	to	AOCI	of	an	accumulated after-tax	loss	of	approximately	$15	million	at	January	1,	2016.	Financial statements	for	periods	prior	to	2016	were	not	subject	to	restatement	under	the provisions	of	this	ASU.	For	additional	information,	see	Notes	19,	24	and	25	to the	Consolidated	Financial	Statements.

Citi	adopted	the	other	provisions	of	ASU	2016-01	and	ASU	2018-03	as	of January	1,	2018.	Accordingly,	as	of	the	first	quarter	of	2018,	the	changes	to accounting	for	equity	securities	and	fair	value	disclosures	have	been	reflected	in Citigroup's	financial	statements.	The	impact	of	adopting	the	change	to	AFS equity	securities	resulted	in	a	cumulative	catch-up	reclassification	from	AOCI	to Retained	earnings	of	an	accumulated	after-tax	gain	of	approximately	$3	million at	January	1,	2018.	Citi	elected	the	measurement	alternative	for	all	non- marketable	equity	investments	that	no	longer	qualify	for	cost	measurement	under the	ASUs.	This	provision	in	the	ASUs	was	adopted	prospectively.	Financial statements	for	periods	prior	to	2018	were	not	subject	to	restatement	under	the provisions	of	the	ASUs.	For	additional	information,	see	Notes	13,	19	and	24	to the	Consolidated	Financial	Statements.

# Statement	of	Cash	Flows

In	November	2016,	the	FASB	issued	ASU	No.	2016-18,	Restricted	Cash,	which requires	that	companies	present	cash,	cash	equivalents	and	amounts	generally described	as	restricted	cash	or	restricted	cash	equivalents	(restricted	cash)	when reconciling	beginning-of-period	and	end-of-period	totals	on	the	Statement	of Cash	Flows.	In	connection	with	the	adoption	of	the	ASU,	Citigroup	also	changed its	definition	of	cash	and	cash	equivalents	to	include	all	of	Cash	and	due	from banks	and	predominately	all	of	Deposits	with	banks.	The	Company	has retrospectively	adopted	this	ASU

as	of	January	1,	2018	and	as	a	result	Net	cash	provided	by	investing	activities	of continuing	operations	on	the	Statement	of	Cash	Flows	for	the	years	ended December	31,	2017	and	2016	increased	by	$19.3	billion	and	$25.3	billion, respectively.

In	August	2016,	the	FASB	issued	ASU	No.	2016-15,	Classification	of Certain	Cash	Receipts	and	Cash	Payments,	which	provides	guidance	on	the classification	and	presentation	of	certain	cash	receipts	and	payments	on	the Statement	of	Cash	Flows.	The	Company	has	retrospectively	adopted	this	ASU	as of	January	1,	2018,	which	resulted	in	immaterial	changes	to	Citi's	Consolidated Statement	of	Cash	Flows.

# Reclassification	of	Certain	Tax	Effects	from	Accumulated	Other Comprehensive	Income

On	February	14,	2018,	the	Financial	Accounting	Standards	Board	(FASB) issued	ASU	No.	2018-02,	Reclassification	of	Certain	Tax	Effects	from Accumulated	Other	Comprehensive	Income.	The	ASU	allows	a	reclassification from	Accumulated	other	comprehensive	income	(loss)	(AOCI)	to	Retained earnings	for	the	deferred	taxes	previously	recorded	in	AOCI	that	exceed	the current	federal	tax	rate	of	21%	resulting	from	the	newly	enacted	corporate	tax rate	in	Tax	Reform	and	other	stranded	tax	amounts	related	to	the	application	of Tax	Reform	that	Citi	elects	to	reclassify.	The	ASU	allows	adjustments	to reclassification	amounts	in	subsequent	periods	as	a	result	of	changes	to	the amounts	recorded	under	SAB	118.	Citi	elected	to	early	adopt	the	ASU	effective December	31,	2017,	which	affected	only	the	period	that	the	effects	related	to	the one-time	Tax	Reform	charge	were	recognized.	In	addition	to	the	reclassification of	deferred	taxes	recorded	in	AOCI	that	exceed	the	current	federal	tax	rate,	Citi also	reclassified	amounts	recorded	in	AOCI	related	to	the	effects	of	the	shift	to	a territorial	system	related	to	the	application	of	Tax	Reform	using	the	portfolio method.

The	effect	of	adopting	the	ASU	resulted	in	an	increase	of	$3.3	billion	to Retained	earnings	at	December	31,	2017	due	to	the	reclassification	of	AOCI	to Retained	earnings.

# Premium	Amortization	on	Purchased	Callable

# Debt	Securities

In	March	2017,	the	FASB	issued	ASU	No.	2017-08,	Receivables— Nonrefundable	Fees	and	Other	Costs	(Subtopic	310-20):	Premium	Amortization on	Purchased	Callable	Debt	Securities,	which	amends	the	amortization	period for	certain	purchased	callable	debt	securities	held	at	a	premium.	The	ASU requires	entities	to	amortize	premiums	on	debt	securities	by	the	first	call	date when	the	securities	have	fixed	and	determinable	call	dates	and	prices.	The	scope of	the	ASU	includes	all	accounting	premiums,	such	as	purchase	premiums	and cumulative	fair	value	hedge	adjustments.	The	ASU	does	not	change	the accounting	for	discounts,	which	continue	to	be	recognized	over	the	contractual life	of	a	security.

Citi	early	adopted	the	ASU	in	the	second	quarter	of	2017,	with	an	effective date	of	January	1,	2017.	Adoption	of	the	ASU	is	on	a	modified	retrospective basis	through	a

cumulative	effect	adjustment	to	Retained	earnings	as	of	the	beginning	of	the year	of	adoption.	Adoption	of	the	ASU	primarily	affected	Citi's	AFS	and	HTM portfolios	of	callable	state	and	municipal	debt	securities.	The	ASU	adoption resulted	in	a	net	reduction	to	total	stockholders'	equity	of	$156	million	(after- tax),	effective	as	of	January	1,	2017.	This	amount	is	composed	of	a	reduction	of approximately	$660	million	to	Retained	earnings	for	the	incremental amortization	of	purchase	premiums	and	cumulative	hedge	adjustments	generated under	fair	value	hedges	of	these	callable	debt	securities,	offset	by	an	increase	to AOCI	of	$504	million	related	to	the	cumulative	fair	value	hedge	adjustments reclassified	to	Retained	earnings	for	AFS	debt	securities.

# Accounting	for	Stock-Based	Compensation

In	March	2016,	the	FASB	issued	ASU	No.	2016-09,	Compensation—Stock Compensation	(Topic	718):	Improvements	to	Employee	Share-Based	Payment Accounting	in	order	to	simplify	certain	complex	aspects	of	the	accounting	for income	taxes	and	forfeitures	related	to	employee	stock-based	compensation.	The guidance	became	effective	for	Citi	beginning	on	January	1,	2017.	Under	the	new standard,	excess	tax	benefits	and	deficiencies	related	to	employee	stock-based compensation	are	recognized	directly	within	income	tax	expense	or	benefit	in Citi's	Consolidated	Statement	of	Income,	rather	than	within	additional	paid-in capital.	The	impact	of	this	change	was	not	material	in	the	first	quarter	of	2017	or each	subsequent	quarterly	period	of	2017	as	the	majority	of	employees'	deferred stock-based	compensation	awards	are	granted	within	the	first	quarter	of	each year	and,	therefore,	vest	within	the	first	quarter	of	each	year,	commensurate	with vesting	in	equal	annual	installments.	For	additional	information	on	these receivables	and	payables,	see	Note	7	to	the	Consolidated	Financial	Statements. Additionally,	as	permitted	under	the	new	guidance,	Citi	made	an	accounting policy	election	to	account	for	forfeitures	of	awards	as	they	occur,	which represents	a	change	from	the	previous	requirement	to	estimate	forfeitures	when recognizing	compensation	expense.	This	change	resulted	in	a	cumulative	effect adjustment	to	Retained	earnings	that	was	not	material	at	January	1,	2017.

# Fair	Value	Measurement

In	August	2018,	the	FASB	issued	ASU	No.	2018-13,	Fair	Value	Measurement (Topic	820):	Disclosure	Framework—Changes	to	the	Disclosure	Requirements for	Fair	Value	Measurement.	The	amendments	modify	certain	disclosure requirements	for	fair	value	measurements	and	are	effective	January	1,	2020,	with early	adoption	permitted.	The	Company	early	adopted	this	ASU	as	of December	31,	2018	in	its	entirety.	The	adoption	of	this	standard	did	not	have	a material	impact	on	the	Company.

# 2.	DISCONTINUED	OPERATIONS	AND	SIGNIFICANT	DISPOSALS

# Summary	of	Discontinued	Operations

The	Company's	Discontinued	operations	consisted	of	residual	activities	related to	the	sales	of	the	Brazil	Credicard	business	in	2013,	the	Egg	Banking	plc	Credit Card	Business	in	2011	and	the	German	Retail	Banking	business	in	2008.	All Discontinued	operations	results	are	recorded	within	Corporate/Other.

The	following	summarizes	financial	information	for	all	Discontinued operations:

|  | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Total\trevenues,\tnet\tof\tinterest\texpense | $— | $— | $— |
| Loss\tfrom\tdiscontinued\toperations | $(26) | $(104) | $(80) |
| Provision\t(benefit)\tfor\tincome\ttaxes | (18) | 7 | (22) |
| Loss\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes | $(8) | $(111) | $(58) |

Cash	flows	from	Discontinued	operations	were	not	material	for	all	periods presented.

# Significant	Disposals

The	transactions	described	below	were	identified	as	significant	disposals	during 2018,	2017	and	2016.	The	major	classes	of	Assets	and	Liabilities	derecognized from	the	Consolidated	Balance	Sheet	at	closing,	and	the	income	(loss)	before taxes	related	to	each	business	until	the	disposal	date,	are	presented	below.

# Sale	of	Mexico	Asset	Management	Business

On	September	21,	2018,	Citi	completed	the	sale	of	its	Mexico	asset	management business,	which	was	part	of	Latin	America	GCB.	As	part	of	the	sale,	Citi derecognized	total	assets	of	$137	million,	including	goodwill	of	$32	million, which	were	classified	as	held-for-sale	beginning	in	the	fourth	quarter	of	2017, and	total	liabilities	of	$41	million.	The	transaction	resulted	in	a	pretax	gain	on sale	of	approximately	$250	million	(approximately	$150	million	after-tax) recorded	in	Other	revenue	in	the	third	quarter	of	2018.	Further,	Citi	and	the buyer	entered	into	a	10-year	services	framework	agreement,	with	Citi	acting	as the	distributor	in	exchange	for	an	ongoing	fee.

Income	before	taxes,	excluding	the	pretax	gain	on	sale,	for	the	divested business	was	as	follows:

# Sale	of	Fixed	Income	Analytics	and	Index	Business

On	August	31,	2017,	Citi	completed	the	sale	of	a	fixed	income	analytics business	and	a	fixed	income	index	business	that	were	part	of	Markets	and securities	services	within	Institutional	Clients	Group	(ICG).	As	part	of	the	sale, Citi	derecognized	Total	assets	of	$112	million,	including	goodwill	of	$72 million,	while	the	derecognized	liabilities	were	$18	million.	The	transaction resulted	in	a	pretax	gain	on	sale	of	approximately	$580	million	($355	million after-tax)	recorded	in	Other	revenue	in	ICG	during	2017.

Income	before	taxes	excluding	the	pretax	gain	on	sale	for	the	divested businesses	was	immaterial	for	the	periods	presented.

# Exit	of	U.S.	Mortgage	Service	Operations

Citigroup	executed	agreements	during	the	first	quarter	of	2017	to	effectively	exit its	direct	U.S.	mortgage	servicing	operations	by	the	end	of	2018	to	intensify focus	on	originations.	The	exit	of	the	mortgage	servicing	operations	included	the sale	of	mortgage	servicing	rights	and	execution	of	a	subservicing	agreement	for the	remaining	Citi-owned	loans	and	certain	other	mortgage	servicing	rights.	As part	of	this	transaction,	Citi	has	also	transferred	certain	employees.

This	transaction,	which	was	part	of	Corporate/Other,	resulted	in	a	pretax loss	of	$331	million	($207	million	after-tax)	recorded	in	Other	revenue	during 2017.	The	loss	on	sale	did	not	include	certain	other	costs	and	charges	related	to the	disposed	operation	recorded	primarily	in	Operating	expenses	during	2017, resulting	in	a	total	pretax	loss	of	$382	million.	As	part	of	the	sale,	Citi derecognized	a	total	of	$1,162	million	of	servicing-related	assets,	including $1,046	million	of	Mortgage	servicing	rights,	related	to	approximately	750,000 Fannie	Mae	and	Freddie	Mac	held	loans	with	outstanding	balances	of approximately	$93	billion.	Excluding	the	loss	on	sale	and	the	additional	charges, income	before	taxes	for	the	disposed	operation	was	immaterial	for	the	periods presented.

# Sale	of	CitiFinancial	Canada	Consumer	Finance	Business

On	March	31,	2017,	Citi	completed	the	sale	of	CitiFinancial	Canada (CitiFinancial),	which	was	part	of	Corporate/Other,	and	included	220	retail branches	and	approximately	1,400	employees.	As	part	of	the	sale,	Citi derecognized	Total	assets	of	approximately	$1.9	billion,	including	$1.7	billion consumer	loans	(net	of	allowance),	and	Total	liabilities	of	approximately	$1.5 billion	related	to	intercompany	borrowings,	which	were	settled	at	closing	of	the transaction.	Separately,	during	2017	and	prior	to	closing	of	the	transaction, CitiFinancial	settled	$0.4	billion	of	debt	issued	through	loan	securitizations.	The sale	of	CitiFinancial	generated	a	pretax	gain	on	sale	of	approximately	$350 million	recorded	in	Other	revenue	($178	million	after-tax)	during	2017. Income	before	taxes,	excluding	the	pretax	gain	on	sale	for	the	divested business,	was	as	follows:

# 3.	BUSINESS	SEGMENTS

Citigroup's	activities	are	conducted	through	the	following	business	segments: Global	Consumer	Banking	(GCB)	and	Institutional	Clients	Group	(ICG).	In addition,	Corporate/Other	includes	activities	not	assigned	to	a	specific	business segment,	as	well	as	certain	North	America	loan	portfolios,	discontinued operations	and	other	legacy	assets.

The	business	segments	are	determined	based	on	products	and	services provided	or	type	of	customers	served,	of	which	those	identified	as	non-core	are recorded	in	Corporate/Other	and	are	reflective	of	how	management	currently evaluates	financial	information	to	make	business	decisions.

GCB	includes	a	global,	full-service	consumer	franchise	delivering	a	wide array	of	banking,	including	commercial	banking,	credit	card	lending	and investment	services	through	a	network	of	local	branches,	offices	and	electronic delivery	systems	and	consists	of	three	GCB	businesses:	North	America,	Latin America	and	Asia	(including	consumer	banking	activities	in	certain	EMEA countries).

ICG	consists	of	Banking	and	Markets	and	securities	services	and	provides corporate,	institutional,	public	sector	and	high-net-worth	clients	in	98	countries and	jurisdictions	with	a	broad	range	of	banking	and	financial	products	and services.

Corporate/Other	includes	certain	unallocated	costs	of	global	functions, other	corporate	expenses	and	net	treasury	results,	unallocated	corporate expenses,	offsets	to	certain	line-

item	reclassifications	and	eliminations,	the	results	of	certain	North	America legacy	loan	portfolios,	discontinued	operations	and	unallocated	taxes.

The	accounting	policies	of	these	reportable	segments	are	the	same	as	those disclosed	in	Note	1	to	the	Consolidated	Financial	Statements.

The	prior-period	balances	reflect	reclassifications	to	conform	the presentation	for	all	periods	to	the	current	period's	presentation.	Effective January	1,	2018,	financial	data	was	reclassified	to	reflect:

•the	adoption	of	ASU	No.	2014-09,	Revenue	Recognition,	which	occurred	on January	1,	2018	on	a	retrospective	basis.	See	"Accounting	Changes"	in	Note 1	to	the	Consolidated	Financial	Statements;

•the	re-attribution	of	certain	costs	between	Corporate/Other	and	GCB	and ICG;	and

•certain	other	immaterial

reclassifications.

Citi's	consolidated	net	income	(loss)	reported	in	its	2017	Annual	Report	on Form	10-K	remains	unchanged	for	all	periods	presented	as	a	result	of	the changes	and	reclassifications	discussed	above.

The	following	table	presents	certain	information	regarding	the	Company's continuing	operations	by	segment:

| identifiable	assets	in	billions | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Global\tConsumer\tBanking | $33,777 | $32,838 | $31,624 | $1,839 | $3,316 | $2,639 | $5,762 | $3,878 | $4,931 | $432 | $428 |
| Institutional\tClients\tGroup | 36,994 | 36,474 | 33,940 | 3,631 | 7,008 | 4,260 | 12,200 | 9,066 | 9,525 | 1,394 | 1,336 |
| Corporate/Other | 2,083 | 3,132 | 5,233 | (113) | 19,064 | (455) | 126 | (19,571) | 577 | 91 | 78 |
| Total | $72,854 | $72,444 | $70,797 | $5,357 | $29,388 | $6,444 | $18,088 | $(6,627) | $15,033 | $1,917 | $1,842 |

(1) Includes	total	revenues,	net	of	interest	expense	(excluding	Corporate/Other),	in	North	America	of	$33.4	billion,	$34.2	billion	and	$32.6	billion;	in	EMEA	of	$11.8	billion,	$10.9	billion	and	$10.0 billion;	in	Latin	America	of	$10.3	billion,	$9.6	billion	and	$9.1	billion;	and	in	Asia	of	$15.3	billion,	$14.6	billion	and	$13.9	billion	in	2018,	2017	and	2016,	respectively.	These	regional	numbers exclude	Corporate/Other,	which	largely	operates	within	the	U.S.

(2) Corporate/Other,	GCB	and	ICG	2017	results	include	the	one-time	impact	of	Tax	Reform.

# 4.		INTEREST	REVENUE	AND	EXPENSE

Interest	revenue	and	Interest	expense	consisted	of	the	following:

| In	millions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Interest\trevenue |  |  |  |
| Loan\tinterest,\tincluding\tfees | $45,682 | $41,736 | $40,125 |
| Deposits\twith\tbanks | 2,203 | 1,635 | 971 |
| Federal\tfunds\tsold\tand\tsecurities\tborrowed\tor\tpurchased\tunder\tagreements\tto\tresell | 5,492 | 3,249 | 2,543 |
| Investments,\tincluding\tdividends | 9,494 | 8,295 | 7,582 |
| Trading\taccount\tassets(1) | 6,284 | 5,501 | 5,738 |
| Other\tinterest | 1,673 | 1,163 | 1,029 |
| Total\tinterest\trevenue | $70,828 | $61,579 | $57,988 |
| Interest\texpense |  |  |  |
| Deposits(2) | $9,616 | $6,587 | $5,300 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\tagreements\tto\trepurchase | 4,889 | 2,661 | 1,912 |
| Trading\taccount\tliabilities(1) | 1,001 | 638 | 410 |
| Short-term\tborrowings | 2,209 | 1,059 | 477 |
| Long-term\tdebt | 6,551 | 5,573 | 4,413 |
| Total\tinterest\texpense | $24,266 | $16,518 | $12,512 |
| Net\tinterest\trevenue | $46,562 | $45,061 | $45,476 |
| Provision\tfor\tloan\tlosses | 7,354 | 7,503 | 6,749 |
| Net\tinterest\trevenue\tafter\tprovision\tfor\tloan\tlosses | $39,208 | $37,558 | $38,727 |

(1) Interest	expense	on	Trading	account	liabilities	is	reported	as	a	reduction	of	interest	revenue	from	 Trading	account	assets.

# 5.			COMMISSIONS	AND	FEES;	ADMINISTRATION	AND	OTHER

# FIDUCIARY	FEES

The	primary	components	of	Commissions	and	fees	revenue	are	investment banking	fees,	brokerage	commissions,	credit-	and	bank-card	income	and	deposit- related	fees.

Investment	banking	fees	are	substantially	composed	of	underwriting	and advisory	revenues.	Such	fees	are	recognized	at	the	point	in	time	when Citigroup's	performance	under	the	terms	of	a	contractual	arrangement	is completed,	which	is	typically	at	the	closing	of	a	transaction.	Reimbursed expenses	related	to	these	transactions	are	recorded	as	revenue	and	are	included within	investment	banking	fees.	In	certain	instances	for	advisory	contracts,	Citi will	receive	amounts	in	advance	of	the	deal's	closing.	In	these	instances,	the amounts	received	will	be	recognized	as	a	liability	and	not	recognized	in	revenue until	the	transaction	closes.	The	contract	liability	amount	for	the	periods presented	was	negligible.	Out-of-pocket	expenses	associated	with	underwriting activity	are	deferred	and	recognized	at	the	time	the	related	revenue	is recognized,	while	out-of-pocket	expenses	associated	with	advisory	arrangements are	expensed	as	incurred.	In	general,	expenses	incurred	related	to	investment banking	transactions,	whether	consummated	or	not,	are	recorded	in	Other operating	expenses.	The	Company	has	determined	that	it	acts	as	principal	in	the majority	of	these	transactions	and	therefore	presents	expenses	gross	within	Other operating	expenses.

Brokerage	commissions	primarily	include	commissions	and	fees	from	the following:	executing	transactions	for	clients	on	exchanges	and	over-the-counter markets;	sales	of	mutual	funds	and	other	annuity	products;	and	assisting	clients in	clearing	transactions,	providing	brokerage	services	and	other	such	activities. Brokerage	commissions	are	recognized	in	Commissions	and	fees	at	the	point	in time	the	associated	service	is	fulfilled,	generally	on	the	trade	execution	date. Gains	or	losses,	if	any,	on	these	transactions	are	included	in	Principal transactions	(see	Note	6	to	the	Consolidated	Financial	Statements).	Sales	of certain	investment	products	include	a	portion	of	variable	consideration associated	with	the	underlying	product.	In	these	instances,	a	portion	of	the revenue	associated	with	the	sale	of	the	product	is	not	recognized	until	the variable	consideration	becomes	fixed.	The	Company	recognized	$521	million, $416	million	and	$371	million	of	revenue	related	to	such	variable	consideration for	the	years	ended	December	31,	2018,	2017	and	2016,	respectively.	These amounts	primarily	relate	to	performance	obligations	satisfied	in	prior	periods.

Credit-	and	bank-card	income	is	primarily	composed	of interchange	fees,	which	are	earned	by	card	issuers	based	on purchase	sales,	and	certain	card	fees,	including	annual	fees. Costs	related	to	customer	reward	programs	and	certain payments	to	partners	(primarily	based	on	program	sales, profitability	and	customer	acquisitions)	are	recorded	as	a reduction	of	credit-	and	bank-card	income.	Interchange revenues	are	recognized	as	earned	on	a	daily	basis	when	Citi's performance	obligation	to	transmit	funds	to	the	payment networks	has	been	satisfied.	Annual	card	fees,	net	of origination	costs,	are	deferred	and	amortized	on	a	straight-line basis	over	a	12-month	period.	Costs	related	to	card	reward programs	are	recognized	when	the	rewards	are	earned	by	the cardholders.	Payments	to	partners	are	recognized	when incurred.

Deposit-related	fees	consist	of	service	charges	on	deposit accounts	and	fees	earned	from	performing	cash	management activities	and	other	deposit	account	services.	Such	fees	are recognized	in	the	period	in	which	the	related	service	is provided.

Transactional	service	fees	primarily	consist	of	fees charged	for	processing	services	such	as	cash	management, global	payments,	clearing,	international	funds	transfer	and other	trade	services.	Such	fees	are	recognized	as/when	the associated	service	is	satisfied,	which	normally	occurs	at	the point	in	time	the	service	is	requested	by	the	customer	and provided	by	Citi.

Insurance	distribution	revenue	consists	of	commissions earned	from	third-party	insurance	companies	for	marketing and	selling	insurance	policies	on	behalf	of	such	entities.	Such commissions	are	recognized	in	Commissions	and	fees	at	the point	in	time	the	associated	service	is	fulfilled,	generally	when the	insurance	policy	is	sold	to	the	policyholder.	Sales	of certain	insurance	products	include	a	portion	of	variable consideration	associated	with	the	underlying	product.	In	these instances,	a	portion	of	the	revenue	associated	with	the	sale	of the	policy	is	not	recognized	until	the	variable	consideration becomes	determinable.	The	Company	recognized	$386	million,	$440	million	and $479	million	of	revenue	related	to	such	variable	consideration	for	the	years ended	December	31,	2018,	2017	and	2016,	respectively.	These	amounts primarily	relate	to	performance	obligations	in	prior	periods. Insurance	premiums	consist	of	premium	income	from insurance	policies	that	Citi	has	underwritten	and	sold	to policyholders.

# The	following	table	presents	Commissions	and	fees	revenue:

|  |  |  | 2018 |  |  |  | 2017 |  |  |  | 2016 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | ICG | GCB | Corp/Other | Total | ICG | GCB | Corp/Other | Total | ICG | GCB | Corp/Other | Total |
| Investment\tbanking | $3,568 | $— | $— | $3,568 | $3,817 | $— | $— | $3,817 | $3,000 | $— | $— | $3,000 |
| Brokerage\tcommissions | 1,977 | 815 | — | 2,792 | 1,889 | 826 | 3 | 2,718 | 1,748 | 636 | 11 | 2,395 |
| Credit-\tand\tbank-card\n\t\tincome |  |  |  |  |  |  |  |  |  |  |  |  |
| \t\t\t\t\tInterchange\tfees | 1,072 | 8,117 | 11 | 9,200 | 950 | 7,526 | 99 | 8,575 | 837 | 6,189 | 164 | 7,190 |
| \t\t\t\t\tCard-related\tloan\tfees | 63 | 627 | 12 | 702 | 53 | 693 | 48 | 794 | 27 | 784 | 65 | 876 |
| \t\t\t\t\tCard\trewards\tand\tpartner\n\t\t\t\t\t\t\tpayments | (503) | (8,254) | (12) | (8,769) | (425) | (7,243) | (57) | (7,725) | (361) | (6,084) | (111) | (6,556) |
| Deposit-related\tfees(1) | 949 | 654 | 1 | 1,604 | 947 | 726 | 14 | 1,687 | 818 | 721 | 19 | 1,558 |
| Transactional\tservice\tfees | 718 | 98 | 4 | 820 | 738 | 91 | 49 | 878 | 700 | 84 | 136 | 920 |
| Corporate\tfinance(2) | 729 | 5 | — | 734 | 761 | 5 | — | 766 | 741 | 4 | — | 745 |
| Insurance\tdistribution\n\t\trevenue(3) | 14 | 565 | 11 | 590 | 12 | 562 | 68 | 642 | 10 | 584 | 90 | 684 |
| Insurance\tpremiums(3) | — | 119 | — | 119 | — | 122 | — | 122 | — | 136 | 144 | 280 |
| Loan\tservicing | 156 | 122 | 37 | 315 | 146 | 101 | 95 | 342 | 147 | 127 | 77 | 351 |
| Other | 25 | 143 | 14 | 182 | (38) | 99 | 30 | 91 | 31 | 90 | 114 | 235 |
| Total\tcommissions\tand\n\t\tfees(4) | $8,768 | $3,011 | $78 | $11,857 | $8,850 | $3,508 | $349 | $12,707 | $7,698 | $3,271 | $709 | $11,678 |

(2) Consists	primarily	of	fees	earned	from	structuring	and	underwriting	loan	syndications	or	related	financing	activity.	This	activity	is	accounted	for	under	ASC	310.

(3) Previously	reported	as	insurance	premiums	in	the	Consolidated	Statement	of	Income.

(4) Commissions	and	fees	includes	$(6,766)	million,	$(5,568)	million	and	$(4,169)	million	not	accounted	for	under	ASC	606,	Revenue	from	Contracts	with	Customers,	for	the	years	ended December	31,	2018,	2017	and	2016,	respectively.	Amounts	reported	in	Commissions	and	fees	accounted	for	under	other	guidance	primarily	include	card-related	loan	fees,	card	reward	programs and	certain	partner	payments,	corporate	finance	fees,	insurance	premiums	and	loan	servicing	fees.

# Administration	and	Other	Fiduciary	Fees

Administration	and	other	fiduciary	fees	are	primarily	composed	of	custody	fees and	fiduciary	fees.

The	custody	product	is	composed	of	numerous	services	related	to	the administration,	safekeeping	and	reporting	for	both	U.S.	and	non-U.S. denominated	securities.	The	services	offered	to	clients	include	trade	settlement, safekeeping,	income	collection,	corporate	action	notification,	record-keeping	and reporting,	tax	reporting	and	cash	management.	These	services	are	provided	for	a wide	range	of	securities,	including	but	not	limited	to	equities,	municipal	and corporate	bonds,	mortgage-	and	asset-backed	securities,	money	market instruments,	U.S.	Treasuries	and	agencies,	derivative	instruments,	mutual	funds, alternative	investments	and	precious	metals.	Custody	fees	are	recognized	as	or when	the	associated	promised	service	is	satisfied,	which	normally	occurs	at	the point	in	time	the	service	is	requested	by	the	customer	and	provided	by	Citi.

Fiduciary	fees	consist	of	trust	services	and	investment	management	services. As	an	escrow	agent,	Citi	receives,	safe-

keeps,	services	and	manages	clients'	escrowed	assets	such	as	cash,	securities, property	(including	intellectual	property),	contracts	or	other	collateral.	Citi performs	its	escrow	agent	duties	by	safekeeping	the	funds	during	the	specified time	period	agreed	upon	by	all	parties	and	therefore	earns	its	revenue	evenly during	the	contract	duration.

Investment	management	services	consist	of	managing	assets	on	behalf	of Citi's	retail	and	institutional	clients.	Revenue	from	these	services	primarily consists	of	asset-based	fees	for	advisory	accounts,	which	are	based	on	the	market value	of	the	client's	assets	and	recognized	monthly,	when	the	market	value	is fixed.	In	some	instances,	the	Company	contracts	with	third-party	advisors	and with	third-party	custodians.	The	Company	has	determined	that	it	acts	as	principal in	the	majority	of	these	transactions	and	therefore	presents	the	amounts	paid	to third	parties	gross	within	Other	operating	expenses.

The	following	table	presents	Administration	and	other	fiduciary	fees:

|  |  |  | 2018 |  |  |  | 2017 |  |  |  | 2016 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | ICG | GCB | Corp/Other | Total | ICG | GCB | Corp/Other | Total | ICG | GCB | Corp/Other | Total |
| Custody\tfees | $1,494 | $136 | $65 | $1,695 | $1,505 | $167 | $56 | $1,728 | $1,353 | $163 | $48 | $1,564 |
| Fiduciary\tfees | 645 | 597 | 43 | 1,285 | 593 | 575 | 91 | 1,259 | 554 | 539 | 50 | 1,143 |
| Guarantee\tfees | 536 | 57 | 7 | 600 | 535 | 54 | 8 | 597 | 523 | 54 | 10 | 587 |
| Total\tadministration\n\t\tand\tother\tfiduciary\tfees(1) | $2,675 | $790 | $115 | $3,580 | $2,633 | $796 | $155 | $3,584 | $2,430 | $756 | $108 | $3,294 |

(1) Administration	and	other	fiduciary	fees	includes	$600	million,	$597	million	and	$587	million	for	the	years	ended	December	31,	2018,	2017	and	2016,	respectively,	that	are	not	accounted	for under	ASC	606,	Revenue	from	Contracts	with	Customers.	These	amounts	include	guarantee	fees.

# 6.	PRINCIPAL	TRANSACTIONS

Citi's	Principal	transactions	revenue	consists	of	realized	and	unrealized	gains and	losses	from	trading	activities.	Trading	activities	include	revenues	from	fixed income,	equities,	credit	and	commodities	products	and	foreign	exchange transactions	that	are	managed	on	a	portfolio	basis	characterized	by	primary	risk. Not	included	in	the	table	below	is	the	impact	of	net	interest	revenue	related	to trading	activities,	which	is	an	integral	part	of	trading	activities'	profitability.	For additional	information	regarding	Principal	transactions	revenue,	see

Note	4	to	the	Consolidated	Financial	Statements	for	information	about	net interest	revenue	related	to	trading	activities.	Principal	transactions	include	CVA (credit	valuation	adjustments	on	derivatives)	and	FVA	(funding	valuation adjustments)	on	over-the-counter	derivatives.	These	adjustments	are	discussed further	in	Note	24	to	the	Consolidated	Financial	Statements.

The	following	table	presents	Principal	transactions	revenue:

| In	millions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Interest\trate\trisks(1) | $5,186 | $5,301 | $4,229 |
| Foreign\texchange\trisks(2) | 1,423 | 2,435 | 1,699 |
| Equity\trisks(3) | 1,346 | 525 | 330 |
| Commodity\tand\tother\trisks(4) | 662 | 425 | 899 |
| Credit\tproducts\tand\trisks(5) | 445 | 789 | 700 |
| Total | $9,062 | $9,475 | $7,857 |

(1) Includes	revenues	from	government	securities	and	corporate	debt,	municipal	securities,	mortgage	securities	and	other	debt	instruments.	Also	includes	spot	and	forward	trading	of	currencies	and exchange-traded	and	over-the-counter	(OTC)	currency	options,	options	on	fixed	income	securities,	interest	rate	swaps,	currency	swaps,	swap	options,	caps	and	floors,	financial	futures,	OTC options	and	forward	contracts	on	fixed	income	securities.

(2) Includes	revenues	from	foreign	exchange	spot,	forward,	option	and	swap	contracts,	as	well	as	foreign	currency	translation	(FX	translation)	gains	and	losses.

(3) Includes	revenues	from	common,	preferred	and	convertible	preferred	stock,	convertible	corporate	debt,	equity-linked	notes	and	exchange-traded	and	OTC	equity	options	and	warrants.

(4) Primarily	includes	revenues	from	crude	oil,	refined	oil	products,	natural	gas	and	other	commodities	trades.

(5) Includes	revenues	from	structured	credit	products.

# 7.	INCENTIVE	PLANS

# Discretionary	Annual	Incentive	Awards

Citigroup	grants	immediate	cash	bonus	payments	and	various	forms	of immediate	and	deferred	awards	as	part	of	its	discretionary	annual	incentive award	program	involving	a	large	segment	of	Citigroup's	employees	worldwide. Most	of	the	shares	of	common	stock	issued	by	Citigroup	as	part	of	its	equity compensation	programs	are	to	settle	the	vesting	of	the	stock	components	of	these awards.

Discretionary	annual	incentive	awards	are	generally	awarded	in	the	first quarter	of	the	year	based	on	the	previous	year's	performance.	Awards	valued	at less	than	U.S.	$100,000	(or	the	local	currency	equivalent)	are	generally	paid entirely	in	the	form	of	an	immediate	cash	bonus.	Pursuant	to	Citigroup	policy and/or	regulatory	requirements,	certain	employees	and	officers	are	subject	to mandatory	deferrals	of	incentive	pay	and	generally	receive	25%–60%	of	their awards	in	a	combination	of	restricted	or	deferred	stock,	deferred	cash	stock	units or	deferred	cash.	Discretionary	annual	incentive	awards	to	many	employees	in the	EU	are	subject	to	deferral	requirements	regardless	of	the	total	award	value, with	at	least	50%	of	the	immediate	incentive	delivered	in	the	form	of	a	stock payment	award	subject	to	a	restriction	on	sale	or	transfer	(generally,	for	12 months).

Deferred	annual	incentive	awards	may	be	delivered	in	the	form	of	one	or more	award	types:	a	restricted	or	deferred	stock	award	under	Citi's	Capital Accumulation	Program	(CAP),	or	a	deferred	cash	stock	unit	award	and/or	a deferred	cash	award	under	Citi's	Deferred	Cash	Award	Plan.	The	applicable	mix of	awards	may	vary	based	on	the	employee's	minimum	deferral	requirement	and the	country	of	employment.

Subject	to	certain	exceptions	(principally,	for	retirement-eligible employees),	continuous	employment	within	Citigroup	is	required	to	vest	in	CAP, deferred	cash	stock	unit	and	deferred	cash	awards.	Post	employment	vesting	by retirement-eligible	employees	and	participants	who	meet	other	conditions	is generally	conditioned	upon	their	refraining	from	competition	with	Citigroup during	the	remaining	vesting	period,	unless	the	employment	relationship	has been	terminated	by	Citigroup	under	certain	conditions.

Generally,	the	deferred	awards	vest	in	equal	annual	installments	over	three- or	four-year	periods.	Vested	CAP	awards	are	delivered	in	shares	of	common stock.	Deferred	cash	awards	are	payable	in	cash	and,	except	as	prohibited	by applicable	regulatory	guidance,	earn	a	fixed	notional	rate	of	interest	that	is	paid only	if	and	when	the	underlying	principal	award	amount	vests.	Deferred	cash stock	unit	awards	are	payable	in	cash	at	the	vesting	value	of	the	underlying stock.	Generally,	in	the	EU,	vested	CAP	shares	are	subject	to	a	restriction	on	sale or	transfer	after	vesting,	and	vested	deferred	cash	awards	and	deferred	cash	stock units	are	subject	to	hold	back	(generally,	for	12	months	in	each	case). Unvested	CAP,	deferred	cash	stock	units	and	deferred	cash	awards	are subject	to	one	or	more	clawback	provisions	that	apply	in	certain	circumstances, including	gross	misconduct.	CAP	and	deferred	cash	stock	unit	awards,	made	to certain	employees,	are	subject	to	a	formulaic	performance-based	vesting condition	pursuant	to	which	amounts	otherwise

scheduled	to	vest	will	be	reduced	based	on	the	amount	of	any	pretax	loss	in	the participant's	business	in	the	calendar	year	preceding	the	scheduled	vesting	date. A	minimum	reduction	of	20%	applies	for	the	first	dollar	of	loss	for	CAP	and deferred	cash	stock	unit	awards.

In	addition,	deferred	cash	awards	are	subject	to	a	discretionary	performance- based	vesting	condition	under	which	an	amount	otherwise	scheduled	to	vest	may be	reduced	in	the	event	of	a	"material	adverse	outcome"	for	which	a	participant has	"significant	responsibility."	These	awards	are	also	subject	to	an	additional clawback	provision	pursuant	to	which	unvested	awards	may	be	canceled	if	the employee	engaged	in	misconduct	or	exercised	materially	imprudent	judgment, or	failed	to	supervise	or	escalate	the	behavior	of	other	employees	who	did.

# Sign-on	and	Long-Term	Retention	Awards

Stock	awards	and	deferred	cash	awards	may	be	made	at	various	times	during	the year	as	sign-on	awards	to	induce	new	hires	to	join	Citi	or	to	high-potential employees	as	long-term	retention	awards.

Vesting	periods	and	other	terms	and	conditions	pertaining	to	these	awards tend	to	vary	by	grant.	Generally,	recipients	must	remain	employed	through	the vesting	dates	to	vest	in	the	awards,	except	in	cases	of	death,	disability	or involuntary	termination	other	than	for	gross	misconduct.	These	awards	do	not usually	provide	for	post	employment	vesting	by	retirement-eligible	participants.

# Outstanding	(Unvested)	Stock	Awards

A	summary	of	the	status	of	unvested	stock	awards	granted	as	discretionary annual	incentive	or	sign-on	and	long-term	retention	awards	is	presented	below:

| Unvested	stock	awards | Shares | Weighted-<br>average	grant<br>date	fair<br>value	per	share |
| :--- | :--- | :--- |
| Unvested\tat\tDecember\t31,\t2017 | 36,931,040 | $47.89 |
| Granted(1) | 12,896,599 | 73.87 |
| Canceled | (1,315,456) | 54.50 |
| Vested(2) | (16,783,587) | 49.54 |
| Unvested\tat\tDecember\t31,\t2018 | 31,728,596 | $57.30 |

(2) The	weighted-average	fair	value	of	the	shares	vesting	during	2018	was	approximately $77.65	per	share.

Total	unrecognized	compensation	cost	related	to	unvested	stock	awards	was $538	million	at	December	31,	2018.	The	cost	is	expected	to	be	recognized	over	a weighted-average	period	of	1.7	years.

# Performance	Share	Units

Certain	executive	officers	were	awarded	a	target	number	of	performance	share units	(PSUs)	each	February	from	2015	to	2018,	for	performance	in	the	year	prior to	the	award	date.	For	grants	prior	to	2016,	PSUs	will	be	earned	only	to	the extent	that	Citigroup	attains	specified	performance	goals	relating	to	Citigroup's return	on	assets	and	relative	total	shareholder	return	against	peers	over	the	three- year	period	beginning	with	the	year	of	award.	The	actual	dollar	amounts ultimately	earned	could	vary	from	zero,	if	performance	goals	are	not	met,	to	as much	as	150%	of	target,	if	performance	goals	are	meaningfully	exceeded.

The	PSUs	granted	in	February	2016	are	earned	over	a	three-year performance	period	based	on	Citigroup's	relative	total	shareholder	return	as compared	to	peers.	The	actual	dollar	amounts	ultimately	earned	could	vary	from zero,	if	performance	goals	are	not	met,	to	as	much	as	150%	of	target,	if performance	goals	are	meaningfully	exceeded.

The	PSUs	granted	in	February	2017	are	earned	over	a	three-year performance	period	based	half	on	return	on	tangible	common	equity performance	in	2019,	and	the	remaining	half	on	cumulative	earnings	per	share over	2017	to	2019.

The	PSUs	granted	in	February	2018	are	earned	over	a	three-year performance	period	based	half	on	return	on	tangible	common	equity performance	in	2020,	and	the	remaining	half	on	cumulative	earnings	per	share over	2018	to	2020.

For	the	PSUs	awarded	in	2016,	2017	and	2018,	if	the	total	shareholder return	is	negative	over	the	three-year	performance	period,	executives	may	earn no	more	than	100%	of	the	target	PSUs,	regardless	of	the	extent	to	which	Citi outperforms	peer	firms.

For	all	award	years,	the	value	of	each	PSU	is	equal	to	the	value	of	one	share of	Citi	common	stock.	Dividend	equivalents	will	be	accrued	and	paid	on	the number	of	earned	PSUs	after	the	end	of	the	performance	period.

PSUs	are	subject	to	variable	accounting,	pursuant	to	which	the	associated value	of	the	award	will	fluctuate	with	changes	in	Citigroup's	stock	price	and	the attainment	of	the	specified	performance	goals	for	each	award,	until	the	award	is settled	solely	in	cash	after	the	end	of	the	performance	period.	The	value	of	the award,	subject	to	the	performance	goals,	is	estimated	using	a	simulation	model that	incorporates	multiple	valuation	assumptions,	including	the	probability	of achieving	the	specified	performance	goals	of	each	award.	The	risk-free	rate	used in	the	model	is	based	on	the	applicable	U.S.	Treasury	yield	curve.	Other significant	assumptions	for	the	awards	are	as	follows:

A	summary	of	the	performance	share	unit	activity	for	2018	is	presented below:

| Performance	share	units | Units | Weighted-<br>average	grant<br>date	fair<br>value	per	unit |
| :--- | :--- | :--- |
| Outstanding,\tbeginning\tof\n\t\tperiod | 1,786,726 | $40.94 |
| Granted(1) | 495,099 | 83.24 |
| Canceled | (25,160) | 44.07 |
| Payments | (488,304) | 44.07 |
| Outstanding,\tend\tof\tperiod | 1,768,362 | $51.88 |

PSUs	granted	in	2015	and	2017	were	equitably	adjusted	after	the	enactment of	Tax	Reform,	as	required	under	the	terms	of	those	awards.	The	adjustments were	intended	to	reproduce	the	expected	value	of	the	awards	immediately	prior to	the	passage	of	Tax	Reform.	The	PSUs	granted	in	2016	were	not	impacted	by Tax	Reform.

# Stock	Option	Programs

All	outstanding	stock	options	are	fully	vested,	with	the	related	expense recognized	as	a	charge	to	income	in	prior	periods.	Generally,	the	stock	options outstanding	have	a	six-year	term,	with	some	stock	options	subject	to	various transfer	restrictions.

# The	following	table	presents	information	with	respect	to	stock	option	activity	under	Citigroup's	stock	option	programs:

|  | Options | 2018<br>Weighted-<br>average<br>exercise<br>price | Intrinsic<br>value<br>per	share | Options | 2017<br>Weighted-<br>average<br>exercise<br>price | Intrinsic<br>value<br>per	share | Options | 2016<br>Weighted-<br>average<br>exercise<br>price | Intrinsic<br>value<br>per	share |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Outstanding,\tbeginning\tof\nperiod | 1,138,813 | $161.96 | $— | 1,527,396 | $131.78 | $— | 6,656,588 | $67.92 | $— |
| Canceled | — | — | — | — | — | — | (25,334) | 40.80 | — |
| Expired | (376,588) | 283.63 | — | — | — | — | (2,613,909) | 48.80 | — |
| Exercised | — | — | — | (388,583) | 43.35 | 15.67 | (2,489,949) | 49.10 | 6.60 |
| Outstanding,\tend\tof\tperiod | 762,225 | $101.84 | $— | 1,138,813 | $161.96 | $— | 1,527,396 | $131.78 | $— |
| Exercisable,\tend\tof\tperiod | 762,225 |  |  | 1,138,813 |  |  | 1,527,396 |  |  |

The	following	table	summarizes	information	about	stock	options	outstanding	under	Citigroup's	stock	option	programs	at	December	31,	2018:

| Range	of	exercise	prices | Number<br>outstanding | contractual	life<br>remaining | Weighted-average<br>exercise	price | Number<br>exercisable | Weighted-average<br>exercise	price |
| :--- | :--- | :--- | :--- | :--- | :--- |
| $39.00–$99.99 | 312,309 | 2.1\tyears $ | 43.56 | 312,309 | $43.56 |
| $100.00–$199.99 | 449,916 | 0.0\tyears | 142.30 | 449,916 | 142.30 |
| Total\tat\tDecember\t31,\t2018 | 762,225 | 0.9\tyears $ | 101.84 | 762,225 | $101.84 |

# Other	Variable	Incentive	Compensation

Citigroup	has	various	incentive	plans	globally	that	are	used	to	motivate	and reward	performance	primarily	in	the	areas	of	sales,	operational	excellence	and customer	satisfaction.	Participation	in	these	plans	is	generally	limited	to employees	who	are	not	eligible	for	discretionary	annual	incentive	awards.	Other forms	of	variable	compensation	include	monthly	commissions	paid	to	financial advisors	and	mortgage	loan	officers.

# Summary

Except	for	awards	subject	to	variable	accounting,	the	total	expense	recognized for	stock	awards	represents	the	grant	date	fair	value	of	such	awards,	which	is generally	recognized	as	a	charge	to	income	ratably	over	the	vesting	period,	other than	for	awards	to	retirement-eligible	employees	and	immediately	vested	awards. Whenever	awards	are	made	or	are	expected	to	be	made	to	retirement-eligible employees,	the	charge	to	income	is	accelerated	based	on	when	the	applicable conditions	to	retirement	eligibility	were	or	will	be	met.	If	the	employee	is retirement	eligible	on	the	grant	date,	or	the	award	is	vested	at	the	grant	date,	the entire	expense	is	recognized	in	the	year	prior	to	grant.

Recipients	of	Citigroup	stock	awards	generally	do	not	have	any	stockholder rights	until	shares	are	delivered	upon	vesting	or	exercise,	or	after	the	expiration of	applicable	required	holding	periods.	Recipients	of	restricted	or	deferred	stock awards	and	deferred	cash	stock	unit	awards,	however,	may,	except	as	prohibited by	applicable	regulatory	guidance,	be	entitled	to	receive	dividends	or	dividend- equivalent	payments	during	the	vesting	period.	Recipients	of	restricted	stock awards	generally	are	entitled	to	vote	the	shares	in	their

award	during	the	vesting	period.	Once	a	stock	award	vests,	the	shares	are	freely transferable,	unless	they	are	subject	to	a	restriction	on	sale	or	transfer	for	a specified	period.

All	equity	awards	granted	since	April	19,	2005	have	been	made	pursuant	to stockholder-approved	stock	incentive	plans	that	are	administered	by	the Personnel	and	Compensation	Committee	of	the	Citigroup	Board	of	Directors, which	is	composed	entirely	of	independent	non-employee	directors.

At	December	31,	2018,	approximately	42.4	million	shares	of	Citigroup common	stock	were	authorized	and	available	for	grant	under	Citigroup's	2014 Stock	Incentive	Plan,	the	only	plan	from	which	equity	awards	are	currently granted.

The	2014	Stock	Incentive	Plan	and	predecessor	plans	permit	the	use	of treasury	stock	or	newly	issued	shares	in	connection	with	awards	granted	under the	plans.	Treasury	shares	were	used	to	settle	vestings	from	2016	to	2018,	and for	the	first	quarter	of	2019,	except	where	local	laws	favor	newly	issued	shares. The	use	of	treasury	stock	or	newly	issued	shares	to	settle	stock	awards	does	not affect	the	compensation	expense	recorded	in	the	Consolidated	Statement	of Income	for	equity	awards.

# Incentive	Compensation	Cost

The	following	table	shows	components	of	compensation	expense,	relating	to certain	of	the	incentive	compensation	programs	described	above:

| In	millions	of	dollars<br>Charges	for	estimated	awards	to	retirement-<br>eligible	employees | 2018<br>$669 | 2017<br>$659 | 2016<br>$555 |
| :--- | :--- | :--- | :--- |
| Amortization\tof\tdeferred\tcash\tawards,\tdeferred\ncash\tstock\tunits\tand\tperformance\tstock\tunits | 202 | 354 | 336 |
| Immediately\tvested\tstock\taward\texpense(1) | 75 | 70 | 73 |
| Amortization\tof\trestricted\tand\tdeferred\tstock\nawards(2) | 435 | 474 | 509 |
| Other\tvariable\tincentive\tcompensation | 640 | 694 | 710 |
| Total | $2,021 | $2,251 | $2,183 |

(1) Represents	expense	for	immediately	vested	stock	awards	that	generally	were	stock payments	in	lieu	of	cash	compensation.	The	expense	is	generally	accrued	as	cash incentive	compensation	in	the	year	prior	to	grant.

(2) All	periods	include	amortization	expense	for	all	unvested	awards	to	non-retirement-

eligible	employees.

# 8.	RETIREMENT	BENEFITS

# Pension	and	Postretirement	Plans

The	Company	has	several	non-contributory	defined	benefit	pension	plans covering	certain	U.S.	employees	and	has	various	defined	benefit	pension	and termination	indemnity	plans	covering	employees	outside	the	U.S.

The	U.S.	qualified	defined	benefit	plan	was	frozen	effective	January	1,	2008 for	most	employees.	Accordingly,	no	additional	compensation-based contributions	have	been	credited	to	the	cash	balance	portion	of	the	plan	for existing	plan	participants	after	2007.	However,	certain	employees	covered	under the	prior	final	pay	plan	formula	continue	to	accrue	benefits.	The	Company	also offers	postretirement	health	care	and	life	insurance	benefits	to	certain	eligible U.S.	retired	employees,	as	well	as	to	certain	eligible	employees	outside	the	U.S. The	Company	also	sponsors	a	number	of	non-contributory,	nonqualified pension	plans.	These	plans,	which	are	unfunded,	provide	supplemental	defined pension	benefits	to	certain	U.S.

employees.	With	the	exception	of	certain	employees	covered	under	the	prior final	pay	plan	formula,	the	benefits	under	these	plans	were	frozen	in	prior	years.

The	plan	obligations,	plan	assets	and	periodic	plan	expense	for	the Company's	most	significant	pension	and	postretirement	benefit	plans (Significant	Plans)	are	measured	and	disclosed	quarterly,	instead	of	annually. The	Significant	Plans	captured	approximately	90%	of	the	Company's	global pension	and	postretirement	plan	obligations	as	of	December	31,	2018.	All	other plans	(All	Other	Plans)	are	measured	annually	with	a	December	31	measurement date.

# Net	(Benefit)	Expense

The	following	table	summarizes	the	components	of	net	(benefit)	expense recognized	in	the	Consolidated	Statement	of	Income	for	the	Company's	pension and	postretirement	plans,	for	Significant	Plans	and	All	Other	Plans:

|  | Pension	plans | Pension	plans | Pension	plans | Pension	plans | Pension	plans | Pension	plans |  | Postretirement	benefit	plans | Postretirement	benefit	plans | Postretirement	benefit	plans |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | U.S.\tplans |  | Non-U.S.\tplans | Non-U.S.\tplans |  |  | U.S.\tplans |  | Non-U.S.\tplans | Non-U.S.\tplans |  |
| In\tmillions\tof\tdollars | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 |
| Benefits\tearned\tduring\tthe\tyear | $1 | $3 | $4 | $146 | $153 | $154 | $— | $— | $— | $9 | $9 | $10 |
| Interest\tcost\ton\tbenefit\tobligation | 514 | 533 | 548 | 292 | 295 | 282 | 26 | 26 | 25 | 102 | 101 | 94 |
| Expected\treturn\ton\tplan\tassets | (844) | (865) | (886) | (291) | (299) | (287) | (14) | (6) | (9) | (88) | (89) | (86) |
| Amortization\tof\tunrecognized |  |  |  |  |  |  |  |  |  |  |  |  |
| Prior\tservice\tcost\t(benefit) | 2 | 2 | 2 | (4) | (3) | (1) | — | — | — | (10) | (10) | (10) |
| Net\tactuarial\tloss\t(gain) | 165 | 173 | 169 | 53 | 61 | 69 | (1) | — | (1) | 29 | 35 | 30 |
| Curtailment\tloss\t(gain)(1) | 1 | 6 | 13 | (1) | — | (2) | — | — | — | — | — | — |
| Settlement\tloss(1) | — | — | — | 7 | 12 | 6 | — | — | — | — | — | — |
| Total\tnet\t(benefit)\texpense | $(161) | $(148) | $(150) | $202 | $219 | $221 | $11 | $20 | $15 | $42 | $46 | $38 |

(1) Losses	and	gains	due	to	curtailment	and	settlement	relate	to	repositioning	and	divestiture	actions.

# Contributions

The	Company's	funding	practice	for	U.S.	and	non-U.S.	pension	and postretirement	plans	is	generally	to	fund	to	minimum	funding	requirements	in accordance	with	applicable	local	laws	and	regulations.	The	Company	may increase	its	contributions	above	the	minimum	required	contribution,	if appropriate.	In	addition,	management	has	the	ability	to	change	its	funding practices.	For	the	U.S.	pension	plans,	there	were	no	required	minimum	cash contributions	for	2018	or	2017.

The	following	table	summarizes	the	actual	Company	contributions	for	the years	ended	December	31,	2018	and	2017,	as	well	as	estimated	expected Company	contributions	for	2019.	Expected	contributions	are	subject	to	change, since	contribution	decisions	are	affected	by	various	factors,	such	as	market performance,	tax	considerations	and	regulatory	requirements.

|  | Pension	plans(1) | Pension	plans(1) | Pension	plans(1) | Pension	plans(1) | Pension	plans(1) | Pension	plans(1) |  | Postretirement	benefit	plans(1) | Postretirement	benefit	plans(1) | Postretirement	benefit	plans(1) | Postretirement	benefit	plans(1) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | U.S.\tplans(2) |  |  | Non-U.S.\tplans | Non-U.S.\tplans |  | U.S.\tplans |  |  | Non-U.S.\tplans | Non-U.S.\tplans |
| In\tmillions\tof\tdollars | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 |
| Contributions\tmade\tby\tthe\tCompany | $— | $— | $50 | $97 | $140 | $90 | $— | $145 | $140 | $4 | $3 | $4 |
| Benefits\tpaid\tdirectly\tby\tthe\tCompany | 57 | 55 | 55 | 47 | 42 | 45 | 6 | 5 | 36 | 6 | 6 | 5 |

(1) Amounts	reported	for	2019	are	expected	amounts.

(2) The	U.S.	pension	plans	include	benefits	paid	directly	by	the	Company	for	the	nonqualified	pension	plans.

# Funded	Status	and	Accumulated	Other	Comprehensive	Income	(AOCI)

The	following	tables	summarize	the	funded	status	and	amounts	recognized	in	the	Consolidated	Balance	Sheet	for	the	Company's	pension	and	postretirement	plans:

|  | Pension	plans | Pension	plans | Pension	plans | Pension	plans |  | Postretirement	benefit	plans | Postretirement	benefit	plans |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | U.S.\tplans | U.S.\tplans | Non-U.S.\tplans |  | U.S.\tplans |  | Non-U.S.\tplans |  |
| In\tmillions\tof\tdollars | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 |
| Change\tin\tprojected\tbenefit\tobligation |  |  |  |  |  |  |  |  |
| Projected\tbenefit\tobligation\tat\tbeginning\tof\tyear | $14,040 | $14,000 | $7,433 | $6,522 | $699 | $686 | $1,261 | $1,141 |
| Benefits\tearned\tduring\tthe\tyear | 1 | 3 | 146 | 153 | — | — | 9 | 9 |
| Interest\tcost\ton\tbenefit\tobligation | 514 | 533 | 292 | 295 | 26 | 26 | 102 | 101 |
| Plan\tamendments | — | — | 7 | 4 | — | — | — | — |
| Actuarial\t(gain)\tloss | (1,056) | 536 | (99) | 127 | (1) | 43 | (123) | 19 |
| Benefits\tpaid,\tnet\tof\tparticipants'\tcontributions\tand\tgovernment\nsubsidy(1) | (845) | (769) | (293) | (278) | (62) | (56) | (68) | (64) |
| Divestitures | — | — | — | (29) | — | — | — | (4) |
| Settlement\tgain(2) | — | — | (121) | (192) | — | — | — | — |
| Curtailment\tloss\t(gain)(2) | 1 | 6 | (1) | (3) | — | — | — | — |
| Foreign\texchange\timpact\tand\tother(3) | — | (269) | (215) | 834 | — | — | (22) | 59 |
| Projected\tbenefit\tobligation\tat\tyear\tend | $12,655 | $14,040 | $7,149 | $7,433 | $662 | $699 | $1,159 | $1,261 |
| Change\tin\tplan\tassets |  |  |  |  |  |  |  |  |
| Plan\tassets\tat\tfair\tvalue\tat\tbeginning\tof\tyear | $12,725 | $12,363 | $7,128 | $6,149 | $262 | $129 | $1,119 | $1,015 |
| Actual\treturn\ton\tplan\tassets | (445) | 1,295 | (11) | 462 | (5) | 13 | (26) | 113 |
| Company\tcontributions | 55 | 105 | 182 | 135 | 150 | 176 | 9 | 9 |
| Benefits\tpaid,\tnet\tof\tparticipants'\tcontributions\tand\tgovernment\nsubsidy(1) | (845) | (769) | (293) | (278) | (62) | (56) | (68) | (64) |
| Divestitures | — | — | — | (31) | — | — | — | — |
| Settlement(2) | — | — | (121) | (192) | — | — | — | — |
| Foreign\texchange\timpact\tand\tother(3) | — | (269) | (186) | 883 | — | — | 2 | 46 |
| Plan\tassets\tat\tfair\tvalue\tat\tyear\tend | $11,490 | $12,725 | $6,699 | $7,128 | $345 | $262 | $1,036 | $1,119 |
| Funded\tstatus\tof\tthe\tplans |  |  |  |  |  |  |  |  |
| Qualified\tplans(4) | $(483) | $(565) | $(450) | $(305) | $(317) | $(437) | $(123) | $(142) |
| Nonqualified\tplans(5) | (682) | (750) | — | — | — | — | — | — |
| Funded\tstatus\tof\tthe\tplans\tat\tyear\tend | $(1,165) | $(1,315) | $(450) | $(305) | $(317) | $(437) | $(123) | $(142) |
| Net\tamount\trecognized |  |  |  |  |  |  |  |  |
| Qualified\tplans |  |  |  |  |  |  |  |  |
| Benefit\tasset | $— | $— | $806 | $900 | $— | $— | $175 | $181 |
| Benefit\tliability | (483) | (565) | (1,256) | (1,205) | (317) | (437) | (298) | (323) |
| Qualified\tplans | $(483) | $(565) | $(450) | $(305) | $(317) | $(437) | $(123) | $(142) |
| Nonqualified\tplans | (682) | (750) | — | — | — | — | — | — |
| Net\tamount\trecognized\ton\tthe\tbalance\tsheet | $(1,165) | $(1,315) | $(450) | $(305) | $(317) | $(437) | $(123) | $(142) |
| Amounts\trecognized\tin\tAOCI |  |  |  |  |  |  |  |  |
| Net\ttransition\tobligation | $— | $— | $(1) | $(1) | $— | $— | $— | $— |
| Prior\tservice\tbenefit | (13) | (15) | 12 | 22 | — | — | 83 | 92 |
| Net\tactuarial\t(loss)\tgain | (6,892) | (6,823) | (1,420) | (1,318) | 53 | 72 | (340) | (382) |
| Net\tamount\trecognized\tin\tequity\t(pretax) | $(6,905) | $(6,838) | $(1,409) | $(1,297) | $53 | $72 | $(257) | $(290) |
| Accumulated\tbenefit\tobligation\tat\tyear\tend |  |  |  |  |  |  |  |  |
|  | $12,646 | $14,034 | $6,720 | $7,038 | $662 | $699 | $1,159 | $1,261 |

(1) U.S.	Postretirement	benefit	plans	was	net	of	Employer	Group	Waiver	Plan	subsidy	of	 $15	million	in	2018	and	2017.

(2) Curtailment	and	settlement	(gains)	losses	relate	to	repositioning	and	divestiture	activities.

(3) With	respect	to	the	U.S.	Plan,	de-risking	activities	during	2017	resulted	in	a	reduction	to	plan	obligations	and	assets.

(4) The	U.S.	qualified	pension	plan	is	fully	funded	under	specified	Employee	Retirement	Income	Security	Act	(ERISA)	funding	rules	as	of	January	1,	2019	and	no	minimum	required	funding	is expected	for	2019.

(5) The	nonqualified	plans	of	the	Company	are	unfunded.

The	following	table	shows	the	change	in	AOCI	related	to	the	Company's	pension,	postretirement	and	post	employment	plans:

| In	millions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Beginning\tof\tyear\tbalance,\tnet\tof\ttax(1)(2) | $(6,183) | $(5,164) | $(5,116) |
| Actuarial\tassumptions\tchanges\tand\tplan\texperience | 1,288 | (760) | (854) |
| Net\tasset\t(loss)\tgain\tdue\tto\tdifference\tbetween\tactual\tand\texpected\treturns | (1,732) | 625 | 400 |
| Net\tamortization | 214 | 229 | 232 |
| Prior\tservice\t(cost)\tcredit | (7) | (4) | 28 |
| Curtailment/settlement\tgain(3) | 7 | 17 | 17 |
| Foreign\texchange\timpact\tand\tother | 136 | (93) | 99 |
| Impact\tof\tTax\tReform(4) | — | (1,020) | — |
| Change\tin\tdeferred\ttaxes,\tnet | 20 | (13) | 30 |
| Change,\tnet\tof\ttax | $(74) | $(1,019) | $(48) |
| End\tof\tyear\tbalance,\tnet\tof\ttax(1)(2) | $(6,257) | $(6,183) | $(5,164) |

(1) See	Note	19	to	the	Consolidated	Financial	Statements	for	further	discussion	of	net	AOCI	balance.

(2) Includes	net-of-tax	amounts	for	certain	profit	sharing	plans	outside	the	U.S.

(3) Curtailment	and	settlement	relate	to	repositioning	and	divestiture	activities.

(4) In	the	fourth	quarter	of	2017,	Citi	adopted	ASU	2018-02,	which	transferred	these	amounts	from	AOCI	to Retained	earnings.	See	Note	1	to	the	Consolidated	Financial	Statements.

At	December	31,	2018	and	2017,	the	aggregate	projected	benefit	obligation	(PBO),	the	aggregate	accumulated	benefit	obligation	(ABO)	and	the	aggregate	fair	value of	plan	assets	are	presented	for	all	defined	benefit	pension	plans	with	a	PBO	in	excess	of	plan	assets	and	for	all	defined	benefit	pension	plans	with	an	ABO	in	excess	of plan	assets	as	follows:

|  | PBO	exceeds	fair	value	of	plan	assets | PBO	exceeds	fair	value	of	plan	assets | PBO	exceeds	fair	value	of	plan	assets | PBO	exceeds	fair	value	of	plan	assets | ABO	exceeds	fair	value	of	plan	assets | ABO	exceeds	fair	value	of	plan	assets | ABO	exceeds	fair	value	of	plan	assets |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | U.S.\tplans(1) | U.S.\tplans(1) | Non-U.S.\tplans | Non-U.S.\tplans | U.S.\tplans(1) | U.S.\tplans(1) | Non-U.S.\tplans | Non-U.S.\tplans |
| In\tmillions\tof\tdollars | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 |
| Projected\tbenefit\tobligation | $12,655 | $14,040 | $3,904 | $2,721 | $12,655 | $14,040 | $3,718 | $2,596 |
| Accumulated\tbenefit\tobligation | 12,646 | 14,034 | 3,528 | 2,381 | 12,646 | 14,034 | 3,387 | 2,296 |
| Fair\tvalue\tof\tplan\tassets | 11,490 | 12,725 | 2,648 | 1,516 | 11,490 | 12,725 | 2,478 | 1,407 |

(1) At	December	31,	2018	and	2017,	for	both	the	U.S.	qualified	plan	and	nonqualified	plans,	the	aggregate	PBO	and	the	aggregate	ABO	exceeded	plan	assets.

# Plan	Assumptions

The	Company	utilizes	a	number	of	assumptions	to	determine	plan	obligations and	expenses.	Changes	in	one	or	a	combination	of	these	assumptions	will	have an	impact	on	the	Company's	pension	and	postretirement	PBO,	funded	status	and (benefit)	expense.	Changes	in	the	plans'	funded	status	resulting	from	changes	in the	PBO	and	fair	value	of	plan	assets	will	have	a	corresponding	impact	on Accumulated	other	comprehensive	income	(loss).

The	actuarial	assumptions	at	the	respective	years	ended	December	31	in	the table	below	are	used	to	measure	the	year-end	PBO	and	the	net	periodic	(benefit) expense	for	the	subsequent	year	(period).		Since	Citi's	Significant	Plans	are measured	on	a	quarterly	basis,	the	year-end	rates	for	those	plans	are	used	to calculate	the	net	periodic	(benefit)	expense	for	the	subsequent	year's	first quarter.		As	a	result	of	the	quarterly	measurement	process,	the	net	periodic (benefit)	expense	for	the	Significant	Plans	is	calculated	at	each	respective	quarter end	based	on	the	preceding	quarter-end	rates	(as	shown	below	for	the	U.S.	and non-U.S.	pension	and	postretirement	plans).	The	actuarial	assumptions	for	All Other	Plans	are	measured	annually.

Certain	assumptions	used	in	determining	pension	and	postretirement	benefit obligations	and	net	benefit	expense	for	the	Company's	plans	are	shown	in	the following	table:

(1) Not	material	for	U.S.	plans.

(2) The	expected	rate	of	return	for	the	VEBA	Trust	was	3.00%.

(1) Reflects	rates	utilized	to	determine	the	quarterly	expense	for	Significant	non-U.S.	pension and	postretirement	plans.

(3) The	expected	rate	of	return	for	the	U.S.	pension	and	postretirement	plans	was	lowered from	6.80%	to	6.70%	effective	in	the	second	quarter	of	2018	to	reflect	a	change	in	target asset	allocation.

# Discount	Rate

The	discount	rates	for	the	U.S.	pension	and	postretirement	plans	were	selected	by reference	to	a	Citigroup-specific	analysis	using	each	plan's	specific	cash	flows and	compared	with	high-quality	corporate	bond	indices	for	reasonableness.	The discount	rates	for	the	non-U.S.	pension	and	postretirement	plans	are	selected	by reference	to	high-quality	corporate	bond	rates	in	countries	that	have	developed corporate	bond	markets.	However,	where	developed	corporate	bond	markets	do not	exist,	the	discount	rates	are	selected	by	reference	to	local	government	bond rates	with	a	premium	added	to	reflect	the	additional	risk	for	corporate	bonds	in certain	countries.

The	established	rounding	convention	is	to	the	nearest	5	bps	for	the	top	five	non- U.S.	countries,	and	25	bps	for	all	other	countries.

# Expected	Rate	of	Return

The	Company	determines	its	assumptions	for	the	expected	rate	of	return	on	plan assets	for	its	U.S.	pension	and	postretirement	plans	using	a	"building	block" approach,	which	focuses	on	ranges	of	anticipated	rates	of	return	for	each	asset class.	A	weighted	average	range	of	nominal	rates	is	then	determined	based	on target	allocations	to	each	asset	class.	Market	performance	over	a	number	of earlier	years	is	evaluated	covering	a	wide	range	of	economic	conditions	to determine	whether	there	are	sound	reasons	for	projecting	any	past	trends. The	Company	considers	the	expected	rate	of	return	to	be	a	long-term assessment	of	return	expectations	and	does	not	anticipate	changing	this assumption	unless	there	are	significant	changes	in	investment	strategy	or economic	conditions.	This	contrasts	with	the	selection	of	the	discount	rate	and certain	other	assumptions,	which	are	reconsidered	annually	(or	quarterly	for	the Significant	Plans)	in	accordance	with	GAAP.

The	expected	rate	of	return	for	the	U.S.	pension	and	postretirement	plans was	6.70%	at	December	31,	2018	and	6.80%	at	December	31,	2017	and	2016. The	expected	return	on	assets	reflects	the	expected	annual	appreciation	of	the plan	assets	and	reduces	the	Company's	annual	pension	expense.	The	expected return	on	assets	is	deducted	from	the	sum	of	service	cost,	interest	cost	and	other components	of	pension	expense	to	arrive	at	the	net	pension	(benefit)	expense. Net	pension	(benefit)	expense	for	the	U.S.	pension	plans	for	2018,	2017	and 2016	reflects	deductions	of	$844	million,	$865	million	and	$886	million	of expected	returns,	respectively.

The	following	table	shows	the	expected	rates	of	return	used	in	determining the	Company's	pension	expense	compared	to	the	actual	rate	of	return	on	plan assets	during	2018,	2017	and	2016	for	the	U.S.	pension	and	postretirement	plans:

| U.S.	plans | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Expected\trate\tof\treturn |  |  |  |
| U.S.\tpension\tand\npostretirement\ttrust | 6.80%/6.70% | 6.80% | 7.00% |
| VEBA\ttrust(1) | 3.00 | 3.00 | — |
| Actual\trate\tof\treturn(2) |  |  |  |
| U.S.\tpension\tand\npostretirement\ttrust | -3.40 | 10.90 | 4.90 |
| VEBA\ttrust(1) | 0.43\tto\t1.41 | — | — |

(1) In	December	2017,	the	VEBA	Trust	was	funded	for	postretirement	benefits	with	an expected	rate	of	return	on	assets	of	3.00%.

(2) Actual	rates	of	return	are	presented	net	of	fees.

For	the	non-U.S.	pension	plans,	pension	expense	for	2018	was	reduced	by the	expected	return	of	$291	million,	compared	with	the	actual	return	of	$(11) million.	Pension	expense	for	2017	and	2016	was	reduced	by	expected	returns	of $299	million	and	$287	million,	respectively.

# Mortality	Tables

At	December	31,	2018,	the	Company	maintained	the	Retirement	Plan	2014	(RP- 2014)	mortality	table	and	adopted	the	Mortality	Projection	2018	(MP-2018) projection	table	for	the	U.S.	plans.

(1) The	RP-2014	table	is	the	white-collar	RP-2014	table.	The	MP-2018	projection	scale	is projected	from	2006,	with	convergence	to	0.75%	ultimate	rate	of	annual	improvement	by 2034.

# Sensitivities	of	Certain	Key	Assumptions

The	following	tables	summarize	the	effect	on	pension	expense	of	a	one- percentage-point	change	in	the	discount	rate:

Since	the	U.S.	qualified	pension	plan	was	frozen,	most	of	the	prospective service	cost	has	been	eliminated	and	the	gain/loss	amortization	period	was changed	to	the	life	expectancy	for	inactive	participants.	As	a	result,	pension expense	for	the	U.S.	qualified	pension	plan	is	driven	more	by	interest	costs	than service	costs,	and	an	increase	in	the	discount	rate	would	increase	pension expense,	while	a	decrease	in	the	discount	rate	would	decrease	pension	expense. The	following	tables	summarize	the	effect	on	pension	expense	of	a	one- percentage-point	change	in	the	expected	rates	of	return:

# 	Health	Care	Cost	Trend	Rate

Assumed	health	care	cost	trend	rates	were	as	follows:

# Interest	Crediting	Rate

The	Company	has	cash	balance	plans	and	other	plans	with	promised	interest crediting	rates.	For	these	plans,	the	interest	crediting	rates	are	set	in	line	with plan	rules	or	country	legislation	and	do	not	change	with	market	conditions.

|  | Weighted	average	interest	crediting	rate | Weighted	average	interest	crediting	rate | Weighted	average	interest	crediting	rate |
| :--- | :--- | :--- | :--- |
| At\tyear\tend | 2018 | 2017 | 2016 |
| U.S.\tplans | 3.25% | 2.60% | 3.10% |
| Non-U.S.\tplans | 1.68 | 1.74 | 1.75 |

# Plan	Assets

Citigroup's	pension	and	postretirement	plans'	asset	allocations	for	the	U.S.	plans	and	the	target	allocations	by	asset	category	based	on	asset	fair	values,	are	as	follows:

|  | Target	asset<br>allocation | U.S.	pension	assets<br>at	December	31, |  | U.S.	postretirement	assets<br>at	December	31, |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Asset\tcategory(1) | 2019 | 2018 | 2017 | 2018 | 2017 |
| Equity\tsecurities(2) | 0–26% | 15% | 20% | 15% | 20% |
| Debt\tsecurities(3) | 35–82 | 57 | 48 | 57 | 48 |
| Real\testate | 0–7 | 5 | 5 | 5 | 5 |
| Private\tequity | 0–10 | 3 | 3 | 3 | 3 |
| Other\tinvestments | 0–30 | 20 | 24 | 20 | 24 |
| Total |  | 100% | 100% | 100% | 100% |

(1) Asset	allocations	for	the	U.S.	plans	are	set	by	investment	strategy,	not	by	investment	product.	For	example,	private	equities	with	an	underlying	investment	in	real	estate	are	classified	in	the	real estate	asset	category,	not	private	equity.

(2) Equity	securities	in	the	U.S.	pension	and	postretirement	plans	do	not	include	any	Citigroup	common	stock	at	the	end	of	2018	and	2017.

(3) The	VEBA	Trust	for	postretirement	benefits	are	primarily	invested	in	debt	securities	which	are	not	reflected	in	the	table	above.

Third-party	investment	managers	and	advisors	provide	their	services	to Citigroup's	U.S.	pension	and	postretirement	plans.	Assets	are	rebalanced	as	the Company's	Pension	Plan	Investment	Committee	deems	appropriate.	Citigroup's investment	strategy,	with	respect	to	its	assets,	is	to	maintain	a	globally diversified	investment	portfolio	across	several	asset	classes	that,	when	combined with	Citigroup's	contributions	to

the	plans,	will	maintain	the	plans'	ability	to	meet	all	required	benefit	obligations. Citigroup's	pension	and	postretirement	plans'	weighted-average	asset allocations	for	the	non-U.S.	plans	and	the	actual	ranges,	and	the	weighted- average	target	allocations	by	asset	category	based	on	asset	fair	values,	are	as follows:

|  | Target	asset<br>allocation | Actual	range<br>at	December	31, | Actual	range<br>at	December	31, | Weighted-average<br>at	December	31, |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Asset\tcategory(1) | 2019 | 2018 | 2017 | 2018 | 2017 |
| Equity\tsecurities | 0–63% | 0–66% | 0–67% | 13% | 15% |
| Debt\tsecurities | 0–100 | 0–100 | 0–99 | 80 | 79 |
| Real\testate | 0–15 | 0–12 | 0–18 | 1 | 1 |
| Other\tinvestments | 0–100 | 0–100 | 0–100 | 6 | 5 |
| Total |  |  |  | 100% | 100% |

(1) Similar	to	the	U.S.	plans,	asset	allocations	for	certain	non-U.S.	plans	are	set	by	investment	strategy,	not	by	investment	product.

|  |  | Non-U.S.	postretirement	plans | Non-U.S.	postretirement	plans |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Target\tasset\nallocation | Actual\trange\nat\tDecember\t31, | Actual\trange\nat\tDecember\t31, | Weighted-average\nat\tDecember\t31, |  |
| Asset\tcategory(1) | 2019 | 2018 | 2017 | 2018 | 2017 |
| Equity\tsecurities | 0–30% | 0–35% | 0–38% | 35% | 38% |
| Debt\tsecurities | 64–100 | 62–100 | 58–100 | 62 | 58 |
| Other\tinvestments | 0–6 | 0–3 | 0–4 | 3 | 4 |
| Total |  |  |  | 100% | 100% |

# Fair	Value	Disclosure

For	information	on	fair	value	measurements,	including	descriptions	of	Levels	1, 2	and	3	of	the	fair	value	hierarchy	and	the	valuation	methodology	utilized	by	the Company,	see	Notes	1	and	24	to	the	Consolidated	Financial	Statements.	ASU 2015-07	removed	the	requirement	to	categorize	within	the	fair	value	hierarchy investments	for	which	fair	value	is	measured	using	the	NAV	per	share	practical expedient.

Certain	investments	may	transfer	between	the	fair	value	hierarchy classifications	during	the	year	due	to	changes	in	valuation	methodology	and pricing	sources.

Plan	assets	by	detailed	asset	categories	and	the	fair	value	hierarchy	are	as follows:

# U.S.	pension	and	postretirement	benefit	plans(1)

| In	millions	of	dollars |  | Fair	value	measurement	at	December	31,	2018 | Fair	value	measurement	at	December	31,	2018 |  |
| :--- | :--- | :--- | :--- | :--- |
| Asset\tcategories | Level\t1 | Level\t2 | Level\t3 | Total |
| U.S.\tequities |  |  |  |  |
|  | $625 | $— | $— | $625 |
| Non-U.S.\tequities |  |  |  |  |
|  | 481 | — | — | 481 |
| Mutual\tfunds\tand\tother\tregistered\tinvestment\tcompanies |  |  |  |  |
|  | 215 | — | — | 215 |
| Commingled\tfunds |  |  |  |  |
|  | — | 1,344 | — | 1,344 |
| Debt\tsecurities |  |  |  |  |
|  | 1,346 | 3,475 | — | 4,821 |
| Annuity\tcontracts | — | — | 1 | 1 |
| Derivatives | 16 | 252 | — | 268 |
| Other\tinvestments | — | — | 127 | 127 |
| Total\tinvestments | $2,683 | $5,071 | $128 | $7,882 |
| Cash\tand\tshort-term\tinvestments | $93 | $865 | $— | $958 |
| Other\tinvestment\tliabilities | (100) | (254) | — | (354) |
| Net\tinvestments\tat\tfair\tvalue | $2,676 | $5,682 | $128 | $8,486 |
| Other\tinvestment\treceivables\tredeemed\tat\tNAV |  |  |  | $80 |
| Securities\tvalued\tat\tNAV |  |  |  | 3,269 |
| Total\tnet\tassets |  |  |  | $11,835 |
| (1)\nThe\tinvestments\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\tare\tcommingled\tin\tone\ttrust.\tAt\tDecember\t31,\t2018,\tthe\tallocable\tinterests\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\twere | (1)\nThe\tinvestments\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\tare\tcommingled\tin\tone\ttrust.\tAt\tDecember\t31,\t2018,\tthe\tallocable\tinterests\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\twere | (1)\nThe\tinvestments\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\tare\tcommingled\tin\tone\ttrust.\tAt\tDecember\t31,\t2018,\tthe\tallocable\tinterests\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\twere | (1)\nThe\tinvestments\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\tare\tcommingled\tin\tone\ttrust.\tAt\tDecember\t31,\t2018,\tthe\tallocable\tinterests\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\twere | 98.0% |

(1) The	investments	of	the	U.S.	pension	and	postretirement	plans	are	commingled	in	one	trust.	At	December	31,	2018,	the	allocable	interests	of	the	U.S.	pension	and	postretirement	plans	were 98.0% and	2.0%,	respectively.	The	investments	of	the	VEBA	Trust	for	the	postretirement	benefits	are	reflected	in	the	above	table.

|  |  | U.S.	pension	and	postretirement	benefit	plans(1) | U.S.	pension	and	postretirement	benefit	plans(1) |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars |  | Fair\tvalue\tmeasurement\tat\tDecember\t31,\t2017 | Fair\tvalue\tmeasurement\tat\tDecember\t31,\t2017 |  |
| Asset\tcategories | Level\t1 | Level\t2 | Level\t3 | Total |
| U.S.\tequities |  |  |  |  |
|  | $726 | $— | $— | $726 |
| Non-U.S.\tequities |  |  |  |  |
|  | 821 | — | — | 821 |
| Mutual\tfunds\tand\tother\tregistered\tinvestment\tcompanies |  |  |  |  |
|  | 376 | — | — | 376 |
| Commingled\tfunds | — | 1,184 | — | 1,184 |
| Debt\tsecurities | 1,381 | 3,080 | — | 4,461 |
| Annuity\tcontracts | — | — | 1 | 1 |
| Derivatives | 11 | 323 | — | 334 |
| Other\tinvestments | — | — | 148 | 148 |
| Total\tinvestments | $3,315 | $4,587 | $149 | $8,051 |
| Cash\tand\tshort-term\tinvestments | $257 | $1,004 | $— | $1,261 |
| Other\tinvestment\tliabilities | (60) | (343) | — | (403) |
| Net\tinvestments\tat\tfair\tvalue | $3,512 | $5,248 | $149 | $8,909 |
| Other\tinvestment\treceivables\tredeemed\tat\tNAV |  |  |  | $16 |
| Securities\tvalued\tat\tNAV |  |  |  | 4,062 |
| Total\tnet\tassets |  |  |  | $12,987 |
| (1)\nThe\tinvestments\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\tare\tcommingled\tin\tone\ttrust.\tAt\tDecember\t31,\t2017,\tthe\tallocable\tinterests\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\twere | (1)\nThe\tinvestments\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\tare\tcommingled\tin\tone\ttrust.\tAt\tDecember\t31,\t2017,\tthe\tallocable\tinterests\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\twere | (1)\nThe\tinvestments\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\tare\tcommingled\tin\tone\ttrust.\tAt\tDecember\t31,\t2017,\tthe\tallocable\tinterests\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\twere | (1)\nThe\tinvestments\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\tare\tcommingled\tin\tone\ttrust.\tAt\tDecember\t31,\t2017,\tthe\tallocable\tinterests\tof\tthe\tU.S.\tpension\tand\tpostretirement\tplans\twere | 99.0% |

# Non-U.S.	pension	and	postretirement	benefit	plans

| In	millions	of	dollars |  | Fair	value	measurement	at	December	31,	2018 | Fair	value	measurement	at	December	31,	2018 |  |
| :--- | :--- | :--- | :--- | :--- |
| Asset\tcategories | Level\t1 | Level\t2 | Level\t3 | Total |
| U.S.\tequities | $4 | $9 | $— | $13 |
| Non-U.S.\tequities | 100 | 100 | — | 200 |
| Mutual\tfunds\tand\tother\tregistered\tinvestment\tcompanies | 2,887 | 63 | — | 2,950 |
| Commingled\tfunds | 21 | — | — | 21 |
| Debt\tsecurities | 5,145 | 1,500 | 9 | 6,654 |
| Real\testate | — | 3 | 1 | 4 |
| Annuity\tcontracts | — | 1 | 10 | 11 |
| Derivatives | — | 156 | — | 156 |
| Other\tinvestments | 1 | — | 210 | 211 |
| Total\tinvestments | $8,158 | $1,832 | $230 | $10,220 |
| Cash\tand\tshort-term\tinvestments | $91 | $3 | $— | $94 |
| Other\tinvestment\tliabilities | (1) | (2,589) | — | (2,590) |
| Net\tinvestments\tat\tfair\tvalue | $8,248 | $(754) | $230 | $7,724 |
| Securities\tvalued\tat\tNAV |  |  |  | $11 |
| Total\tnet\tassets |  |  |  | $7,735 |

|  |  | Non-U.S.	pension	and	postretirement	benefit	plans | Non-U.S.	pension	and	postretirement	benefit	plans |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars |  | Fair\tvalue\tmeasurement\tat\tDecember\t31,\t2017 | Fair\tvalue\tmeasurement\tat\tDecember\t31,\t2017 |  |
| Asset\tcategories | Level\t1 | Level\t2 | Level\t3 | Total |
| U.S.\tequities | $4 | $12 | $— | $16 |
| Non-U.S.\tequities | 103 | 122 | 1 | 226 |
| Mutual\tfunds\tand\tother\tregistered\tinvestment\tcompanies |  |  |  |  |
|  | 3,098 | 74 | — | 3,172 |
| Commingled\tfunds | 24 | — | — | 24 |
| Debt\tsecurities | 3,999 | 1,555 | 7 | 5,561 |
| Real\testate | — | 3 | 1 | 4 |
| Annuity\tcontracts | — | 1 | 9 | 10 |
| Derivatives | 1 | 3,102 | — | 3,103 |
| Other\tinvestments | 1 | — | 214 | 215 |
| Total\tinvestments | $7,230 | $4,869 | $232 | $12,331 |
| Cash\tand\tshort-term\tinvestments | $119 | $3 | $— | $122 |
| Other\tinvestment\tliabilities | (2) | (4,220) | — | (4,222) |
| Net\tinvestments\tat\tfair\tvalue | $7,347 | $652 | $232 | $8,231 |
| Securities\tvalued\tat\tNAV |  |  |  | $16 |
| Total\tnet\tassets |  |  |  | $8,247 |

# Level	3	Rollforward

The	reconciliations	of	the	beginning	and	ending	balances	during	the	year	for	Level	3	assets	are	as	follows:

| Asset	categories | value	at<br>Dec.	31,	2017 | Realized	gains	(losses) | Unrealized	gains<br>(losses) | Purchases,	sales	and<br>issuances | Transfers	in<br>and/or	out	of	Level	3 | Ending	Level	3	fair<br>value	at	Dec.	31,	2018 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Annuity\tcontracts | $1 | $— | $— | $— | $— | $1 |
| Other\tinvestments | 148 | (2) | (18) | (1) | — | 127 |
| Total\tinvestments | $149 | $(2) | $(18) | $(1) | $— | $128 |

| Asset	categories | value	at<br>Dec.	31,	2016 | Realized	gains	(losses) | Unrealized	gains	(losses) | Purchases,	sales	and<br>issuances | Transfers	in	and/or	out	of<br>Level	3 | Ending	Level	3	fair<br>value	at	Dec.	31,	2017 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Annuity\tcontracts | $1 | $— | $— | $— | $— | $1 |
| Other\tinvestments | 129 | — | — | 19 | — | 148 |
| Total\tinvestments | $130 | $— | $— | $19 | $— | $149 |

| In	millions	of	dollars |  | Non-U.S.	pension	and	postretirement	benefit	plans | Non-U.S.	pension	and	postretirement	benefit	plans | Non-U.S.	pension	and	postretirement	benefit	plans |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Asset\tcategories | Beginning\tLevel\t3\tfair\nvalue\tat\nDec.\t31,\t2017 | Unrealized\tgains\t(losses) | Purchases,\tsales\tand\nissuances | Transfers\tin\tand/or\tout\tof\nLevel\t3 | Ending\tLevel\t3\tfair\nvalue\tat\nDec.\t31,\t2018 |
| Non-U.S.\tequities | $1 | $— | $— | $(1) | $— |
| Debt\tsecurities | 7 | (1) | 3 | — | 9 |
| Real\testate | 1 | — | — | — | 1 |
| Annuity\tcontracts | 9 | (1) | 1 | 1 | 10 |
| Other\tinvestments | 214 | (3) | (1) | — | 210 |
| Total\tinvestments | $232 | $(5) | $3 | $— | $230 |

| Asset	categories | value	at<br>Dec.	31,	2016 | Unrealized	gains	(losses) | Purchases,	sales	and<br>issuances | Transfers	in	and/or	out	of<br>Level	3 | Ending	Level	3	fair	value<br>at	Dec.	31,	2017 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Non-U.S.\tequities | $1 | $— | $— | $— | $1 |
| Debt\tsecurities | 7 | — | — | — | 7 |
| Real\testate | 1 | — | — | — | 1 |
| Annuity\tcontracts | 8 | 1 | — | — | 9 |
| Other\tinvestments | 187 | 31 | (4) | — | 214 |
| Total\tinvestments | $204 | $32 | $(4) | $— | $232 |

# Investment	Strategy

The	Company's	global	pension	and	postretirement	funds'	investment	strategy	is to	invest	in	a	prudent	manner	for	the	exclusive	purpose	of	providing	benefits	to participants.	The	investment	strategies	are	targeted	to	produce	a	total	return	that, when	combined	with	the	Company's	contributions	to	the	funds,	will	maintain	the funds'	ability	to	meet	all	required	benefit	obligations.	Risk	is	controlled	through diversification	of	asset	types	and	investments	in	domestic	and	international equities,	fixed	income	securities	and	cash	and	short-term	investments.	The	target asset	allocation	in	most	locations	outside	the	U.S.	is	primarily	in	equity	and	debt securities.	These	allocations	may	vary	by	geographic	region	and	country depending	on	the	nature	of	applicable	obligations	and	various	other	regional considerations.	The	wide	variation	in	the	actual	range	of	plan	asset	allocations for	the	funded	non-U.S.	plans	is	a	result	of	differing	local	statutory	requirements and	economic	conditions.	For	example,	in	certain	countries	local	law	requires that	all	pension	plan	assets	must	be	invested	in	fixed	income	investments, government	funds	or	local-country	securities.

# Significant	Concentrations	of	Risk	in	Plan	Assets

The	assets	of	the	Company's	pension	plans	are	diversified	to	limit	the	impact	of any	individual	investment.	The	U.S.	qualified	pension	plan	is	diversified	across multiple	asset	classes,	with	publicly	traded	fixed	income,	hedge	funds,	publicly traded	equity	and	real	estate	representing	the	most	significant	asset	allocations. Investments	in	these	four	asset	classes	are	further	diversified	across	funds, managers,	strategies,	vintages,	sectors	and	geographies,	depending	on	the specific	characteristics	of	each	asset	class.	The	pension	assets	for	the	Company's non-U.S.	Significant	Plans	are	primarily	invested	in	publicly	traded	fixed income	and	publicly	traded	equity	securities.

# Oversight	and	Risk	Management	Practices

The	framework	for	the	Company's	pension	oversight	process	includes monitoring	of	retirement	plans	by	plan	fiduciaries	and/or	management	at	the global,	regional	or	country	level,	as	appropriate.	Independent	Risk	Management contributes	to	the	risk	oversight	and	monitoring	for	the	Company's	U.S. qualified	pension	plan	and	non-U.S.	Significant	Pension	Plans.	Although	the specific	components	of	the	oversight	process	are	tailored	to	the	requirements	of each	region,	country	and	plan,	the	following	elements	are	common	to	the Company's	monitoring	and	risk	management	process:

•periodic	asset/liability	management	studies	and	strategic	asset	allocation reviews;

•periodic	monitoring	of	funding	levels	and	funding

ratios;

•periodic	monitoring	of	compliance	with	asset	allocation	guidelines;

•periodic	monitoring	of	asset	class	and/or	investment	manager	performance

against	benchmarks;	and

•periodic	risk	capital	analysis	and	stress

testing.

# Estimated	Future	Benefit	Payments

The	Company	expects	to	pay	the	following	estimated	benefit	payments	in	future years:

|  | Pension	plans | Pension	plans | Postretirement	benefit	plans | Postretirement	benefit	plans |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | U.S.\tplans | Non-U.S.\tplans | U.S.\tplans | Non-U.S.\tplans |
| 2019 | $797 | $435 | $62 | $70 |
| 2020 | 828 | 417 | 62 | 75 |
| 2021 | 847 | 426 | 61 | 80 |
| 2022 | 857 | 448 | 59 | 86 |
| 2023 | 873 | 471 | 57 | 92 |
| 2024–2028 | 4,365 | 2,557 | 252 | 547 |

# Post	Employment	Plans

The	Company	sponsors	U.S.	post	employment	plans	that	provide	income continuation	and	health	and	welfare	benefits	to	certain	eligible	U.S.	employees on	long-term	disability.

As	of	December	31,	2018	and	2017,	the	plans'	funded	status	recognized	in the	Company's	Consolidated	Balance	Sheet	was	$(32)	million	and	$(46)	million, respectively.	The	pretax	amounts	recognized	in	Accumulated	other comprehensive	income	(loss)	as	of	December	31,	2018	and	2017	were	$(15) million	and	$3	million,	respectively.	The	improvement	in	funded	status	as	of December	31,	2017	was	primarily	due	to	the	Company's	funding	of	the	VEBA Trust	during	2017.

The	following	table	summarizes	the	components	of	net	expense	recognized in	the	Consolidated	Statement	of	Income	for	the	Company's	U.S.	post employment	plans:

| In	millions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Service-related\texpense |  |  |  |
| Interest\tcost\ton\tbenefit\tobligation | $2 | $2 | $3 |
| Expected\treturn\ton\tplan\tassets | (1) | — | — |
| Amortization\tof\tunrecognized |  |  |  |
| \t\t\tPrior\tservice\t(benefit)\tcost | (23) | (31) | (31) |
| \t\t\tNet\tactuarial\tloss | 2 | 2 | 5 |
| Total\tservice-related\tbenefit | $(20) | $(27) | $(23) |
| Non-service-related\texpense | 2 | 30 | 21 |
| Total\tnet\texpense\t(benefit) | $(18) | $3 | $(2) |

The	following	table	summarizes	certain	assumptions	used	in	determining the	post	employment	benefit	obligations	and	net	benefit	expense	for	the Company's	U.S.	post	employment	plans:

# Defined	Contribution	Plans

The	Company	sponsors	defined	contribution	plans	in	the	U.S.	and	in	certain	non- U.S.	locations,	all	of	which	are	administered	in	accordance	with	local	laws.	The most	significant	defined	contribution	plan	is	the	Citi	Retirement	Savings	Plan (formerly	known	as	the	Citigroup	401(k)	Plan)	sponsored	by	the	Company	in	the U.S. Under	the	Citi	Retirement	Savings	Plan,	eligible	U.S.	employees	received matching	contributions	of	up	to	6%	of	their	eligible	compensation	for	2018	and 2017,	subject	to	statutory	limits.	Additionally,	for	eligible	employees	whose eligible	compensation	is	$100,000	or	less,	a	fixed	contribution	of	up	to	2%	of eligible	compensation	is	provided.	All	Company	contributions	are	invested according	to	participants'	individual	elections.	The	following	table	summarizes the	Company	contributions	for	the	defined	contribution	plans:

# Income	Tax	Provision

Details	of	the	Company's	income	tax	provision	are	presented	below:

| In	millions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Current |  |  |  |
| Federal | $834 | $332 | $1,016 |
| Non-U.S. | 4,290 | 3,910 | 3,585 |
| State | 284 | 269 | 384 |
| Total\tcurrent\tincome\ttaxes | $5,408 | $4,511 | $4,985 |
| Deferred |  |  |  |
| Federal | $(620) | $24,902 | $1,280 |
| Non-U.S. | 371 | (377) | 53 |
| State | 198 | 352 | 126 |
| Total\tdeferred\tincome\ttaxes | $(51) | $24,877 | $1,459 |
| Provision\tfor\tincome\ttax\ton\tcontinuing\noperations\tbefore\tnoncontrolling\tinterests(1) | $5,357 | $29,388 | $6,444 |
| Provision\t(benefit)\tfor\tincome\ttaxes\ton\ndiscontinued\toperations | (18) | 7 | (22) |
| Income\ttax\texpense\t(benefit)\treported\tin\nstockholders'\tequity\trelated\tto: |  |  |  |
| FX\ttranslation | (263) | 188 | (402) |
| Investment\tsecurities | (346) | (149) | 59 |
| Employee\tstock\tplans | (2) | (4) | 13 |
| Cash\tflow\thedges | (8) | (12) | 27 |
| Benefit\tplans | (20) | 13 | (30) |
| FVO\tDVA | 302 | (250) | (201) |
| Excluded\tfair\tvalue\thedges | (17) | — | — |
| Retained\tearnings(2) | (305) | (295) | — |
| Income\ttaxes\tbefore\tnoncontrolling\tinterests | $4,680 | $28,886 | $5,888 |

(1) Includes	the	effect	of	securities	transactions	and	other-than-temporary-impairment	losses resulting	in	a	provision	(benefit)	of	$104	million	and	$(32)	million	in	2018,	$272	million and	$(22)	million	in	2017	and	$332	million	and	$(217)	million	in	2016,	respectively.

(2) 2018	reflects	the	tax	effect	of	the	accounting	change	for	ASU	2016-16	and	the	tax	effect of	the	accounting	change	for	ASU	2018-03,	to	report	the	net	unrealized	gains	on	former AFS	equity	securities.	2017	reflects	the	tax	effect	of	the	accounting	change	for	ASU 2017-08.	See	Note	1	to	the	Consolidated	Financial	Statements.

# Tax	Rate

The	reconciliation	of	the	federal	statutory	income	tax	rate	to	the	Company's effective	income	tax	rate	applicable	to	income	from	continuing	operations (before	noncontrolling	interests	and	the	cumulative	effect	of	accounting changes)	for	each	of	the	periods	indicated	is	as	follows:

|  | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Federal\tstatutory\trate | 21.0\t% | 35.0\t% | 35.0\t% |
| State\tincome\ttaxes,\tnet\tof\tfederal\tbenefit | 1.8 | 1.1 | 1.8 |
| Non-U.S.\tincome\ttax\trate\tdifferential | 5.3 | (1.6) | (3.6) |
| Effect\tof\ttax\tlaw\tchanges(1) | (0.6) | 99.7 | — |
| Basis\tdifference\tin\taffiliates | (2.4) | (2.1) | (0.1) |
| Tax\tadvantaged\tinvestments | (2.0) | (2.2) | (2.4) |
| Other,\tnet | (0.3) | (0.8) | (0.7) |
| Effective\tincome\ttax\trate | 22.8\t% | 129.1\t% | 30.0\t% |

(1) 2018	includes	one-time	Tax	Reform	benefits	of	 $94	million	for	amounts	that	were considered	provisional	pursuant	to	SAB	118.	2017	includes	the	one-time	$22,594	million charge	for	Tax	Reform.

As	set	forth	in	the	table	above,	Citi's	effective	tax	rate	for	2018	was	22.8% (23.3%	excluding	the	effect	of	provisional	amounts	pursuant	to	SAB	118).	The rate	is	lower	than	the	29.8%	reported	in	2017	(excluding	the	one-time	impact	of Tax	Reform)	primarily	due	to	the	U.S.	statutory	rate	reduction	from	35%	to	21% as	part	of	Tax	Reform.

# Deferred	Income	Taxes

Deferred	income	taxes	at	December	31	related	to	the	following:

| In	millions	of	dollars | 2018 | 2017 |
| :--- | :--- | :--- |
| Deferred\ttax\tassets |  |  |
| Credit\tloss\tdeduction | $3,419 | $3,423 |
| Deferred\tcompensation\tand\temployee\tbenefits | 1,975 | 1,585 |
| Repositioning\tand\tsettlement\treserves | 428 | 454 |
| U.S.\ttax\ton\tnon-U.S.\tearnings | 2,080 | 2,452 |
| Investment\tand\tloan\tbasis\tdifferences | 4,891 | 3,384 |
| Cash\tflow\thedges | 240 | 233 |
| Tax\tcredit\tand\tnet\toperating\tloss\tcarry-forwards | 20,759 | 21,575 |
| Fixed\tassets\tand\tleases | 1,006 | 1,090 |
| Other\tdeferred\ttax\tassets | 2,145 | 1,988 |
| Gross\tdeferred\ttax\tassets | $36,943 | $36,184 |
| Valuation\tallowance | $9,258 | $9,387 |
| Deferred\ttax\tassets\tafter\tvaluation\tallowance | $27,685 | $26,797 |
| Deferred\ttax\tliabilities |  |  |
| Intangibles | $(975) | $(1,247) |
| Debt\tissuances | (530) | (294) |
| Non-U.S.\twithholding\ttaxes | (1,040) | (668) |
| Interest-related\titems | (594) | (562) |
| Other\tdeferred\ttax\tliabilities | (1,643) | (1,545) |
| Gross\tdeferred\ttax\tliabilities | $(4,782) | $(4,316) |
| Net\tdeferred\ttax\tassets | $22,903 | $22,481 |

# Unrecognized	Tax	Benefits

The	following	is	a	rollforward	of	the	Company's	unrecognized	tax	benefits:

| In	millions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Total\tunrecognized\ttax\tbenefits\tat\tJanuary\t1 | $1,013 | $1,092 | $1,235 |
| Net\tamount\tof\tincreases\tfor\tcurrent\tyear's\ttax\npositions | 40 | 43 | 34 |
| Gross\tamount\tof\tincreases\tfor\tprior\tyears'\ttax\npositions | 46 | 324 | 273 |
| Gross\tamount\tof\tdecreases\tfor\tprior\tyears'\ttax\npositions | (174) | (246) | (225) |
| Amounts\tof\tdecreases\trelating\tto\tsettlements | (283) | (199) | (174) |
| Reductions\tdue\tto\tlapse\tof\tstatutes\tof\tlimitation | (23) | (11) | (21) |
| Foreign\texchange,\tacquisitions\tand\tdispositions | (12) | 10 | (30) |
| Total\tunrecognized\ttax\tbenefits\tat\nDecember\t31 | $607 | $1,013 | $1,092 |

The	total	amounts	of	unrecognized	tax	benefits	at	December	31,	2018,	2017 and	2016	that,	if	recognized,	would	affect	Citi's	tax	expense,	are	$0.4	billion, $0.8	billion	and	$0.8	billion,	respectively.	The	remaining	uncertain	tax	positions have	offsetting	amounts	in	other	jurisdictions	or	are	temporary	differences.

Interest	and	penalties	(not	included	in	"unrecognized	tax	benefits"	above) are	a	component	of	Provision	for	income	taxes.

|  | 2018 | 2018 | 2017 | 2017 |  | 2016 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Pretax | Net\tof\ttax | Pretax | Net\tof\ttax | Pretax | Net\tof\ttax |
| Total\tinterest\tand\tpenalties\ton\tthe\tConsolidated\tBalance\tSheet\tat\tJanuary\t1 | $121 | $101 | $260 | $164 | $233 | $146 |
| Total\tinterest\tand\tpenalties\tin\tthe\tConsolidated\tStatement\tof\tIncome | 6 | 6 | 5 | 21 | 105 | 68 |
| Total\tinterest\tand\tpenalties\ton\tthe\tConsolidated\tBalance\tSheet\tat\tDecember\t31(1) | 103 | 85 | 121 | 101 | 260 | 164 |

As	of	December	31,	2018,	Citi	was	under	audit	by	the	Internal	Revenue Service	and	other	major	taxing	jurisdictions	around	the	world.	It	is	thus reasonably	possible	that	significant	changes	in	the	gross	balance	of	unrecognized tax	benefits	may	occur	within	the	next	12	months,	although	Citi	does	not	expect such	audits	to	result	in	amounts	that	would	cause	a	significant	change	to	its effective	tax	rate.

The	following	are	the	major	tax	jurisdictions	in	which	the	Company	and	its affiliates	operate	and	the	earliest	tax	year	subject	to	examination:

# Non-U.S.	Earnings

Non-U.S.	pretax	earnings	approximated	$16.1	billion	in	2018	(of	which	a	$21 million	loss	was	recorded	in	Discontinued	operations),	$13.7	billion	in	2017	and $11.6	billion	in	2016.	As	a	U.S.	corporation,	Citigroup	and	its	U.S.	subsidiaries are	currently	subject	to	U.S.	taxation	on	all	non-U.S.	pretax	earnings	of	non-U.S. branches.	Beginning	in	2018,	there	is	a	separate	foreign	tax	credit	(FTC)	basket for	branches.	Also,	dividends	from	a	non-U.S.	subsidiary	or	affiliate	are effectively	exempt	from	U.S.	taxation.	The	Company	provides	income	taxes	on the	book	over	tax	basis	differences	of	non-U.S.	subsidiaries	except	to	the	extent that	such	differences	are	indefinitely	reinvested	outside	the	U.S.

At	December	31,	2018,	$15.5	billion	of	basis	differences	of	non-U.S. subsidiaries	was	indefinitely	invested.	At	the	existing	tax	rates,	additional	taxes (net	of	U.S.	FTCs)	of	$4.3	billion	would	have	to	be	provided	if	such	basis differences	were	realized.

Income	taxes	are	not	provided	for	the	Company's	"savings	bank	base	year bad	debt	reserves"	that	arose	before	1988,	because	under	current	U.S.	tax	rules, such	taxes	will	become	payable	only	to	the	extent	that	such	amounts	are distributed	in	excess	of	limits	prescribed	by	federal	law.	At	December	31,	2018, the	amount	of	the	base	year	reserves	totaled	approximately	$358	million	(subject to	a	tax	of	$75	million).

# Deferred	Tax	Assets

As	of	December	31,	2018,	Citi	had	a	valuation	allowance	of	$9.3	billion, composed	of	valuation	allowances	of	$6.0	billion	on	its	FTC	carry-forwards, $1.7	billion	on	its	U.S.	residual	DTA	related	to	its	non-U.S.	branches,	$1.5 billion	on	local	non-U.S.	DTAs	and	$0.1	billion	on	state	net	operating	loss	carry- forwards.	The	valuation	allowance	against	FTCs	results	from	the	impact	of	the lower	tax	rate	and	the	new	separate	FTC	basket	for	non-U.S.	branches,	as	well	as the	diminished	ability	under	Tax	Reform	to	generate	income	from	sources outside	the	U.S.	to	support	FTC	utilization.	The	absolute	amount	of	Citi's	post- Tax	Reform-related	valuation	allowances	may	change	in	future	years.	First,	the separate	FTC	basket	for	non-U.S.	branches	will	result	in	additional	DTAs	(for FTCs)	requiring	a	valuation	allowance,	given	that	the	local	tax	rate	for	these branches	exceeds	on	average	the	U.S.	tax	rate	of	21%.	Second,	in	Citi's	general basket	for	FTCs,	changes	in	the	forecasted	amount	of	income	in	U.S.	locations derived	from	sources	outside	the	U.S.	could	alter	the	amount	of	valuation allowance	that	is	needed	against	such	FTCs.	The	following	table	summarizes Citi's	DTAs:

# In	billions	of	dollars

| Jurisdiction/component(1) | DTAs	balance<br>December	31,	2018 | DTAs	balance<br>December	31,	2017 |
| :--- | :--- | :--- |
| U.S.\tfederal(2) |  |  |
| Net\toperating\tlosses\t(NOLs)(3) | $2.6 | $2.3 |
| Foreign\ttax\tcredits\t(FTCs) | 6.8 | 7.6 |
| General\tbusiness\tcredits\t(GBCs) | 1.0 | 1.4 |
| Future\ttax\tdeductions\tand\tcredits | 6.7 | 4.8 |
| Total\tU.S.\tfederal | $17.1 | $16.1 |
| State\tand\tlocal |  |  |
| New\tYork\tNOLs | $2.0 | $2.3 |
| Other\tstate\tNOLs | 0.2 | 0.2 |
| Future\ttax\tdeductions | 1.4 | 1.3 |
| Total\tstate\tand\tlocal | $3.6 | $3.8 |
| Non-U.S. |  |  |
| NOLs | $0.6 | $0.6 |
| Future\ttax\tdeductions | 1.6 | 2.0 |
| Total\tnon-U.S. | $2.2 | $2.6 |
| Total | $22.9 | $22.5 |

(1) All	amounts	are	net	of	valuation	allowances.

(2) Included	in	the	net	U.S.	federal	DTAs	of	$17.1	billion	as	of	December	31,	2018	were deferred	tax	liabilities	of	$2.8	billion	that	will	reverse	in	the	relevant	carry-forward	period and	may	be	used	to	support	the	DTAs.

(3) Consists	of	non-consolidated	tax	return	NOL	carry-forwards	that	are	eventually	expected to	be	utilized	in	Citigroup's	consolidated	tax	return.

The	following	table	summarizes	the	amounts	of	tax	carry-forwards	and	their expiration	dates:

| Year	of	expiration | December	31,<br>2018 | December	31,<br>2017 |
| :--- | :--- | :--- |
| U.S.\ttax\treturn\tforeign\ttax\tcredit\tcarry-\nforwards(1) |  |  |
| 2018 | $— $ | 0.4 |
| 2019 | 0.9 | 1.3 |
| 2020 | 2.6 | 3.2 |
| 2021 | 1.8 | 2.0 |
| 2022 | 3.3 | 3.4 |
| 2023(2) | 0.4 | 0.4 |
| 2025(2) | 1.4 | 1.4 |
| 2027(2) | 1.1 | 1.2 |
| 2028 | 1.3 | — |
| Total\tU.S.\ttax\treturn\tforeign\ttax\tcredit\tcarry-\nforwards | $12.8 | $13.3 |
| U.S.\ttax\treturn\tgeneral\tbusiness\tcredit\tcarry-\nforwards |  |  |
| 2032 | $— $ | 0.2 |
| 2033 | — | 0.3 |
| 2034 | — | 0.2 |
| 2035 | — | 0.2 |
| 2036 | 0.1 | 0.2 |
| 2037 | 0.4 | 0.3 |
| 2038 | 0.5 | — |
| Total\tU.S.\ttax\treturn\tgeneral\tbusiness\tcredit\ncarry-forwards | $1.0 | $1.4 |
| U.S.\tsubsidiary\tseparate\tfederal\tNOL\tcarry-\nforwards |  |  |
| 2027 | $0.2 | $0.2 |
| 2028 | 0.1 | 0.1 |
| 2030 | 0.3 | 0.3 |
| 2032 | 0.1 | 0.1 |
| 2033 | 1.6 | 1.6 |
| 2034 | 2.1 | 2.3 |
| 2035 | 3.3 | 3.3 |
| 2036 | 2.1 | 2.1 |
| 2037 | 1.0 | 1.0 |
| Unlimited\tcarry-forward\tperiod | 1.7 | — |
| Total\tU.S.\tsubsidiary\tseparate\tfederal\tNOL\ncarry-forwards(3) | $12.5 | $11.0 |
| New\tYork\tState\tNOL\tcarry-forwards(3) |  |  |
| 2034 | $11.7 | $13.6 |
| New\tYork\tCity\tNOL\tcarry-forwards(3) |  |  |
| 2034 | $11.5 | $13.1 |
| Non-U.S.\tNOL\tcarry-forwards(1) |  |  |
| Various | $2.0 | $2.0 |

(1) Before	valuation	allowance.

consolidated	tax	return	entity	but	will	be	utilized	(net	of	valuation	allowances)	in Citigroup's	consolidated	tax	return.

The	time	remaining	for	utilization	of	the	FTC	component	has	shortened, given	the	passage	of	time.	Although	realization	is	not	assured,	Citi	believes	that the	realization	of	the	recognized	net	DTAs	of	$22.9	billion	at	December	31, 2018	is	more-likely-than-not,	based	upon	expectations	as	to	future

taxable	income	in	the	jurisdictions	in	which	the	DTAs	arise	and	consideration	of available	tax	planning	strategies	(as	defined	in	ASC	740,	Income	Taxes).

Citi	believes	the	U.S.	federal	and	New	York	State	and	City	NOL	carry- forward	period	of	20	years	provides	enough	time	to	fully	utilize	the	DTAs pertaining	to	the	existing	NOL	carry-forwards.	This	is	due	to	Citi's	forecast	of sufficient	U.S.	taxable	income	and	the	fact	that	New	York	State	and	City continue	to	tax	Citi's	non-U.S.	income.

With	respect	to	the	FTCs	component	of	the	DTAs,	the	carry-forward	period is	10	years.	Utilization	of	FTCs	in	any	year	is	restricted	to	21%	of	foreign	source taxable	income	in	that	year.	However,	overall	domestic	losses	that	Citi	has incurred	of	approximately	$47	billion	as	of	December	31,	2018	are	allowed	to	be reclassified	as	foreign	source	income	to	the	extent	of	50%–100%	of	domestic source	income	produced	in	subsequent	years.	Such	resulting	foreign	source income	would	cover	the	FTC	carry-forwards	after	valuation	allowance.	As	noted in	the	tables	above,	Citi's	FTC	carry-forwards	were	$6.8	billion	($12.8	billion before	valuation	allowance)	as	of	December	31,	2018,	compared	to	$7.6	billion as	of	December	31,	2017.	Citi	believes	that	it	will	generate	sufficient	U.S. taxable	income	within	the	10-year	carry-forward	period	to	be	able	to	utilize	the net	FTCs	after	the	valuation	allowance,	after	considering	any	FTCs	produced	in the	tax	return	for	such	period,	which	must	be	used	prior	to	any	carry-forward utilization.

The	following	table	reconciles	the	income	and	share	data	used	in	the	basic	and	diluted	earnings	per	share	(EPS)	computations:

| In	millions,	except	per	share	amounts | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Income\t(loss)\tfrom\tcontinuing\toperations\tbefore\tattribution\tof\tnoncontrolling\tinterests | $18,088 | $(6,627) | $15,033 |
| Less:\tNoncontrolling\tinterests\tfrom\tcontinuing\toperations | 35 | 60 | 63 |
| Net\tincome\t(loss)\tfrom\tcontinuing\toperations\t(for\tEPS\tpurposes) | $18,053 | $(6,687) | $14,970 |
| Income\t(loss)\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes | (8) | (111) | (58) |
| Citigroup's\tnet\tincome\t(loss) | $18,045 | $(6,798) | $14,912 |
| Less:\tPreferred\tdividends(1) | 1,173 | 1,213 | 1,077 |
| Net\tincome\t(loss)\tavailable\tto\tcommon\tshareholders | $16,872 | $(8,011) | $13,835 |
| Less:\tDividends\tand\tundistributed\tearnings\tallocated\tto\temployee\trestricted\tand\tdeferred\tshares\twith\tnonforfeitable\trights\tto\ndividends,\tapplicable\tto\tbasic\tEPS | 200 | 37 | 195 |
| Net\tincome\t(loss)\tallocated\tto\tcommon\tshareholders\tfor\tbasic\tand\tdiluted\tEPS | $16,672 | $(8,048) | $13,640 |
| Weighted-average\tcommon\tshares\toutstanding\tapplicable\tto\tbasic\tEPS\t(in\tmillions) | 2,493.3 | 2,698.5 | 2,888.1 |
| Effect\tof\tdilutive\tsecurities |  |  |  |
| Options(2) | 0.1 | — | 0.1 |
| Other\temployee\tplans | 1.4 | — | 0.1 |
| Adjusted\tweighted-average\tcommon\tshares\toutstanding\tapplicable\tto\tdiluted\tEPS (3) | 2,494.8 | 2,698.5 | 2,888.3 |
| Basic\tearnings\tper\tshare(4) |  |  |  |
| Income\t(loss)\tfrom\tcontinuing\toperations | $6.69 | $(2.94) | $4.74 |
| Discontinued\toperations | — | (0.04) | (0.02) |
| Net\tincome\t(loss) | $6.69 | $(2.98) | $4.72 |
| Diluted\tearnings\tper\tshare(4) |  |  |  |
| Income\t(loss)\tfrom\tcontinuing\toperations | $6.69 | $(2.94) | $4.74 |
| Discontinued\toperations | — | (0.04) | (0.02) |
| Net\tincome\t(loss) | $6.68 | $(2.98) | $4.72 |

(1) See	Note	20	to	the	Consolidated	Financial	Statements	for	the	potential	future	impact	of	preferred	stock	dividends.

(2) During	2018,	2017	and	2016,	weighted-average	options	to	purchase	0.5	million,	0.8	million	and	4.2	million	shares	of	common	stock,	respectively,	were	outstanding	but	not	included	in	the computation	of	earnings	per	share	because	the	weighted-average	exercise	prices	of	$145.69,	$204.80	and	$98.01	per	share,	respectively,	were	anti-dilutive.

(3) Due	to	rounding,	common	shares	outstanding	applicable	to	basic	EPS	and	the	effect	of	dilutive	securities	may	not	sum	to	common	shares	outstanding	applicable	to	diluted	EPS.

# 11.	FEDERAL	FUNDS,	SECURITIES	BORROWED,	LOANED	AND

# SUBJECT	TO	REPURCHASE	AGREEMENTS

Federal	funds	sold	and	securities	borrowed	and	purchased	under	agreements	to resell,	at	their	respective	carrying	values,	consisted	of	the	following:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 |
| Federal\tfunds\tsold | $— $ | — |
| Securities\tpurchased\tunder\tagreements\tto\nresell | 159,364 | 130,984 |
| Deposits\tpaid\tfor\tsecurities\tborrowed | 111,320 | 101,494 |
| Total(1) | $270,684 | $232,478 |

Federal	funds	purchased	and	securities	loaned	and	sold	under	agreements to	repurchase,	at	their	respective	carrying	values,	consisted	of	the	following:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 |
| Federal\tfunds\tpurchased | $— $ | 326 |
| Securities\tsold\tunder\tagreements\tto\nrepurchase | 166,090 | 142,646 |
| Deposits\treceived\tfor\tsecurities\tloaned | 11,678 | 13,305 |
| Total(1) | $177,768 | $156,277 |

(1) The	above	tables	do	not	include	securities-for-securities	lending	transactions	of	$15.9 billion	and	$14.0	billion	at	December	31,	2018	and	2017,	respectively,	where	the Company	acts	as	lender	and	receives	securities	that	can	be	sold	or	pledged	as	collateral.	In these	transactions,	the	Company	recognizes	the	securities	received	at	fair	value	within Other	assets	and	the	obligation	to	return	those	securities	as	a	liability	within	 Brokerage payables.

The	resale	and	repurchase	agreements	represent	collateralized	financing transactions.	Citi	executes	these	transactions	primarily	through	its	broker-dealer subsidiaries	to	facilitate	customer	matched-book	activity	and	to	efficiently	fund	a portion	of	Citi's	trading	inventory.	Transactions	executed	by	Citi's	bank subsidiaries	primarily	facilitate	customer	financing	activity.

To	maintain	reliable	funding	under	a	wide	range	of	market	conditions, including	under	periods	of	stress,	Citi	manages	these	activities	by	taking	into consideration	the	quality	of	the	underlying	collateral	and	stipulating	financing tenor.	Citi	manages	the	risks	in	its	collateralized	financing	transactions	by conducting	daily	stress	tests	to	account	for	changes	in	capacity,	tenors,	haircut, collateral	profile	and	client	actions.	Additionally,	Citi	maintains	counterparty diversification	by	establishing	concentration	triggers	and	assessing	counterparty reliability	and	stability	under	stress.

It	is	the	Company's	policy	to	take	possession	of	the	underlying	collateral, monitor	its	market	value	relative	to	the	amounts	due	under	the	agreements	and, when	necessary,

require	prompt	transfer	of	additional	collateral	in	order	to	maintain	contractual margin	protection.	For	resale	and	repurchase	agreements,	when	necessary,	the Company	posts	additional	collateral	in	order	to	maintain	contractual	margin protection.

Collateral	typically	consists	of	government	and	government-agency securities,	corporate	and	municipal	bonds,	equities	and	mortgage-	and	other asset-backed	securities.

The	resale	and	repurchase	agreements	are	generally	documented	under industry	standard	agreements	that	allow	the	prompt	close-out	of	all	transactions (including	the	liquidation	of	securities	held)	and	the	offsetting	of	obligations	to return	cash	or	securities	by	the	non-defaulting	party,	following	a	payment	default or	other	type	of	default	under	the	relevant	master	agreement.	Events	of	default generally	include	(i)	failure	to	deliver	cash	or	securities	as	required	under	the transaction,	(ii)	failure	to	provide	or	return	cash	or	securities	as	used	for margining	purposes,	(iii)	breach	of	representation,	(iv)	cross-default	to	another transaction	entered	into	among	the	parties,	or,	in	some	cases,	their	affiliates	and (v)	a	repudiation	of	obligations	under	the	agreement.	The	counterparty	that receives	the	securities	in	these	transactions	is	generally	unrestricted	in	its	use	of the	securities,	with	the	exception	of	transactions	executed	on	a	tri-party	basis, where	the	collateral	is	maintained	by	a	custodian	and	operational	limitations may	restrict	its	use	of	the	securities.

A	substantial	portion	of	the	resale	and	repurchase	agreements	is	recorded	at fair	value,	as	described	in	Notes	24	and	25	to	the	Consolidated	Financial Statements.	The	remaining	portion	is	carried	at	the	amount	of	cash	initially advanced	or	received,	plus	accrued	interest,	as	specified	in	the	respective agreements.

The	securities	borrowing	and	lending	agreements	also	represent collateralized	financing	transactions	similar	to	the	resale	and	repurchase agreements.	Collateral	typically	consists	of	government	and	government-agency securities	and	corporate	debt	and	equity	securities.

Similar	to	the	resale	and	repurchase	agreements,	securities	borrowing	and lending	agreements	are	generally	documented	under	industry	standard agreements	that	allow	the	prompt	close-out	of	all	transactions	(including	the liquidation	of	securities	held)	and	the	offsetting	of	obligations	to	return	cash	or securities	by	the	non-defaulting	party,	following	a	payment	default	or	other default	by	the	other	party	under	the	relevant	master	agreement.	Events	of	default and	rights	to	use	securities	under	the	securities	borrowing	and	lending agreements	are	similar	to	the	resale	and	repurchase	agreements	referenced above.

A	substantial	portion	of	securities	borrowing	and	lending	agreements	is recorded	at	the	amount	of	cash	advanced	or	received.	The	remaining	portion	is recorded	at	fair	value	as	the	Company	elected	the	fair	value	option	for	certain securities	borrowed	and	loaned	portfolios,	as	described	in	Note	25	to	the Consolidated	Financial	Statements.	With	respect	to	securities	loaned,	the Company	receives	cash	collateral	in	an	amount	generally	in	excess	of	the	market value	of	the	securities	loaned.	The	Company	monitors	the	market	value	of securities	borrowed	and	securities	loaned	on	a	daily	basis	and	obtains	or

posts	additional	collateral	in	order	to	maintain	contractual	margin	protection. The	enforceability	of	offsetting	rights	incorporated	in	the	master	netting agreements	for	resale	and	repurchase	agreements,	and	securities	borrowing	and lending	agreements,	is	evidenced	to	the	extent	that	a	supportive	legal	opinion has	been	obtained	from	counsel	of	recognized	standing	that	provides	the requisite	level	of	certainty	regarding	the	enforceability	of	these	agreements. Also,	the	exercise	of	rights	by	the	non-defaulting	party	to	terminate	and	close	out transactions	on	a	net	basis	under	these	agreements	will	not	be	stayed	or	avoided under	applicable	law	upon	an	event	of	default	including	bankruptcy,	insolvency or	similar	proceeding.

A	legal	opinion	may	not	have	been	sought	or	obtained	for	certain jurisdictions	where	local	law	is	silent	or	sufficiently	ambiguous	to	determine	the enforceability	of	offsetting	rights	or	where	adverse	case	law	or	conflicting regulation	may	cast

doubt	on	the	enforceability	of	such	rights.	In	some	jurisdictions	and	for	some counterparty	types,	the	insolvency	law	for	a	particular	counterparty	type	may	be nonexistent	or	unclear	as	overlapping	regimes	may	exist.	For	example,	this	may be	the	case	for	certain	sovereigns,	municipalities,	central	banks	and	U.S.	pension plans.

The	following	tables	present	the	gross	and	net	resale	and	repurchase agreements	and	securities	borrowing	and	lending

agreements	and	the	related	offsetting	amount	permitted	under	ASC	210-20-45. The	tables	also	include	amounts	related	to	financial	instruments	that	are	not permitted	to	be	offset	under	ASC	210-20-45,	but	would	be	eligible	for	offsetting to	the	extent	that	an	event	of	default	occurred	and	a	legal	opinion	supporting enforceability	of	the	offsetting	rights	has	been	obtained.	Remaining	exposures continue	to	be	secured	by	financial	collateral,	but	the	Company	may	not	have sought	or	been	able	to	obtain	a	legal	opinion	evidencing	enforceability	of	the offsetting	right.

| In	millions	of	dollars | Gross	amounts<br>of	recognized<br>assets | Gross	amounts<br>offset	on	the<br>Consolidated<br>Balance	Sheet(1) | Net	amounts	of<br>assets	included	on<br>the	Consolidated<br>Balance	Sheet(2) | Consolidated	Balance<br>Sheet	but	eligible	for<br>offsetting	upon<br>counterparty	default(3) | Net<br>amounts(4) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Securities\tpurchased\tunder\tagreements\tto\tresell | $246,788 | $87,424 | $159,364 | $124,557 | $34,807 |
| Deposits\tpaid\tfor\tsecurities\tborrowed | 111,320 | — | 111,320 | 35,766 | 75,554 |
| Total | $358,108 | $87,424 | $270,684 | $160,323 | $110,361 |

| In	millions	of	dollars | Gross	amounts<br>of	recognized<br>liabilities | Gross	amounts<br>offset	on	the<br>Consolidated<br>Balance	Sheet(1) | Net	amounts	of<br>liabilities	included	on<br>the	Consolidated<br>Balance	Sheet(2) | Consolidated	Balance<br>Sheet	but	eligible	for<br>offsetting	upon<br>counterparty	default(3) | Net<br>amounts(4) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Securities\tsold\tunder\tagreements\tto\trepurchase | $253,514 | $87,424 | $166,090 | $82,823 | $83,267 |
| Deposits\treceived\tfor\tsecurities\tloaned | 11,678 | — | 11,678 | 3,415 | 8,263 |
| Total | $265,192 | $87,424 | $177,768 | $86,238 | $91,530 |

| In	millions	of	dollars | Gross	amounts<br>of	recognized<br>assets | Gross	amounts<br>offset	on	the<br>Consolidated<br>Balance	Sheet(1) | Net	amounts	of<br>assets	included	on<br>the	Consolidated<br>Balance	Sheet(2) | Consolidated	Balance<br>Sheet	but	eligible	for<br>offsetting	upon<br>counterparty	default(3) | Net<br>amounts(4) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Securities\tpurchased\tunder\tagreements\tto\tresell | $204,460 | $73,476 | $130,984 | $103,022 | $27,962 |
| Deposits\tpaid\tfor\tsecurities\tborrowed | 101,494 | — | 101,494 | 22,271 | 79,223 |
| Total | $305,954 | $73,476 | $232,478 | $125,293 | $107,185 |

| In	millions	of	dollars | Gross	amounts<br>of	recognized<br>liabilities | Gross	amounts<br>offset	on	the<br>Consolidated<br>Balance	Sheet(1) | Net	amounts	of<br>liabilities	included	on<br>the	Consolidated<br>Balance	Sheet(2) | Amounts<br>not	offset	on	the<br>Consolidated	Balance<br>Sheet	but	eligible	for<br>offsetting	upon<br>counterparty	default(3) | Net<br>amounts(4) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Securities\tsold\tunder\tagreements\tto\trepurchase | $216,122 | $73,476 | $142,646 | $73,716 | $68,930 |
| Deposits\treceived\tfor\tsecurities\tloaned | 13,305 | — | 13,305 | 4,079 | 9,226 |
| Total | $229,427 | $73,476 | $155,951 | $77,795 | $78,156 |

(1) Includes	financial	instruments	subject	to	enforceable	master	netting	agreements	that	are	permitted	to	be	offset	under	ASC	210-20-45.

(2) The	total	of	this	column	for	each	period	excludes	federal	funds	sold/purchased.	See	tables	above.

(3) Includes	financial	instruments	subject	to	enforceable	master	netting	agreements	that	are	not	permitted	to	be	offset	under	ASC	210-20-45,	but	would	be	eligible	for	offsetting	to	the	extent	that	an event	of	default	has	occurred	and	a	legal	opinion	supporting	enforceability	of	the	offsetting	right	has	been	obtained.

(4) Remaining	exposures	continue	to	be	secured	by	financial	collateral,	but	the	Company	may	not	have	sought	or	been	able	to	obtain	a	legal	opinion	evidencing	enforceability	of	the	offsetting	right.

The	following	tables	present	the	gross	amount	of	liabilities	associated	with	repurchase	agreements	and	securities	lending	agreements,	by	remaining	contractual	maturity:

|  | Open	and |  |  | Greater	than	90 |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | overnight | Up\tto\t30\tdays | 31–90\tdays | days | Total |
| Securities\tsold\tunder\tagreements\tto\trepurchase | $108,405 | $70,850 | $29,898 | $44,361 | $253,514 |
| Deposits\treceived\tfor\tsecurities\tloaned | 6,296 | 774 | 2,626 | 1,982 | 11,678 |
| Total | $114,701 | $71,624 | $32,524 | $46,343 | $265,192 |

|  |  |  |  | Greater	than	90 |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Open\tand\tovernight | Up\tto\t30\tdays | 31–90\tdays | days | Total |
| Securities\tsold\tunder\tagreements\tto\trepurchase | $82,073 | $68,372 | $33,846 | $31,831 | $216,122 |
| Deposits\treceived\tfor\tsecurities\tloaned | 9,946 | 266 | 1,912 | 1,181 | 13,305 |
| Total | $92,019 | $68,638 | $35,758 | $33,012 | $229,427 |

The	following	tables	present	the	gross	amount	of	liabilities	associated	with	repurchase	agreements	and	securities	lending	agreements,	by	class	of	underlying	collateral:

|  |  | As	of	December	31,	2018 |  |
| :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Repurchase\nagreements | Securities\tlending\nagreements | Total |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities | $86,785 | $41 | $86,826 |
| State\tand\tmunicipal\tsecurities | 2,605 | — | 2,605 |
| Foreign\tgovernment\tsecurities | 99,131 | 179 | 99,310 |
| Corporate\tbonds | 21,719 | 749 | 22,468 |
| Equity\tsecurities | 12,920 | 10,664 | 23,584 |
| Mortgage-backed\tsecurities | 19,421 | — | 19,421 |
| Asset-backed\tsecurities | 6,207 | — | 6,207 |
| Other | 4,726 | 45 | 4,771 |
| Total | $253,514 | $11,678 | $265,192 |

| In	millions	of	dollars | Repurchase	agreements | Securities	lending<br>agreements | Total |
| :--- | :--- | :--- | :--- |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities | $58,774 | $— | $58,774 |
| State\tand\tmunicipal\tsecurities | 1,605 | — | 1,605 |
| Foreign\tgovernment\tsecurities | 89,576 | 105 | 89,681 |
| Corporate\tbonds | 20,194 | 657 | 20,851 |
| Equity\tsecurities | 20,724 | 11,907 | 32,631 |
| Mortgage-backed\tsecurities | 17,791 | — | 17,791 |
| Asset-backed\tsecurities | 5,479 | — | 5,479 |
| Other | 1,979 | 636 | 2,615 |
| Total | $216,122 | $13,305 | $229,427 |

# 12.	BROKERAGE	RECEIVABLES	AND	BROKERAGE PAYABLES

The	Company	has	receivables	and	payables	for	financial	instruments	sold	to	and purchased	from	brokers,	dealers	and	customers,	which	arise	in	the	ordinary course	of	business.	Citi	is	exposed	to	risk	of	loss	from	the	inability	of	brokers, dealers	or	customers	to	pay	for	purchases	or	to	deliver	the	financial	instruments sold,	in	which	case	Citi	would	have	to	sell	or	purchase	the	financial	instruments at	prevailing	market	prices.	Credit	risk	is	reduced	to	the	extent	that	an	exchange or	clearing	organization	acts	as	a	counterparty	to	the	transaction	and	replaces	the broker,	dealer	or	customer	in	question.

Citi	seeks	to	protect	itself	from	the	risks	associated	with	customer	activities by	requiring	customers	to	maintain	margin	collateral	in	compliance	with regulatory	and	internal	guidelines.	Margin	levels	are	monitored	daily,	and customers	deposit	additional	collateral	as	required.	Where	customers	cannot meet	collateral	requirements,	Citi	may	liquidate	sufficient	underlying	financial instruments	to	bring	the	customer	into	compliance	with	the	required	margin level.

Exposure	to	credit	risk	is	impacted	by	market	volatility,	which	may	impair the	ability	of	clients	to	satisfy	their	obligations	to	Citi.	Credit	limits	are established	and	closely	monitored	for	customers	and	for	brokers	and	dealers engaged	in	forwards,	futures	and	other	transactions	deemed	to	be	credit sensitive.

Brokerage	receivables	and	Brokerage	payables	consisted	of	the	following:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 |
| Receivables\tfrom\tcustomers | $14,415 | $19,215 |
| Receivables\tfrom\tbrokers,\tdealers\tand\nclearing\torganizations | 21,035 | 19,169 |
| Total\tbrokerage\treceivables(1) | $35,450 | $38,384 |
| Payables\tto\tcustomers | $40,273 | $38,741 |
| Payables\tto\tbrokers,\tdealers\tand\tclearing\norganizations | 24,298 | 22,601 |
| Total\tbrokerage\tpayables(1) | $64,571 | $61,342 |

(1) Includes	brokerage	receivables	and	payables	recorded	by	Citi	broker-dealer	entities	that are	accounted	for	in	accordance	with	the	AICPA	Accounting	Guide	for	Brokers	and

Dealers	in	Securities	as	codified	in	ASC	940-320.

Citi	adopted	ASU	2016-01	and	ASU	2018-03	as	of	January	1,	2018.	The	ASUs require	fair	value	changes	on	marketable	equity	securities	to	be	recognized	in earnings.	The	available-for-sale	category	was	eliminated	for	equity	securities. Also,	non-marketable	equity	securities	are	required	to	be	measured

at	fair	value	with	changes	in	fair	value	recognized	in	earnings	unless	(i)	the measurement	alternative	is	elected	or	(ii)	the	investment	represents	Federal Reserve	Bank	and	Federal	Home	Loan	Bank	stock	or	certain	exchange	seats	that continue	to	be	carried	at	cost.	See	Note	1	to	the	Consolidated	Financial Statements	for	additional	details.

# The	following	tables	present	Citi's	investments	by	category:

(1) Carried	at	adjusted	amortized	cost	basis,	net	of	any	credit-related	impairment.

(2) Unrealized	gains	and	losses	are	recognized	in	earnings.

(3) Impairment	losses	and	adjustments	to	the	carrying	value	as	a	result	of	observable	price	changes	are	recognized	in	earnings.

(4) Primarily	consists	of	shares	issued	by	the	Federal	Reserve	Bank,	Federal	Home	Loan	Banks	and	certain	exchanges	of	which	Citigroup	is	a	member.

The	following	table	presents	interest	and	dividend	income	on	investments:

The	Company	has	sold	certain	debt	securities	that	were	classified	as	HTM. These	sales	were	in	response	to	significant	deterioration	in	the	creditworthiness of	the	issuers	or	securities	or	because	the	Company	has	collected	a	substantial portion	(at	least	85%)	of	the	principal	outstanding	at	acquisition	of	the	security. In	addition,	certain	other	debt	securities	were	reclassified	to	AFS	investments	in response	to

significant	credit	deterioration.	Because	the	Company	generally	intends	to	sell these	reclassified	debt	securities,	Citi	recorded	OTTI	on	the	securities.	The following	table	presents,	for	the	periods	indicated,	the	carrying	value	of	HTM debt	securities	sold	and	reclassified	to	AFS,	as	well	as	the	related	gain	(loss)	or the	OTTI	losses	recorded	on	these	securities:

| In	millions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Carrying\tvalue\tof\tHTM\tdebt\tsecurities\tsold | $61 | $81 | $49 |
| Net\trealized\tgain\t(loss)\ton\tsale\tof\tHTM\tdebt\tsecurities | — | 13 | 14 |
| Carrying\tvalue\tof\tdebt\tsecurities\treclassified\tto\tAFS | 8 | 74 | 150 |
| OTTI\tlosses\ton\tdebt\tsecurities\treclassified\tto\tAFS | — | — | (6) |

# Securities	Available-for-Sale

The	amortized	cost	and	fair	value	of	AFS	securities	were	as	follows:

| In	millions	of	dollars | Amortized<br>cost | Gross<br>unrealized<br>gains | Gross<br>unrealized<br>losses | Fair<br>value | Amortized<br>cost | Gross<br>unrealized<br>gains | Gross<br>unrealized<br>losses | Fair<br>value |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Securities\tAFS |  |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities(1) |  |  |  |  |  |  |  |  |
| U.S.\tgovernment-sponsored\tagency\tguaranteed | $43,504 | $241 | $725 | $43,020 | $42,116 | $125 | $500 | $41,741 |
| Prime | — | — | — | — | 11 | 6 | — | 17 |
| Alt-A | 1 | — | — | 1 | 26 | 90 | — | 116 |
| Non-U.S.\tresidential | 1,310 | 4 | 2 | 1,312 | 2,744 | 13 | 6 | 2,751 |
| Commercial | 173 | 1 | 2 | 172 | 334 | — | 2 | 332 |
| Total\tmortgage-backed\tsecurities | $44,988 | $246 | $729 | $44,505 | $45,231 | $234 | $508 | $44,957 |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities |  |  |  |  |  |  |  |  |
| U.S.\tTreasury | $109,376 | $33 | $1,339 | $108,070 | $108,344 | $77 | $971 | $107,450 |
| Agency\tobligations | 9,283 | 1 | 132 | 9,152 | 10,813 | 7 | 124 | 10,696 |
| Total\tU.S.\tTreasury\tand\tfederal\tagency\tsecurities | $118,659 | $34 | $1,471 | $117,222 | $119,157 | $84 | $1,095 | $118,146 |
| State\tand\tmunicipal(2) | $9,372 | $96 | $262 | $9,206 | $8,870 | $140 | $245 | $8,765 |
| Foreign\tgovernment | 100,872 | 415 | 596 | 100,691 | 100,615 | 508 | 590 | 100,533 |
| Corporate | 11,714 | 42 | 157 | 11,599 | 14,144 | 51 | 86 | 14,109 |
| Asset-backed\tsecurities(1) | 845 | 2 | 4 | 843 | 3,906 | 14 | 2 | 3,918 |
| Other\tdebt\tsecurities | 3,973 | — | 1 | 3,972 | 297 | — | — | 297 |
| Total\tdebt\tsecurities\tAFS | $290,423 | $835 | $3,220 | $288,038 | $292,220 | $1,031 | $2,526 | $290,725 |
| Marketable\tequity\tsecurities\tAFS(3) | $— | $— | $— | $— | $186 | $4 | $1 | $189 |
| Total\tsecurities\tAFS | $290,423 | $835 | $3,220 | $288,038 | $292,406 | $1,035 | $2,527 | $290,914 |

(1) The	Company	invests	in	mortgage-	and	asset-backed	securities.	These	securitization	entities	are	generally	considered	VIEs.	The	Company's	maximum	exposure	to	loss	from	these	VIEs	is	equal to	the	carrying	amount	of	the	securities,	which	is	reflected	in	the	table	above.	For	mortgage-	and	asset-backed	securitizations	in	which	the	Company	has	other	involvement,	see	Note	21	to	the Consolidated	Financial	Statements.

(2) In	the	second	quarter	of	2017,	Citi	early	adopted	ASU	2017-08 ,	Receivable—Nonrefundable	Fees	and	Other	Costs	(Subtopic	310-20):	Premium	Amortization	on	Purchased	Callable	Debt Securities.	Upon	adoption,	a	cumulative	effect	adjustment	was	recorded	to	reduce	Retained	earnings,	effective	January	1,	2017,	for	the	incremental	amortization	of	purchase	premiums	and cumulative	fair	value	hedge	adjustments	on	callable	state	and	municipal	debt	securities.	See	Note	1	to	the	Consolidated	Financial	Statements.

(3) Citi	adopted	ASU	2016-01	and	ASU	2018-03	as	of	January	1,	2018,	resulting	in	a	cumulative	effect	adjustment	from	AOCI	to	 Retained	earnings	for	net	unrealized	gains	on	marketable	equity securities	AFS.	The	AFS	category	was	eliminated	for	equity	securities	effective	January	1,	2018.	See	Note	1	to	the	Consolidated	Financial	Statements	for	additional	details.

At	December	31,	2018,	the	amortized	cost	of	fixed	income	securities exceeded	their	fair	value	by	$3,220	million.	Of	the	$3,220	million,	$752	million represented	unrealized	losses	on	fixed	income	investments	that	have	been	in	a gross-unrealized-loss	position	for	less	than	a	year	and,	of	these,	92%	were	rated investment	grade;	and	$2,468	million

represented	unrealized	losses	on	fixed	income	investments	that	have	been	in	a gross-unrealized-loss	position	for	a	year	or	more	and,	of	these,	98%	were	rated investment	grade.	Of	the	$2,468	million	mentioned	above,	$1,297	million represents	U.S.	Treasury	securities.

The	following	table	shows	the	fair	value	of	AFS	securities	that	have	been	in	an	unrealized	loss	position:

|  | Less	than	12	months | Less	than	12	months | 12	months	or	longer | 12	months	or	longer | Total |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Fair\nvalue | Gross\nunrealized\nlosses | Fair\nvalue | Gross\nunrealized\nlosses | Fair\nvalue | Gross\nunrealized\nlosses |
| December\t31,\t2018 |  |  |  |  |  |  |
| Debt\tsecurities\tAFS(1) |  |  |  |  |  |  |
| Mortgage-backed\tsecurities |  |  |  |  |  |  |
| U.S.\tgovernment-sponsored\tagency\tguaranteed | $4,022 | $286 | $13,143 | $439 | $17,165 | $725 |
| Non-U.S.\tresidential | 284 | 2 | 2 | — | 286 | 2 |
| Commercial | 79 | 1 | 82 | 1 | 161 | 2 |
| Total\tmortgage-backed\tsecurities | $4,385 | $289 | $13,227 | $440 | $17,612 | $729 |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities |  |  |  |  |  |  |
| U.S.\tTreasury | $8,389 | $42 | $77,883 | $1,297 | $86,272 | $1,339 |
| Agency\tobligations | 277 | 2 | 8,660 | 130 | 8,937 | 132 |
| Total\tU.S.\tTreasury\tand\tfederal\tagency\tsecurities | $8,666 | $44 | $86,543 | $1,427 | $95,209 | $1,471 |
| State\tand\tmunicipal | $1,614 | $34 | $1,303 | $228 | $2,917 | $262 |
| Foreign\tgovernment | 40,655 | 265 | 15,053 | 331 | 55,708 | 596 |
| Corporate | 4,547 | 115 | 2,077 | 42 | 6,624 | 157 |
| Asset-backed\tsecurities | 441 | 4 | 55 | — | 496 | 4 |
| Other\tdebt\tsecurities | 1,790 | 1 | — | — | 1,790 | 1 |
| Total\tdebt\tsecurities\tAFS | $62,098 | $752 | $118,258 | $2,468 | $180,356 | $3,220 |
| December\t31,\t2017 |  |  |  |  |  |  |
| Securities\tAFS |  |  |  |  |  |  |
| Mortgage-backed\tsecurities |  |  |  |  |  |  |
| U.S.\tgovernment-sponsored\tagency\tguaranteed | $30,994 | $438 | $2,206 | $62 | $33,200 | $500 |
| Non-U.S.\tresidential | 753 | 6 | — | — | 753 | 6 |
| Commercial | 150 | 1 | 57 | 1 | 207 | 2 |
| Total\tmortgage-backed\tsecurities | $31,897 | $445 | $2,263 | $63 | $34,160 | $508 |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities |  |  |  |  |  |  |
| U.S.\tTreasury | $79,050 | $856 | $7,404 | $115 | $86,454 | $971 |
| Agency\tobligations | 8,857 | 110 | 1,163 | 14 | 10,020 | 124 |
| Total\tU.S.\tTreasury\tand\tfederal\tagency\tsecurities | $87,907 | $966 | $8,567 | $129 | $96,474 | $1,095 |
| State\tand\tmunicipal | $1,009 | $11 | $1,155 | $234 | $2,164 | $245 |
| Foreign\tgovernment | 53,206 | 356 | 9,051 | 234 | 62,257 | 590 |
| Corporate | 6,737 | 74 | 859 | 12 | 7,596 | 86 |
| Asset-backed\tsecurities | 449 | 1 | 25 | 1 | 474 | 2 |
| Other\tdebt\tsecurities | — | — | — | — | — | — |
| Marketable\tequity\tsecurities\tAFS(1) | 11 | 1 | — | — | 11 | 1 |
| Total\tsecurities\tAFS | $181,216 | $1,854 | $21,920 | $673 | $203,136 | $2,527 |

The	following	table	presents	the	amortized	cost	and	fair	value	of	AFS	debt	securities	by	contractual	maturity	dates:

# December	31,

| In	millions	of	dollars | Amortized<br>cost | Fair<br>value | Amortized<br>cost | Fair<br>value |
| :--- | :--- | :--- | :--- | :--- |
| Mortgage-backed\tsecurities(1) |  |  |  |  |
| Due\twithin\t1\tyear | $14 | $14 | $45 | $45 |
| After\t1\tbut\twithin\t5\tyears | 662 | 661 | 1,306 | 1,304 |
| After\t5\tbut\twithin\t10\tyears | 2,779 | 2,828 | 1,376 | 1,369 |
| After\t10\tyears(2) | 41,533 | 41,002 | 42,504 | 42,239 |
| Total | $44,988 | $44,505 | $45,231 | $44,957 |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities |  |  |  |  |
| Due\twithin\t1\tyear | $41,941 | $41,867 | $4,913 | $4,907 |
| After\t1\tbut\twithin\t5\tyears | 76,139 | 74,800 | 111,236 | 110,238 |
| After\t5\tbut\twithin\t10\tyears | 489 | 462 | 3,008 | 3,001 |
| After\t10\tyears(2) | 90 | 93 | — | — |
| Total | $118,659 | $117,222 | $119,157 | $118,146 |
| State\tand\tmunicipal |  |  |  |  |
| Due\twithin\t1\tyear | $2,586 | $2,586 | $1,792 | $1,792 |
| After\t1\tbut\twithin\t5\tyears | 1,676 | 1,675 | 2,579 | 2,576 |
| After\t5\tbut\twithin\t10\tyears | 585 | 602 | 514 | 528 |
| After\t10\tyears(2) | 4,525 | 4,343 | 3,985 | 3,869 |
| Total | $9,372 | $9,206 | $8,870 | $8,765 |
| Foreign\tgovernment |  |  |  |  |
| Due\twithin\t1\tyear | $39,078 | $39,028 | $32,130 | $32,100 |
| After\t1\tbut\twithin\t5\tyears | 50,125 | 49,962 | 53,034 | 53,165 |
| After\t5\tbut\twithin\t10\tyears | 10,153 | 10,149 | 12,949 | 12,680 |
| After\t10\tyears(2) | 1,516 | 1,552 | 2,502 | 2,588 |
| Total | $100,872 | $100,691 | $100,615 | $100,533 |
| All\tother(3) |  |  |  |  |
| Due\twithin\t1\tyear | $6,166 | $6,166 | $3,998 | $3,991 |
| After\t1\tbut\twithin\t5\tyears | 8,459 | 8,416 | 9,047 | 9,027 |
| After\t5\tbut\twithin\t10\tyears | 1,474 | 1,427 | 3,415 | 3,431 |
| After\t10\tyears(2) | 433 | 405 | 1,887 | 1,875 |
| Total | $16,532 | $16,414 | $18,347 | $18,324 |
| Total\tdebt\tsecurities\tAFS | $290,423 | $288,038 | $292,220 | $290,725 |

(1) Includes	mortgage-backed	securities	of	U.S.	government-sponsored	agencies.

(2) Investments	with	no	stated	maturities	are	included	as	contractual	maturities	of	greater	than	10	years.	Actual	maturities	may	differ	due	to	call	or	prepayment	rights.

(3) Includes	corporate,	asset-backed	and	other	debt	securities.

# Debt	Securities	Held-to-Maturity

The	carrying	value	and	fair	value	of	debt	securities	HTM	were	as	follows:

| In	millions	of	dollars | Carrying<br>value | Gross<br>unrealized<br>gains | Gross<br>unrealized<br>losses | Fair<br>value |
| :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2018 |  |  |  |  |
| Debt\tsecurities\tHTM |  |  |  |  |
| Mortgage-backed\tsecurities(1)(2) |  |  |  |  |
| U.S.\tgovernment\tagency\tguaranteed | $34,239 | $199 | $578 | $33,860 |
| Alt-A | — | — | — | — |
| Non-U.S.\tresidential | 1,339 | 12 | 1 | 1,350 |
| Commercial | 368 | — | — | 368 |
| Total\tmortgage-backed\tsecurities | $35,946 | $211 | $579 | $35,578 |
| State\tand\tmunicipal | $7,628 | $167 | $138 | $7,657 |
| Foreign\tgovernment | 1,027 | — | 24 | 1,003 |
| Asset-backed\tsecurities(1) | 18,756 | 8 | 112 | 18,652 |
| Total\tdebt\tsecurities\tHTM | $63,357 | $386 | $853 | $62,890 |
| December\t31,\t2017 |  |  |  |  |
| Debt\tsecurities\tHTM |  |  |  |  |
| Mortgage-backed\tsecurities(1) |  |  |  |  |
| U.S.\tgovernment\tagency\tguaranteed | $23,880 | $40 | $157 | $23,763 |
| Alt-A | 141 | 57 | — | 198 |
| Non-U.S.\tresidential | 1,841 | 65 | — | 1,906 |
| Commercial | 237 | — | — | 237 |
| Total\tmortgage-backed\tsecurities | $26,099 | $162 | $157 | $26,104 |
| State\tand\tmunicipal(3) | $8,897 | $378 | $73 | $9,202 |
| Foreign\tgovernment | 740 | — | 18 | 722 |
| Asset-backed\tsecurities(1) | 17,584 | 162 | 22 | 17,724 |
| Total\tdebt\tsecurities\tHTM | $53,320 | $702 | $270 | $53,752 |

(2) In	November	2018,	Citibank	transferred	$10	billion	of	agency	residential	mortgage-backed	securities	(RMBS)	and	commercial	mortgage-backed	securities	(CMBS)	from	AFS	classification	to HTM	classification	in	accordance	with	ASC	320.	At	the	time	of	transfer,	the	securities	were	in	an	unrealized	loss	position	of	$598	million.	This	amount	will	remain	in	AOCI	and	be	amortized over	the	remaining	life	of	the	securities.

(3) In	the	second	quarter	of	2017,	Citi	early	adopted	ASU	2017-08. 	Upon	adoption,	a	cumulative	effect	adjustment	was	recorded	to	reduce	Retained	earnings,	effective	January	1,	2017,	for	the incremental	amortization	of	purchase	premiums	and	cumulative	fair	value	hedge	adjustments	that	would	have	been	recorded	under	the	ASU	on	callable	state	and	municipal	debt	securities.	See Note	1	to	the	Consolidated	Financial	Statements.

The	Company	has	the	positive	intent	and	ability	to	hold	these	securities	to maturity	or,	where	applicable,	to	exercise	any	issuer	call	options,	absent	any unforeseen	significant	changes	in	circumstances,	including	deterioration	in	credit or	changes	in	regulatory	capital	requirements.

The	net	unrealized	losses	classified	in	AOCI	for	HTM	securities	primarily relate	to	debt	securities	previously	classified	as	AFS	that	were	transferred	to HTM,	and	include	any	cumulative	fair	value	hedge	adjustments.	The	net unrealized	loss	amount	also	includes	any	non-credit-related	changes	in	fair	value of	HTM	debt	securities	that	have	suffered	credit	impairment	recorded	in earnings.	The	AOCI	balance	related	to	HTM	debt	securities	is	amortized	as	an adjustment	of	yield,	in	a	manner	consistent	with	the	accretion	of	any	difference between	the	carrying	value	at	the	transfer	date	and	par	value	of	the	same	debt securities.

The	table	below	shows	the	fair	value	of	debt	securities	HTM	that	have	been	in	an	unrecognized	loss	position:

|  | Less	than	12	months | Less	than	12	months | 12	months	or	longer | 12	months	or	longer |  | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Fair\nvalue | Gross\nunrecognized\nlosses | Fair\nvalue | Gross\nunrecognized\nlosses | Fair\nvalue | Gross\nunrecognized\nlosses |
| December\t31,\t2018 |  |  |  |  |  |  |
| Debt\tsecurities\tHTM |  |  |  |  |  |  |
| Mortgage-backed\tsecurities | $2,822 | $20 | $18,086 | $559 | $20,908 | $579 |
| State\tand\tmunicipal | 981 | 34 | 1,242 | 104 | 2,223 | 138 |
| Foreign\tgovernment | 1,003 | 24 | — | — | 1,003 | 24 |
| Asset-backed\tsecurities | 13,008 | 112 | — | — | 13,008 | 112 |
| Total\tdebt\tsecurities\tHTM | $17,814 | $190 | $19,328 | $663 | $37,142 | $853 |
| December\t31,\t2017 |  |  |  |  |  |  |
| Debt\tsecurities\tHTM |  |  |  |  |  |  |
| Mortgage-backed\tsecurities | $8,569 | $50 | $6,353 | $107 | $14,922 | $157 |
| State\tand\tmunicipal | 353 | 5 | 835 | 68 | 1,188 | 73 |
| Foreign\tgovernment | 723 | 18 | — | — | 723 | 18 |
| Asset-backed\tsecurities | 71 | 3 | 134 | 19 | 205 | 22 |
| Total\tdebt\tsecurities\tHTM | $9,716 | $76 | $7,322 | $194 | $17,038 | $270 |

Note:	Excluded	from	the	gross	unrecognized	losses	presented	in	the	above	table	are	$(653)	million	and	$(117)	million	of	net	unrealized	losses	recorded	in	AOCI	as	of	December	31,	2018	and	2017, respectively,	primarily	related	to	the	difference	between	the	amortized	cost	and	carrying	value	of	HTM	debt	securities	that	were	reclassified	from	AFS.	Substantially	all	of	these	net	unrecognized losses	relate	to	securities	that	have	been	in	a	loss	position	for	12	months	or	longer	at	December	31,	2018	and	2017.

The	following	table	presents	the	carrying	value	and	fair	value	of	HTM	debt	securities	by	contractual	maturity	dates:

|  | 2018 |  | 2017 | 2017 |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Carrying\tvalue | Fair\tvalue | Carrying\tvalue | Fair\tvalue |
| Mortgage-backed\tsecurities |  |  |  |  |
| Due\twithin\t1\tyear | $3 | $3 | $— | $— |
| After\t1\tbut\twithin\t5\tyears | 539 | 540 | 720 | 720 |
| After\t5\tbut\twithin\t10\tyears | 997 | 1,011 | 148 | 149 |
| After\t10\tyears(1) | 34,407 | 34,024 | 25,231 | 25,235 |
| Total | $35,946 | $35,578 | $26,099 | $26,104 |
| State\tand\tmunicipal |  |  |  |  |
| Due\twithin\t1\tyear | $37 | $37 | $407 | $425 |
| After\t1\tbut\twithin\t5\tyears | 168 | 174 | 259 | 270 |
| After\t5\tbut\twithin\t10\tyears | 540 | 544 | 512 | 524 |
| After\t10\tyears(1) | 6,883 | 6,902 | 7,719 | 7,983 |
| Total | $7,628 | $7,657 | $8,897 | $9,202 |
| Foreign\tgovernment |  |  |  |  |
| Due\twithin\t1\tyear | $60 | $36 | $381 | $381 |
| After\t1\tbut\twithin\t5\tyears | 967 | 967 | 359 | 341 |
| After\t5\tbut\twithin\t10\tyears | — | — | — | — |
| After\t10\tyears(1) | — | — | — | — |
| Total | $1,027 | $1,003 | $740 | $722 |
| All\tother(2) |  |  |  |  |
| Due\twithin\t1\tyear | $— | $— | $— | $— |
| After\t1\tbut\twithin\t5\tyears | — | — | — | — |
| After\t5\tbut\twithin\t10\tyears | 2,535 | 2,539 | 1,669 | 1,680 |
| After\t10\tyears(1) | 16,221 | 16,113 | 15,915 | 16,044 |
| Total | $18,756 | $18,652 | $17,584 | $17,724 |
| Total\tdebt\tsecurities\tHTM | $63,357 | $62,890 | $53,320 | $53,752 |

(2) Includes	corporate	and	asset-backed	securities.

# Evaluating	Investments	for	Other-Than-Temporary	Impairment

The	Company	conducts	periodic	reviews	of	all	securities	with	unrealized	losses to	evaluate	whether	the	impairment	is	other-than-temporary.	These	reviews apply	to	all	securities	that	are	not	measured	at	fair	value	through	earnings. Effective	January	1,	2018,	the	AFS	category	was	eliminated	for	equity	securities and,	therefore,	other-than-temporary	impairment	(OTTI)	review	is	not	required for	those	securities.	See	Note	1	to	the	Consolidated	Financial	Statements	for additional	details.

An	unrealized	loss	exists	when	the	current	fair	value	of	an	individual security	is	less	than	its	amortized	cost	basis.	Unrealized	losses	that	are determined	to	be	temporary	in	nature	are	recorded,	net	of	tax,	in	AOCI	for	AFS securities.	Temporary	losses	related	to	HTM	debt	securities	generally	are	not recorded,	as	these	investments	are	carried	at	adjusted	amortized	cost	basis. However,	for	HTM	debt	securities	with	credit-related	impairment,	the	credit	loss is	recognized	in	earnings	as	OTTI,	and	any	difference	between	the	cost	basis adjusted	for	the	OTTI	and	fair	value	is	recognized	in	AOCI	and	amortized	as	an adjustment	of	yield	over	the	remaining	contractual	life	of	the	security.	For	debt securities	transferred	to	HTM	from	Trading	account	assets,	amortized	cost	is defined	as	the	fair	value	of	the	securities	at	the	date	of	transfer,	plus	any accretion	income	and	less	any	impairment	recognized	in	earnings	subsequent	to transfer.	For	debt	securities	transferred	to	HTM	from	AFS,	amortized	cost	is defined	as	the	original	purchase	cost,	adjusted	for	the	cumulative	accretion	or amortization	of	any	purchase	discount	or	premium,	plus	or	minus	any	cumulative fair	value	hedge	adjustments,	net	of	accretion	or	amortization,	and	less	any impairment	recognized	in	earnings.

Regardless	of	the	classification	of	securities	as	AFS	or	HTM,	the	Company assesses	each	position	with	an	unrealized	loss	for	OTTI.	Factors	considered	in determining	whether	a	loss	is	temporary	include:

•the	length	of	time	and	the	extent	to	which	fair	value	has	been	below cost;

•the	severity	of	the	impairment;

•the	cause	of	the	impairment	and	the	financial	condition	and	near-term prospects	of	the	issuer;

•activity	in	the	market	of	the	issuer	that	may	indicate	adverse	credit conditions;	and

•the	Company's	ability	and	intent	to	hold	the	investment	for	a	period	of	time sufficient	to	allow	for	any	anticipated	recovery.

# The	Company's	review	for	impairment	generally	entails:

•identification	and	evaluation	of	impaired	investments; •analysis	of	individual	investments	that	have	fair	values	less	than	amortized cost,	including	consideration	of	the	length	of	time	the	investment	has	been in	an	unrealized	loss	position	and	the	expected	recovery	period; •consideration	of	evidential	matter,	including	an	evaluation	of	factors	or triggers	that	could	cause	individual	investments	to	qualify	as	having	other- than-

temporary	impairment	and	those	that	would	not	support	other-than- temporary	impairment;	and

•documentation	of	the	results	of	these	analyses,	as	required	under	business policies.

The	difference	between	amortized	cost	basis	and	fair	value	is	recognized	in earnings	as	OTTI	for	impaired	debt	securities	that	the	Company	has	an	intent	to sell,	or	for	which	the	Company	believes	it	will	more-likely-than-not	be	required to	sell	prior	to	recovery	of	the	amortized	cost	basis.	However,	for	those	securities that	the	Company	does	not	intend	to	sell	and	is	not	likely	to	be	required	to	sell, only	the	credit-related	impairment	is	recognized	in	earnings	and	any	non-credit- related	impairment	is	recorded	in	AOCI.

For	debt	securities,	credit	impairment	exists	where	management	does	not expect	to	receive	contractual	principal	and	interest	cash	flows	sufficient	to recover	the	entire	amortized	cost	basis	of	a	security.

# AFS	Equity	Securities	and	Equity	Method	Investments

For	AFS	equity	securities,	prior	to	January	1,	2018,	management	considered	the various	factors	described	above,	including	its	intent	and	ability	to	hold	an	equity security	for	a	period	of	time	sufficient	for	recovery	to	cost,	or	whether	it	was more-likely-than-not	that	the	Company	would	have	been	required	to	sell	the security	prior	to	recovery	of	its	cost	basis.	Where	management	lacked	that	intent or	ability,	the	security's	decline	in	fair	value	was	deemed	to	be	other-than- temporary	and	was	recorded	in	earnings.	Effective	January	1,	2018,	the	AFS category	has	been	eliminated	for	equity	securities	and,	therefore,	OTTI	review	is not	required	for	those	securities.	See	Note	1	to	the	Consolidated	Financial Statements	for	additional	details.

Management	also	assesses	equity	method	investments	that	have	fair	values that	are	less	than	their	respective	carrying	values	for	OTTI.	Fair	value	is measured	as	price	multiplied	by	quantity	if	the	investee	has	publicly	listed securities.	If	the	investee	is	not	publicly	listed,	other	methods	are	used	(see Note	24	to	the	Consolidated	Financial	Statements).

For	impaired	equity	method	investments	that	Citi	plans	to	sell	prior	to recovery	of	value	or	would	likely	be	required	to	sell,	with	no	expectation	that	the fair	value	will	recover	prior	to	the	expected	sale	date,	the	full	impairment	is recognized	in	earnings	as	OTTI	regardless	of	severity	and	duration.	The measurement	of	the	OTTI	does	not	include	partial	projected	recoveries subsequent	to	the	balance	sheet	date.

For	impaired	equity	method	investments	that	management	does	not	plan	to sell	and	is	not	likely	to	be	required	to	sell	prior	to	recovery	of	value,	the evaluation	of	whether	an	impairment	is	other-than-temporary	is	based	on (i)	whether	and	when	an	equity	method	investment	will	recover	in	value	and (ii)	whether	the	investor	has	the	intent	and	ability	to	hold	that	investment	for	a period	of	time	sufficient	to	recover	the	value.	The	determination	of	whether	the impairment	is	considered	other-than-temporary	considers	the	following indicators:

•the	cause	of	the	impairment	and	the	financial	condition	and	near-term prospects	of	the	issuer,	including	any	specific	events	that	may	influence	the operations	of	the	issuer;

•the	intent	and	ability	to	hold	the	investment	for	a	period	of	time	sufficient	to allow	for	any	anticipated	recovery	in	market	value;	and •the	length	of	time	and	extent	to	which	fair	value	has	been	less	than	the carrying	value.

The	sections	below	describe	the	Company's	process	for	identifying	credit- related	impairments	for	security	types	that	have	the	most	significant	unrealized losses	as	of	December	31,	2018.

# Mortgage-Backed	Securities

For	U.S.	mortgage-backed	securities,	credit	impairment	is	assessed	using	a	cash flow	model	that	estimates	the	principal	and	interest	cash	flows	on	the	underlying mortgages	using	the	security-specific	collateral	and	transaction	structure.	The model	distributes	the	estimated	cash	flows	to	the	various	tranches	of	securities, considering	the	transaction	structure	and	any	subordination	and	credit enhancements	that	exist	in	that	structure.	The	cash	flow	model	incorporates actual	cash	flows	on	the	mortgage-backed	securities	through	the	current	period and	then	estimates	the	remaining	cash	flows	using	a	number	of	assumptions, including	default	rates,	prepayment	rates,	recovery	rates	(on	foreclosed properties)	and	loss	severity	rates	(on	non-agency	mortgage-backed	securities). Management	develops	specific	assumptions	using	market	data,	internal estimates	and	estimates	published	by	rating	agencies	and	other	third-party sources.	Default	rates	are	projected	by	considering	current	underlying	mortgage loan	performance,	generally	assuming	the	default	of	(i)	10%	of

current	loans,	(ii)	25%	of	30–59	day	delinquent	loans,	(iii)	70%	of	60–90	day delinquent	loans	and	(iv)	100%	of	91+	day	delinquent	loans.	These	estimates	are extrapolated	along	a	default	timing	curve	to	estimate	the	total	lifetime	pool default	rate.	Other	assumptions	contemplate	the	actual	collateral	attributes, including	geographic	concentrations,	rating	actions	and	current	market	prices.

Cash	flow	projections	are	developed	using	different	stress	test	scenarios. Management	evaluates	the	results	of	those	stress	tests	(including	the	severity	of any	cash	shortfall	indicated	and	the	likelihood	of	the	stress	scenarios	actually occurring	based	on	the	underlying	pool's	characteristics	and	performance)	to assess	whether	management	expects	to	recover	the	amortized	cost	basis	of	the security.	If	cash	flow	projections	indicate	that	the	Company	does	not	expect	to recover	its	amortized	cost	basis,	the	Company	recognizes	the	estimated	credit loss	in	earnings.

# State	and	Municipal	Securities

The	process	for	identifying	credit	impairments	in	Citigroup's	AFS	and	HTM state	and	municipal	bonds	is	primarily	based	on	a	credit	analysis	that incorporates	third-party	credit	ratings.		Citigroup	monitors	the	bond	issuers	and any	insurers	providing	default	protection	in	the	form	of	financial	guarantee insurance.		The	average	external	credit	rating,	ignoring	any	insurance,	is Aa3/AA-.		In	the	event	of	an	external	rating	downgrade	or	other	indicator	of credit	impairment	(i.e.,	based	on	instrument-specific	estimates	of	cash	flows	or probability	of	issuer	default),	the	subject	bond	is	specifically	reviewed	for adverse	changes	in	the	amount	or	timing	of	expected	contractual	principal	and interest	payments.

For	state	and	municipal	bonds	with	unrealized	losses	that	Citigroup	plans	to sell,	or	would	be	more-likely-than-not	required	to	sell,	the	full	impairment	is recognized	in	earnings.

# Recognition	and	Measurement	of	OTTI

The	following	tables	present	total	OTTI	recognized	in	earnings:

| In	millions	of	dollars | AFS(1) | HTM | assets | Total |
| :--- | :--- | :--- | :--- | :--- |
| Impairment\tlosses\trelated\tto\tdebt\tsecurities\tthat\tthe\tCompany\tdoes\tnot\tintend\tto\tsell\tnor\twill\tlikely\tbe\trequired\tto\nsell: |  |  |  |  |
| Total\tOTTI\tlosses\trecognized\tduring\tthe\tperiod | $— | $— | $— | $— |
| Less:\tportion\tof\timpairment\tloss\trecognized\tin\tAOCI\t(before\ttaxes) | — | — | — | — |
| Net\timpairment\tlosses\trecognized\tin\tearnings\tfor\tdebt\tsecurities\tthat\tthe\tCompany\tdoes\tnot\tintend\tto\tsell\tnor\twill\nlikely\tbe\trequired\tto\tsell | $— | $— | $— | $— |
| Impairment\tlosses\trecognized\tin\tearnings\tfor\tdebt\tsecurities\tthat\tthe\tCompany\tintends\tto\tsell,\twould\tbe\tmore-\nlikely-than-not\trequired\tto\tsell\tor\twill\tbe\tsubject\tto\tan\tissuer\tcall\tdeemed\tprobable\tof\texercise | 125 | — | — | 125 |
| Total\tOTTI\tlosses\trecognized\tin\tearnings | $125 | $— | $— | $125 |

(1) For	the	year	ended	December	31,	2018,	amounts	represent	AFS	debt	securities.	Effective	January	1,	2018,	the	AFS	category	was	eliminated	for	equity	securities.	See	Note	1	to	the	Consolidated Financial	Statements	for	additional	details.

| In	millions	of	dollars | AFS(1) | HTM | assets | Total |
| :--- | :--- | :--- | :--- | :--- |
| Impairment\tlosses\trelated\tto\tsecurities\tthat\tthe\tCompany\tdoes\tnot\tintend\tto\tsell\tnor\twill\tlikely\tbe\trequired\tto\tsell: |  |  |  |  |
| Total\tOTTI\tlosses\trecognized\tduring\tthe\tperiod | $2 | $— | $— | $2 |
| Less:\tportion\tof\timpairment\tloss\trecognized\tin\tAOCI\t(before\ttaxes) | — | — | — | — |
| Net\timpairment\tlosses\trecognized\tin\tearnings\tfor\tsecurities\tthat\tthe\tCompany\tdoes\tnot\tintend\tto\tsell\tnor\twill\tlikely\nbe\trequired\tto\tsell | $2 | $— | $— | $2 |
| Impairment\tlosses\trecognized\tin\tearnings\tfor\tsecurities\tthat\tthe\tCompany\tintends\tto\tsell,\twould\tbe\tmore-likely-\nthan-not\trequired\tto\tsell\tor\twill\tbe\tsubject\tto\tan\tissuer\tcall\tdeemed\tprobable\tof\texercise | 59 | 2 | — | 61 |
| Total\tOTTI\tlosses\trecognized\tin\tearnings | $61 | $2 | $— | $63 |

# (1) Includes	OTTI	on	non-marketable	equity	securities.

| OTTI	on	Investments	and	Other	Assets |  | Year	ended<br>December	31,	2016 |  |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | AFS(1)(2) | HTM | Other\nassets(3) | Total |
| Impairment\tlosses\trelated\tto\tsecurities\tthat\tthe\tCompany\tdoes\tnot\tintend\tto\tsell\tnor\twill\tlikely\tbe\trequired\tto\tsell: |  |  |  |  |
| Total\tOTTI\tlosses\trecognized\tduring\tthe\tperiod | $3 | $1 | $— | $4 |
| Less:\tportion\tof\timpairment\tloss\trecognized\tin\tAOCI\t(before\ttaxes) | — | — | — | — |
| Net\timpairment\tlosses\trecognized\tin\tearnings\tfor\tsecurities\tthat\tthe\tCompany\tdoes\tnot\tintend\tto\tsell\tnor\twill\tlikely\nbe\trequired\tto\tsell | $3 | $1 | $— | $4 |
| Impairment\tlosses\trecognized\tin\tearnings\tfor\tsecurities\tthat\tthe\tCompany\tintends\tto\tsell\tor\tmore-likely-than-not\nwill\tbe\trequired\tto\tsell\tbefore\trecovery | 246 | 38 | 332 | 616 |
| Total\tOTTI\tlosses\trecognized\tin\tearnings | $249 | $39 | $332 | $620 |

(2) Includes	a	$160	million	impairment	related	to	AFS	securities	affected	by	changes	in	the	Venezuela	exchange	rate	during	2016.

(3) The	impairment	charge	is	related	to	the	carrying	value	of	an	equity	investment	sold	in	2016.

The	following	are	12-month	rollforwards	of	the	credit-related	impairments	recognized	in	earnings	for	AFS	and	HTM	debt	securities	held	that	the	Company	does	not intend	to	sell	nor	likely	will	be	required	to	sell:

# Cumulative	OTTI	credit	losses	recognized	in	earnings	on	debt	securities	still	held

|  |  | Cumulative	OTTI	credit	losses	recognized	in	earnings	on	debt	securities	still	held | Cumulative	OTTI	credit	losses	recognized	in	earnings	on	debt	securities	still	held | Cumulative	OTTI	credit	losses	recognized	in	earnings	on	debt	securities	still	held |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Dec.\t31,\t2017\nbalance | Credit\nimpairments\nrecognized\tin\nearnings\ton\nsecurities\tnot\npreviously\nimpaired | Credit\nimpairments\nrecognized\tin\nearnings\ton\nsecurities\nthat\thave\nbeen\tpreviously\nimpaired | Reductions\tdue\tto\ncredit-impaired\nsecurities\tsold,\ntransferred\tor\nmatured(1) | Dec.\t31,\t2018\nbalance |
| AFS\tdebt\tsecurities |  |  |  |  |  |
| Mortgage-backed\tsecurities(2) | $38 | $— | $— | $(37) | $1 |
| State\tand\tmunicipal | 4 | — | — | (4) | — |
| Foreign\tgovernment\tsecurities | — | — | — | — | — |
| Corporate | 4 | — | — | — | 4 |
| All\tother\tdebt\tsecurities | 2 | — | — | (2) | — |
| Total\tOTTI\tcredit\tlosses\trecognized\tfor\tAFS\tdebt\nsecurities | $48 | $— | $— | $(43) | $5 |
| HTM\tdebt\tsecurities |  |  |  |  |  |
| Mortgage-backed\tsecurities(3) | $54 | $— | $— | $(54) | $— |
| State\tand\tmunicipal | 3 | — | — | (3) | — |
| Total\tOTTI\tcredit\tlosses\trecognized\tfor\tHTM\tdebt\nsecurities | $57 | $— | $— | $(57) | $— |

(1) Includes	$18	million	in	cumulative	OTTI	reclassified	from	HTM	to	AFS	due	to	the	transfer	of	the	related	debt	securities	from	HTM	to	AFS.	Citi	adopted	ASU	2017-12, Targeted	Improvements to	Accounting	for	Hedging	Activities,	on	January	1,	2018	and	transferred	approximately	$4	billion	of	HTM	debt	securities	into	AFS	classification	as	permitted	as	a	one-time	transfer	under	the standard.

(2) Primarily	consists	of	Prime	securities.

(3) Primarily	consists	of	Alt-A	securities.

| In	millions	of	dollars | Dec.	31,	2016<br>balance | Credit<br>impairments<br>recognized	in<br>earnings	on<br>securities	not<br>previously<br>impaired | impairments<br>recognized	in<br>earnings	on<br>securities<br>that	have<br>been	previously<br>impaired | Reductions	due	to<br>credit-impaired<br>securities	sold,<br>transferred	or<br>matured(1) | Dec.	31,	2017<br>balance |
| :--- | :--- | :--- | :--- | :--- | :--- |
| AFS\tdebt\tsecurities |  |  |  |  |  |
| Mortgage-backed\tsecurities\t(1)(2) | $— | $— | $— | $38 | $38 |
| State\tand\tmunicipal | 4 | — | — | — | 4 |
| Foreign\tgovernment\tsecurities | — | — | — | — | — |
| Corporate | 5 | — | — | (1) | 4 |
| All\tother\tdebt\tsecurities | 22 | — | 2 | (22) | 2 |
| Total\tOTTI\tcredit\tlosses\trecognized\tfor\tAFS\tdebt\nsecurities | $31 | $— | $2 | $15 | $48 |
| HTM\tdebt\tsecurities |  |  |  |  |  |
| Mortgage-backed\tsecurities(1)\t(3) | $101 | $— | $— | $(47) | $54 |
| State\tand\tmunicipal |  |  |  |  |  |
|  | 3 | — | — | — | 3 |
| Total\tOTTI\tcredit\tlosses\trecognized\tfor\tHTM\tdebt\nsecurities | $104 | $— | $— | $(47) | $57 |

(1) Includes	$38	million	in	cumulative	OTTI	reclassified	from	HTM	to	AFS	due	to	the	transfer	of	the	related	securities	from	HTM	to	AFS.

# Non-Marketable	Equity	Securities	Not	Carried	at Fair	Value

Effective	January	1,	2018,	non-marketable	equity	securities	are	required	to	be measured	at	fair	value	with	changes	in	fair	value	recognized	in	earnings	unless (i)	the	measurement	alternative	is	elected	or	(ii)	the	investment	represents Federal	Reserve	Bank	and	Federal	Home	Loan	Bank	stock	or	certain	exchange seats	that	continue	to	be	carried	at	cost.	See	Note	1	to	the	Consolidated	Financial Statements	for	additional	details.

The	election	to	measure	a	non-marketable	equity	security	using	the measurement	alternative	is	made	on	an	instrument-by-instrument	basis.	Under the	measurement	alternative,	an	equity	security	is	carried	at	cost	plus	or	minus changes	resulting	from	observable	prices	in	orderly	transactions	for	the	identical or	a	similar	investment	of	the	same	issuer.	The	carrying	value	of	the	equity security	is	adjusted	to	fair	value	on	the	date	of	an	observed	transaction.	Fair value	may	differ	from	the	observed	transaction	price	due	to	a	number	of	factors, including	marketability	adjustments	and	differences	in	rights	and	obligations when	the	observed	transaction	is	not	for	the	identical	investment	held	by	Citi. Equity	securities	under	the	measurement	alternative	are	also	assessed	for impairment.	On	a	quarterly	basis,	management	qualitatively	assesses	whether each	equity	security	under	the	measurement	alternative	is	impaired.	Impairment indicators	that	are	considered	include,	but	are	not	limited	to,	the	following:

•a	significant	deterioration	in	the	earnings	performance,	credit	rating,	asset quality	or	business	prospects	of	the	investee;

•a	significant	adverse	change	in	the	regulatory,	economic	or	technological environment	of	the	investee;

•a	significant	adverse	change	in	the	general	market	condition	of	either	the geographical	area	or	the	industry	in	which	the	investee	operates;

•a	bona	fide	offer	to	purchase,	an	offer	by	the	investee	to	sell	or	a	completed auction	process	for	the	same	or	similar	investment	for	an	amount	less	than the	carrying	amount	of	that	investment;	and

•factors	that	raise	significant	concerns	about	the	investee's	ability	to	continue as	a	going	concern,	such	as	negative	cash	flows	from	operations,	working capital	deficiencies	or	noncompliance	with	statutory	capital	requirements	or debt	covenants.

When	the	qualitative	assessment	indicates	that	impairment	exists,	the investment	is	written	down	to	fair	value,	with	the	full	difference	between	the	fair value	of	the	investment	and	its	carrying	amount	recognized	in	earnings.

Below	is	the	carrying	value	of	non-marketable	equity	securities	measured using	the	measurement	alternative	at	December	31,	2018,	and	amounts recognized	in	earnings	for	the	year	ended	December	31,	2018:

# (1) See	Note	24	to	the	Consolidated	Financial	Statements	for	additional	information	on	these nonrecurring	fair	value	measurements.

A	similar	impairment	analysis	is	performed	for	non-marketable	equity securities	carried	at	cost.	For	the	year	ended	December	31,	2018,	there	was	no impairment	loss	recognized	in	earnings	for	non-marketable	equity	securities carried	at	cost.

# Investments	in	Alternative	Investment	Funds	That	Calculate	Net	Asset Value

The	Company	holds	investments	in	certain	alternative	investment	funds	that calculate	net	asset	value	(NAV),	or	its	equivalent,	including	hedge	funds,	private equity	funds,	funds	of	funds	and	real	estate	funds,	as	provided	by	third-party asset	managers.	Investments	in	such	funds	are	generally	classified	as	non- marketable	equity	securities	carried	at	fair	value.	The	fair	values	of	these investments	are	estimated	using	the	NAV	of	the	Company's	ownership	interest	in the	funds.	Some	of	these	investments	are	in	"covered	funds"	for	purposes	of	the

Volcker	Rule,	which	prohibits	certain	proprietary	investment	activities	and	limits the	ownership	of,	and	relationships	with,	covered	funds.	On	April	21,	2017, Citi's	request	for	extension	of	the	permitted	holding	period	under	the	Volcker Rule	for	certain	of	its	investments	in	illiquid	funds	was	approved,	allowing	the Company	to	hold	such	investments	until	the	earlier	of	five	years	from	the	July 21,	2017	expiration	date	of	the	general	conformance	period,	or	the	date	such investments	mature	or	are	otherwise	conformed	with	the	Volcker	Rule.

|  |  |  |  |  | Redemption	frequency | Redemption |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Fair\tvalue | Fair\tvalue | Unfunded\ncommitments | Unfunded\ncommitments | (if\tcurrently\teligible)\nmonthly,\tquarterly,\tannually | notice\nperiod |
| In\tmillions\tof\tdollars | December\t31,\t2018 | December\t31,\t2017 | December\t31,\t2018 | December\t31,\t2017 |  |  |
| Hedge\tfunds | $— | $1 | $— | $— | Generally\tquarterly | 10–95\tdays |
| Private\tequity\tfunds(1) | 168 | 372 | 62 | 62 | — | — |
| Real\testate\tfunds(2) | 14 | 31 | 19 | 20 | — | — |
| Mutual/collective\n\t\tinvestment\tfunds | 25 | — | — | — |  |  |
| Total | $207 | $404 | $81 | $82 | — | — |

(1) Private	equity	funds	include	funds	that	invest	in	infrastructure,	emerging	markets	and	venture	capital.

(2) Includes	several	real	estate	funds	that	invest	primarily	in	commercial	real	estate	in	the	U.S.,	Europe	and	Asia.

Citigroup	loans	are	reported	in	two	categories:	consumer	and	corporate.	These categories	are	classified	primarily	according	to	the	segment	and	subsegment	that manage	the	loans.

Consumer	loans	represent	loans	and	leases	managed	primarily	by	GCB	and Corporate/Other.	The	following	table	provides	Citi's	consumer	loans	by	loan type:

|  | December	31, |  |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 |
| In\tU.S.\toffices |  |  |
| Mortgage\tand\treal\testate(1) | $60,127 | $65,467 |
| Installment,\trevolving\tcredit\tand\tother | 3,398 | 3,398 |
| Cards | 143,788 | 139,006 |
| Commercial\tand\tindustrial | 8,256 | 7,840 |
| Total | $215,569 | $215,711 |
| In\toffices\toutside\tthe\tU.S. |  |  |
| Mortgage\tand\treal\testate(1) | $43,379 | $44,081 |
| Installment,\trevolving\tcredit\tand\tother | 27,609 | 26,556 |
| Cards | 25,400 | 26,257 |
| Commercial\tand\tindustrial | 17,773 | 20,238 |
| Lease\tfinancing | 49 | 76 |
| Total | $114,210 | $117,208 |
| Total\tconsumer\tloans | $329,779 | $332,919 |
| Net\tunearned\tincome | $708 | $737 |
| Consumer\tloans,\tnet\tof\tunearned\tincome | $330,487 | $333,656 |

Citigroup	has	established	a	risk	management	process	to	monitor,	evaluate and	manage	the	principal	risks	associated	with	its	consumer	loan	portfolio. Credit	quality	indicators	that	are	actively	monitored	include	delinquency	status, consumer	credit	scores	(FICO)	and	loan	to	value	(LTV)	ratios,	each	as	discussed in	more	detail	below.

Included	in	the	loan	table	above	are	lending	products	whose	terms	may	give rise	to	greater	credit	issues.	Credit	cards	with	below-market	introductory	interest rates	and	interest-only	loans	are	examples	of	such	products.	These	products	are closely	managed	using	credit	techniques	that	are	intended	to	mitigate	their	higher inherent	risk.

During	the	years	ended	December	31,	2018	and	2017,	the	Company	sold and/or	reclassified	to	HFS	$3.2	billion	and	$4.9	billion,	respectively,	of consumer	loans.

# Delinquency	Status

Delinquency	status	is	monitored	and	considered	a	key	indicator	of	credit	quality of	consumer	loans.	Principally,	the	U.S.	residential	first	mortgage	loans	use	the Mortgage	Bankers	Association	(MBA)	method	of	reporting	delinquencies, which	considers	a	loan	delinquent	if	a	monthly	payment	has	not	been	received by	the	end	of	the	day	immediately	preceding	the	loan's	next	due	date.	All	other loans	use	a	method	of	reporting	delinquencies	that	considers	a	loan	delinquent	if a	monthly	payment	has	not	been	received	by	the	close	of	business	on	the	loan's next	due	date.

As	a	general	policy,	residential	first	mortgages,	home	equity	loans	and installment	loans	are	classified	as	non-accrual	when	loan	payments	are	90	days contractually	past	due.	Credit	cards	and	unsecured	revolving	loans	generally accrue	interest	until	payments	are	180	days	past	due.	Home	equity	loans	in regulated	bank	entities	are	classified	as	non-accrual	if	the	related	residential	first mortgage	is	90	days	or	more	past	due.	Mortgage	loans,	other	than	Federal Housing	Administration	(FHA)-insured	loans,	are	classified	as	non-accrual within	60	days	of	notification	that	the	borrower	has	filed	for	bankruptcy. Commercial	banking	loans	are	placed	on	a	cash	(non-accrual)	basis	when	it	is determined,	based	on	actual	experience	and	a	forward-looking	assessment	of	the collectability	of	the	loan	in	full,	that	the	payment	of	interest	or	principal	is doubtful	or	when	interest	or	principal	is	90	days	past	due.

The	policy	for	re-aging	modified	U.S.	consumer	loans	to	current	status varies	by	product.	Generally,	one	of	the	conditions	to	qualify	for	these modifications	is	that	a	minimum	number	of	payments	(typically	ranging	from one	to	three)	be	made.	Upon	modification,	the	loan	is	re-aged	to	current	status. However,	re-aging	practices	for	certain	open-ended	consumer	loans,	such	as credit	cards,	are	governed	by	Federal	Financial	Institutions	Examination	Council (FFIEC)	guidelines.	For	open-ended	consumer	loans	subject	to	FFIEC guidelines,	one	of	the	conditions	for	a	loan	to	be	re-aged	to	current	status	is	that at	least	three	consecutive	minimum	monthly	payments,	or	the	equivalent	amount, must	be	received.	In	addition,	under	FFIEC	guidelines,	the	number	of	times	that such	a	loan	can	be	re-aged	is	subject	to	limitations	(generally	once	in	12	months and	twice	in	five	years).	Furthermore,	FHA	and	Department	of	Veterans	Affairs (VA)	loans	are	modified	under	those	respective	agencies'	guidelines	and payments	are	not	always	required	in	order	to	re-age	a	modified	loan	to	current.

# Consumer	Loan	Delinquency	and	Non-Accrual	Details	at	December	31,	2018

| In	millions	of	dollars | Total<br>current(1)(2) | 30–89	days<br>past	due(3) | ≥	90	days<br>past	due(3) | Past	due<br>government<br>guaranteed(4) | Total<br>loans(2) | Total<br>non-accrual | 90	days	past	due<br>and	accruing |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tNorth\tAmerica\toffices |  |  |  |  |  |  |  |
| Residential\tfirst\tmortgages(5) | $45,953 | $420 | $253 | $786 | $47,412 | $583 | $549 |
| Home\tequity\tloans(6)(7) | 11,135 | 161 | 247 | — | 11,543 | 527 | — |
| Credit\tcards | 141,106 | 1,687 | 1,764 | — | 144,557 | — | 1,764 |
| Installment\tand\tother | 3,394 | 43 | 16 | — | 3,453 | 22 | — |
| Commercial\tbanking\tloans | 9,662 | 20 | 46 | — | 9,728 | 109 | — |
| Total | $211,250 | $2,331 | $2,326 | $786 | $216,693 | $1,241 | $2,313 |
| In\toffices\toutside\tNorth\tAmerica |  |  |  |  |  |  |  |
| Residential\tfirst\tmortgages(5) | $35,624 | $203 | $145 | $— | $35,972 | $383 | $— |
| Credit\tcards | 24,131 | 425 | 370 | — | 24,926 | 312 | 235 |
| Installment\tand\tother | 25,085 | 254 | 107 | — | 25,446 | 152 | — |
| Commercial\tbanking\tloans | 27,345 | 51 | 53 | — | 27,449 | 138 | — |
| Total | $112,185 | $933 | $675 | $— | $113,793 | $985 | $235 |
| Total\tGCB\tand\tCorporate/Other—Consumer | $323,435 | $3,264 | $3,001 | $786 | $330,486 | $2,226 | $2,548 |
| Other(8) | 1 | — | — | — | 1 | — | — |
| Total\tCitigroup | $323,436 | $3,264 | $3,001 | $786 | $330,487 | $2,226 | $2,548 |

(1) Loans	less	than	30	days	past	due	are	presented	as	current.

(2) Includes	$20	million	of	residential	first	mortgages	recorded	at	fair	value.

(3) Excludes	loans	guaranteed	by	U.S.	government-sponsored	entities.

(4) Consists	of	residential	first	mortgages	that	are	guaranteed	by	U.S.	government-sponsored	entities	that	are	30–89	days	past	due	of $0.2	billion	and	90	days	or	more	past	due	of	$0.6	billion.

(5) Includes	approximately	$0.1	billion	of	residential	first	mortgage	loans	in	process	of	foreclosure.

(6) Includes	approximately	$0.1	billion	of	home	equity	loans	in	process	of	foreclosure.

(7) Fixed-rate	home	equity	loans	and	loans	extended	under	home	equity	lines	of	credit,	which	are	typically	in	junior	lien	positions.

(8) Represents	loans	classified	as	consumer	loans	on	the	Consolidated	Balance	Sheet	that	are	not	included	in	Corporate/Other	consumer	credit	metrics.

| In	millions	of	dollars | Total<br>current(1)(2) | 30–89	days<br>past	due(3) | ≥	90	days<br>past	due(3) | Past	due<br>government<br>guaranteed(4) | Total<br>loans(2) | Total<br>non-accrual | 90	days	past	due<br>and	accruing |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tNorth\tAmerica\toffices |  |  |  |  |  |  |  |
| Residential\tfirst\tmortgages(5) | $47,366 | $505 | $280 | $1,225 | $49,376 | $665 | $941 |
| Home\tequity\tloans(6)(7) | 14,268 | 207 | 352 | — | 14,827 | 750 | — |
| Credit\tcards | 136,588 | 1,528 | 1,613 | — | 139,729 | — | 1,596 |
| Installment\tand\tother | 3,395 | 45 | 16 | — | 3,456 | 22 | 1 |
| Commercial\tbanking\tloans | 9,395 | 51 | 65 | — | 9,511 | 213 | — |
| Total | $211,012 | $2,336 | $2,326 | $1,225 | $216,899 | $1,650 | $2,538 |
| In\toffices\toutside\tNorth\tAmerica |  |  |  |  |  |  |  |
| Residential\tfirst\tmortgages(5) | $37,062 | $209 | $148 | $— | $37,419 | $400 | $— |
| Credit\tcards | 24,934 | 427 | 366 | — | 25,727 | 323 | 259 |
| Installment\tand\tother | 25,634 | 275 | 123 | — | 26,032 | 157 | — |
| Commercial\tbanking\tloans | 27,449 | 57 | 72 | — | 27,578 | 160 | — |
| Total | $115,079 | $968 | $709 | $— | $116,756 | $1,040 | $259 |
| Total\tGCB\tand\tCorporate/Other— |  |  |  |  |  |  |  |
| \t\tConsumer | $326,091 | $3,304 | $3,035 | $1,225 | $333,655 | $2,690 | $2,797 |
| Other(8) | 1 | — | — | — | 1 | — | — |
| Total\tCitigroup | $326,092 | $3,304 | $3,035 | $1,225 | $333,656 | $2,690 | $2,797 |

(2) Includes	$25	million	of	residential	first	mortgages	recorded	at	fair	value.

(8) Represents	loans	classified	as	consumer	loans	on	the	Consolidated	Balance	Sheet	that	are	not	included	in	the	Corporate/Other	consumer	credit	metrics.

# Consumer	Credit	Scores	(FICO)

In	the	U.S.,	independent	credit	agencies	rate	an	individual's	risk	for	assuming debt	based	on	the	individual's	credit	history	and	assign	every	consumer	a "FICO"	(Fair	Isaac	Corporation)	credit	score.	These	scores	are	continually updated	by	the	agencies	based	upon	an	individual's	credit	actions	(e.g.,	taking out	a	loan	or	missed	or	late	payments).

The	following	tables	provide	details	on	the	FICO	scores	for	Citi's U.S.	consumer	loan	portfolio	based	on	end-of-period	receivables	(commercial banking	loans	are	excluded	from	the	tables	since	the	customers	are	businesses and	FICO	scores	are	not	a	primary	driver	in	their	credit	evaluation).	FICO	scores are	updated	monthly	for	substantially	all	of	the	portfolio	or,	otherwise,	on	a quarterly	basis	for	the	remaining	portfolio.

# FICO	score	distribution	in

| U.S.	portfolio(1)(2) |  | December	31,	2018 |  |
| :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Less\tthan\n680 | 680\tto\t760 | Greater\nthan\t760 |
| Residential\tfirst\tmortgages | $4,530 | $13,848 | $26,546 |
| Home\tequity\tloans | 2,438 | 4,296 | 4,471 |
| Credit\tcards | 32,686 | 58,722 | 51,299 |
| Installment\tand\tother | 625 | 1,097 | 1,121 |
| Total | $40,279 | $77,963 | $83,437 |

| U.S.	portfolio(1)(2) |  | December	31,	2017 |  |
| :--- | :--- | :--- | :--- |
|  | Less\tthan |  | Greater |
| In\tmillions\tof\tdollars | 680 | 680\tto\t760 | than\t760 |
| Residential\tfirst\tmortgages | $5,603 | $14,423 | $26,271 |
| Home\tequity\tloans | 3,347 | 5,439 | 5,650 |
| Credit\tcards | 30,875 | 56,443 | 48,989 |
| Installment\tand\tother | 716 | 1,020 | 1,275 |
| Total | $40,541 | $77,325 | $82,185 |

(1) Excludes	loans	guaranteed	by	U.S.	government	entities,	loans	subject	to	long-term standby	commitments	(LTSC)	with	U.S.	government-sponsored	entities	and	loans recorded	at	fair	value.

(2) Excludes	balances	where	FICO	was	not	available.	Such	amounts	are	not	material.

# Loan	to	Value	(LTV)	Ratios

LTV	ratios	(loan	balance	divided	by	appraised	value)	are	calculated	at origination	and	updated	by	applying	market	price	data.

The	following	tables	provide	details	on	the	LTV	ratios	for	Citi's U.S.	consumer	mortgage	portfolios.	LTV	ratios	are	updated	monthly	using	the most	recent	Core	Logic	Home	Price	Index	data	available	for	substantially	all	of the	portfolio	applied	at	the	Metropolitan	Statistical	Area	level,	if	available,	or	the state	level	if	not.	The	remainder	of	the	portfolio	is	updated	in	a	similar	manner using	the	Federal	Housing	Finance	Agency	indices.

# LTV	distribution	in

| LTV	distribution	in<br>U.S.	portfolio(1)(2) |  | December	31,	2018 |  |
| :--- | :--- | :--- | :--- |
|  |  | &gt;\t80%\tbut\tless | Greater |
|  | Less\tthan\tor | than\tor\tequal\tto | than |
| In\tmillions\tof\tdollars | equal\tto\t80% | 100% | 100% |
| Residential\tfirst\tmortgages | $42,379 | $2,474 | $197 |
| Home\tequity\tloans | 9,465 | 1,287 | 390 |
| Total | $51,844 | $3,761 | $587 |

| LTV	distribution	in<br>U.S.	portfolio(1)(2) |  | December	31,	2017 |  |
| :--- | :--- | :--- | :--- |
|  |  | &gt;\t80%\tbut\tless | Greater |
|  | Less\tthan\tor | than\tor\tequal\tto | than |
| In\tmillions\tof\tdollars | equal\tto\t80% | 100% | 100% |
| Residential\tfirst\tmortgages | $43,626 | $2,578 | $247 |
| Home\tequity\tloans | 11,403 | 2,147 | 800 |
| Total | $55,029 | $4,725 | $1,047 |

(1) Excludes	loans	guaranteed	by	U.S.	government	entities,	loans	subject	to	LTSCs	with U.S.	government-sponsored	entities	and	loans	recorded	at	fair	value.

(2) Excludes	balances	where	LTV	was	not	available.	Such	amounts	are	not	material.

# Impaired	Consumer	Loans

A	loan	is	considered	impaired	when	Citi	believes	it	is	probable	that	all	amounts due	according	to	the	original	contractual	terms	of	the	loan	will	not	be	collected. Impaired	consumer	loans	include	non-accrual	commercial	banking	loans,	as well	as	smaller-balance	homogeneous	loans	whose	terms	have	been	modified due	to	the	borrower's	financial	difficulties	and	where	Citi	has	granted	a concession	to	the	borrower.	These

modifications	may	include	interest	rate	reductions	and/or	principal	forgiveness. Impaired	consumer	loans	exclude	smaller-balance	homogeneous	loans	that	have not	been	modified	and	are	carried	on	a	non-accrual	basis.

The	following	tables	present	information	about	impaired	consumer	loans and	interest	income	recognized	on	impaired	consumer	loans:

# At	and	for	the	year	ended	December	31,	2018

|  |  | At	and	for	the	year	ended	December	31,	2018 | At	and	for	the	year	ended	December	31,	2018 | At	and	for	the	year	ended	December	31,	2018 |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Recorded\ninvestment(1)(2) | Unpaid\nprincipal\nbalance | Related\nspecific\nallowance(3) | Average\ncarrying\tvalue(4) | Interest\tincome\nrecognized(5) |
| Mortgage\tand\treal\testate |  |  |  |  |  |
| Residential\tfirst\tmortgages | $2,130 | $2,329 | $178 | $2,483 | $81 |
| Home\tequity\tloans | 684 | 946 | 122 | 698 | 12 |
| Credit\tcards | 1,818 | 1,842 | 677 | 1,815 | 105 |
| Installment\tand\tother |  |  |  |  |  |
| Individual\tinstallment\tand\tother | 400 | 434 | 146 | 414 | 22 |
| Commercial\tbanking | 252 | 432 | 55 | 286 | 14 |
| Total | $5,284 | $5,983 | $1,178 | $5,696 | $234 |

(1) Recorded	investment	in	a	loan	includes	net	deferred	loan	fees	and	costs,	unamortized	premium	or	discount	and	direct	write-downs	and	includes	accrued	interest	only	on	credit	card	loans.

(2) $484	million	of	residential	first	mortgages,	$263	million	of	home	equity	loans	and	$2	million	of	commercial	banking	loans	do	not	have	a	specific	allowance.

(3) Included	in	the	Allowance	for	loan	losses.

(4) Average	carrying	value	represents	the	average	recorded	investment	ending	balance	for	the	last four	quarters	and	does	not	include	the	related	specific	allowance.

(5) Includes	amounts	recognized	on	both	an	accrual	and	cash	basis.

|  |  | At	and	for	the	year	ended	December	31,	2017 | At	and	for	the	year	ended	December	31,	2017 | At	and	for	the	year	ended	December	31,	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Recorded\ninvestment(1)(2) | Unpaid\nprincipal\tbalance | Related\nspecific\nallowance(3) | Average\ncarrying\nvalue(4) | Interest\tincome\nrecognized(5)(6) |
| Mortgage\tand\treal\testate |  |  |  |  |  |
| Residential\tfirst\tmortgages | $2,877 | $3,121 | $278 | $3,155 | $119 |
| Home\tequity\tloans | 1,151 | 1,590 | 216 | 1,181 | 28 |
| Credit\tcards | 1,787 | 1,819 | 614 | 1,803 | 150 |
| Installment\tand\tother |  |  |  |  |  |
| Individual\tinstallment\tand\tother | 431 | 460 | 175 | 415 | 25 |
| Commercial\tbanking | 334 | 541 | 51 | 429 | 20 |
| Total | $6,580 | $7,531 | $1,334 | $6,983 | $342 |

(2) $607	million	of	residential	first	mortgages,	$370	million	of	home	equity	loans	and	$10	million	of	commercial	banking	loans	do	not	have	a	specific	allowance.

(6) Interest	income	recognized	for	the	year	ended	December	31,	2016	was	$402	million.

# Consumer	Troubled	Debt	Restructurings

|  |  | modification |  | Contingent |  | Average |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars,\texcept\tnumber\tof\tloans\nmodified | Number\tof\nloans\tmodified | recorded\ninvestment(1)(2) | Deferred\nprincipal(3) | principal\nforgiveness(4) | Principal\nforgiveness(5) | interest\trate\nreduction |
| North\tAmerica |  |  |  |  |  |  |
| Residential\tfirst\tmortgages | 2,019 | $300 | $2 | $— | $— | —% |
| Home\tequity\tloans | 1,381 | 130 | 5 | — | — | 1 |
| Credit\tcards | 243,253 | 978 | — | — | — | 18 |
| Installment\tand\tother\trevolving | 1,320 | 10 | — | — | — | 5 |
| Commercial\tbanking(6) | 43 | 6 | — | — | — | — |
| Total(8) | 248,016 | $1,424 | $7 | $— | $— |  |
| International |  |  |  |  |  |  |
| Residential\tfirst\tmortgages | 2,572 | $85 | $— | $— | $— | —% |
| Credit\tcards | 77,823 | 323 | — | — | 9 | 16 |
| Installment\tand\tother\trevolving | 30,344 | 182 | — | — | 7 | 10 |
| Commercial\tbanking(6) | 526 | 70 | — | — | — | 1 |
| Total(8) | 111,265 | $660 | $— | $— | $16 |  |

|  |  | modification |  | Contingent |  | Average |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars,\texcept\tnumber\tof\tloans\nmodified | Number\tof\nloans\tmodified | recorded\ninvestment(1)(7) | Deferred\nprincipal(3) | principal\nforgiveness(4) | Principal\nforgiveness(5) | interest\trate\nreduction |
| North\tAmerica |  |  |  |  |  |  |
| Residential\tfirst\tmortgages | 4,063 | $580 | $6 | $— | $2 | 1% |
| Home\tequity\tloans | 2,807 | 247 | 16 | — | 1 | 1 |
| Credit\tcards | 230,042 | 880 | — | — | — | 17 |
| Installment\tand\tother\trevolving | 1,088 | 8 | — | — | — | 5 |
| Commercial\tbanking(6) | 112 | 117 | — | — | — | — |
| Total(8) | 238,112 | $1,832 | $22 | $— | $3 |  |
| International |  |  |  |  |  |  |
| Residential\tfirst\tmortgages | 4,477 | $123 | $— | $— | $— | —% |
| Credit\tcards | 115,941 | 399 | — | — | 7 | 11 |
| Installment\tand\tother\trevolving | 44,880 | 254 | — | — | 11 | 9 |
| Commercial\tbanking(6) | 370 | 50 | — | — | — | — |
| Total(8) | 165,668 | $826 | $— | $— | $18 |  |

(1) Post-modification	balances	include	past	due	amounts	that	are	capitalized	at	the	modification	date.

(2) Post-modification	balances	in	North	America	include	$38	million	of	residential	first	mortgages	and	$ 12	million	of	home	equity	loans	to	borrowers	who	have	gone	through	Chapter	7	bankruptcy in	the	year	ended	December	31,	2018.	These	amounts	include	$27	million	of	residential	first	mortgages	and	$ 10	million	of	home	equity	loans	that	were	newly	classified	as	TDRs	during	2018, based	on	previously	received	OCC	guidance.

(3) Represents	portion	of	contractual	loan	principal	that	is	non-interest	bearing,	but	still	due	from	the	borrower.	Such	deferred	principal	is	charged	off	at	the	time	of	permanent	modification	to	the extent	that	the	related	loan	balance	exceeds	the	underlying	collateral	value.

(4) Represents	portion	of	contractual	loan	principal	that	is	non-interest	bearing	and,	depending	upon	borrower	performance,	eligible	for	forgiveness.

(5) Represents	portion	of	contractual	loan	principal	that	was	forgiven	at	the	time	of	permanent	modification.

(6) Commercial	banking	loans	are	generally	borrower-specific	modifications	and	incorporate	changes	in	the	amount	and/or	timing	of	principal	and/or	interest.

(7) Post-modification	balances	in	North	America	include	$53	million	of	residential	first	mortgages	and	$ 21	million	of	home	equity	loans	to	borrowers	who	have	gone	through	Chapter	7	bankruptcy in	the	year	ended	December	31,	2017.	These	amounts	include	$36	million	of	residential	first	mortgages	and	$ 18	million	of	home	equity	loans	that	were	newly	classified	as	TDRs	during	2017, based	on	previously	received	OCC	guidance.

(8) The	above	tables	reflect	activity	for	loans	outstanding	that	were	considered	TDRs	as	of	the	end	of	the	reporting	period.

The	following	table	presents	consumer	TDRs	that	defaulted	for	which	the	payment	default	occurred	within	one	year	of	a	permanent	modification.	Default	is	defined as	60	days	past	due,	except	for	classifiably	managed	commercial	banking	loans,	where	default	is	defined	as	90	days	past	due.

|  | Years	ended	December	31, | Years	ended	December	31, |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 |
| North\tAmerica |  |  |
| Residential\tfirst\tmortgages | $136 | $253 |
| Home\tequity\tloans | 23 | 46 |
| Credit\tcards | 241 | 221 |
| Installment\tand\tother\trevolving | 3 | 2 |
| Commercial\tbanking | 22 | 2 |
| Total | $425 | $524 |
| International |  |  |
| Residential\tfirst\tmortgages | $9 | $11 |
| Credit\tcards | 198 | 185 |
| Installment\tand\tother\trevolving | 80 | 96 |
| Commercial\tbanking | 17 | 1 |
| Total | $304 | $293 |

Corporate	loans	represent	loans	and	leases	managed	by	ICG.	The	following	table presents	information	by	corporate	loan	type:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 |
| In\tU.S.\toffices |  |  |
| Commercial\tand\tindustrial | $52,063 | $51,319 |
| Financial\tinstitutions | 48,447 | 39,128 |
| Mortgage\tand\treal\testate(1) | 50,124 | 44,683 |
| Installment,\trevolving\tcredit\tand\nother | 33,247 | 33,181 |
| Lease\tfinancing | 1,429 | 1,470 |
| Total | $185,310 | $169,781 |
| In\toffices\toutside\tthe\tU.S. |  |  |
| Commercial\tand\tindustrial | $94,701 | $93,750 |
| Financial\tinstitutions | 36,837 | 35,273 |
| Mortgage\tand\treal\testate(1) | 7,376 | 7,309 |
| Installment,\trevolving\tcredit\tand\nother | 25,684 | 22,638 |
| Lease\tfinancing | 103 | 190 |
| Governments\tand\tofficial\ninstitutions | 4,520 | 5,200 |
| Total | $169,221 | $164,360 |
| Total\tcorporate\tloans | $354,531 | $334,141 |
| Net\tunearned\tincome | $(822) | $(763) |
| Corporate\tloans,\tnet\tof\tunearned\nincome | $353,709 | $333,378 |

The	Company	sold	and/or	reclassified	to	held-for-sale	$1.0	billion	of corporate	loans	during	each	of	the	years	ended	December	31,	2018	and	2017, respectively.	The	Company	did	not	have	significant	purchases	of	corporate	loans classified	as	held-for-investment	for	the	years	ended	December	31,	2018	or	2017.

Citi	generally	does	not	manage	corporate	loans	on	a	delinquency	basis. Corporate	loans	are	identified	as	impaired	and	placed	on	a	cash	(non-accrual) basis	when	it	is	determined,	based	on	actual	experience	and	a	forward-looking assessment	of	the	collectability	of	the	loan	in	full,	that	the	payment	of	interest	or principal	is	doubtful	or	when	interest	or	principal	is	90	days	past	due,	except when	the	loan	is	well	collateralized	and	in	the	process	of	collection.	Any	interest accrued	on	impaired	corporate	loans	and	leases	is	reversed	at	90	days	and charged	against	current	earnings,	and	interest	is	thereafter	included	in	earnings only	to	the	extent	actually	received	in	cash.	When	there	is	doubt	regarding	the ultimate	collectability	of	principal,	all	cash	receipts	are	thereafter	applied	to reduce	the	recorded	investment	in	the	loan.	While	corporate	loans	are	generally managed	based	on	their	internally	assigned	risk	rating	(see	further	discussion below),	the	following	tables	present	delinquency	information	by	corporate	loan type.

# Corporate	Loan	Delinquency	and	Non-Accrual	Details	at	December	31,	2018

| In	millions	of	dollars | past	due<br>and	accruing(1) | past	due	and<br>accruing(1) | Total	past	due<br>and	accruing | Total<br>non-accrual(2) | Total<br>current(3) | Total<br>loans(4) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Commercial\tand\tindustrial | $365 | $42 | $407 | $919 | $143,960 | $145,286 |
| Financial\tinstitutions | 87 | 7 | 94 | 102 | 83,672 | 83,868 |
| Mortgage\tand\treal\testate | 128 | 5 | 133 | 215 | 57,116 | 57,464 |
| Leases | 5 | 10 | 15 | — | 1,516 | 1,531 |
| Other | 151 | 52 | 203 | 75 | 62,079 | 62,357 |
| Loans\tat\tfair\tvalue |  |  |  |  |  | 3,203 |
| Total | $736 | $116 | $852 | $1,311 | $348,343 | $353,709 |
| Corporate\tLoan\tDelinquency\tand\tNon-Accrual\tDetails\tat\tDecember\t31,\t2017 |  |  |  |  |  |  |
|  | 30–89\tdays | ≥\t90\tdays |  |  |  |  |

| In	millions	of	dollars | past	due<br>and	accruing(1) | past	due	and<br>accruing(1) | Total	past	due<br>and	accruing | Total<br>non-accrual(2) | Total<br>current(3) | Total<br>loans(4) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Commercial\tand\tindustrial | $249 | $13 | $262 | $1,506 | $139,554 | $141,322 |
| Financial\tinstitutions | 93 | 15 | 108 | 92 | 73,557 | 73,757 |
| Mortgage\tand\treal\testate | 147 | 59 | 206 | 195 | 51,563 | 51,964 |
| Leases | 68 | 8 | 76 | 46 | 1,533 | 1,655 |
| Other | 70 | 13 | 83 | 103 | 60,145 | 60,331 |
| Loans\tat\tfair\tvalue |  |  |  |  |  | 4,349 |
| Total | $627 | $108 | $735 | $1,942 | $326,352 | $333,378 |

(1) Corporate	loans	that	are	90	days	past	due	are	generally	classified	as	non-accrual.	Corporate	loans	are	considered	past	due	when	principal	or	interest	is	contractually	due	but	unpaid.

(2) Non-accrual	loans	generally	include	those	loans	that	are	≥	90	days	past	due	or	those	loans	for	which	Citi	believes,	based	on	actual	experience	and	a	forward-looking	assessment	of	the collectability	of	the	loan	in	full,	that	the	payment	of	interest	or	principal	is	doubtful.

(4) Total	loans	include	loans	at	fair	value,	which	are	not	included	in	the	various	delinquency	columns.

Citigroup	has	a	risk	management	process	to	monitor,	evaluate	and	manage the	principal	risks	associated	with	its	corporate	loan	portfolio.	As	part	of	its	risk management	process,	Citi	assigns	numeric	risk	ratings	to	its	corporate	loan facilities	based	on	quantitative	and	qualitative	assessments	of	the	obligor	and facility.	These	risk	ratings	are	reviewed	at	least	annually	or	more	often	if material	events	related	to	the	obligor	or	facility	warrant.	Factors	considered	in assigning	the	risk	ratings	include	financial	condition	of	the	obligor,	qualitative assessment	of	management	and	strategy,	amount	and	sources	of	repayment, amount	and	type	of	collateral	and	guarantee	arrangements,	amount	and	type	of any	contingencies	associated	with	the	obligor	and	the	obligor's	industry	and geography.

The	obligor	risk	ratings	are	defined	by	ranges	of	default	probabilities.	The facility	risk	ratings	are	defined	by	ranges	of	loss	norms,	which	are	the	product	of the	probability	of	default	and	the	loss	given	default.	The	investment	grade	rating categories	are	similar	to	the	category	BBB-/Baa3	and	above	as	defined	by	S&P and	Moody's.	Loans	classified	according	to	the	bank	regulatory	definitions	as special	mention,	substandard	and	doubtful	will	have	risk	ratings	within	the	non- investment	grade	categories.

# Corporate	Loans	Credit	Quality	Indicators

# Recorded	investment	in	loans(1)

| In	millions	of	dollars | December	31,	2018 | 2017 |
| :--- | :--- | :--- |
| Investment\tgrade(2) |  |  |
| Commercial\tand\tindustrial | $102,722 | $101,313 |
| Financial\tinstitutions | 73,080 | 60,404 |
| Mortgage\tand\treal\testate | 25,855 | 23,213 |
| Leases | 1,036 | 1,090 |
| Other | 57,299 | 56,306 |
| Total\tinvestment\tgrade | $259,992 | $242,326 |
| Non-investment\tgrade(2) |  |  |
| Accrual |  |  |
| Commercial\tand\tindustrial | $41,645 | $38,503 |
| Financial\tinstitutions | 10,686 | 13,261 |
| Mortgage\tand\treal\testate | 3,793 | 2,881 |
| Leases | 496 | 518 |
| Other | 4,981 | 3,924 |
| Non-accrual |  |  |
| Commercial\tand\tindustrial | 919 | 1,506 |
| Financial\tinstitutions | 102 | 92 |
| Mortgage\tand\treal\testate | 215 | 195 |
| Leases | — | 46 |
| Other | 75 | 103 |
| Total\tnon-investment\tgrade | $62,912 | $61,029 |
| Non-rated\tprivate\tbank\tloans\nmanaged\ton\ta\tdelinquency\tbasis(2) | $27,602 | $25,674 |
| Loans\tat\tfair\tvalue | 3,203 | 4,349 |
| Corporate\tloans,\tnet\tof\tunearned\nincome | $353,709 | $333,378 |

Impaired	collateral-dependent	loans	and	leases,	where	repayment	is expected	to	be	provided	solely	by	the	sale	of	the	underlying	collateral	and	there are	no	other	available	and	reliable	sources	of	repayment,	are	written	down	to	the lower	of	carrying	value	or	collateral	value,	less	cost	to	sell.	Cash-basis	loans	are returned	to	an	accrual	status	when	all	contractual	principal	and	interest	amounts are	reasonably	assured	of	repayment	and	there	is	a	sustained	period	of	repayment performance,	generally	six	months,	in	accordance	with	the	contractual	terms	of the	loan.

(1) Recorded	investment	in	a	loan	includes	net	deferred	loan	fees	and	costs,	unamortized premium	or	discount,	less	any	direct	write-downs.

(2) Held-for-investment	loans	are	accounted	for	on	an	amortized	cost	basis.

# Non-Accrual	Corporate	Loans

The	following	tables	present	non-accrual	loan	information	by	corporate	loan	type	and	interest	income	recognized	on	non-accrual	corporate	loans:

|  |  | At	and	for	the	year	ended	December	31,	2018 | At	and	for	the	year	ended	December	31,	2018 | At	and	for	the	year	ended	December	31,	2018 |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Recorded\ninvestment(1) | Unpaid\nprincipal\tbalance | Related\tspecific\nallowance | Average\ncarrying\tvalue(2) | Interest\tincome\nrecognized(3) |
| Non-accrual\tcorporate\tloans |  |  |  |  |  |
| Commercial\tand\tindustrial | $919 | $1,070 | $183 | $1,099 | $35 |
| Financial\tinstitutions | 102 | 123 | 35 | 99 | — |
| Mortgage\tand\treal\testate | 215 | 323 | 39 | 233 | 1 |
| Lease\tfinancing | — | 28 | — | 21 | — |
| Other | 75 | 165 | 6 | 83 | 6 |
| Total\tnon-accrual\tcorporate\tloans | $1,311 | $1,709 | $263 | $1,535 | $42 |

|  |  |  | At	and	for	the	year	ended	December	31,	2017 | At	and	for	the	year	ended	December	31,	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Recorded\ninvestment(1) | Unpaid\nprincipal\tbalance | Related\tspecific\nallowance | Average\ncarrying\tvalue(2) | Interest\tincome\nrecognized(3) |
| Non-accrual\tcorporate\tloans |  |  |  |  |  |
| Commercial\tand\tindustrial | $1,506 | $1,775 | $368 | $1,547 | $23 |
| Financial\tinstitutions | 92 | 102 | 41 | 212 | 1 |
| Mortgage\tand\treal\testate | 195 | 324 | 11 | 183 | 10 |
| Lease\tfinancing | 46 | 46 | 4 | 59 | — |
| Other | 103 | 212 | 2 | 108 | 1 |
| Total\tnon-accrual\tcorporate\tloans | $1,942 | $2,459 | $426 | $2,109 | $35 |

|  | December	31,	2018 | December	31,	2018 | December	31,	2017 | December	31,	2017 |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Recorded\ninvestment(1) | Related\tspecific\nallowance | Recorded\ninvestment(1) | Related\tspecific\nallowance |
| Non-accrual\tcorporate\tloans\twith\tvaluation\tallowances |  |  |  |  |
| Commercial\tand\tindustrial | $603 | $183 | $1,017 | $368 |
| Financial\tinstitutions | 76 | 35 | 88 | 41 |
| Mortgage\tand\treal\testate | 100 | 39 | 51 | 11 |
| Lease\tfinancing | — | — | 46 | 4 |
| Other | 24 | 6 | 13 | 2 |
| Total\tnon-accrual\tcorporate\tloans\twith\tspecific\tallowance | $803 | $263 | $1,215 | $426 |
| Non-accrual\tcorporate\tloans\twithout\tspecific\tallowance |  |  |  |  |
| Commercial\tand\tindustrial | $316 |  | $489 |  |
| Financial\tinstitutions | 26 |  | 4 |  |
| Mortgage\tand\treal\testate | 115 |  | 144 |  |
| Lease\tfinancing | — |  | — |  |
| Other | 51 |  | 90 |  |
| Total\tnon-accrual\tcorporate\tloans\twithout\tspecific\tallowance | $508 | N/A | $727 | N/A |

(2) Average	carrying	value	represents	the	average	recorded	investment	balance	and	does	not	include	related	specific	allowance.

N/A	Not	applicable

# Corporate	Troubled	Debt	Restructurings

The	following	table	presents	corporate	TDR	activity	at	and	for	the	year	ended	December	31,	2018:

| In	millions	of	dollars | Carrying	value	of	TDRs<br>modified	during	the	period | TDRs<br>involving	changes<br>in	the	amount<br>and/or	timing	of<br>principal	payments(1) | TDRs<br>involving	changes<br>in	the	amount<br>and/or	timing	of<br>interest	payments(2) | TDRs<br>involving	changes<br>in	the	amount<br>and/or	timing	of<br>both	principal	and<br>interest	payments |
| :--- | :--- | :--- | :--- | :--- |
| Commercial\tand\tindustrial | $113 | $5 | $8 | $100 |
| Mortgage\tand\treal\testate | 60 | 3 | — | 57 |
| Total | $173 | $8 | $8 | $157 |

| In	millions	of	dollars | Carrying	value	of	TDRs<br>modified	during	the	period | TDRs<br>involving	changes<br>in	the	amount<br>and/or	timing	of<br>principal	payments(1) | TDRs<br>involving	changes<br>in	the	amount<br>and/or	timing	of<br>interest	payments(2) | TDRs<br>involving	changes<br>in	the	amount<br>and/or	timing	of<br>both	principal	and<br>interest	payments |
| :--- | :--- | :--- | :--- | :--- |
| Commercial\tand\tindustrial | $509 | $131 | $7 | $371 |
| Financial\tinstitutions | 15 | — | — | 15 |
| Mortgage\tand\treal\testate | 36 | — | — | 36 |
| Total | $560 | $131 | $7 | $422 |

(1) TDRs	involving	changes	in	the	amount	or	timing	of	principal	payments	may	involve	principal	forgiveness	or	deferral	of	periodic	and/or	final	principal	payments.	Because	forgiveness	of principal	is	rare	for	corporate	loans,	modifications	typically	have	little	to	no	impact	on	the	loans'	projected	cash	flows	and	thus	little	to	no	impact	on	the	allowance	established	for	the loans.	Charge-offs	for	amounts	deemed	uncollectable	may	be	recorded	at	the	time	of	the	restructuring	or	may	have	already	been	recorded	in	prior	periods	such	that	no	charge-off	is	required	at	the time	of	the	modification.

(2) TDRs	involving	changes	in	the	amount	or	timing	of	interest	payments	may	involve	a	below-market	interest	rate.

The	following	table	presents	total	corporate	loans	modified	in	a	TDR	as	well	as	those	TDRs	that	defaulted	and	for	which	the	payment	default	occurred	within	one	year of	a	permanent	modification.	Default	is	defined	as	60	days	past	due,	except	for	classifiably	managed	commercial	banking	loans,	where	default	is	defined	as	90	days	past due.

| In	millions	of	dollars | TDR	balances	at<br>December	31,	2018 | TDR	loans	in	payment	default	during<br>the	year	ended	December	31,	2018 | TDR	balances	at<br>December	31,	2017 | TDR	loans	in	payment	default	during<br>the	year	ended	December	31,	2017 |
| :--- | :--- | :--- | :--- | :--- |
| Commercial\tand\tindustrial | $414 | $70 | $617 | $72 |
| Financial\tinstitutions | 25 | — | 48 | — |
| Mortgage\tand\treal\testate | 123 | — | 101 | — |
| Lease\tfinancing | — | — | 7 | — |
| Other | 2 | — | 45 | — |
| Total(1) | $564 | $70 | $818 | $72 |

| In	millions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Allowance\tfor\tloan\tlosses\tat\tbeginning\tof\tperiod | $12,355 | $12,060 | $12,626 |
| Gross\tcredit\tlosses | (8,665) | (8,673) | (8,222) |
| Gross\trecoveries(1) | 1,552 | 1,597 | 1,661 |
| Net\tcredit\tlosses\t(NCLs) | $(7,113) | $(7,076) | $(6,561) |
| NCLs | $7,113 | $7,076 | $6,561 |
| Net\treserve\tbuilds\t(releases) | 394 | 544 | 340 |
| Net\tspecific\treserve\treleases | (153) | (117) | (152) |
| Total\tprovision\tfor\tloan\tlosses | $7,354 | $7,503 | $6,749 |
| Other,\tnet\t(see\ttable\tbelow) | (281) | (132) | (754) |
| Allowance\tfor\tloan\tlosses\tat\tend\tof\tperiod | $12,315 | $12,355 | $12,060 |
| Allowance\tfor\tcredit\tlosses\ton\tunfunded\tlending\tcommitments\tat\tbeginning\tof\tperiod | $1,258 | $1,418 | $1,402 |
| Provision\t(release)\tfor\tunfunded\tlending\tcommitments | 113 | (161) | 29 |
| Other,\tnet | (4) | 1 | (13) |
| Allowance\tfor\tcredit\tlosses\ton\tunfunded\tlending\tcommitments\tat\tend\tof\tperiod(2) | $1,367 | $1,258 | $1,418 |
| Total\tallowance\tfor\tloans,\tleases\tand\tunfunded\tlending\tcommitments | $13,682 | $13,613 | $13,478 |

(2) Represents	additional	credit	loss	reserves	for	unfunded	lending	commitments	and	letters	of	credit	recorded	in	 Other	liabilities	on	the	Consolidated	Balance	Sheet.

| In	millions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Sales\tor\ttransfers\tof\tvarious\tconsumer\tloan\tportfolios\tto\tHFS |  |  |  |
| Transfer\tof\treal\testate\tloan\tportfolios | $(91) | $(106) | $(106) |
| Transfer\tof\tother\tloan\tportfolios | (110) | (155) | (468) |
| Sales\tor\ttransfers\tof\tvarious\tconsumer\tloan\tportfolios\tto\tHFS | $(201) | $(261) | $(574) |
| FX\ttranslation,\tconsumer | (60) | 115 | (199) |
| Other | (20) | 14 | 19 |
| Other,\tnet | $(281) | $(132) | $(754) |

# Allowance	for	Credit	Losses	and	End-of-Period	Loans	at	December	31,	2018

| In	millions	of	dollars | Corporate | Consumer | Total |
| :--- | :--- | :--- | :--- |
| Allowance\tfor\tloan\tlosses\tat\tbeginning\tof\tyear | $2,486 | $9,869 | $12,355 |
| Charge-offs | (271) | (8,394) | (8,665) |
| Recoveries | 102 | 1,450 | 1,552 |
| Replenishment\tof\tnet\tcharge-offs | 169 | 6,944 | 7,113 |
| Net\treserve\tbuilds\t(releases) | 56 | 338 | 394 |
| Net\tspecific\treserve\tbuilds\t(releases) | (159) | 6 | (153) |
| Other | (18) | (263) | (281) |
| Ending\tbalance | $2,365 | $9,950 | $12,315 |
| Allowance\tfor\tloan\tlosses |  |  |  |
| Collectively\tevaluated\tin\taccordance\twith\tASC\t450 | $2,102 | $8,770 | $10,872 |
| Individually\tevaluated\tin\taccordance\twith\tASC\t310-10-35 | 263 | 1,178 | 1,441 |
| Purchased\tcredit\timpaired\tin\taccordance\twith\tASC\t310-30 | — | 2 | 2 |
| Total\tallowance\tfor\tloan\tlosses | $2,365 | $9,950 | $12,315 |
| Loans,\tnet\tof\tunearned\tincome |  |  |  |
| Collectively\tevaluated\tin\taccordance\twith\tASC\t450 | $349,292 | $325,055 | $674,347 |
| Individually\tevaluated\tin\taccordance\twith\tASC\t310-10-35 | 1,214 | 5,284 | 6,498 |
| Purchased\tcredit\timpaired\tin\taccordance\twith\tASC\t310-30 | — | 128 | 128 |
| Held\tat\tfair\tvalue | 3,203 | 20 | 3,223 |
| Total\tloans,\tnet\tof\tunearned\tincome | $353,709 | $330,487 | $684,196 |

| In	millions	of	dollars | Corporate | Consumer | Total |
| :--- | :--- | :--- | :--- |
| Allowance\tfor\tloan\tlosses\tat\tbeginning\tof\tyear | $2,702 | $9,358 | $12,060 |
| Charge-offs | (491) | (8,182) | (8,673) |
| Recoveries | 112 | 1,485 | 1,597 |
| Replenishment\tof\tnet\tcharge-offs | 379 | 6,697 | 7,076 |
| Net\treserve\tbuilds\t(releases) | (267) | 811 | 544 |
| Net\tspecific\treserve\tbuilds\t(releases) | 28 | (145) | (117) |
| Other | 23 | (155) | (132) |
| Ending\tbalance | $2,486 | $9,869 | $12,355 |
| Allowance\tfor\tloan\tlosses |  |  |  |
| Collectively\tevaluated\tin\taccordance\twith\tASC\t450 | $2,060 | $8,531 | $10,591 |
| Individually\tevaluated\tin\taccordance\twith\tASC\t310-10-35 | 426 | 1,334 | 1,760 |
| Purchased\tcredit\timpaired\tin\taccordance\twith\tASC\t310-30 | — | 4 | 4 |
| Total\tallowance\tfor\tloan\tlosses | $2,486 | $9,869 | $12,355 |
| Loans,\tnet\tof\tunearned\tincome |  |  |  |
| Collectively\tevaluated\tin\taccordance\twith\tASC\t450 | $327,142 | $326,884 | $654,026 |
| Individually\tevaluated\tin\taccordance\twith\tASC\t310-10-35 | 1,887 | 6,580 | 8,467 |
| Purchased\tcredit\timpaired\tin\taccordance\twith\tASC\t310-30 | — | 167 | 167 |
| Held\tat\tfair\tvalue | 4,349 | 25 | 4,374 |
| Total\tloans,\tnet\tof\tunearned\tincome | $333,378 | $333,656 | $667,034 |

# Allowance	for	Credit	Losses	at	December	31,	2016

| In	millions	of	dollars | Corporate | Consumer | Total |
| :--- | :--- | :--- | :--- |
| Allowance\tfor\tloan\tlosses\tat\tbeginning\tof\tyear | $2,791 | $9,835 | $12,626 |
| Charge-offs | (580) | (7,642) | (8,222) |
| Recoveries | 67 | 1,594 | 1,661 |
| Replenishment\tof\tnet\tcharge-offs | 513 | 6,048 | 6,561 |
| Net\treserve\tbuilds\t(releases) | (85) | 425 | 340 |
| Net\tspecific\treserve\tbuilds\t(releases) | — | (152) | (152) |
| Other | (4) | (750) | (754) |
| Ending\tbalance | $2,702 | $9,358 | $12,060 |

# 16.			GOODWILL	AND	INTANGIBLE	ASSETS

# The	changes	in	Goodwill	were	as	follows:

The	changes	in	Goodwill	by	segment	were	as	follows:

| In	millions	of	dollars | Consumer<br>Banking | Institutional<br>Clients	Group | Corporate/Other | Total |
| :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2016 | $12,530 | $9,085 | $44 | $21,659 |
| Foreign\texchange\ttranslation\tand\tother | $286 | $443 | $— | $729 |
| Divestitures(2) | (32) | (72) | — | (104) |
| Impairment\tof\tgoodwill(3) | — | — | (28) | (28) |
| Balance\tat\tDecember\t31,\t2017 | $12,784 | $9,456 | $16 | $22,256 |
| Foreign\texchange\ttranslation\tand\tother | $(41) | $(153) | $— | $(194) |
| Divestitures(4) | — | — | (16) | (16) |
| Balance\tat\tDecember\t31,\t2018 | $12,743 | $9,303 | $— | $22,046 |

(1) Primarily	related	to	the	sale	of	the	private	equity	services	business	completed	in	2016	and	agreements	to	sell	Argentina	and	Brazil	consumer	operations	as	of	December	31,	2016.

(2)	Primarily	related	to	the	sale	of	a	fixed	income	analytics	business	and	a	fixed	income	index	business	completed	in	2017	and	agreement	to	sell	a	Mexico	asset	management	business	as	of	December 31,	2017.	See	Note	2	to	the	Consolidated	Financial	Statements.

(3) Related	to	the	transfer	of	the	mortgage	servicing	business	from	 North	America	GCB	to	Corporate/Other	effective	January	1,	2017.

(4) Primarily	related	to	the	sale	of	consumer	operations	in	Colombia	in	2018.

Goodwill	impairment	testing	is	performed	at	the	level	below	each	business segment	(referred	to	as	a	reporting	unit).	See	Note	3	for	further	information	on business	segments.

The	Company	performed	its	annual	goodwill	impairment	test	as	of	July	1, 2018.	The	fair	values	of	the	Company's	reporting	units	exceeded	their	carrying values	by	approximately	14%	to	243%	and	no	reporting	unit	is	at	risk	of impairment.	Further,	there	were	no	triggering	events	identified	and	no	goodwill was	impaired	during	the	year.

# The	components	of	intangible	assets	were	as	follows:

|  |  | December	31,	2018 |  |  | December	31,	2017 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Gross\ncarrying\namount | Accumulated\namortization | Net\ncarrying\namount | Gross\ncarrying\namount | Accumulated\namortization | Net\ncarrying\namount |
| Purchased\tcredit\tcard\trelationships | $5,733 | $3,936 | $1,797 | $5,375 | $3,836 | $1,539 |
| Credit\tcard\tcontract\trelated\tintangibles (1) | 5,225 | 2,791 | 2,434 | 5,045 | 2,456 | 2,589 |
| Core\tdeposit\tintangibles | 419 | 415 | 4 | 639 | 628 | 11 |
| Other\tcustomer\trelationships | 470 | 299 | 171 | 459 | 272 | 187 |
| Present\tvalue\tof\tfuture\tprofits | 32 | 29 | 3 | 32 | 28 | 4 |
| Indefinite-lived\tintangible\tassets | 218 | — | 218 | 244 | — | 244 |
| Other | 84 | 75 | 9 | 100 | 86 | 14 |
| Intangible\tassets\t(excluding\tMSRs) | $12,181 | $7,545 | $4,636 | $11,894 | $7,306 | $4,588 |
| Mortgage\tservicing\trights\t(MSRs)(2) | 584 | — | 584 | 558 | — | 558 |
| Total\tintangible\tassets | $12,765 | $7,545 | $5,220 | $12,452 | $7,306 | $5,146 |

(1) Primarily	reflects	contract-related	intangibles	associated	with	the	American	Airlines,	The	Home	Depot,	Costco,	Sears	and	AT&T	credit	card	program	agreements,	which	represented 97%	of	the aggregate	net	carrying	amount	as	of	December	31,	2018.

(2) For	additional	information	on	Citi's	MSRs,	see	Note	21	to	the	Consolidated	Financial	Statements.

The	changes	in	intangible	assets	were	as	follows:

|  | Net	carrying<br>amount	at |  |  |  | Net	carrying<br>amount	at |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | December\t31,\t2017 | Acquisitions/\ndivestitures | Amortization | FX\ttranslation\tand\nother | December\t31,\n2018 |
| Purchased\tcredit\tcard\trelationships(1) | $1,539 | $429 | $(173) | $2 | $1,797 |
| Credit\tcard\tcontract-related\tintangibles (2) | 2,589 | 185 | (339) | (1) | 2,434 |
| Core\tdeposit\tintangibles | 11 | — | (8) | 1 | 4 |
| Other\tcustomer\trelationships | 187 | — | (25) | 9 | 171 |
| Present\tvalue\tof\tfuture\tprofits | 4 | — | — | (1) | 3 |
| Indefinite-lived\tintangible\tassets | 244 | — | — | (26) | 218 |
| Other | 14 | — | (12) | 7 | 9 |
| Intangible\tassets\t(excluding\tMSRs) | $4,588 | $614 | $(557) | $(9) | $4,636 |
| Mortgage\tservicing\trights\t(MSRs)(3) | 558 |  |  |  | 584 |
| Total\tintangible\tassets | $5,146 |  |  |  | $5,220 |

(1) Reflects	intangibles	for	the	value	of	cardholder	relationships,	which	are	discrete	from	partner	contract	intangibles	and	include	credit	card	accounts	primarily	in	the	Costco,	Macy's	and	Sears portfolios.	The	increase	since	December	31,	2017	reflects	the	purchase	of	certain	rights	related	to	credit	card	accounts	in	the	Sears	portfolio.

(2) Primarily	reflects	contract-related	intangibles	associated	with	the	American	Airlines,	Costco,	The	Home	Depot,	Sears	and	AT&T	credit	card	program	agreements,	which	represent 97%	of	the aggregate	net	carrying	amount	as	of	December	31,	2018.

(3) For	additional	information	on	Citi's	MSRs,	including	the	rollforward	from	2017	to	2018,	see	Note	 21	to	the	Consolidated	Financial	Statements.

# Short-Term	Borrowings

(1) The	weighted	average	contractual	rates	exclude	structured	notes	accounted	for	at	fair value.

(2) Represents	the	parent	holding	company.

(3) Includes	notes	that	are	subordinated	within	certain	countries,	regions	or	subsidiaries.

(4) Represents	Citibank	entities	as	well	as	other	bank	entities.	At	 December	31,	2018	and 2017,	collateralized	long-term	advances	from	the	Federal	Home	Loan	Banks	were	$10.5 billion	and	$19.3	billion,	respectively.

(5) Represents	broker-dealer	and	other	non-bank	subsidiaries	that	are	consolidated	into Citigroup	Inc.,	the	parent	holding	company.

The	Company	issues	both	fixed-	and	variable-rate	debt	in	a	range	of currencies.	It	uses	derivative	contracts,	primarily	interest	rate	swaps,	to effectively	convert	a	portion	of	its	fixed-rate	debt	to	variable-rate	debt.	The maturity	structure	of	the	derivatives	generally	corresponds	to	the	maturity structure	of	the	debt	being	hedged.	In	addition,	the	Company	uses	other derivative	contracts	to	manage	the	foreign	exchange	impact	of	certain	debt issuances.	At	December	31,	2018,	the	Company's	overall	weighted	average interest	rate	for	long-term	debt,	excluding	structured	notes	accounted	for	at	fair value,	was	3.87%	on	a	contractual	basis	and	3.84%	including	the	effects	of derivative	contracts.

Aggregate	annual	maturities	of	long-term	debt	obligations	(based	on	final	maturity	dates)	including	trust	preferred	securities	are	as	follows:

| In	millions	of	dollars | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Citigroup\tInc. | $14,144 | $9,266 | $14,758 | $9,944 | $14,361 | $81,295 | $143,768 |
| Bank | 18,809 | 21,620 | 10,877 | 2,595 | 2,572 | 4,764 | 61,237 |
| Broker-dealer | 5,637 | 6,417 | 2,907 | 1,556 | 2,128 | 8,349 | 26,994 |
| Total | $38,590 | $37,303 | $28,542 | $14,095 | $19,061 | $94,408 | $231,999 |

The	following	table	summarizes	the	Company's	outstanding	trust	preferred	securities	at	December	31,	2018:

| Trust | Issuance<br>date | Securities<br>issued | Liquidation<br>value(1) | Coupon<br>rate(2) | Common<br>shares<br>issued<br>to	parent | Amount | Maturity | Redeemable<br>by	issuer<br>beginning |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| \tIn\tmillions\tof\tdollars,\texcept\tshare\tamounts |  |  |  |  |  |  |  |  |
| Citigroup\tCapital\tIII | Dec.\t1996 | 194,053 | $194 | 7.625% | 6,003 | $200 | Dec.\t1,\t2036 | Not\tredeemable |
|  |  |  |  | 3\tmo\tLIBOR\t+ |  |  |  |  |
| Citigroup\tCapital\tXIII | Sept.\t2010 | 89,840,000 | 2,246 | 637\tbps | 1,000 | 2,246 | Oct.\t30,\t2040 | Oct.\t30,\t2015 |
|  |  |  |  | 3\tmo\tLIBOR\t+ |  |  |  |  |
| Citigroup\tCapital\tXVIII | June\t2007 | 99,901 | 127 | 88.75\tbps | 50 | 127 | June\t28,\t2067 | June\t28,\t2017 |
| Total\tobligated |  |  | $2,567 |  |  | $2,573 |  |  |

Note:	Distributions	on	the	trust	preferred	securities	and	interest	on	the	subordinated	debentures	are	payable	semiannually	for	Citigroup	Capital	III	and	Citigroup	Capital	XVIII	and	quarterly	for Citigroup	Capital	XIII.

(1) Represents	the	notional	value	received	by	investors	from	the	trusts	at	the	time	of	issuance.

(2) In	each	case,	the	coupon	rate	on	the	subordinated	debentures	is	the	same	as	that	on	the	trust	preferred	securities.

# 18.	REGULATORY	CAPITAL

Citigroup	is	subject	to	risk-based	capital	and	leverage	standards	issued	by	the Federal	Reserve	Board,	which	constitute	the	U.S.	Basel	III	rules.	Citi's	U.S.- insured	depository	institution	subsidiaries,	including	Citibank,	are	subject	to similar	standards	issued	by	their	respective	primary	federal	bank	regulatory agencies.	These	standards	are	used	to	evaluate	capital	adequacy	and	include	the required	minimums

shown	in	the	following	table.	The	regulatory	agencies	are	required	by	law	to	take specific,	prompt	corrective	actions	with	respect	to	institutions	that	do	not	meet minimum	capital	standards.

	The	following	table	sets	forth	for	Citigroup	and	Citibank	the	regulatory capital	tiers,	total	risk-weighted	assets,	quarterly	adjusted	average	total	assets, Total	Leverage	Exposure,	risk-based	capital	ratios	and	leverage	ratios:

|  |  | Citigroup | Citigroup | Citibank |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars,\texcept\tratios | Stated\nminimum | Well-\ncapitalized\nminimum | December\t31,\n2018 | Well-\ncapitalized\nminimum | December\t31,\n2018 |
| Common\tEquity\tTier\t1\tCapital |  |  | $139,252 | $129,217 | $129,217 |
| Tier\t1\tCapital |  |  | 158,122 | 131,341 | 131,341 |
| Total\tCapital\t(Tier\t1\tCapital\t+\tTier\t2\tCapital)—Standardized\tApproach |  |  | 195,440 |  | 155,280 |
| Total\tCapital\t(Tier\t1\tCapital\t+\tTier\t2\tCapital)—Advanced\tApproaches |  |  | 183,144 | 144,485 | 144,485 |
| Total\trisk-weighted\tassets—Standardized\tApproach |  |  | 1,174,448 |  | 1,030,514 |
| Total\trisk-weighted\tassets—Advanced\tApproaches |  |  | 1,131,933 | 927,931 | 927,931 |
| Quarterly\tadjusted\taverage\ttotal\tassets(1) |  |  | 1,896,959 |  | 1,399,029 |
| Total\tLeverage\tExposure(2) |  |  | 2,465,641 | 1,914,817 | 1,914,817 |
| Common\tEquity\tTier\t1\tCapital\tratio(3) | 4.5% | \t\t\t\tN/A | 11.86% | 6.5% | 12.54% |
| Tier\t1\tCapital\tratio(3) | 6.0 | 6.0% | 13.46 | 8.0 | 12.75 |
| Total\tCapital\tratio(3) | 8.0 | 10.0 | 16.18 | 10.0 | 15.07 |
| Tier\t1\tLeverage\tratio | 4.0 | N/A | 8.34 | 5.0 | 9.39 |
| Supplementary\tLeverage\tratio | 3.0 | N/A | 6.41 | 6.0 | 6.86 |

(3) As	of	December	31,	2018,	Citigroup's	reportable	Common	Equity	Tier	1	Capital	and	Tier	1	Capital	ratios	were	the	lower	derived	under	the	Basel	III	Standardized	Approach,	whereas	the reportable	Total	Capital	ratios	were	the	lower	derived	under	the	Basel	III	Advanced	Approaches	framework.	Citibank's	reportable	Common	Equity	Tier	1	Capital,	Tier	1	Capital	and	Total Capital	ratios	were	the	lower	derived	under	the	Basel	III	Standardized	Approach.

As	indicated	in	the	table	above,	Citigroup	and	Citibank	were	"well capitalized"	under	the	current	federal	bank	regulatory	agency	definitions	as	of December	31,	2018.

# Banking	Subsidiaries—Constraints	on	Dividends

There	are	various	legal	limitations	on	the	ability	of	Citigroup's	subsidiary depository	institutions	to	extend	credit,	pay	dividends,	or	otherwise	supply	funds to	Citigroup	and	its	non-bank	subsidiaries.	The	approval	of	the	Office	of	the Comptroller	of	the	Currency	is	required	if	total	dividends	declared	in	any calendar	year	were	to	exceed	amounts	specified	by	the	agency's	regulations. In	determining	the	dividends,	each	subsidiary	depository	institution	must also	consider	its	effect	on	applicable	risk-based	capital	and	leverage	ratio requirements,	as	well	as	policy	statements	of	the	federal	bank	regulatory agencies	that	indicate	that	banking	organizations	should	generally	pay	dividends out	of	current	operating	earnings.	Citigroup	received	$8.3	billion	and	$7.5	billion in	dividends	from	Citibank	during	2018	and	2017,	respectively.

# 19.			CHANGES	IN	ACCUMULATED	OTHER	COMPREHENSIVE	INCOME	(LOSS)	(AOCI)

Changes	in	each	component	of	Citigroup's	Accumulated	other	comprehensive	income	(loss)	were	as	follows:

| In	millions	of	dollars | Net<br>unrealized<br>gains	(losses)<br>on	investment<br>securities | Debt	valuation<br>adjustment<br>(DVA)(1) | Cash	flow<br>hedges(2) | Benefit<br>plans(3) | Foreign<br>currency<br>translation<br>adjustment<br>(CTA),	net	of<br>hedges(4) | Excluded<br>component	of<br>fair	value<br>hedges(5) | Accumulated<br>other<br>comprehensive<br>income	(loss) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Balance,\tDecember\t31,\t2015 | $(907) | $— | $(617) | $(5,116) | $(22,704) | $— | $(29,344) |
| Adjustment\tto\topening\tbalance,\tnet\n\t\tof\ttaxes(1) | $— | $(15) | $— | $— | $— | $— | $(15) |
| Adjusted\tbalance,\tbeginning\tof\tperiod | $(907) | $(15) | $(617) | $(5,116) | $(22,704) | $— | $(29,359) |
| Other\tcomprehensive\tincome\tbefore\n\t\treclassifications | $531 | $(335) | $(88) | $(208) | $(2,802) | $— | $(2,902) |
| Increase\t(decrease)\tdue\tto\tamounts\n\t\treclassified\tfrom\tAOCI | (423) | (2) | 145 | 160 | — | — | (120) |
| Change,\tnet\tof\ttaxes | $108 | $(337) | $57 | $(48) | $(2,802) | $— | $(3,022) |
| Balance,\tDecember\t31,\t2016 | $(799) | $(352) | $(560) | $(5,164) | $(25,506) | $— | $(32,381) |
| Adjustment\tto\topening\tbalance,\tnet\n\t\tof\ttaxes(6) | $504 | $— | $— | $— | $— | $— | $504 |
| Adjusted\tbalance,\tbeginning\tof\tperiod | $(295) | $(352) | $(560) | $(5,164) | $(25,506) | $— | $(31,877) |
| Impact\tof\tTax\tReform(7) | (223) | (139) | (113) | (1,020) | (1,809) | — | (3,304) |
| Other\tcomprehensive\tincome\tbefore\treclassifications | (186) | (426) | (111) | (158) | 1,607 | — | 726 |
| Increase\t(decrease)\tdue\tto\tamounts\treclassified\tfrom\nAOCI | (454) | (4) | 86 | 159 | — | — | (213) |
| Change,\tnet\tof\ttaxes | $(863) | $(569) | $(138) | $(1,019) | $(202) | $— | $(2,791) |
| Balance\tat\tDecember\t31,\t2017 | $(1,158) | $(921) | $(698) | $(6,183) | $(25,708) | $— | $(34,668) |
| Adjustment\tto\topening\tbalance,\tnet\n\t\tof\ttaxes(8) | (3) | — | — | — | — | — | (3) |
| Adjusted\tbalance,\tbeginning\tof\tperiod | $(1,161) | $(921) | $(698) | $(6,183) | $(25,708) | $— | $(34,671) |
| Other\tcomprehensive\tincome\tbefore\n\t\treclassifications | (866) | 1,081 | (135) | (240) | (2,607) | (57) | (2,824) |
| Increase\t(decrease)\tdue\tto\tamounts\n\t\treclassified\tfrom\tAOCI(9) | (223) | 32 | 105 | 166 | 245 | — | 325 |
| Change,\tnet\tof\ttaxes | $(1,089) | $1,113 | $(30) | $(74) | $(2,362) | $(57) | $(2,499) |
| Balance\tat\tDecember\t31,\t2018 | $(2,250) | $192 | $(728) | $(6,257) | $(28,070) | $(57) | $(37,170) |

(1) Changes	in	DVA	are	reflected	as	a	component	of	AOCI,	pursuant	to	the	adoption	of	only	the	provisions	of	ASU	2016-01	relating	to	the	presentation	of	DVA	on	fair	value	option	liabilities.	See Note	1	to	the	Consolidated	Financial	Statements.

(2) Primarily	driven	by	Citi's	pay	fixed/receive	floating	interest	rate	swap	programs	that	hedge	the	floating	rates	on	liabilities.

(3) Primarily	reflects	adjustments	based	on	the	quarterly	actuarial	valuations	of	Citi's	significant	pension	and	postretirement	plans,	annual	actuarial	valuations	of	all	other	plans	and	amortization	of amounts	previously	recognized	in	Other	comprehensive	income.

(4) Primarily	reflects	the	movements	in	(by	order	of	impact)	the	Brazilian	real,	Indian	rupee,	Mexican	peso,	and	Australian	dollar	against	the	U.S.	dollar	and	changes	in	related	tax	effects	and	hedges for	the	year	ended	December	31,	2018.	Primarily	reflects	the	movements	in	(by	order	of	impact)	the	Euro,	Mexican	peso,	Polish	zloty	and	Korean	won	against	the	U.S.	dollar	and	changes	in related	tax	effects	and	hedges	for	the	year	ended	December	31,	2017.	Primarily	reflects	the	movements	in	(by	order	of	impact)	the	Mexican	peso,	Euro,	British	pound	and	Indian	rupee	against	the U.S.	dollar	and	changes	in	related	tax	effects	and	hedges	for	the	year	ended	December	31,	2016.

(5) Beginning	in	the	first	quarter	of	2018,	changes	in	the	excluded	component	of	fair	value	hedges	are	reflected	as	a	component	of	AOCI,	pursuant	to	the	early	adoption	of	ASU	No.	2017-12, Targeted	Improvements	to	Accounting	for	Hedging	Activities .	See	Note	1	of	the	Consolidated	Financial	Statements	for	further	information	regarding	this	change.

(6) In	the	second	quarter	of	2017,	Citi	early	adopted	ASU	No.	2017-08 .	Upon	adoption,	a	cumulative	effect	adjustment	was	recorded	to	reduce	Retained	earnings,	effective	January	1,	2017,	for	the incremental	amortization	of	cumulative	fair	value	hedge	adjustments	on	callable	state	and	municipal	debt	securities.	See	Note	1	to	the	Consolidated	Financial	Statements.

(8) Citi	adopted	ASU	2016-01	and	ASU	2018-03	on	January	1,	2018.	Upon	adoption,	a	cumulative	effect	adjustment	was	recorded	from	AOCI	to	 Retained	earnings	for	net	unrealized	gains	on former	AFS	equity	securities.	For	additional	information,	see	Note	1	to	the	Consolidated	Financial	Statements.

(9) Includes	the	impact	of	the	release	upon	meeting	the	accounting	trigger	for	substantial	liquidation	of	Citi's	Japan	Consumer	Finance	business	during	the	fourth	quarter	of	2018.	See	Note	1	to	the Consolidated	Financial	Statements.

The	pretax	and	after-tax	changes	in	each	component	of	Accumulated	other	comprehensive	income	(loss)	were	as	follows:

| In	millions	of	dollars | Pretax | Tax	effect(1) | After-tax |
| :--- | :--- | :--- | :--- |
| Balance,\tDecember\t31,\t2015 | $(38,440) | $9,096 | $(29,344) |
| Adjustment\tto\topening\tbalance(2) | (26) | 11 | (15) |
| Adjusted\tbalance,\tbeginning\tof\tperiod |  |  |  |
|  | $(38,466) | $9,107 | $(29,359) |
| Change\tin\tnet\tunrealized\tgains\t(losses)\ton\tinvestment\tsecurities | 167 | (59) | 108 |
| Debt\tvaluation\tadjustment\t(DVA) | (538) | 201 | (337) |
| Cash\tflow\thedges | 84 | (27) | 57 |
| Benefit\tplans | (78) | 30 | (48) |
| Foreign\tcurrency\ttranslation\tadjustment | (3,204) | 402 | (2,802) |
| Change | $(3,569) | $547 | $(3,022) |
| Balance,\tDecember\t31,\t2016 | $(42,035) | $9,654 | $(32,381) |
| Adjustment\tto\topening\tbalance(3) | 803 | (299) | 504 |
| Adjusted\tbalance,\tbeginning\tof\tperiod | $(41,232) | $9,355 | $(31,877) |
| Change\tin\tnet\tunrealized\tgains\t(losses)\ton\tinvestment\tsecurities | (1,088) | 225 | (863) |
| Debt\tvaluation\tadjustment\t(DVA) | (680) | 111 | (569) |
| Cash\tflow\thedges | (37) | (101) | (138) |
| Benefit\tplans | 14 | (1,033) | (1,019) |
| Foreign\tcurrency\ttranslation\tadjustment | 1,795 | (1,997) | (202) |
| Change | $4 | $(2,795) | $(2,791) |
| Balance,\tDecember\t31,\t2017 | $(41,228) | $6,560 | $(34,668) |
| Adjustment\tto\topening\tbalance(4) | (4) | 1 | (3) |
| Adjusted\tbalance,\tbeginning\tof\tperiod | $(41,232) | $6,561 | $(34,671) |
| Change\tin\tnet\tunrealized\tgains\t(losses)\ton\tAFS\tdebt\tsecurities | (1,435) | 346 | (1,089) |
| Debt\tvaluation\tadjustment\t(DVA) | 1,415 | (302) | 1,113 |
| Cash\tflow\thedges | (38) | 8 | (30) |
| Benefit\tplans | (94) | 20 | (74) |
| Foreign\tcurrency\ttranslation\tadjustment | (2,624) | 262 | (2,362) |
| Excluded\tcomponent\tof\tfair\tvalue\thedges | (74) | 17 | (57) |
| Change | $(2,850) | $351 | $(2,499) |
| Balance,\tDecember\t31,\t2018 | $(44,082) | $6,912 | $(37,170) |

(2) Represents	the	$(15)	million	adjustment	related	to	the	initial	adoption	of	ASU	2016-01.	See	Note	1	to	the	Consolidated	Financial	Statements.

(3) In	the	second	quarter	of	2017,	Citi	early	adopted	ASU	2017-08 .	Upon	adoption,	a	cumulative	effect	adjustment	was	recorded	to	reduce	Retained	earnings,	effective	January	1,	2017,	for	the incremental	amortization	of	cumulative	fair	value	hedge	adjustments	on	callable	state	and	municipal	debt	securities.	See	Note	1	to	the	Consolidated	Financial	Statements.

The	Company	recognized	pretax	gains	(losses)	related	to	amounts	in	AOCI	reclassified	to	the	Consolidated	Statement	of	Income	as	follows:

|  |  | Year	ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 | 2016 |
| Realized\t(gains)\tlosses\ton\tsales\tof\tinvestments | $(421) | $(778) | $(949) |
| Gross\timpairment\tlosses | 125 | 63 | 288 |
| Subtotal,\tpretax | $(296) | $(715) | $(661) |
| Tax\teffect | 73 | 261 | 238 |
| Net\trealized\t(gains)\tlosses\ton\tinvestments,\tafter-tax (1) | $(223) | $(454) | $(423) |
| Realized\tDVA\t(gains)\tlosses\ton\tfair\tvalue\toption\tliabilities | $41 | $(7) | $(3) |
| Subtotal,\tpretax | $41 | $(7) | $(3) |
| Tax\teffect | (9) | 3 | 1 |
| Net\trealized\tDVA,\tafter-tax | $32 | $(4) | $(2) |
| Interest\trate\tcontracts | $131 | $126 | $140 |
| Foreign\texchange\tcontracts | 7 | 10 | 93 |
| Subtotal,\tpretax | $138 | $136 | $233 |
| Tax\teffect | (33) | (50) | (88) |
| Amortization\tof\tcash\tflow\thedges,\tafter-tax (2) | $105 | $86 | $145 |
| Amortization\tof\tunrecognized |  |  |  |
| Prior\tservice\tcost\t(benefit) | $(34) | $(42) | $(40) |
| Net\tactuarial\tloss | 248 | 271 | 272 |
| Curtailment/settlement\timpact(3) | 6 | 17 | 18 |
| Subtotal,\tpretax | $220 | $246 | $250 |
| Tax\teffect | (54) | (87) | (90) |
| Amortization\tof\tbenefit\tplans,\tafter-tax(3) | $166 | $159 | $160 |
| Foreign\tcurrency\ttranslation\tadjustment(4) | $34 | $— | $— |
| Tax\teffect(4) | 211 | — | — |
| Foreign\tcurrency\ttranslation\tadjustment | $245 | $— | $— |
| Total\tamounts\treclassified\tout\tof\tAOCI,\tpretax | $137 | $(340) | $(181) |
| Total\ttax\teffect | 188 | 127 | 61 |
| Total\tamounts\treclassified\tout\tof\tAOCI,\tafter-tax | $325 | $(213) | $(120) |

(1) The	pretax	amount	is	reclassified	to	Realized	gains	(losses)	on	sales	of	investments,	net 	and	Gross	impairment	losses	in	the	Consolidated	Statement	of	Income.	See	Note	 13	to	the	Consolidated Financial	Statements	for	additional	details.

# 20.			PREFERRED	STOCK

The	following	table	summarizes	the	Company's	preferred	stock	outstanding:

| Issuance	date | Redeemable	by	issuer<br>beginning | Dividend<br>rate | Redemption<br>price	per	depositary<br>share/preference	share | Number<br>of	depositary<br>shares | December	31,<br>2018 | December	31,<br>2017 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| January\t25,\t2008 | February\t15,\t2018 | 8.125% | $25 | 3,870,330 | $— | $97 |
| April\t28,\t2008 | April\t30,\t2018 | 8.400 | 1,000 | 121,254 | — | 121 |
| October\t29,\t2012 | January\t30,\t2023 | 5.950 | 1,000 | 1,500,000 | 1,500 | 1,500 |
| December\t13,\t2012 | February\t15,\t2023 | 5.900 | 1,000 | 750,000 | 750 | 750 |
| March\t26,\t2013 | April\t22,\t2018 | 5.800 | 25 | 23,000,000 | — | 575 |
| April\t30,\t2013 | May\t15,\t2023 | 5.350 | 1,000 | 1,250,000 | 1,250 | 1,250 |
| September\t19,\t2013 | September\t30,\t2023 | 7.125 | 25 | 38,000,000 | 950 | 950 |
| October\t31,\t2013 | November\t15,\t2023 | 6.875 | 25 | 59,800,000 | 1,495 | 1,495 |
| February\t12,\t2014 | February\t12,\t2019 | 6.875 | 25 | 19,200,000 | 480 | 480 |
| April\t30,\t2014 | May\t15,\t2024 | 6.300 | 1,000 | 1,750,000 | 1,750 | 1,750 |
| October\t29,\t2014 | November\t15,\t2019 | 5.800 | 1,000 | 1,500,000 | 1,500 | 1,500 |
| March\t20,\t2015 | March\t27,\t2020 | 5.875 | 1,000 | 1,500,000 | 1,500 | 1,500 |
| April\t24,\t2015 | May\t15,\t2025 | 5.950 | 1,000 | 2,000,000 | 2,000 | 2,000 |
| August\t12,\t2015 | August\t15,\t2020 | 5.950 | 1,000 | 1,250,000 | 1,250 | 1,250 |
| November\t13,\t2015 | November\t15,\t2020 | 6.125 | 1,000 | 1,500,000 | 1,500 | 1,500 |
| February\t2,\t2016 | February\t12,\t2021 | 6.300 | 25 | 41,400,000 | 1,035 | 1,035 |
| April\t25,\t2016 | August\t15,\t2026 | 6.250 | 1,000 | 1,500,000 | 1,500 | 1,500 |
|  |  |  |  |  | $18,460 | $19,253 |

(1) The	Series	AA	preferred	stock	was	redeemed	in	full	on	February	15,	2018.

(2) The	Series	E	preferred	stock	was	redeemed	in	full	on	April	30,	2018.

(3) Issued	as	depositary	shares,	each	representing	a	1/25 th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	semiannually	on January	30	and	July	30	at	a	fixed	rate	until	January	30,	2023,	thereafter	payable	quarterly	on	January	30,	April	30,	July	30	and	October	30	at	a	floating	rate,	in	each	case	when,	as	and	if	declared by	the	Citi	Board	of	Directors.

(4) Issued	as	depositary	shares,	each	representing	a	1/25 th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	semiannually	on February	15	and	August	15	at	a	fixed	rate	until	February	15,	2023,	thereafter	payable	quarterly	on	February	15,	May	15,	August	15	and	November	15	at	a	floating	rate,	in	each	case	when,	as	and if	declared	by	the	Citi	Board	of	Directors.

(5) The	Series	C	preferred	stock	was	redeemed	in	full	on	November	1,	2018.

(6) Issued	as	depositary	shares,	each	representing	a	1/25 th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	semiannually	on	May	15 and	November	15	at	a	fixed	rate	until	May	15,	2023,	thereafter	payable	quarterly	on	February	15,	May	15,	August	15	and	November	15	at	a	floating	rate,	in	each	case	when,	as	and	if	declared	by the	Citi	Board	of	Directors.

(7) Issued	as	depositary	shares,	each	representing	a	1/1,000th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	quarterly	on March	30,	June	30,	September	30	and	December	30	at	a	fixed	rate	until	September	30,	2023,	thereafter	payable	quarterly	on	the	same	dates	at	a	floating	rate,	in	each	case	when,	as	and	if	declared by	the	Citi	Board	of	Directors.

(8) Issued	as	depositary	shares,	each	representing	a	1/1,000th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	quarterly	on	February 15,	May	15,	August	15	and	November	15	at	a	fixed	rate	until	November	15,	2023,	thereafter	payable	quarterly	on	the	same	dates	at	a	floating	rate,	in	each	case	when,	as	and	if	declared	by	the Citi	Board	of	Directors.

(9) Issued	as	depositary	shares,	each	representing	a	1/1,000th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	quarterly	on	February 12,	May	12,	August	12	and	November	12	at	a	fixed	rate,	in	each	case	when,	as	and	if	declared	by	the	Citi	Board	of	Directors.

(10) Issued	as	depositary	shares,	each	representing	a	1/25 th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	semiannually	on	May	15 and	November	15	at	a	fixed	rate	until	May	15,	2024,	thereafter	payable	quarterly	on	February	15,	May	15,	August	15	and	November	15	at	a	floating	rate,	in	each	case	when,	as	and	if	declared by	the	Citi	Board	of	Directors.

(11) Issued	as	depositary	shares,	each	representing	a	1/25 th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	semiannually	on	May	15 and	November	15	at	a	fixed	rate	until,	but	excluding,	November	15,	2019,	and	thereafter	payable	quarterly	on	February	15,	May	15,	August	15	and	November	15	at	a	floating	rate,	in	each	case when,	as	and	if	declared	by	the	Citi	Board	of	Directors.

(12) Issued	as	depositary	shares,	each	representing	a	1/25 th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	semiannually	on	March 27	and	September	27	at	a	fixed	rate	until,	but	excluding,	March	27,	2020,	and	thereafter	payable	quarterly	on	March	27,	June	27,	September	27	and	December	27	at	a	floating	rate,	in	each	case when,	as	and	if	declared	by	the	Citi	Board	of	Directors.

(13) Issued	as	depositary	shares,	each	representing	a	1/25 th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	semiannually	on	May	15 and	November	15	at	a	fixed	rate	until,	but	excluding,	May	15,	2025,	and	thereafter	payable	quarterly	on	February	15,	May	15,	August	15	and	November	15	at	a	floating	rate,	in	each	case	when, as	and	if	declared	by	the	Citi	Board	of	Directors.

(14) Issued	as	depositary	shares,	each	representing	a	1/25 th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	semiannually	on February	15	and	August	15	at	a	fixed	rate	until,	but	excluding,	August	15,	2020,	and	thereafter	payable	quarterly	on	February	15,	May	15,	August	15	and	November	15	at	a	floating	rate,	in	each case	when,	as	and	if	declared	by	the	Citi	Board	of	Directors.

(15) Issued	as	depositary	shares,	each	representing	a	1/25 th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	semiannually	on	May	15 and	November	15	at	a	fixed	rate	until,	but	excluding,	November	15,	2020,	and	thereafter	payable	quarterly	on	February	15,	May	15,	August	15	and	November	15	at	a	floating	rate,	in	each	case when,	as	and	if	declared	by	the	Citi	Board	of	Directors.

(17) Issued	as	depositary	shares,	each	representing	a	1/25 th	interest	in	a	share	of	the	corresponding	series	of	non-cumulative	perpetual	preferred	stock.	Dividends	are	payable	semiannually	on February	15	and	August	15	at	a	fixed	rate	until	August	15,	2026,	thereafter	payable	quarterly	on	February	15,	May	15,	August	15	and	November	15	at	a	floating	rate,	in	each	case	when,	as	and if	declared	by	the	Citi	Board	of	Directors.

During	2018,	Citi	distributed	$1,173	million	in	dividends	on	its	outstanding preferred	stock.	Based	on	its	preferred	stock	outstanding	as	of	December	31,

2018,	Citi	estimates	it	will	distribute	preferred	dividends	of	approximately $1,109	million	during	2019,	assuming	such	dividends	are	declared	by	the	Citi Board	of	Directors.

# 21.	SECURITIZATIONS	AND	VARIABLE	INTEREST	ENTITIES

# Uses	of	Special	Purpose	Entities

A	special	purpose	entity	(SPE)	is	an	entity	designed	to	fulfill	a	specific	limited need	of	the	company	that	organized	it.	The	principal	uses	of	SPEs	by	Citi	are	to obtain	liquidity	and	favorable	capital	treatment	by	securitizing	certain	financial assets,	to	assist	clients	in	securitizing	their	financial	assets	and	to	create investment	products	for	clients.	SPEs	may	be	organized	in	various	legal	forms, including	trusts,	partnerships	or	corporations.	In	a	securitization,	through	the SPE's	issuance	of	debt	and	equity	instruments,	certificates,	commercial	paper	or other	notes	of	indebtedness,	the	company	transferring	assets	to	the	SPE	converts all	(or	a	portion)	of	those	assets	into	cash	before	they	would	have	been	realized in	the	normal	course	of	business.	These	issuances	are	recorded	on	the	balance sheet	of	the	SPE,	which	may	or	may	not	be	consolidated	onto	the	balance	sheet of	the	company	that	organized	the	SPE.

Investors	usually	have	recourse	only	to	the	assets	in	the	SPE,	but	may	also benefit	from	other	credit	enhancements,	such	as	a	collateral	account,	a	line	of credit	or	a	liquidity	facility,	such	as	a	liquidity	put	option	or	asset	purchase agreement.	Because	of	these	enhancements,	the	SPE	issuances	typically	obtain	a more	favorable	credit	rating	than	the	transferor	could	obtain	for	its	own	debt issuances.	This	results	in	less	expensive	financing	costs	than	unsecured	debt.	The SPE	may	also	enter	into	derivative	contracts	in	order	to	convert	the	yield	or currency	of	the	underlying	assets	to	match	the	needs	of	the	SPE	investors	or	to limit	or	change	the	credit	risk	of	the	SPE.	Citigroup	may	be	the	provider	of certain	credit	enhancements	as	well	as	the	counterparty	to	any	related	derivative contracts.

Most	of	Citigroup's	SPEs	are	variable	interest	entities	(VIEs),	as	described below.

# Variable	Interest	Entities

VIEs	are	entities	that	have	either	a	total	equity	investment	that	is	insufficient	to permit	the	entity	to	finance	its	activities	without	additional	subordinated financial	support	or	whose	equity	investors	lack	the	characteristics	of	a controlling	financial	interest	(i.e.,	ability	to	make	significant	decisions	through voting	rights	or	similar	rights	and	a	right	to	receive	the	expected	residual	returns of	the	entity	or	an	obligation	to	absorb	the	expected	losses	of	the	entity). Investors	that	finance	the	VIE	through	debt	or	equity	interests	or	other counterparties	providing	other	forms	of	support,	such	as	guarantees,	certain	fee arrangements	or	certain	types	of	derivative	contracts,	are	variable	interest holders	in	the	entity.

The	variable	interest	holder,	if	any,	that	has	a	controlling	financial	interest	in a	VIE	is	deemed	to	be	the	primary	beneficiary	and	must	consolidate	the	VIE. Citigroup	would	be	deemed	to	have	a	controlling	financial	interest	and	be	the primary	beneficiary	if	it	has	both	of	the	following	characteristics:

•power	to	direct	the	activities	of	the	VIE	that	most	significantly	impact	the entity's	economic	performance;	and

•an	obligation	to	absorb	losses	of	the	entity	that	could	potentially	be significant	to	the	VIE,	or	a	right	to	receive	benefits	from	the	entity	that could	potentially	be	significant	to	the	VIE.

The	Company	must	evaluate	each	VIE	to	understand	the	purpose	and	design of	the	entity,	the	role	the	Company	had	in	the	entity's	design	and	its	involvement in	the	VIE's	ongoing	activities.	The	Company	then	must	evaluate	which activities	most	significantly	impact	the	economic	performance	of	the	VIE	and who	has	the	power	to	direct	such	activities.

For	those	VIEs	where	the	Company	determines	that	it	has	the	power	to direct	the	activities	that	most	significantly	impact	the	VIE's	economic performance,	the	Company	must	then	evaluate	its	economic	interests,	if	any,	and determine	whether	it	could	absorb	losses	or	receive	benefits	that	could potentially	be	significant	to	the	VIE.	When	evaluating	whether	the	Company	has an	obligation	to	absorb	losses	that	could	potentially	be	significant,	it	considers the	maximum	exposure	to	such	loss	without	consideration	of	probability.	Such obligations	could	be	in	various	forms,	including,	but	not	limited	to,	debt	and equity	investments,	guarantees,	liquidity	agreements	and	certain	derivative contracts.

In	various	other	transactions,	the	Company	may	(i)	act	as	a	derivative counterparty	(for	example,	interest	rate	swap,	cross-currency	swap	or	purchaser of	credit	protection	under	a	credit	default	swap	or	total	return	swap	where	the Company	pays	the	total	return	on	certain	assets	to	the	SPE),	(ii)	act	as underwriter	or	placement	agent,	(iii)	provide	administrative,	trustee	or	other services	or	(iv)	make	a	market	in	debt	securities	or	other	instruments	issued	by VIEs.	The	Company	generally	considers	such	involvement,	by	itself,	not	to	be variable	interests	and	thus	not	an	indicator	of	power	or	potentially	significant benefits	or	losses.

Citigroup's	involvement	with	consolidated	and	unconsolidated	VIEs	with	which	the	Company	holds	significant	variable	interests	or	has	continuing	involvement through	servicing	a	majority	of	the	assets	in	a	VIE	is	presented	below:

| In	millions	of	dollars | involvement<br>with	SPE<br>assets | Consolidated<br>VIE/SPE	assets | Significant<br>unconsolidated<br>VIE	assets(3) | Debt<br>investments | Equity<br>investments | Funding<br>commitments | Guarantees<br>and<br>derivatives | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Credit\tcard\tsecuritizations | $46,232 | $46,232 | $— | $— | $— | $— | $— | $— |
| Mortgage\tsecuritizations(4) |  |  |  |  |  |  |  |  |
| U.S.\tagency-sponsored | 116,563 | — | 116,563 | 3,038 | — | — | 60 | 3,098 |
| Non-agency-sponsored | 30,886 | 1,498 | 29,388 | 431 | — | — | 1 | 432 |
| Citi-administered\tasset-backed |  |  |  |  |  |  |  |  |
| commercial\tpaper\tconduits |  |  |  |  |  |  |  |  |
| (ABCP) | 18,750 | 18,750 | — | — | — | — | — | — |
| Collateralized\tloan\tobligations\n(CLOs) | 21,837 | — | 21,837 | 5,891 | — | — | 9 | 5,900 |
| Asset-based\tfinancing | 73,199 | 628 | 72,571 | 21,640 | 715 | 9,757 | — | 32,112 |
| Municipal\tsecurities\ttender\noption\tbond\ttrusts\t(TOBs) | 7,998 | 1,776 | 6,222 | 9 | — | 4,262 | — | 4,271 |
| Municipal\tinvestments | 18,044 | 3 | 18,041 | 2,813 | 3,922 | 2,738 | — | 9,473 |
| Client\tintermediation | 858 | 614 | 244 | 172 | — | — | 2 | 174 |
| Investment\tfunds | 1,272 | 440 | 832 | 12 | — | 1 | 1 | 14 |
| Other | 63 | 3 | 60 | 37 | — | 23 | — | 60 |
| Total | $335,702 | $69,944 | $265,758 | $34,043 | $4,637 | $16,781 | $73 | $55,534 |

| In	millions	of	dollars | involvement<br>with	SPE<br>assets | Consolidated<br>VIE/SPE	assets | Significant<br>unconsolidated<br>VIE	assets(3) | Debt<br>investments | Equity<br>investments | Funding<br>commitments | Guarantees<br>and<br>derivatives | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Credit\tcard\tsecuritizations | $50,795 | $50,795 | $— | $— | $— | $— | $— | $— |
| Mortgage\tsecuritizations(4) |  |  |  |  |  |  |  |  |
| U.S.\tagency-sponsored | 116,610 | — | 116,610 | 2,647 | — | — | 74 | 2,721 |
| Non-agency-sponsored | 22,251 | 2,035 | 20,216 | 330 | — | — | 1 | 331 |
| Citi-administered\tasset-backed |  |  |  |  |  |  |  |  |
| commercial\tpaper\tconduits |  |  |  |  |  |  |  |  |
| (ABCP) | 19,282 | 19,282 | — | — | — | — | — | — |
| Collateralized\tloan\tobligations\n(CLOs) | 20,588 | — | 20,588 | 5,956 | — | — | 9 | 5,965 |
| Asset-based\tfinancing | 60,472 | 633 | 59,839 | 19,478 | 583 | 5,878 | — | 25,939 |
| Municipal\tsecurities\ttender\noption\tbond\ttrusts\t(TOBs) | 6,925 | 2,166 | 4,759 | 138 | — | 3,035 | — | 3,173 |
| Municipal\tinvestments | 19,119 | 7 | 19,112 | 2,709 | 3,640 | 2,344 | — | 8,693 |
| Client\tintermediation | 958 | 824 | 134 | 32 | — | — | 9 | 41 |
| Investment\tfunds | 1,892 | 616 | 1,276 | 14 | 7 | 13 | — | 34 |
| Other | 677 | 36 | 641 | 27 | 9 | 34 | 47 | 117 |
| Total | $319,569 | $76,394 | $243,175 | $31,331 | $4,239 | $11,304 | $140 | $47,014 |

(1) The	definition	of	maximum	exposure	to	loss	is	included	in	the	text	that	follows	this	table.

(2) Included	on	Citigroup's	December	31,	2018	and	2017	Consolidated	Balance	Sheet.

(3) A	significant	unconsolidated	VIE	is	an	entity	in	which	the	Company	has	any	variable	interest	or	continuing	involvement	considered	to	be	significant,	regardless	of	the	likelihood	of	loss.

(4) Citigroup	mortgage	securitizations	also	include	agency	and	non-agency	(private	label)	re-securitization	activities.	These	SPEs	are	not	consolidated.	See	"Re-securitizations"	below	for	further discussion.

The	previous	tables	do	not	include	the	following:

•certain	venture	capital	investments	made	by	some	of	the	Company's	private equity	subsidiaries,	as	the	Company	accounts	for	these	investments	in accordance	with	the	Investment	Company	Audit	Guide	(codified	in	ASC Topic	946);

•certain	investment	funds	for	which	the	Company	provides	investment management	services	and	personal	estate	trusts	for	which	the	Company provides	administrative,	trustee	and/or	investment	management	services; •certain	VIEs	structured	by	third	parties	in	which	the	Company	holds securities	in	inventory,	as	these	investments	are	made	on	arm's-length	terms; •certain	positions	in	mortgage-	and	asset-backed	securities	held	by	the Company,	which	are	classified	as	Trading	account	assets	or	Investments,	in which	the	Company	has	no	other	involvement	with	the	related	securitization entity	deemed	to	be	significant	(for	more	information	on	these	positions,	see Notes	13	and	24	to	the	Consolidated	Financial	Statements); •certain	representations	and	warranties	exposures	in	legacy	ICG-sponsored mortgage-	and	asset-backed	securitizations,	in	which	the	Company	has	no variable	interest	or	continuing	involvement	as	servicer.	The	outstanding balance	of	mortgage	loans	securitized	during	2005	to	2008	in	which	the Company	has	no	variable	interest	or	continuing	involvement	as	servicer	was approximately	$7	billion	and	$9	billion	at	December	31,	2018	and	2017, respectively;

•certain	representations	and	warranties	exposures	in	Citigroup	residential

mortgage	securitizations,	in	which	the	original	mortgage	loan	balances	are no	longer	outstanding;	and

•VIEs	such	as	trust	preferred	securities	trusts	used	in	connection	with	the Company's	funding	activities.	The	Company	does	not	have	a	variable interest	in	these	trusts.

The	asset	balances	for	consolidated	VIEs	represent	the	carrying	amounts	of the	assets	consolidated	by	the	Company.	The	carrying	amount	may	represent	the amortized	cost	or	the	current	fair	value	of	the	assets	depending	on	the	legal	form of	the	asset	(e.g.,	loan	or	security)	and	the	Company's	standard	accounting policies	for	the	asset	type	and	line	of	business.

The	asset	balances	for	unconsolidated	VIEs	in	which	the	Company	has significant	involvement	represent	the	most	current	information	available	to	the Company.	In	most	cases,	the	asset	balances	represent	an	amortized	cost	basis without	regard	to	impairments,	unless	fair	value	information	is	readily	available to	the	Company.

The	maximum	funded	exposure	represents	the	balance	sheet	carrying amount	of	the	Company's	investment	in	the	VIE.	It	reflects	the	initial	amount	of cash	invested	in	the	VIE	adjusted	for	any	accrued	interest	and	cash	principal payments	received.	The	carrying	amount	may	also	be	adjusted	for	increases	or declines	in	fair	value	or	any	impairment	in	value	recognized	in	earnings.	The maximum	exposure	of	unfunded	positions	represents	the	remaining	undrawn committed	amount,	including	liquidity	and	credit	facilities	provided	by	the Company	or	the	notional	amount	of	a	derivative	instrument	considered	to	be	a variable	interest.	In	certain	transactions,	the	Company	has	entered	into	derivative instruments	or	other	arrangements	that	are	not	considered	variable	interests	in the	VIE	(e.g.,	interest	rate	swaps,	cross-currency	swaps	or	where	the	Company	is the	purchaser	of	credit	protection	under	a	credit	default	swap	or	total	return	swap where	the	Company	pays	the	total	return	on	certain	assets	to	the	SPE). Receivables	under	such	arrangements	are	not	included	in	the	maximum	exposure amounts.

# Funding	Commitments	for	Significant	Unconsolidated	VIEs—Liquidity	Facilities	and	Loan	Commitments

The	following	table	presents	the	notional	amount	of	liquidity	facilities	and	loan	commitments	that	are	classified	as	funding	commitments	in	the	VIE	tables	above:

|  | December	31,	2018 | December	31,	2018 | December	31,	2017 |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Liquidity\nfacilities | Loan/equity\ncommitments | Liquidity\nfacilities | Loan/equity\ncommitments |
| Asset-based\tfinancing | $— | $9,757 | $— | $5,878 |
| Municipal\tsecurities\ttender\toption\tbond\ttrusts\t(TOBs) | 4,262 | — | 3,035 | — |
| Municipal\tinvestments | — | 2,738 | — | 2,344 |
| Investment\tfunds | — | 1 | — | 13 |
| Other | — | 23 | — | 34 |
| Total\tfunding\tcommitments | $4,262 | $12,519 | $3,035 | $8,269 |

# Consolidated	VIEs

The	Company	engages	in	on-balance	sheet	securitizations,	which	are securitizations	that	do	not	qualify	for	sales	treatment;	thus,	the	assets	remain	on Citi's	Consolidated	Balance	Sheet,	and	any	proceeds	received	are	recognized	as secured	liabilities.	The	consolidated	VIEs	represent	more	than	a	hundred separate	entities	with	which	the	Company	is	involved.	In	general,	the	third-party investors	in	the	obligations	of	consolidated	VIEs	have	legal	recourse	only	to	the assets	of	the	respective	VIEs	and	do	not	have	such	recourse	to	the	Company, except	where	Citi	has	provided	a	guarantee	to	the	investors	or	is	the	counterparty to	certain

derivative	transactions	involving	the	VIE.	Thus,	Citigroup's	maximum	legal exposure	to	loss	related	to	consolidated	VIEs	is	significantly	less	than	the carrying	value	of	the	consolidated	VIE	assets	due	to	outstanding	third-party financing.	Intercompany	assets	and	liabilities	are	excluded	from	Citi's Consolidated	Balance	Sheet.	All	VIE	assets	are	restricted	from	being	sold	or pledged	as	collateral.	The	cash	flows	from	these	assets	are	the	only	source	used to	pay	down	the	associated	liabilities,	which	are	non-recourse	to	Citi's	general assets.	See	the	Consolidated	Balance	Sheet	for	more	information	about	these Consolidated	VIE	assets	and	liabilities.

# Significant	Interests	in	Unconsolidated	VIEs—Balance	Sheet	Classification

The	following	table	presents	the	carrying	amounts	and	classification	of	significant	variable	interests	in	unconsolidated	VIEs:

| In	billions	of	dollars | December	31,	2018 | December	31,	2017 |
| :--- | :--- | :--- |
| Cash | $— | $— |
| Trading\taccount\tassets | 8.7 | 8.5 |
| Investments | 5.0 | 4.4 |
| Total\tloans,\tnet\tof\tallowance | 24.5 | 22.2 |
| Other | 0.5 | 0.5 |
| Total\tassets | $38.7 | $35.6 |

# Credit	Card	Securitizations

The	Company	securitizes	credit	card	receivables	through	trusts	established	to purchase	the	receivables.	Citigroup	transfers	receivables	into	the	trusts	on	a	non- recourse	basis.	Credit	card	securitizations	are	revolving	securitizations;	as customers	pay	their	credit	card	balances,	the	cash	proceeds	are	used	to	purchase new	receivables	and	replenish	the	receivables	in	the	trust.

Substantially	all	of	the	Company's	credit	card	securitization	activity	is through	two	trusts—Citibank	Credit	Card	Master	Trust	(Master	Trust)	and Citibank	Omni	Master	Trust	(Omni	Trust),	with	the	substantial	majority	through the	Master	Trust.	These	trusts	are	consolidated	entities	because,	as

servicer,	Citigroup	has	the	power	to	direct	the	activities	that	most	significantly impact	the	economic	performance	of	the	trusts.	Citigroup	holds	a	seller's	interest and	certain	securities	issued	by	the	trusts,	which	could	result	in	exposure	to potentially	significant	losses	or	benefits	from	the	trusts.	Accordingly,	the transferred	credit	card	receivables	remain	on	Citi's	Consolidated	Balance	Sheet with	no	gain	or	loss	recognized.	The	debt	issued	by	the	trusts	to	third	parties	is included	on	Citi's	Consolidated	Balance	Sheet.

Citi	utilizes	securitizations	as	one	of	the	sources	of	funding	for	its	business in	North	America.	The	following	table	reflects	amounts	related	to	the	Company's securitized	credit	card	receivables:

The	following	table	summarizes	selected	cash	flow	information	related	to Citigroup's	credit	card	securitizations:

| In	billions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Proceeds\tfrom\tnew\tsecuritizations | $6.8 | $11.1 | $3.3 |
| Pay\tdown\tof\tmaturing\tnotes | (8.3) | (5.0) | (10.3) |

# Managed	Loans

After	securitization	of	credit	card	receivables,	the	Company	continues	to maintain	credit	card	customer	account	relationships	and	provides	servicing	for receivables	transferred	to	the	trusts.	As	a	result,	the	Company	considers	the securitized	credit	card	receivables	to	be	part	of	the	business	it	manages.	As Citigroup	consolidates	the	credit	card	trusts,	all	managed	securitized	card receivables	are	on-balance	sheet.

# Funding,	Liquidity	Facilities	and	Subordinated	Interests

As	noted	above,	Citigroup	securitizes	credit	card	receivables	through	two securitization	trusts—Master	Trust	and	Omni	Trust.	The	liabilities	of	the	trusts are	included	on	the	Consolidated	Balance	Sheet,	excluding	those	retained	by Citigroup.

# Master	Trust	Liabilities	(at	Par	Value)

The	Master	Trust	issues	fixed-	and	floating-rate	term	notes.	Some	of	the	term notes	may	be	issued	to	multi-seller	commercial	paper	conduits.	The	weighted average	maturity	of

# Omni	Trust	Liabilities	(at	Par	Value)

The	Omni	Trust	issues	fixed-	and	floating-rate	term	notes,	some	of	which	are purchased	by	multi-seller	commercial	paper	conduits.	The	weighted	average maturity	of	the	third-party	term	notes	issued	by	the	Omni	Trust	was	1.4	years	as of	December	31,	2018	and	1.9	years	as	of	December	31,	2017.

# Mortgage	Securitizations

Citigroup	provides	a	wide	range	of	mortgage	loan	products	to	a	diverse	customer base.	Once	originated,	the	Company	often	securitizes	these	loans	through	the	use of	VIEs.	These	VIEs	are	funded	through	the	issuance	of	trust	certificates	backed solely	by	the	transferred	assets.	These	certificates	have	the	same	life	as	the transferred	assets.	In	addition	to	providing	a	source	of	liquidity	and	less expensive	funding,	securitizing	these	assets	also	reduces	Citi's	credit	exposure	to the	borrowers.	These	mortgage	loan	securitizations	are	primarily	non-recourse, thereby	effectively	transferring	the	risk	of	future	credit	losses	to	the	purchasers of	the	securities	issued	by	the	trust.

Citi's	U.S.	consumer	mortgage	business	generally	retains	the	servicing rights	and	in	certain	instances	retains	investment	securities,	interest-only	strips and	residual	interests	in	future	cash	flows	from	the	trusts	and	also	provides servicing	for	a	limited	number	of	ICG	securitizations.	Citi's	ICG	business	may hold	investment	securities	pursuant	to	credit	risk	retention	rules	or	in	connection with	secondary	market-making	activities.

The	Company	securitizes	mortgage	loans	generally	through	either	a government-sponsored	agency,	such	as	Ginnie	Mae,	Fannie	Mae	or	Freddie	Mac (U.S.	agency-sponsored	mortgages),	or	private	label	(non-agency-sponsored

mortgages)	securitization.	Citi	is	not	the	primary	beneficiary of	its	U.S.	agency-sponsored	mortgage	securitization	entities	because	Citigroup does	not	have	the	power	to	direct	the	activities	of	the	VIE	that	most	significantly impact	the	entity's	economic	performance.	Therefore,	Citi	does	not	consolidate these	U.S.	agency-sponsored	mortgage	securitization	entities.	Substantially	all	of the	consumer	loans	sold	or	securitized	through	non-consolidated	trusts	by Citigroup	are	U.S.	prime	residential	mortgage	loans.	Retained	interests	in	non- consolidated	agency-sponsored	mortgage	securitization	trusts	are	classified	as Trading	account	assets,	except	for	MSRs,	which	are	included	in	Mortgage servicing	rights	on	Citigroup's	Consolidated	Balance	Sheet.

Citigroup	does	not	consolidate	certain	non-agency-sponsored	mortgage securitization	entities	because	Citi	is	either	not	the	servicer	with	the	power	to direct	the	significant	activities	of	the	entity	or	Citi	is	the	servicer,	but	the servicing	relationship	is	deemed	to	be	a	fiduciary	relationship;	therefore,	Citi	is not	deemed	to	be	the	primary	beneficiary	of	the	entity.

In	certain	instances,	the	Company	has	(i)	the	power	to	direct	the	activities and	(ii)	the	obligation	to	either	absorb	losses	or	the	right	to	receive	benefits	that could	be	potentially	significant	to	its	non-agency-sponsored	mortgage securitization	entities	and,	therefore,	is	the	primary	beneficiary	and,	thus, consolidates	the	VIE.

The	following	tables	summarize	selected	cash	flow	information	and	retained	interests	related	to	Citigroup	mortgage	securitizations:

|  | 2018 | 2018 | 2017 | 2017 |  | 2016 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars | U.S.\tagency-\nsponsored\nmortgages | Non-agency-\nsponsored\nmortgages | U.S.\tagency-\nsponsored\nmortgages | Non-agency-\nsponsored\nmortgages | U.S.\tagency-\nsponsored\nmortgages | Non-agency-\nsponsored\nmortgages |
| Principal\tsecuritized | $4.0 | $5.6 | $7.8 | $7.3 | $14.8 | $0.3 |
| Proceeds\tfrom\tnew\tsecuritizations(1) | 4.2 | 7.1 | 8.1 | 7.3 | 15.4 | 0.3 |
| Contractual\tservicing\tfees\treceived | 0.1 | — | 0.2 | — | 0.4 | — |
| Purchases\tof\tpreviously\ttransferred\tfinancial\tassets |  |  |  |  |  |  |
|  | 0.2 | — | 0.4 | — | 0.5 | — |

# Note:	Excludes	re-securitization	transactions.

(1)	The	proceeds	from	new	securitizations	in	2016	include	$0.3	billion	related	to	personal	loan	securitizations.

For	non-consolidated	mortgage	securitization	entities	where	the	transfer	of loans	to	the	VIE	meets	the	conditions	for	sale	accounting,	Citi	recognizes	a	gain or	loss	based	on	the	difference	between	the	carrying	value	of	the	transferred assets	and	the	proceeds	received	(generally	cash	but	may	be	beneficial	interests or	servicing	rights).

Agency	and	non-agency	securitization	gains	for	the	year	ended December	31,	2018	were	$17	million	and	$36	million,	respectively. Agency	and	non-agency	securitization	gains	for	the	year	ended December	31,	2017	were	$28	million	and	$70	million,	respectively,	and	$76 million	and	$(5)	million,	respectively,	for	the	year	ended	December	31,	2016.

|  |  | December	31,	2018<br>Non-agency-sponsored	mortgages(1) | December	31,	2018<br>Non-agency-sponsored	mortgages(1) |  | December	31,	2017<br>Non-agency-sponsored	mortgages(1) | December	31,	2017<br>Non-agency-sponsored	mortgages(1) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | U.S.\tagency-\nsponsored\nmortgages | Senior\ninterests | Subordinated\ninterests | U.S.\tagency-\nsponsored\tmortgages | Senior\ninterests | Subordinated\ninterests |
| Carrying\tvalue\tof\tretained\tinterests(2) | $564 | $300 | $51 | $529 | $132 | $30 |

(1) Disclosure	of	non-agency-sponsored	mortgages	as	senior	and	subordinated	interests	is	indicative	of	the	interests'	position	in	the	capital	structure	of	the	securitization.

(2) Retained	interests	consist	of	Level	2	or	Level	3	assets	depending	on	the	observability	of	significant	inputs.	See	Footnote	24	for	more	information	about	fair	value	measurements.

Key	assumptions	used	in	measuring	the	fair	value	of	retained	interests	at	the	date	of	sale	or	securitization	of	mortgage	receivables	were	as	follows:

(2) Anticipated	net	credit	losses	represent	estimated	loss	severity	associated	with	defaulted	mortgage	loans	underlying	the	mortgage	securitizations	disclosed	above.	Anticipated	net	credit	losses,	in this	instance,	do	not	represent	total	credit	losses	incurred	to	date,	nor	do	they	represent	credit	losses	expected	on	retained	interests	in	mortgage	securitizations.

NM Anticipated	net	credit	losses	are	not	meaningful	due	to	U.S.	agency	guarantees.

The	interests	retained	by	Citi	range	from	highly	rated	and/or	senior	in	the capital	structure	to	unrated	and/or	residual	interests.

The	key	assumptions	used	to	value	retained	interests,	and	the	sensitivity	of the	fair	value	to	adverse	changes	of	10%	and	20%	in	each	of	the	key assumptions,	are	presented	in	the

tables	below.	The	negative	effect	of	each	change	is	calculated	independently, holding	all	other	assumptions	constant.	Because	the	key	assumptions	may	not	be independent,	the	net	effect	of	simultaneous	adverse	changes	in	the	key assumptions	may	be	less	than	the	sum	of	the	individual	effects	shown	below.

The	following	table	includes	information	about	loan	delinquencies	and	liquidation	losses	for	assets	held	in	non-consolidated,	non-agency-sponsored	securitization entities	as	of	December	31,	2018	and	2017:

|  | Securitized	assets | Securitized	assets | 90	days	past	due | 90	days	past	due | Liquidation	losses |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 |
| Securitized\tassets |  |  |  |  |  |  |
| Residential\tmortgage | $5.2 | $4.9 | $0.4 | $0.4 | $0.1 | $0.1 |
| Commercial\tand\tother | 13.1 | 6.8 | — | — | — | — |
| Total | $18.3 | $11.7 | $0.4 | $0.4 | $0.1 | $0.1 |

In	connection	with	the	securitization	of	mortgage	loans,	Citi's	U.S.	consumer mortgage	business	generally	retains	the	servicing	rights,	which	entitle	the Company	to	a	future	stream	of	cash	flows	based	on	the	outstanding	principal balances	of	the	loans	and	the	contractual	servicing	fee.	Failure	to	service	the loans	in	accordance	with	contractual	requirements	may	lead	to	a	termination	of the	servicing	rights	and	the	loss	of	future	servicing	fees.

These	transactions	create	intangible	assets	referred	to	as	MSRs,	which	are recorded	at	fair	value	on	Citi's	Consolidated	Balance	Sheet.	The	fair	value	of Citi's	capitalized	MSRs	was	$584	million	and	$558	million	at	December	31, 2018	and	2017,	respectively.	The	MSRs	correspond	to	principal	loan	balances	of $62	billion	and	$66	billion	as	of	December	31,	2018	and	2017,	respectively.

The	following	table	summarizes	the	changes	in	capitalized	MSRs:

| In	millions	of	dollars | 2018 | 2017 |
| :--- | :--- | :--- |
| Balance,\tbeginning\tof\tyear | $558 | $1,564 |
| Originations | 58 | 96 |
| Changes\tin\tfair\tvalue\tof\tMSRs\tdue\tto\tchanges\tin\ninputs\tand\tassumptions | 54 | 65 |
| Other\tchanges(1) | (68) | (110) |
| Sale\tof\tMSRs(2) | (18) | (1,057) |
| Balance,\tas\tof\tDecember\t31 | $584 | $558 |

(1) Represents	changes	due	to	customer	payments	and	passage	of	time.

(2) See	Note	2	to	the	Consolidated	Financial	Statements	for	additional	information	on	the	exit of	the	U.S.	mortgage	servicing	operations	and	sale	of	MSRs.

The	fair	value	of	the	MSRs	is	primarily	affected	by	changes	in	prepayments of	mortgages	that	result	from	shifts	in	mortgage	interest	rates.	Specifically, higher	interest	rates	tend	to	lead	to	declining	prepayments,	which	causes	the	fair value	of	the	MSRs	to	increase.	In	managing	this	risk,	Citigroup	economically hedges	a	significant	portion	of	the	value	of	its	MSRs	through	the	use	of	interest rate	derivative	contracts,	forward	purchase	and	sale	commitments	of	mortgage- backed	securities	and	purchased	securities	all	classified	as	Trading	account assets.	The	Company	receives	fees	during	the	course	of	servicing	previously securitized	mortgages.	The	amounts	of	these	fees	were	as	follows:

| In	millions	of	dollars | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Servicing\tfees | $172 | $276 | $484 |
| Late\tfees | 4 | 10 | 14 |
| Ancillary\tfees | 8 | 13 | 17 |
| Total\tMSR\tfees | $184 | $299 | $515 |

In	the	Consolidated	Statement	of	Income	these	fees	are	primarily	classified as	Commissions	and	fees,	and	changes	in	MSR	fair	values	are	classified	as	Other revenue.

# Re-securitizations

The	Company	engages	in	re-securitization	transactions	in	which	debt	securities are	transferred	to	a	VIE	in	exchange	for	new	beneficial	interests.	Citi	did	not transfer	non-agency	(private	label)	securities	to	re-securitization	entities	during the	years	ended	December	31,	2018	and	2017.	These	securities	are	backed	by either	residential	or	commercial	mortgages	and	are	often	structured	on	behalf	of clients.

As	of	December	31,	2018,	the	fair	value	of	Citi-retained	interests	in	private label	re-securitization	transactions	structured	by	Citi	totaled	approximately	$16 million	(all	related	to	re-securitization	transactions	executed	prior	to	2016), which	has	been	recorded	in	Trading	account	assets.	Of	this	amount,	all	was related	to	subordinated	beneficial	interests.	As	of	December	31,	2017,	the	fair value	of	Citi-retained	interests	in	private	label	re-securitization	transactions structured	by	Citi	totaled	approximately	$79	million	(all	related	to	re- securitization	transactions	executed	prior	to	2016).	Of	this	amount,	substantially all	was	related	to	subordinated	beneficial	interests.	The	original	par	value	of private	label	re-securitization	transactions	in	which	Citi	holds	a	retained	interest as	of	December	31,	2018	and	2017	was	approximately	$271	million	and	$887 million,	respectively.

The	Company	also	re-securitizes	U.S.	government-agency	guaranteed mortgage-backed	(agency)	securities.	During	the	years	ended	December	31, 2018	and	2017,	Citi	transferred	agency	securities	with	a	fair	value	of approximately	$26.3	billion	and	$26.6	billion,	respectively,	to	re-securitization entities.

As	of	December	31,	2018,	the	fair	value	of	Citi-retained	interests	in	agency re-securitization	transactions	structured	by	Citi	totaled	approximately	$2.5 billion	(including	$1.4	billion	related	to	re-securitization	transactions	executed	in 2018)	compared	to	$2.1	billion	as	of	December	31,	2017	(including	$854	million related	to	re-securitization	transactions	executed	in	2017),	which	is	recorded	in Trading	account	assets.	The	original	fair	value	of	agency	re-securitization transactions	in

which	Citi	holds	a	retained	interest	as	of	December	31,	2018	and	2017	was approximately	$70.9	billion	and	$68.3	billion,	respectively.

As	of	December	31,	2018	and	2017,	the	Company	did	not	consolidate	any private	label	or	agency	re-securitization	entities.

# Citi-Administered	Asset-Backed	Commercial	Paper	Conduits

The	Company	is	active	in	the	asset-backed	commercial	paper	conduit	business	as administrator	of	several	multi-seller	commercial	paper	conduits	and	also	as	a service	provider	to	single-seller	and	other	commercial	paper	conduits	sponsored by	third	parties.

Citi's	multi-seller	commercial	paper	conduits	are	designed	to	provide	the Company's	clients	access	to	low-cost	funding	in	the	commercial	paper	markets. The	conduits	purchase	assets	from	or	provide	financing	facilities	to	clients	and are	funded	by	issuing	commercial	paper	to	third-party	investors.	The	conduits generally	do	not	purchase	assets	originated	by	Citi.	The	funding	of	the	conduits is	facilitated	by	the	liquidity	support	and	credit	enhancements	provided	by	the Company.

As	administrator	to	Citi's	conduits,	the	Company	is	generally	responsible for	selecting	and	structuring	assets	purchased	or	financed	by	the	conduits, making	decisions	regarding	the	funding	of	the	conduits,	including	determining the	tenor	and	other	features	of	the	commercial	paper	issued,	monitoring	the quality	and	performance	of	the	conduits'	assets	and	facilitating	the	operations and	cash	flows	of	the	conduits.	In	return,	the	Company	earns	structuring	fees from	customers	for	individual	transactions	and	earns	an	administration	fee	from the	conduit,	which	is	equal	to	the	income	from	the	client	program	and	liquidity fees	of	the	conduit	after	payment	of	conduit	expenses.	This	administration	fee	is fairly	stable,	since	most	risks	and	rewards	of	the	underlying	assets	are	passed back	to	the	clients.	Once	the	asset	pricing	is	negotiated,	most	ongoing	income, costs	and	fees	are	relatively	stable	as	a	percentage	of	the	conduit's	size.

The	conduits	administered	by	Citi	do	not	generally	invest	in	liquid	securities that	are	formally	rated	by	third	parties.	The	assets	are	privately	negotiated	and structured	transactions	that	are	generally	designed	to	be	held	by	the	conduit, rather	than	actively	traded	and	sold.	The	yield	earned	by	the	conduit	on	each asset	is	generally	tied	to	the	rate	on	the	commercial	paper	issued	by	the	conduit, thus	passing	interest	rate	risk	to	the	client.	Each	asset	purchased	by	the	conduit	is structured	with	transaction-specific	credit	enhancement	features	provided	by	the third-party	client	seller,	including	over-collateralization,	cash	and	excess	spread collateral	accounts,	direct	recourse	or	third-party	guarantees.	These	credit enhancements	are	sized	with	the	objective	of	approximating	a	credit	rating	of	A or	above,	based	on	Citi's	internal	risk	ratings.	At	December	31,	2018	and	2017, the	conduits	had	approximately	$18.8	billion	and	$19.3	billion	of	purchased assets	outstanding,	respectively,	and	had	incremental	funding	commitments	with clients	of	approximately	$14.0	billion	and	$14.5	billion,	respectively.

Substantially	all	of	the	funding	of	the	conduits	is	in	the	form	of	short-term commercial	paper.	At	December	31,	2018	and	2017,	the	weighted	average remaining	lives	of	the

commercial	paper	issued	by	the	conduits	were	approximately	53	and	51	days, respectively.

The	primary	credit	enhancement	provided	to	the	conduit	investors	is	in	the form	of	transaction-specific	credit	enhancements	described	above.	In	addition	to the	transaction-specific	credit	enhancements,	the	conduits,	other	than	the government	guaranteed	loan	conduit,	have	obtained	a	letter	of	credit	from	the Company,	which	is	equal	to	at	least	8%	to	10%	of	the	conduit's	assets	with	a minimum	of	$200	million.	The	letters	of	credit	provided	by	the	Company	to	the conduits	total	approximately	$1.7	billion	as	of	December	31,	2018	and	2017.	The net	result	across	multi-seller	conduits	administered	by	the	Company	is	that,	in the	event	defaulted	assets	exceed	the	transaction-specific	credit	enhancements described	above,	any	losses	in	each	conduit	are	allocated	first	to	the	Company and	then	to	the	commercial	paper	investors.

Citigroup	also	provides	the	conduits	with	two	forms	of	liquidity	agreements that	are	used	to	provide	funding	to	the	conduits	in	the	event	of	a	market disruption,	among	other	events.	Each	asset	of	the	conduits	is	supported	by	a transaction-specific	liquidity	facility	in	the	form	of	an	asset	purchase	agreement (APA).	Under	the	APA,	the	Company	has	generally	agreed	to	purchase	non- defaulted	eligible	receivables	from	the	conduit	at	par.	The	APA	is	not	designed to	provide	credit	support	to	the	conduit,	as	it	generally	does	not	permit	the purchase	of	defaulted	or	impaired	assets.	Any	funding	under	the	APA	will	likely subject	the	underlying	conduit	clients	to	increased	interest	costs.	In	addition,	the Company	provides	the	conduits	with	program-wide	liquidity	in	the	form	of short-term	lending	commitments.	Under	these	commitments,	the	Company	has agreed	to	lend	to	the	conduits	in	the	event	of	a	short-term	disruption	in	the commercial	paper	market,	subject	to	specified	conditions.	The	Company receives	fees	for	providing	both	types	of	liquidity	agreements	and	considers these	fees	to	be	on	fair	market	terms.

Finally,	Citi	is	one	of	several	named	dealers	in	the	commercial	paper	issued by	the	conduits	and	earns	a	market-based	fee	for	providing	such	services.	Along with	third-party	dealers,	the	Company	makes	a	market	in	the	commercial	paper and	may	from	time	to	time	fund	commercial	paper	pending	sale	to	a	third	party. On	specific	dates	with	less	liquidity	in	the	market,	the	Company	may	hold	in inventory	commercial	paper	issued	by	conduits	administered	by	the	Company,	as well	as	conduits	administered	by	third	parties.	Separately,	in	the	normal	course	of business,	Citi	purchases	commercial	paper,	including	commercial	paper	issued by	Citigroup's	conduits.	At	December	31,	2018	and	2017,	the	Company	owned $5.5	billion	and	$9.3	billion,	respectively,	of	the	commercial	paper	issued	by	its administered	conduits.	The	Company's	investments	were	not	driven	by	market illiquidity	and	the	Company	is	not	obligated	under	any	agreement	to	purchase the	commercial	paper	issued	by	the	conduits.

The	asset-backed	commercial	paper	conduits	are	consolidated	by	Citi.	The Company	has	determined	that,	through	its	roles	as	administrator	and	liquidity provider,	it	has	the	power	to	direct	the	activities	that	most	significantly	impact the	entities'	economic	performance.	These	powers	include	its	ability	to	structure and	approve	the	assets	purchased	by	the	conduits,	its	ongoing	surveillance	and credit	mitigation	activities,	its	ability	to	sell	or	repurchase	assets	out	of	the

conduits	and	its	liability	management.	In	addition,	as	a	result	of	all	the Company's	involvement	described	above,	it	was	concluded	that	Citi	has	an economic	interest	that	could	potentially	be	significant.	However,	the	assets	and liabilities	of	the	conduits	are	separate	and	apart	from	those	of	Citigroup.	No assets	of	any	conduit	are	available	to	satisfy	the	creditors	of	Citigroup	or	any	of its	other	subsidiaries.

# Collateralized	Loan	Obligations	(CLOs)

A	collateralized	loan	obligation	(CLO)	is	a	VIE	that	purchases	a	portfolio	of assets	consisting	primarily	of	non-investment	grade	corporate	loans.	CLOs	issue multiple	tranches	of	debt	and	equity	to	investors	to	fund	the	asset	purchases	and pay	upfront	expenses	associated	with	forming	the	CLO.	A	third-party	asset manager	is	contracted	by	the	CLO	to	purchase	the	underlying	assets	from	the open	market	and	monitor	the	credit	risk	associated	with	those	assets.	Over	the term	of	a	CLO,	the	asset	manager	directs	purchases	and	sales	of	assets	in	a manner	consistent	with	the	CLO's	asset	management	agreement	and	indenture. In	general,	the	CLO	asset	manager	will	have	the	power	to	direct	the	activities	of the	entity	that	most	significantly	impact	the	economic	performance	of	the	CLO. Investors	in	a	CLO,	through	their	ownership	of	debt	and/or	equity	in	it,	can	also direct	certain	activities	of	the	CLO,	including	removing	its	asset	manager	under limited	circumstances,	optionally	redeeming	the	notes,	voting	on	amendments	to the	CLO's	operating	documents	and	other	activities.	A	CLO	has	a	finite	life, typically	12	years.

Citi	serves	as	a	structuring	and	placement	agent	with	respect	to	the	CLOs. Typically,	the	debt	and	equity	of	the	CLOs	are	sold	to	third-party	investors.	On occasion,	certain	Citi	entities	may	purchase	some	portion	of	a	CLO's	liabilities for	investment	purposes.	In	addition,	Citi	may	purchase,	typically	in	the secondary	market,	certain	securities	issued	by	the	CLOs	to	support	its	market making	activities.

The	Company	does	not	generally	have	the	power	to	direct	the	activities	that most	significantly	impact	the	economic	performance	of	the	CLOs,	as	this	power is	generally	held	by	a	third-party	asset	manager	of	the	CLO.	As	such,	those CLOs	are	not	consolidated.

The	following	tables	summarize	selected	cash	flow	information	and	retained interests	related	to	Citigroup	CLOs:

Key	assumptions	used	in	measuring	the	fair	value	of	retained	interests	at	the date	of	sale	or	securitization	of	CLOs	were	as	follows:

The	key	assumptions	used	to	value	retained	interests	in	CLOs,	and	the sensitivity	of	the	fair	value	to	adverse	changes	of	10%	and	20%,	are	set	forth	in the	tables	below:

All	of	Citi's	retained	interests	were	held-to-maturity	securities	as	of December	31,	2018	and	substantially	all	were	held-to-maturity	securities	as	of December	31,	2017.

# Asset-Based	Financing

The	Company	provides	loans	and	other	forms	of	financing	to	VIEs	that	hold assets.	Those	loans	are	subject	to	the	same	credit	approvals	as	all	other	loans originated	or	purchased	by	the	Company.	Financings	in	the	form	of	debt securities	or	derivatives	are,	in	most	circumstances,	reported	in	Trading	account assets	and	accounted	for	at	fair	value	through	earnings.	The	Company	generally does	not	have	the	power	to	direct	the	activities	that	most	significantly	impact these	VIEs'	economic	performance;	thus,	it	does	not	consolidate	them. The	primary	types	of	Citi's	asset-based	financings,	total	assets	of	the unconsolidated	VIEs	with	significant	involvement	and	Citi's	maximum	exposure to	loss	are	shown	below.	For	Citi	to	realize	the	maximum	loss,	the	VIE (borrower)	would	have	to	default	with	no	recovery	from	the	assets	held	by	the VIE.

|  | December	31,	2018 |  |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Total\nunconsolidated\nVIE\tassets | Maximum\nexposure\tto\nunconsolidated\tVIEs |
| Type |  |  |
| Commercial\tand\tother\treal\testate | $23,918 | $6,928 |
| Corporate\tloans | 6,731 | 5,744 |
| Hedge\tfunds\tand\tequities | 388 | 53 |
| Airplanes,\tships\tand\tother\tassets | 41,534 | 19,387 |
| Total | $72,571 | $32,112 |

|  | December	31,	2017 |  |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Total\nunconsolidated\nVIE\tassets | Maximum\nexposure\tto\nunconsolidated\tVIEs |
| Type |  |  |
| Commercial\tand\tother\treal\testate | $15,370 | $5,445 |
| Corporate\tloans | 4,725 | 3,587 |
| Hedge\tfunds\tand\tequities | 542 | 58 |
| Airplanes,\tships\tand\tother\tassets | 39,202 | 16,849 |
| Total | $59,839 | $25,939 |

# Municipal	Securities	Tender	Option	Bond	(TOB)	Trusts

Municipal	TOB	trusts	may	hold	fixed-	or	floating-rate,	taxable	or	tax-exempt securities	issued	by	state	and	local	governments	and	municipalities.	TOB	trusts are	typically	structured	as	single-issuer	entities	whose	assets	are	purchased	from either	the	Company	or	from	other	investors	in	the	municipal	securities	market. TOB	trusts	finance	the	purchase	of	their	municipal	assets	by	issuing	two	classes of	certificates:	long-dated,	floating	rate	certificates	("Floaters")	that	are	putable pursuant	to	a	liquidity	facility	and	residual	interest	certificates	("Residuals").	The Floaters	are	purchased	by	third-party	investors,	typically	tax-exempt	money market	funds.	The	Residuals	are	purchased	by	the	original	owner	of	the municipal	securities	that	are	being	financed.

From	Citigroup's	perspective,	there	are	two	types	of	TOB	trusts:	customer and	non-customer.	Customer	TOB	trusts	are	those	trusts	utilized	by	customers	of the	Company	to	finance	their	securities,	generally	municipal	securities.	The Residuals	issued	by	these	trusts	are	purchased	by	the	customer	being	financed. Non-customer	TOB	trusts	are	generally	used	by	the	Company	to	finance	its	own municipal	securities	investments;	the	Residuals	issued	by	non-customer	TOB trusts	are	purchased	by	the	Company.

With	respect	to	both	customer	and	non-customer	TOB	trusts,	Citi	may provide	remarketing	agent	services.	If	Floaters	are	optionally	tendered	and	the Company,	in	its	role	as	remarketing	agent,	is	unable	to	find	a	new	investor	to purchase	the	optionally	tendered	Floaters	within	a	specified	period	of	time, Citigroup	may,	but	is	not	obligated	to,	purchase	the	tendered	Floaters	into	its own	inventory.	The	level	of	the	Company's	inventory	of	such	Floaters	fluctuates. For	certain	customer	TOB	trusts,	Citi	may	also	serve	as	a	voluntary	advance provider.	In	this	capacity,	the	Company	may,	but	is	not	obligated	to,	make	loan advances	to	customer	TOB	trusts	to	purchase	optionally	tendered	Floaters	that have	not	otherwise	been	successfully	remarketed	to	new	investors.	Such	loans are	secured	by	pledged	Floaters.	As	of	December	31,	2018,	Citi	had	no outstanding	voluntary	advances	to	customer	TOB	trusts.

For	certain	non-customer	trusts,	the	Company	also	provides	credit enhancement.	At	December	31,	2018	and	2017,	none	of	the	municipal	bonds owned	by	non-customer	TOB	trusts	were	subject	to	a	credit	guarantee	provided by	the	Company.

Citigroup	also	provides	liquidity	services	to	many	customer	and	non- customer	trusts.	If	a	trust	is	unwound	early	due	to	an	event	other	than	a	credit event	on	the	underlying	municipal	bonds,	the	underlying	municipal	bonds	are sold	out	of	the	trust	and	bond	sale	proceeds	are	used	to	redeem	the	outstanding trust	certificates.	If	this	results	in	a	shortfall	between	the	bond	sale	proceeds	and the	redemption	price	of	the	tendered	Floaters,	the	Company,	pursuant	to	the liquidity	agreement,	would	be	obligated	to	make	a	payment	to	the	trust	to	satisfy that	shortfall.	For	certain	customer	TOB	trusts,	Citigroup	has	also	executed	a reimbursement	agreement	with	the	holder	of	the	Residual,	pursuant	to	which	the Residual	holder	is	obligated	to	reimburse	the	Company	for	any	payment	the Company	makes	under	the	liquidity	arrangement.	These	reimbursement agreements	may	be	subject	to	daily	margining	based	on	changes	in	the	market value	of	the	underlying

municipal	bonds.	In	cases	where	a	third	party	provides	liquidity	to	a	non- customer	TOB	trust,	a	similar	reimbursement	arrangement	may	be	executed, whereby	the	Company	(or	a	consolidated	subsidiary	of	the	Company),	as Residual	holder,	would	absorb	any	losses	incurred	by	the	liquidity	provider. For	certain	other	non-customer	TOB	trusts,	Citi	serves	as	tender	option provider.	The	tender	option	provider	arrangement	allows	Floater	holders	to	put their	interests	directly	to	the	Company	at	any	time,	subject	to	the	requisite	notice period	requirements,	at	a	price	of	par.

At	December	31,	2018	and	2017,	liquidity	agreements	provided	with	respect to	customer	TOB	trusts	totaled	$4.3	billion	and	$3.2	billion,	respectively,	of which	$2.3	billion	and	$2.0	billion,	respectively,	were	offset	by	reimbursement agreements.	For	the	remaining	exposure	related	to	TOB	transactions,	where	the residual	owned	by	the	customer	was	at	least	25%	of	the	bond	value	at	the inception	of	the	transaction,	no	reimbursement	agreement	was	executed. Citi	considers	both	customer	and	non-customer	TOB	trusts	to	be	VIEs. Customer	TOB	trusts	are	not	consolidated	by	the	Company,	as	the	power	to direct	the	activities	that	most	significantly	impact	the	trust's	economic performance	rests	with	the	customer	Residual	holder,	which	may	unilaterally cause	the	sale	of	the	trust's	bonds.

Non-customer	TOB	trusts	generally	are	consolidated	because	the	Company holds	the	Residual	interest	and	thus	has	the	unilateral	power	to	cause	the	sale	of the	trust's	bonds.

The	Company	also	provides	other	liquidity	agreements	or	letters	of	credit	to customer-sponsored	municipal	investment	funds,	which	are	not	variable	interest entities,	and	municipality-related	issuers	that	totaled	$6.1	billion	as	of December	31,	2018	and	2017.	These	liquidity	agreements	and	letters	of	credit	are offset	by	reimbursement	agreements	with	various	term-out	provisions.

# Municipal	Investments

Municipal	investment	transactions	include	debt	and	equity	interests	in partnerships	that	finance	the	construction	and	rehabilitation	of	low-income housing,	facilitate	lending	in	new	or	underserved	markets	or	finance	the construction	or	operation	of	renewable	municipal	energy	facilities.	Citi	generally invests	in	these	partnerships	as	a	limited	partner	and	earns	a	return	primarily through	the	receipt	of	tax	credits	and	grants	earned	from	the	investments	made by	the	partnership.	The	Company	may	also	provide	construction	loans	or permanent	loans	for	the	development	or	operation	of	real	estate	properties	held by	partnerships.	These	entities	are	generally	considered	VIEs.	The	power	to direct	the	activities	of	these	entities	is	typically	held	by	the	general	partner. Accordingly,	these	entities	are	not	consolidated	by	Citigroup.

# Client	Intermediation

Client	intermediation	transactions	represent	a	range	of	transactions	designed	to provide	investors	with	specified	returns	based	on	the	returns	of	an	underlying security,	referenced	asset	or	index.	These	transactions	include	credit-linked	notes and	equity-linked	notes.	In	these	transactions,	the	VIE	typically	obtains	exposure to	the	underlying	security,	referenced	asset	or	index	through	a	derivative instrument,	such	as	a	total-return	swap	or	a	credit-default	swap.	In	turn,	the	VIE issues	notes	to	investors	that	pay	a	return	based	on	the	specified	underlying security,	referenced	asset	or	index.	The	VIE	invests	the	proceeds	in	a	financial asset	or	a	guaranteed	insurance	contract	that	serves	as	collateral	for	the derivative	contract	over	the	term	of	the	transaction.	The	Company's	involvement in	these	transactions	includes	being	the	counterparty	to	the	VIE's	derivative instruments	and	investing	in	a	portion	of	the	notes	issued	by	the	VIE.	In	certain transactions,	the	investor's	maximum	risk	of	loss	is	limited	and	the	Company absorbs	risk	of	loss	above	a	specified	level.	Citi	does	not	have	the	power	to direct	the	activities	of	the	VIEs	that	most	significantly	impact	their	economic performance	and	thus	it	does	not	consolidate	them.

Citi's	maximum	risk	of	loss	in	these	transactions	is	defined	as	the	amount invested	in	notes	issued	by	the	VIE	and	the	notional	amount	of	any	risk	of	loss absorbed	by	Citi	through	a	separate	instrument	issued	by	the	VIE.	The	derivative instrument	held	by	the	Company	may	generate	a	receivable	from	the	VIE	(for example,	where	the	Company	purchases	credit	protection	from	the	VIE	in connection	with	the	VIE's	issuance	of	a	credit-linked	note),	which	is collateralized	by	the	assets	owned	by	the	VIE.	These	derivative	instruments	are not	considered	variable	interests	and	any	associated	receivables	are	not	included in	the	calculation	of	maximum	exposure	to	the	VIE.

# Investment	Funds

The	Company	is	the	investment	manager	for	certain	investment	funds	and retirement	funds	that	invest	in	various	asset	classes	including	private	equity, hedge	funds,	real	estate,	fixed	income	and	infrastructure.	Citigroup	earns	a management	fee,	which	is	a	percentage	of	capital	under	management,	and	may earn	performance	fees.	In	addition,	for	some	of	these	funds	the	Company	has	an ownership	interest	in	the	investment	funds.	Citi	has	also	established	a	number	of investment	funds	as	opportunities	for	qualified	employees	to	invest	in	private equity	investments.	The	Company	acts	as	investment	manager	for	these	funds and	may	provide	employees	with	financing	on	both	recourse	and	non-recourse bases	for	a	portion	of	the	employees'	investment	commitments.

# 22.			DERIVATIVES	ACTIVITIES

In	the	ordinary	course	of	business,	Citigroup	enters	into	various	types	of derivative	transactions,	which	include:

•Futures	and	forward	contracts,	which	are	commitments	to	buy	or	sell	at	a future	date	a	financial	instrument,	commodity	or	currency	at	a	contracted price	that	may	be	settled	in	cash	or	through	delivery	of	an	item	readily convertible	to	cash.

•Swap	contracts,	which	are	commitments	to	settle	in	cash	at	a	future	date	or dates	that	may	range	from	a	few	days	to	a	number	of	years,	based	on differentials	between	specified	indices	or	financial	instruments,	as	applied to	a	notional	principal	amount.

•Option	contracts,	which	give	the	purchaser,	for	a	premium,	the	right,	but	not the	obligation,	to	buy	or	sell	within	a	specified	time	a	financial	instrument, commodity	or	currency	at	a	contracted	price	that	may	also	be	settled	in cash,	based	on	differentials	between	specified	indices	or	prices.

Swaps,	forwards	and	some	option	contracts	are	over-the-counter	(OTC) derivatives	that	are	bilaterally	negotiated	with	counterparties	and	settled	with those	counterparties,	except	for	swap	contracts	that	are	novated	and	"cleared" through	central	counterparties	(CCPs).	Futures	contracts	and	other	option contracts	are	standardized	contracts	that	are	traded	on	an	exchange	with	a	CCP as	the	counterparty	from	the	inception	of	the	transaction.	Citigroup	enters	into derivative	contracts	relating	to	interest	rate,	foreign	currency,	commodity	and other	market/credit	risks	for	the	following	reasons:

•Trading	Purposes:	Citigroup	trades	derivatives	as	an	active	market	maker. Citigroup	offers	its	customers	derivatives	in	connection	with	their	risk management	actions	to	transfer,	modify	or	reduce	their	interest	rate,	foreign exchange	and	other	market/credit	risks	or	for	their	own	trading	purposes. Citigroup	also	manages	its	derivative	risk	positions	through	offsetting	trade activities,	controls	focused	on	price	verification	and	daily	reporting	of positions	to	senior	managers.

•Hedging:	Citigroup	uses	derivatives	in	connection	with	its	own	risk management	activities	to	hedge	certain	risks	or	reposition	the	risk	profile	of the	Company.	Hedging	may	be	accomplished	by	applying	hedge	accounting in	accordance	with	ASC	815,	Derivatives	and	Hedging,	or	by	an	economic hedge.	For	example,	Citigroup	issues	fixed-rate	long-term	debt	and	then enters	into	a	receive-fixed,	pay-variable-rate	interest	rate	swap	with	the	same tenor	and	notional	amount	to	synthetically	convert	the	interest	payments	to	a net	variable-rate	basis.	This	strategy	is	the	most	common	form	of	an	interest rate	hedge,	as	it	minimizes	net	interest	cost	in	certain	yield	curve environments.	Derivatives	are	also	used	to	manage	market	risks	inherent	in specific	groups	of	on-balance	sheet	assets	and	liabilities,	including	AFS securities,	commodities	and	borrowings,	as	well	as	other	interest-sensitive assets	and	liabilities.	In	addition,	foreign	exchange	contracts	are	used	to hedge	non-U.S.-dollar-

denominated	debt,	foreign	currency-denominated	AFS	securities	and	net investment	exposures.

Derivatives	may	expose	Citigroup	to	market,	credit	or	liquidity	risks	in excess	of	the	amounts	recorded	on	the	Consolidated	Balance	Sheet.	Market	risk on	a	derivative	product	is	the	exposure	created	by	potential	fluctuations	in interest	rates,	market	prices,	foreign	exchange	rates	and	other	factors	and	is	a function	of	the	type	of	product,	the	volume	of	transactions,	the	tenor	and	terms of	the	agreement	and	the	underlying	volatility.	Credit	risk	is	the	exposure	to	loss in	the	event	of	nonperformance	by	the	other	party	to	satisfy	a	derivative	liability where	the	value	of	any	collateral	held	by	Citi	is	not	adequate	to	cover	such losses.	The	recognition	in	earnings	of	unrealized	gains	on	derivative	transactions is	subject	to	management's	assessment	of	the	probability	of	counterparty	default. Liquidity	risk	is	the	potential	exposure	that	arises	when	the	size	of	a	derivative position	may	affect	the	ability	to	monetize	the	position	in	a	reasonable	period	of time	and	at	a	reasonable	cost	in	periods	of	high	volatility	and	financial	stress. Derivative	transactions	are	customarily	documented	under	industry	standard master	netting	agreements,	which	provide	that	following	an	event	of	default,	the non-defaulting	party	may	promptly	terminate	all	transactions	between	the	parties and	determine	the	net	amount	due	to	be	paid	to,	or	by,	the	defaulting	party. Events	of	default	include	(i)	failure	to	make	a	payment	on	a	derivative transaction	that	remains	uncured	following	applicable	notice	and	grace	periods, (ii)	breach	of	agreement	that	remains	uncured	after	applicable	notice	and	grace periods,	(iii)	breach	of	a	representation,	(iv)	cross	default,	either	to	third-party debt	or	to	other	derivative	transactions	entered	into	between	the	parties,	or,	in some	cases,	their	affiliates,	(v)	the	occurrence	of	a	merger	or	consolidation	that results	in	a	party's	becoming	a	materially	weaker	credit	and	(vi)	the	cessation	or repudiation	of	any	applicable	guarantee	or	other	credit	support	document. Obligations	under	master	netting	agreements	are	often	secured	by	collateral posted	under	an	industry	standard	credit	support	annex	to	the	master	netting agreement.	An	event	of	default	may	also	occur	under	a	credit	support	annex	if	a party	fails	to	make	a	collateral	delivery	that	remains	uncured	following applicable	notice	and	grace	periods.

The	netting	and	collateral	rights	incorporated	in	the	master	netting agreements	are	considered	to	be	legally	enforceable	if	a	supportive	legal	opinion has	been	obtained	from	counsel	of	recognized	standing	that	provides	(i)	the requisite	level	of	certainty	regarding	enforceability,	and	(ii)	that	the	exercise	of rights	by	the	non-defaulting	party	to	terminate	and	close-out	transactions	on	a	net basis	under	these	agreements	will	not	be	stayed	or	avoided	under	applicable	law upon	an	event	of	default,	including	bankruptcy,	insolvency	or	similar proceeding.

A	legal	opinion	may	not	be	sought	for	certain	jurisdictions	where	local	law is	silent	or	unclear	as	to	the	enforceability	of	such	rights	or	where	adverse	case law	or	conflicting	regulation	may	cast	doubt	on	the	enforceability	of	such	rights. In	some	jurisdictions	and	for	some	counterparty	types,	the	insolvency	law	may not	provide	the	requisite	level	of	certainty.	For

example,	this	may	be	the	case	for	certain	sovereigns,	municipalities,	central banks	and	U.S.	pension	plans.

Exposure	to	credit	risk	on	derivatives	is	affected	by	market	volatility,	which may	impair	the	ability	of	counterparties	to	satisfy	their	obligations	to	the Company.	Credit	limits	are	established	and	closely	monitored	for	customers engaged	in	derivatives	transactions.	Citi	considers	the	level	of	legal	certainty regarding	enforceability	of	its	offsetting	rights	under	master	netting	agreements and	credit	support	annexes	to	be	an	important	factor	in	its	risk	management process.	Specifically,	Citi	generally	transacts	much	lower	volumes	of	derivatives under	master	netting	agreements	where	Citi	does	not	have	the	requisite	level	of legal	certainty	regarding	enforceability,	because	such	derivatives	consume greater	amounts	of	single	counterparty	credit	limits	than	those	executed	under enforceable	master	netting	agreements.

Cash	collateral	and	security	collateral	in	the	form	of	G10	government	debt securities	are	often	posted	by	a	party	to	a	master	netting	agreement	to	secure	the net	open	exposure	of	the	other	party;	the	receiving	party	is	free	to commingle/rehypothecate	such	collateral	in	the	ordinary	course	of	its	business. Nonstandard	collateral	such	as	corporate	bonds,	municipal	bonds,	U.S.	agency securities	and/or	MBS	may	also	be	pledged	as	collateral	for	derivative transactions.	Security	collateral	posted	to	open	and	maintain	a	master	netting agreement	with	a	counterparty,	in	the	form	of	cash	and/or	securities,	may	from time	to	time	be	segregated	in	an	account	at	a	third-party	custodian	pursuant	to	a tri-party	account	control	agreement.

As	of	January	1,	2018,	Citigroup	early	adopted	ASU	2017-12,	Targeted Improvements	to	Accounting	for	Hedge	Activities.	This	standard	primarily impacts	Citi's	accounting	for	derivatives	designated	as	cash	flow	hedges	and	fair value	hedges.	Refer	to	the	respective	sections	below	for	details.

Information	pertaining	to	Citigroup's	derivative	activities,	based	on	notional amounts,	is	presented	in	the	table	below.	Derivative	notional	amounts	are reference	amounts	from	which	contractual	payments	are	derived	and	do	not represent	a	complete	and	accurate	measure	of	Citi's	exposure	to	derivative transactions.	Rather,	Citi's	derivative	exposure	arises	primarily	from	market fluctuations	(i.e.,	market	risk),	counterparty	failure	(i.e.,	credit	risk)	and/or periods	of	high	volatility	or	financial	stress	(i.e.,	liquidity	risk),	as	well	as	any market	valuation	adjustments	that	may	be	required	on	the

transactions.	Moreover,	notional	amounts	do	not	reflect	the	netting	of	offsetting trades.	For	example,	if	Citi	enters	into	a	receive-fixed	interest	rate	swap	with $100	million	notional,	and	offsets	this	risk	with	an	identical	but	opposite	pay- fixed	position	with	a	different	counterparty,	$200	million	in	derivative	notionals is	reported,	although	these	offsetting	positions	may	result	in	de	minimis	overall market	risk.	Aggregate	derivative	notional	amounts	can	fluctuate	from	period	to period	in	the	normal	course	of	business	based	on	Citi's	market	share,	levels	of client	activity	and	other	factors.	All	derivatives	are	recorded	in	Trading	account assets/Trading	account	liabilities	on	the	Consolidated	Balance	Sheet.

# Derivative	Notionals

|  | Hedging	instruments	under<br>ASC	815 | Hedging	instruments	under<br>ASC	815 | Trading	derivative	instruments | Trading	derivative	instruments |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | December\t31,\n2018 | December\t31,\n2017 | December\t31,\n2018 | December\t31,\n2017 |
| Interest\trate\tcontracts |  |  |  |  |
| Swaps | $273,636 | $189,779 | $18,138,686 | $18,754,219 |
| Futures\tand\tforwards | — | — | 4,632,257 | 6,460,539 |
| Written\toptions | — | — | 3,018,469 | 3,516,131 |
| Purchased\toptions | — | — | 2,532,479 | 3,234,025 |
| Total\tinterest\trate\tcontract\tnotionals | $273,636 | $189,779 | $28,321,891 | $31,964,914 |
| Foreign\texchange\tcontracts |  |  |  |  |
| Swaps | $57,153 | $37,162 | $6,738,158 | $5,576,357 |
| Futures,\tforwards\tand\tspot | 41,410 | 33,103 | 5,115,504 | 3,097,700 |
| Written\toptions | 1,726 | 3,951 | 1,566,717 | 1,127,728 |
| Purchased\toptions | 2,104 | 6,427 | 1,543,516 | 1,148,686 |
| Total\tforeign\texchange\tcontract\tnotionals | $102,393 | $80,643 | $14,963,895 | $10,950,471 |
| Equity\tcontracts |  |  |  |  |
| Swaps | $— | $— | $217,580 | $215,834 |
| Futures\tand\tforwards | — | — | 52,053 | 72,616 |
| Written\toptions | — | — | 454,675 | 389,961 |
| Purchased\toptions | — | — | 341,018 | 328,154 |
| Total\tequity\tcontract\tnotionals | $— | $— | $1,065,326 | $1,006,565 |
| Commodity\tand\tother\tcontracts |  |  |  |  |
| Swaps | $— | $— | $79,133 | $72,431 |
| Futures\tand\tforwards | 802 | 23 | 146,647 | 153,248 |
| Written\toptions | — | — | 62,629 | 62,045 |
| Purchased\toptions | — | — | 61,298 | 60,526 |
| Total\tcommodity\tand\tother\tcontract\tnotionals | $802 | $23 | $349,707 | $348,250 |
| Credit\tderivatives(1) |  |  |  |  |
| Protection\tsold | $— | $— | $724,939 | $735,142 |
| Protection\tpurchased | — | — | 795,649 | 777,713 |
| Total\tcredit\tderivatives | $— | $— | $1,520,588 | $1,512,855 |
| Total\tderivative\tnotionals | $376,831 | $270,445 | $46,221,407 | $45,783,055 |

(1) Credit	derivatives	are	arrangements	designed	to	allow	one	party	(protection	buyer)	to	transfer	the	credit	risk	of	a	"reference	asset"	to	another	party	(protection	seller).	These	arrangements	allow	a protection	seller	to	assume	the	credit	risk	associated	with	the	reference	asset	without	directly	purchasing	that	asset.	The	Company	enters	into	credit	derivative	positions	for	purposes	such	as	risk management,	yield	enhancement,	reduction	of	credit	concentrations	and	diversification	of	overall	risk.

The	following	tables	present	the	gross	and	net	fair	values	of	the	Company's derivative	transactions	and	the	related	offsetting	amounts	as	of	December	31, 2018	and	2017.	Gross	positive	fair	values	are	offset	against	gross	negative	fair values	by	counterparty,	pursuant	to	enforceable	master	netting	agreements. Under	ASC	815-10-45,	payables	and	receivables	in	respect	of	cash	collateral received	from	or	paid	to	a	given	counterparty	pursuant	to	a	credit	support	annex are	included	in	the	offsetting	amount,	if	a	legal	opinion	supporting	the enforceability	of	netting	and	collateral	rights	has	been	obtained.	GAAP	does	not permit	similar	offsetting	for	security	collateral.

In	addition,	the	following	tables	reflect	rule	changes	adopted	by	clearing organizations	that	require	or	allow	entities	to	treat	derivative	assets,	liabilities and	the	related	variation	margin	as	settlement	of	the	related	derivative	fair	value for	legal	and	accounting	purposes,	as	opposed	to	presenting	gross	derivative assets	and	liabilities	that	are	subject	to	collateral,	whereby	the	counterparties would	record	a	related	collateral	payable	or	receivable.	As	a	result,	the	tables reflect	a	reduction	of	approximately	$100	billion	as	of	both	December	31,	2018 and	2017,	respectively,	of	derivative	assets	and	derivative	liabilities	that previously	would	have	been	reported	on	a	gross	basis,	but	are	now	settled	and not	subject	to	collateral.	The	tables	also	present	amounts	that	are	not	permitted	to be	offset,	such	as	security	collateral	or	cash	collateral	posted	at	third-party custodians,	but	which	would	be	eligible	for	offsetting	to	the	extent	that	an	event of	default	occurred	and	a	legal	opinion	supporting	enforceability	of	the	netting and	collateral	rights	has	been	obtained.

# Derivative	Mark-to-Market	(MTM)	Receivables/Payables

# In	millions	of	dollars	at	December	31,	2018

# Derivatives	classified

| In	millions	of	dollars	at	December	31,	2018 | Derivatives	classified<br>in	Trading	account	assets/liabilities(1)(2) |  |
| :--- | :--- | :--- |
| Derivatives\tinstruments\tdesignated\tas\tASC\t815\thedges | Assets | Liabilities |
| Over-the-counter | $1,631 | $172 |
| Cleared | 238 | 53 |
| Interest\trate\tcontracts | $1,869 | $225 |
| Over-the-counter | $1,402 | $736 |
| Cleared | — | 4 |
| Foreign\texchange\tcontracts | $1,402 | $740 |
| Total\tderivatives\tinstruments\tdesignated\tas\tASC\t815\thedges | $3,271 | $965 |
| Derivatives\tinstruments\tnot\tdesignated\tas\tASC\t815\thedges |  |  |
| Over-the-counter | $161,183 | $146,909 |
| Cleared | 8,489 | 7,594 |
| Exchange\ttraded | 91 | 99 |
| Interest\trate\tcontracts | $169,763 | $154,602 |
| Over-the-counter | $159,099 | $156,904 |
| Cleared | 1,900 | 1,671 |
| Exchange\ttraded | 53 | 40 |
| Foreign\texchange\tcontracts | $161,052 | $158,615 |
| Over-the-counter | $18,253 | $21,527 |
| Cleared | 17 | 32 |
| Exchange\ttraded | 11,623 | 12,249 |
| Equity\tcontracts | $29,893 | $33,808 |
| Over-the-counter | $16,661 | $19,894 |
| Exchange\ttraded | 894 | 795 |
| Commodity\tand\tother\tcontracts | $17,555 | $20,689 |
| Over-the-counter | $6,967 | $6,155 |
| Cleared | 3,798 | 4,196 |
| Credit\tderivatives | $10,765 | $10,351 |
| Total\tderivatives\tinstruments\tnot\tdesignated\tas\tASC\t815\thedges | $389,028 | $378,065 |
| Total\tderivatives | $392,299 | $379,030 |
| Cash\tcollateral\tpaid/received(3) | $11,518 | $13,906 |
| Less:\tNetting\tagreements(4) | (311,089) | (311,089) |
| Less:\tNetting\tcash\tcollateral\treceived/paid(5) | (38,608) | (29,911) |
| Net\treceivables/payables\tincluded\ton\tthe\tConsolidated\tBalance\tSheet(6) | $54,120 | $51,936 |
| Additional\tamounts\tsubject\tto\tan\tenforceable\tmaster\tnetting\tagreement,\tbut\tnot\toffset\ton\tthe\nConsolidated\tBalance\tSheet |  |  |
| Less:\tCash\tcollateral\treceived/paid | $(767) | $(164) |
| Less:\tNon-cash\tcollateral\treceived/paid | (13,509) | (13,354) |
| Total\tnet\treceivables/payables(6) | $39,844 | $38,418 |

(1) The	derivatives	fair	values	are	presented	in	Note	24	to	the	Consolidated	Financial	Statements.

(2) Over-the-counter	(OTC)	derivatives	are	derivatives	executed	and	settled	bilaterally	with	counterparties	without	the	use	of	an	organized	exchange	or	central	clearing	house.	Cleared	derivatives include	derivatives	executed	bilaterally	with	a	counterparty	in	the	OTC	market,	but	then	novated	to	a	central	clearing	house,	whereby	the	central	clearing	house	becomes	the	counterparty	to	both of	the	original	counterparties.	Exchange	traded	derivatives	include	derivatives	executed	directly	on	an	organized	exchange	that	provides	pre-trade	price	transparency.

(3) Reflects	the	net	amount	of	the	$41,429	million	and	$52,514	million	of	gross	cash	collateral	paid	and	received,	respectively.	Of	the	gross	cash	collateral	paid, $29,911	million	was	used	to	offset trading	derivative	liabilities	and,	of	the	gross	cash	collateral	received,	$38,608	million	was	used	to	offset	trading	derivative	assets.

(4) Represents	the	netting	of	derivative	receivable	and	payable	balances	with	the	same	counterparty	under	enforceable	netting	agreements.	Approximately $296	billion,	$4	billion	and	$11	billion	of the	netting	against	trading	account	asset/liability	balances	is	attributable	to	each	of	the	OTC,	cleared	and	exchange	traded	derivatives,	respectively.

(5) Represents	the	netting	of	cash	collateral	paid	and	received	by	counterparty	under	enforceable	credit	support	agreements.	Substantially	all	cash	collateral	received	and	paid	is	netted	against	OTC derivative	assets	and	liabilities,	respectively.

(6) The	net	receivables/payables	include	approximately	$5	billion	of	derivative	asset	and	$7	billion	of	derivative	liability	fair	values	not	subject	to	enforceable	master	netting	agreements, respectively.

| In	millions	of	dollars	at	December	31,	2017 | Derivatives	classified<br>in	Trading	account	assets/liabilities(1)(2) |  |
| :--- | :--- | :--- |
| Derivatives\tinstruments\tdesignated\tas\tASC\t815\thedges | Assets | Liabilities |
| Over-the-counter | $1,969 | $134 |
| Cleared | 110 | 92 |
| Interest\trate\tcontracts | $2,079 | $226 |
| Over-the-counter | $1,143 | $1,150 |
| Foreign\texchange\tcontracts | $1,143 | $1,150 |
| Total\tderivatives\tinstruments\tdesignated\tas\tASC\t815\thedges | $3,222 | $1,376 |
| Derivatives\tinstruments\tnot\tdesignated\tas\tASC\t815\thedges |  |  |
| Over-the-counter | $195,677 | $173,937 |
| Cleared | 7,129 | 10,381 |
| Exchange\ttraded | 102 | 95 |
| Interest\trate\tcontracts | $202,908 | $184,413 |
| Over-the-counter | $119,092 | $117,473 |
| Cleared | 1,690 | 2,028 |
| Exchange\ttraded | 34 | 121 |
| Foreign\texchange\tcontracts | $120,816 | $119,622 |
| Over-the-counter | $17,221 | $21,201 |
| Cleared | 21 | 25 |
| Exchange\ttraded | 9,736 | 10,147 |
| Equity\tcontracts | $26,978 | $31,373 |
| Over-the-counter | $13,499 | $16,362 |
| Exchange\ttraded | 604 | 665 |
| Commodity\tand\tother\tcontracts | $14,103 | $17,027 |
| Over-the-counter | $12,972 | $12,958 |
| Cleared | 7,562 | 8,575 |
| Credit\tderivatives | $20,534 | $21,533 |
| Total\tderivatives\tinstruments\tnot\tdesignated\tas\tASC\t815\thedges | $385,339 | $373,968 |
| Total\tderivatives | $388,561 | $375,344 |
| Cash\tcollateral\tpaid/received(3) | $7,541 | $14,308 |
| Less:\tNetting\tagreements(4) | (306,401) | (306,401) |
| Less:\tNetting\tcash\tcollateral\treceived/paid(5) | (38,532) | (35,666) |
| Net\treceivables/payables\tincluded\ton\tthe\tConsolidated\tBalance\tSheet(6) | $51,169 | $47,585 |
| Additional\tamounts\tsubject\tto\tan\tenforceable\tmaster\tnetting\tagreement,\tbut\tnot\toffset\ton\tthe\nConsolidated\tBalance\tSheet |  |  |
| Less:\tCash\tcollateral\treceived/paid | $(872) | $(121) |
| Less:\tNon-cash\tcollateral\treceived/paid | (12,739) | (6,929) |
| Total\tnet\treceivables/payables(6) | $37,558 | $40,535 |

(1) The	derivatives	fair	values	are	presented	in	Note	24	to	the	Consolidated	Financial	Statements.	Derivative	mark-to-market	receivables/payables	previously	reported	within	 Other	assets/Other liabilities	have	been	reclassified	to	Trading	account	assets/Trading	account	liabilities	to	conform	with	the	current-period	presentation.

(2) Over-the-counter	(OTC)	derivatives	include	derivatives	executed	and	settled	bilaterally	with	counterparties	without	the	use	of	an	organized	exchange	or	central	clearing	house.	Cleared derivatives	include	derivatives	executed	bilaterally	with	a	counterparty	in	the	OTC	market,	but	then	novated	to	a	central	clearing	house,	whereby	the	central	clearing	house	becomes	the counterparty	to	both	of	the	original	counterparties.	Exchange	traded	derivatives	include	derivatives	executed	directly	on	an	organized	exchange	that	provides	pre-trade	price	transparency.

(3) Reflects	the	net	amount	of	the	$43,207	million	and	$52,840	million	of	gross	cash	collateral	paid	and	received,	respectively.	Of	the	gross	cash	collateral	paid,	 $35,666	million	was	used	to	offset trading	derivative	liabilities	and,	of	the	gross	cash	collateral	received,	$38,532	million	was	used	to	offset	trading	derivative	assets.

(6) The	net	receivables/payables	include	approximately	$6	billion	of	derivative	asset	and	$8	billion	of	liability	fair	values	not	subject	to	enforceable	master	netting	agreements,	respectively.

For	the	years	ended	December	31,	2018,	2017	and	2016,	the	amounts recognized	in	Principal	transactions	in	the	Consolidated	Statement	of	Income related	to	derivatives	not	designated	in	a	qualifying	hedging	relationship,	as	well as	the	underlying	non-derivative	instruments,	are	presented	in	Note	6	to	the Consolidated	Financial	Statements.	Citigroup	presents	this	disclosure	by showing	derivative	gains	and	losses	related	to	its	trading	activities	together	with gains	and	losses	related	to	non-derivative	instruments	within	the	same	trading portfolios,	as	this	represents	how	these	portfolios	are	risk	managed.

The	amounts	recognized	in	Other	revenue	in	the	Consolidated	Statement	of Income	related	to	derivatives	not	designated	in	a	qualifying	hedging	relationship are	shown	below.	The	table	below	does	not	include	any	offsetting	gains	(losses) on	the	economically	hedged	items	to	the	extent	that	such	amounts	are	also recorded	in	Other	revenue.

|  |  | Year	ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 | 2016 |
| Interest\trate\tcontracts | $(25) | $(73) | $51 |
| Foreign\texchange | (197) | 2,062 | (847) |
| Credit\tderivatives | (155) | (538) | (1,174) |
| Total | $(377) | $1,451 | $(1,970) |

# Accounting	for	Derivative	Hedging

Citigroup	accounts	for	its	hedging	activities	in	accordance	with	ASC	815, Derivatives	and	Hedging.	As	a	general	rule,	hedge	accounting	is	permitted where	the	Company	is	exposed	to	a	particular	risk,	such	as	interest	rate	or foreign	exchange	risk,	that	causes	changes	in	the	fair	value	of	an	asset	or	liability or	variability	in	the	expected	future	cash	flows	of	an	existing	asset,	liability	or	a forecasted	transaction	that	may	affect	earnings.

Derivative	contracts	hedging	the	risks	associated	with	changes	in	fair	value are	referred	to	as	fair	value	hedges,	while	contracts	hedging	the	variability	of expected	future	cash	flows	are	cash	flow	hedges.	Hedges	that	utilize	derivatives or	debt	instruments	to	manage	the	foreign	exchange	risk	associated	with	equity investments	in	non-U.S.-dollar-functional-currency	foreign	subsidiaries	(net investment	in	a	foreign	operation)	are	net	investment	hedges.

To	qualify	as	an	accounting	hedge	under	the	hedge	accounting	rules	(versus an	economic	hedge	where	hedge	accounting	is	not	applied),	a	hedging relationship	must	be	highly	effective	in	offsetting	the	risk	designated	as	being hedged.	The	hedging	relationship	must	be	formally	documented	at	inception, detailing	the	particular	risk	management	objective	and	strategy	for	the	hedge. This	includes	the	item	and	risk(s)	being	hedged,	the	hedging	instrument	being used	and	how	effectiveness	will	be	assessed.	The	effectiveness	of	these	hedging relationships	is	evaluated	at	hedge	inception	and	on	an	ongoing	basis	both	on	a

retrospective	and	prospective	basis,	typically	using	quantitative	measures	of correlation,	with	hedge	ineffectiveness	measured	and	recorded	in	current earnings.	Hedge	effectiveness	assessment	methodologies	are	performed	in	a similar	manner	for	similar	hedges,	and	are	used	consistently	throughout	the hedging	relationships.	The	assessment	of	effectiveness	may	exclude	changes	in the	value	of	the	hedged	item	that	are	unrelated	to	the	risks	being	hedged	and	the changes	in	fair	value	of	the	derivative	associated	with	time	value.	Prior	to January	1,	2018,	these	excluded	items	were	recognized	in	current	earnings	for	the hedging	derivative,	while	changes	in	the	value	of	a	hedged	item	that	were	not related	to	the	hedged	risk	were	not	recorded.	Upon	adoption	of	ASC	2017-12, Citi	excludes	changes	in	the	cross	currency	basis	associated	with	cross	currency swaps	from	the	assessment	of	hedge	effectiveness	and	records	it	in	other comprehensive	income.

# Discontinued	Hedge	Accounting

A	hedging	instrument	must	be	highly	effective	in	accomplishing	the	hedge objective	of	offsetting	either	changes	in	the	fair	value	or	cash	flows	of	the hedged	item	for	the	risk	being	hedged.	Management	may	voluntarily	de- designate	an	accounting	hedge	at	any	time,	but	if	a	hedging	relationship	is	not highly	effective,	it	no	longer	qualifies	for	hedge	accounting	and	must	be	de- designated.	Subsequent	changes	in	the	fair	value	of	the	derivative	are	recognized in	Other	revenue	or	Principal	transactions,	similar	to	trading	derivatives,	with	no offset	recorded	related	to	the	hedged	item.

For	fair	value	hedges,	any	changes	in	the	fair	value	of	the	hedged	item remain	as	part	of	the	basis	of	the	asset	or	liability	and	are	ultimately	realized	as an	element	of	the	yield	on	the	item.	For	cash	flow	hedges,	changes	in	fair	value of	the	end-user	derivative	remain	in	Accumulated	other	comprehensive	income (loss)	(AOCI)	and	are	included	in	the	earnings	of	future	periods	when	the forecasted	hedged	cash	flows	impact	earnings.	However,	if	it	becomes	probable that	some	or	all	of	the	hedged	forecasted	transactions	will	not	occur,	any amounts	that	remain	in	AOCI	related	to	these	transactions	must	be	immediately reflected	in	Other	revenue.

The	foregoing	criteria	are	applied	on	a	decentralized	basis,	consistent	with the	level	at	which	market	risk	is	managed,	but	are	subject	to	various	limits	and controls.	The	underlying	asset,	liability	or	forecasted	transaction	may	be	an individual	item	or	a	portfolio	of	similar	items.

# Fair	Value	Hedges

# Hedging	of	Benchmark	Interest	Rate	Risk

Citigroup's	fair	value	hedges	are	primarily	hedges	of	fixed-rate	long-term	debt	or assets,	such	as	available-for-sale	debt	securities	or	loans.

For	qualifying	fair	value	hedges	of	interest	rate	risk,	the	changes	in	the	fair value	of	the	derivative	and	the	change	in	the	fair	value	of	the	hedged	item attributable	to	the	hedged	risk,	either	total	cash	flows	or	benchmark	only	cash flows,	are	presented	within	Interest	revenue	or	Interest	expense	based	on	whether the	hedged	item	is	an	asset	or	a	liability.	Prior	to	the	adoption	of	ASU	2017-12, the	fair	value	of	the	derivative	was	presented	in	Other	revenue	or	Principal transactions	and	the	difference	between	the	changes	in	the	hedged	item	and	the derivative	was	defined	as	ineffectiveness.

# Hedging	of	Foreign	Exchange	Risk

Citigroup	hedges	the	change	in	fair	value	attributable	to	foreign	exchange	rate movements	in	available-for-sale	debt	securities	and	long-term	debt	that	are denominated	in	currencies	other	than	the	functional	currency	of	the	entity holding	the	securities	or	issuing	the	debt,	which	may	be	within	or	outside	the U.S.	The	hedging	instrument	may	be	a	forward	foreign	exchange	contract	or	a cross-currency	swap	contract.	Citigroup	considers	the	premium	associated	with forward	contracts	(i.e.,	the	differential	between	the	spot	and	contractual	forward rates)	as	the	cost	of	hedging;	this	amount	is	excluded	from	the	assessment	of hedge	effectiveness	and	reflected	directly	in	earnings	over	the	life	of	the	hedge. Beginning	January	1,	2018,	Citi	excludes	changes	in	cross-currency	basis associated	with	cross-currency	swaps	from	the	assessment	of	hedge	effectiveness and	records	it	in	Other	comprehensive	income.

# Hedging	of	Commodity	Price	Risk

Citigroup	hedges	the	change	in	fair	value	attributable	to	spot	price	movements	in physical	commodities	inventory.	The	hedging	instrument	is	a	futures	contract	to sell	the	underlying	commodity.	In	this	hedge,	the	change	in	the	value	of	the hedged	inventory	is	reflected	in	earnings,	which	offsets	the	change	in	the	fair value	of	the	futures	contract	that	is	also	reflected	in	earnings.	Although	the change	in	the	fair	value	of	the	hedging	instrument	recorded	in	earnings	includes changes	in	forward	rates,	Citigroup	excludes	the	differential	between	the	spot and	the	contractual	forward	rates	under	the	futures	contract	from	the	assessment of	hedge	effectiveness	and	amortizes	it	directly	into	earnings	over	the	life	of	the hedge.

# The	following	table	summarizes	the	gains	(losses)	on	the	Company's	fair	value	hedges:

# Gains	(losses)	on	fair	value	hedges(1)

| In	millions	of	dollars | Other	revenue | Net	interest	revenue | Other<br>revenue | Other<br>revenue |
| :--- | :--- | :--- | :--- | :--- |
| Gain\t(loss)\ton\tthe\tderivatives\tin\tdesignated\tand\tqualifying\tfair\tvalue\thedges |  |  |  |  |
| Interest\trate\thedges | $— | $794 | $(891) | $(753) |
| Foreign\texchange\thedges | (225) | — | (824) | (1,415) |
| Commodity\thedges | (140) | — | (17) | 182 |
| Total\tgain\t(loss)\ton\tthe\tderivatives\tin\tdesignated\tand\tqualifying\tfair\tvalue\thedges | $(365) | $794 | $(1,732) | $(1,986) |
| Gain\t(loss)\ton\tthe\thedged\titem\tin\tdesignated\tand\tqualifying\tfair\tvalue\thedges |  |  |  |  |
| Interest\trate\thedges | $— | $(747) | $853 | $668 |
| Foreign\texchange\thedges | 99 | — | 969 | 1,573 |
| Commodity\thedges | 124 | — | 18 | (210) |
| Total\tgain\t(loss)\ton\tthe\thedged\titem\tin\tdesignated\tand\tqualifying\tfair\tvalue\nhedges | $223 | $(747) | $1,840 | $2,031 |
| Net\tgain\t(loss)\texcluded\tfrom\tassessment\tof\tthe\teffectiveness\tof\tfair\tvalue\thedges |  |  |  |  |
| Interest\trate\thedges | $— | $(5) | $(7) | $(1) |
| Foreign\texchange\thedges(3) | 14 | — | 96 | 154 |
| Commodity\thedges | 7 | — | 1 | (28) |
| Total\tnet\tgain\t(loss)\texcluded\tfrom\tassessment\tof\tthe\teffectiveness\tof\tfair\tvalue\nhedges | $21 | $(5) | $90 | $125 |

(1) Beginning	January	1,	2018,	gain	(loss)	amounts	for	interest	rate	risk	hedges	are	included	in	 Interest	income/Interest	expense,	while	the	remaining	amounts	including	the	amounts	for	interest	rate hedges	prior	to	January	1,	2018	are	included	in	Other	revenue	or	Principal	transactions	on	the	Consolidated	Statement	of	Income.	The	accrued	interest	income	on	fair	value	hedges	both	prior	to and	after	January	1,	2018	is	recorded	in	Net	interest	revenue	and	is	excluded	from	this	table.

(2) Hedge	ineffectiveness	recognized	in	earnings	on	designated	and	qualifying	fair	value	hedges	for	the	year	ended	December	31,	2017	was	 $(31)	million	for	interest	rate	hedges	and	$49	million	for foreign	exchange	hedges,	for	a	total	of	$18	million.	Hedge	ineffectiveness	recognized	in	earnings	on	designated	and	qualifying	fair	value	hedges	for	the	year	ended	December	31,	2016	was $(84)	million	for	interest	rate	hedges	and	$4	million	for	foreign	exchange	hedges,	for	a	total	of	 $(80)	million.

(3) Amounts	relate	to	the	premium	associated	with	forward	contracts	(differential	between	spot	and	contractual	forward	rates).	These	amounts	are	excluded	from	the	assessment	of	hedge effectiveness	and	are	reflected	directly	in	earnings.	After	January	1,	2018,	amounts	include	cross-currency	basis,	which	is	recognized	in	accumulated	other	comprehensive	income.	The	amount	of cross-currency	basis	that	was	included	in	AOCI	was	$(74)	million	for	the	year	ended	December	31,	2018,	none	of	which	was	recognized	in	earnings.

# Cumulative	Basis	Adjustment

Upon	electing	to	apply	ASC	815	fair	value	hedge	accounting,	the	carrying	value of	the	hedged	item	is	adjusted	to	reflect	the	cumulative	impact	of	changes	in	the hedged	risk.	The	hedge	basis	adjustment,	whether	arising	from	an	active	or	de- designated	hedge	relationship,	remains	with	the	hedged	item	until	the	hedged item	is	derecognized	from	the	balance	sheet.	The	table	below	presents	the carrying	amount	of	Citi's	hedged	assets	and	liabilities	under	qualifying	fair	value hedges	at	December	31,	2018,	along	with	the	cumulative	hedge	basis adjustments	included	in	the	carrying	value	of	those	hedged	assets	and	liabilities.

In	millions	of	dollars	as	of	December	31,	2018

| Balance	sheet	line |  | Cumulative	fair	value	hedging |  |
| :--- | :--- | :--- | :--- |
| item\tin\twhich | Carrying\tamount | adjustment\tincreasing\t(decreasing)\tthe | adjustment\tincreasing\t(decreasing)\tthe |
| hedged\titem\tis\nrecorded\nDebt\tsecurities\n\t\tAFS | of\thedged\tasset/\nliability\n$81,632 | carrying\tamount\nActive\n$(196) | De-designated\n$295 |
| Long-term\n\t\tdebt | 149,054 | 1,211 | 869 |

# Cash	Flow	Hedges

Citigroup	hedges	the	variability	of	forecasted	cash	flows	associated	with floating-rate	assets/liabilities	and	other	forecasted	transactions.	Variable	cash flows	from	those	liabilities	are	synthetically	converted	to	fixed-rate	cash	flows by	entering	into	receive-variable,	pay-fixed	interest	rate	swaps	and	receive- variable,	pay-fixed	forward-starting	interest	rate	swaps.	Variable	cash	flows associated	with	certain	assets	are	synthetically	converted	to	fixed-rate	cash	flows by	entering	into	receive-fixed,	pay-variable	interest	rate	swaps.	These	cash	flow hedging	relationships	use	either	regression	analysis	or	dollar-offset	ratio	analysis to	assess	whether	the	hedging	relationships	are	highly	effective	at	inception	and on	an	ongoing	basis.	Prior	to	the	adoption	of	ASU	2017-12,	Citigroup	designated the	risk	being	hedged	as	the	risk	of	overall	variability	in	the	hedged	cash	flows for	certain	items.

With	the	adoption	of	ASU	2017-12,	Citigroup	hedges	the	variability	from changes	in	a	contractually	specified	rate	and	recognizes	the	entire	change	in	fair value	of	the	cash	flow	hedging	instruments	in	AOCI.	Prior	to	the	adoption	of ASU	2017-12,	to	the	extent	that	these	derivatives	were	not	fully	effective, changes	in	their	fair	values	in	excess	of	changes	in	the	value	of	the	hedged transactions	were	immediately	included	in	Other	revenue.	With	the	adoption	of ASU	2017-12,	such	amounts	are	no	longer	required	to	be	immediately recognized	in	income,	but	instead	the	full	change	in	the	value	of	the	hedging instrument	is	required	to	be	recognized	in	AOCI,	and	then	recognized	in earnings	in	the	same	period	that	the	cash	flows	impact	earnings.	The	pretax change	in	AOCI	from	cash	flow	hedges	is	presented	below:

(1) After	January	1,	2018,	all	amounts	reclassified	into	earnings	for	interest	rate	contracts	are	included	in Interest	income/Interest	expense	(Net	interest	revenue).	For	all	other	hedges,	including interest	rate	hedges	prior	to	January	1,	2018,	the	amounts	reclassified	to	earnings	are	included	primarily	in	Other	revenue	and	Net	interest	revenue	in	the	Consolidated	Statement	of	Income.

For	cash	flow	hedges,	the	changes	in	the	fair	value	of	the	hedging	derivative remain	in	AOCI	on	the	Consolidated	Balance	Sheet	and	will	be	included	in	the earnings	of	future	periods	to	offset	the	variability	of	the	hedged	cash	flows	when such	cash	flows	affect	earnings.	The	net	gain	(loss)	associated	with	cash	flow hedges	expected	to	be	reclassified	from	AOCI	within	12	months	of December	31,	2018	is	approximately	$404	million.	The	maximum	length	of	time over	which	forecasted	cash	flows	are	hedged	is	10	years.

The	after-tax	impact	of	cash	flow	hedges	on	AOCI	is	shown	in	Note	19	to the	Consolidated	Financial	Statements.

# Net	Investment	Hedges

# Consistent	with	ASC	830-20,	Foreign	Currency	Matters—Foreign	Currency

Transactions,	ASC	815	allows	the	hedging	of	the	foreign	currency	risk	of	a	net investment	in	a	foreign	operation.	Citigroup	uses	foreign	currency	forwards, cross-currency	swaps,	options	and	foreign	currency-denominated	debt instruments	to	manage	the	foreign	exchange	risk	associated	with	Citigroup's equity	investments	in	several	non-U.S.-dollar-functional-currency	foreign subsidiaries.	Citigroup	records	the	change	in	the	carrying	amount	of	these investments	in	the	Foreign	currency	translation	adjustment	account	within AOCI.	Simultaneously,	the	effective	portion	of	the	hedge	of	this	exposure	is	also recorded	in	the	Foreign	currency	translation	adjustment	account	and	any ineffective	portion	is	immediately	recorded	in	earnings.

For	derivatives	designated	as	net	investment	hedges,	Citigroup	follows	the forward-rate	method	outlined	in	ASC	815-35-35.	According	to	that	method,	all changes	in	fair	value,	including	changes	related	to	the	forward-rate	component	of the	foreign	currency	forward	contracts	and	the	time	value	of	foreign	currency options,	are	recorded	in	the	Foreign	currency	translation	adjustment	account within	AOCI.

For	foreign	currency-denominated	debt	instruments	that	are	designated	as hedges	of	net	investments,	the	translation	gain	or	loss	that	is	recorded	in	the Foreign	currency	translation	adjustment	account	is	based	on	the	spot	exchange rate	between	the	functional	currency	of	the	respective	subsidiary	and	the	U.S. dollar,	which	is	the	functional	currency	of	Citigroup.	To	the	extent	that	the notional	amount	of	the	hedging	instrument	exactly	matches	the	hedged	net investment,	and	the	underlying	exchange	rate	of	the	derivative	hedging instrument	relates	to	the	exchange	rate	between	the	functional	currency	of	the net	investment	and	Citigroup's	functional	currency	(or,	in	the	case	of	a	non- derivative	debt	instrument,	such	instrument	is	denominated	in	the	functional currency	of	the	net	investment),	no	ineffectiveness	is	recorded	in	earnings. The	pretax	gain	(loss)	recorded	in	the	Foreign	currency	translation adjustment	account	within	AOCI,	related	to	net	investment	hedges,	is	$1,207 million,	$2,528	million	and	$(220)	million	for	the	years	ended	December	31, 2018,	2017	and	2016,	respectively.

# Economic	Hedges

Citigroup	often	uses	economic	hedges	when	hedge	accounting	would	be	too complex	or	operationally	burdensome.	End-user	derivatives	that	are	economic hedges	are	carried	at	fair	value,	with	changes	in	value	included	in	either Principal	transactions	or	Other	revenue.

For	asset/liability	management	hedging,	fixed-rate	long-term	debt	is recorded	at	amortized	cost	under	GAAP.

For	other	hedges	that	either	do	not	meet	the	ASC	815	hedging	criteria	or	for which	management	decides	not	to	apply	ASC	815	hedge	accounting,	the derivative	is	recorded	at	fair	value	on	the	balance	sheet	with	the	associated changes	in	fair	value	recorded	in	earnings,	while	the	debt	continues	to	be	carried at	amortized	cost.	Therefore,	current	earnings	are	affected	by	the	interest	rate shifts	and	other	factors	that	cause	a

change	in	the	swap's	value,	but	for	which	no	offsetting	change	in	value	is recorded	on	the	debt.

Citigroup	may	alternatively	elect	to	account	for	the	debt	at	fair	value	under the	fair	value	option.	Once	the	irrevocable	election	is	made	upon	issuance	of	the debt,	the	full	change	in	fair	value	of	the	debt	is	reported	in	earnings.	The	changes in	fair	value	of	the	related	interest	rate	swap	are	also	reflected	in	earnings,	which provides	a	natural	offset	to	the	debt's	fair	value	change.	To	the	extent	that	the two	amounts	differ	because	the	full	change	in	the	fair	value	of	the	debt	includes risks	not	offset	by	the	interest	rate	swap,	the	difference	is	automatically	captured in	current	earnings.

Additional	economic	hedges	include	hedges	of	the	credit	risk	component	of commercial	loans	and	loan	commitments.	Citigroup	periodically	evaluates	its hedging	strategies	in	other	areas	and	may	designate	either	an	accounting	hedge or	an	economic	hedge	after	considering	the	relative	costs	and	benefits.	Economic hedges	are	also	employed	when	the	hedged	item	itself	is	marked	to	market through	current	earnings,	such	as	hedges	of	commitments	to	originate	one-	to four-family	mortgage	loans	to	be	HFS	and	MSRs.

# Credit	Derivatives

Citi	is	a	market	maker	and	trades	a	range	of	credit	derivatives.	Through	these contracts,	Citi	either	purchases	or	writes	protection	on	either	a	single	name	or	a portfolio	of	reference	credits.	Citi	also	uses	credit	derivatives	to	help	mitigate credit	risk	in	its	corporate	and	consumer	loan	portfolios	and	other	cash	positions and	to	facilitate	client	transactions.

Citi	monitors	its	counterparty	credit	risk	in	credit	derivative	contracts.	As	of both	December	31,	2018	and	2017,	approximately	98%	of	the	gross	receivables are	from	counterparties	with	which	Citi	maintains	collateral	agreements.	A majority	of	Citi's	top	15	counterparties	(by	receivable	balance	owed	to	Citi)	are banks,	financial	institutions	or	other	dealers.	Contracts	with	these	counterparties do	not	include	ratings-based	termination	events.	However,	counterparty	ratings downgrades	may	have	an	incremental	effect	by	lowering	the	threshold	at	which Citi	may	call	for	additional	collateral.

The	range	of	credit	derivatives	entered	into	includes	credit	default	swaps, total	return	swaps,	credit	options	and	credit-linked	notes.

A	credit	default	swap	is	a	contract	in	which,	for	a	fee,	a	protection	seller agrees	to	reimburse	a	protection	buyer	for	any	losses	that	occur	due	to	a predefined	credit	event	on	a	reference	entity.	These	credit	events	are	defined	by the	terms	of	the	derivative	contract	and	the	reference	credit	and	are	generally limited	to	the	market	standard	of	failure	to	pay	on	indebtedness	and	bankruptcy of	the	reference	credit	and,	in	a	more	limited	range	of	transactions,	debt restructuring.	Credit	derivative	transactions	that	reference	emerging	market entities	also	typically	include	additional	credit	events	to	cover	the	acceleration	of indebtedness	and	the	risk	of	repudiation	or	a	payment	moratorium.	In	certain transactions,	protection	may	be	provided	on	a	portfolio	of	reference	entities	or asset-backed	securities.	If	there	is	no	credit	event,	as	defined	by	the	specific derivative	contract,	then	the	protection	seller	makes	no	payments	to	the protection	buyer	and	receives	only	the

contractually	specified	fee.	However,	if	a	credit	event	occurs	as	defined	in	the specific	derivative	contract	sold,	the	protection	seller	will	be	required	to	make	a payment	to	the	protection	buyer.	Under	certain	contracts,	the	seller	of	protection may	not	be	required	to	make	a	payment	until	a	specified	amount	of	losses	has occurred	with	respect	to	the	portfolio	and/or	may	only	be	required	to	pay	for losses	up	to	a	specified	amount.

A	total	return	swap	typically	transfers	the	total	economic	performance	of	a reference	asset,	which	includes	all	associated	cash	flows,	as	well	as	capital appreciation	or	depreciation.	The	protection	buyer	receives	a	floating	rate	of interest	and	any	depreciation	on	the	reference	asset	from	the	protection	seller and,	in	return,	the	protection	seller	receives	the	cash	flows	associated	with	the reference	asset	plus	any	appreciation.	Thus,	according	to	the	total	return	swap agreement,	the	protection	seller	will	be	obligated	to	make	a	payment	any	time	the floating	interest	rate	payment	plus	any	depreciation	of	the	reference	asset exceeds	the	cash	flows	associated	with	the	underlying	asset.	A	total	return	swap may	terminate	upon	a	default	of	the	reference	asset	or	a	credit	event	with	respect to	the	reference	entity,	subject	to	the	provisions	of	the	related	total	return	swap agreement	between	the	protection	seller	and	the	protection	buyer.

A	credit	option	is	a	credit	derivative	that	allows	investors	to	trade	or	hedge changes	in	the	credit	quality	of	a	reference	entity.	For	example,	in	a	credit	spread option,	the	option	writer	assumes	the	obligation	to	purchase	or	sell	credit protection	on	the	reference	entity	at	a	specified	"strike"	spread	level.	The	option purchaser	buys	the	right	to	sell	credit	default	protection	on	the	reference	entity to,	or	purchase	it	from,	the	option	writer	at	the	strike	spread	level.	The	payments on	credit	spread	options	depend	either	on	a	particular	credit	spread	or	the	price of	the	underlying	credit-sensitive	asset	or	other	reference	entity.	The	options usually	terminate	if	a	credit	event	occurs	with	respect	to	the	underlying	reference entity.

A	credit-linked	note	is	a	form	of	credit	derivative	structured	as	a	debt security	with	an	embedded	credit	default	swap.	The	purchaser	of	the	note effectively	provides	credit	protection	to	the	issuer	by	agreeing	to	receive	a	return that	could	be	negatively	affected	by	credit	events	on	the	underlying	reference credit.	If	the	reference	entity	defaults,	the	note	may	be	cash	settled	or	physically settled	by	delivery	of	a	debt	security	of	the	reference	entity.	Thus,	the	maximum amount	of	the	note	purchaser's	exposure	is	the	amount	paid	for	the	credit-linked note.

The	following	tables	summarize	the	key	characteristics	of	Citi's	credit	derivatives	portfolio	by	counterparty	and	derivative	form:

|  | Fair	values |  | Notionals |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars\tat\tDecember\t31,\t2018 | Receivable(1) | Payable(2) | Protection\npurchased | Protection\nsold |
| By\tindustry/counterparty |  |  |  |  |
| Banks | $4,785 | $4,432 | $214,842 | $218,273 |
| Broker-dealers | 1,706 | 1,612 | 62,904 | 63,014 |
| Non-financial | 64 | 87 | 2,687 | 1,192 |
| Insurance\tand\tother\tfinancial\tinstitutions | 4,210 | 4,220 | 515,216 | 442,460 |
| Total\tby\tindustry/counterparty | $10,765 | $10,351 | $795,649 | $724,939 |
| By\tinstrument |  |  |  |  |
| Credit\tdefault\tswaps\tand\toptions | $10,030 | $9,755 | $771,865 | $712,623 |
| Total\treturn\tswaps\tand\tother | 735 | 596 | 23,784 | 12,316 |
| Total\tby\tinstrument | $10,765 | $10,351 | $795,649 | $724,939 |
| By\trating |  |  |  |  |
| Investment\tgrade | $4,725 | $4,544 | $637,790 | $568,849 |
| Non-investment\tgrade | 6,040 | 5,807 | 157,859 | 156,090 |
| Total\tby\trating | $10,765 | $10,351 | $795,649 | $724,939 |
| By\tmaturity |  |  |  |  |
| Within\t1\tyear | $2,037 | $2,063 | $251,994 | $225,597 |
| From\t1\tto\t5\tyears | 6,720 | 6,414 | 493,096 | 456,409 |
| After\t5\tyears | 2,008 | 1,874 | 50,559 | 42,933 |
| Total\tby\tmaturity | $10,765 | $10,351 | $795,649 | $724,939 |

(1) The	fair	value	amount	receivable	is	composed	of	$5,126	million	under	protection	purchased	and	 $5,639	million	under	protection	sold.

(2) The	fair	value	amount	payable	is	composed	of	$5,882	million	under	protection	purchased	and	 $4,469	million	under	protection	sold.

|  | Fair	values |  | Notionals |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars\tat\tDecember\t31,\t2017 | Receivable(1) | Payable(2) | Protection\npurchased | Protection\nsold |
| By\tindustry/counterparty |  |  |  |  |
| Banks | $7,471 | $6,669 | $264,414 | $273,711 |
| Broker-dealers | 2,325 | 2,285 | 73,273 | 83,229 |
| Non-financial | 70 | 91 | 1,288 | 1,140 |
| Insurance\tand\tother\tfinancial\tinstitutions | 10,668 | 12,488 | 438,738 | 377,062 |
| Total\tby\tindustry/counterparty | $20,534 | $21,533 | $777,713 | $735,142 |
| By\tinstrument |  |  |  |  |
| Credit\tdefault\tswaps\tand\toptions | $20,251 | $20,554 | $754,114 | $724,228 |
| Total\treturn\tswaps\tand\tother | 283 | 979 | 23,599 | 10,914 |
| Total\tby\tinstrument | $20,534 | $21,533 | $777,713 | $735,142 |
| By\trating |  |  |  |  |
| Investment\tgrade | $10,473 | $10,616 | $588,324 | $557,987 |
| Non-investment\tgrade | 10,061 | 10,917 | 189,389 | 177,155 |
| Total\tby\trating | $20,534 | $21,533 | $777,713 | $735,142 |
| By\tmaturity |  |  |  |  |
| Within\t1\tyear | $2,477 | $2,914 | $231,878 | $218,097 |
| From\t1\tto\t5\tyears | 16,098 | 16,435 | 498,606 | 476,345 |
| After\t5\tyears | 1,959 | 2,184 | 47,229 | 40,700 |
| Total\tby\tmaturity | $20,534 | $21,533 | $777,713 | $735,142 |

Fair	values	included	in	the	above	tables	are	prior	to	application	of	any netting	agreements	and	cash	collateral.	For	notional	amounts,	Citi	generally	has a	mismatch	between	the	total	notional	amounts	of	protection	purchased	and	sold, and	it	may	hold	the	reference	assets	directly	rather	than	entering	into	offsetting credit	derivative	contracts	as	and	when	desired.	The	open	risk	exposures	from credit	derivative	contracts	are	largely	matched	after	certain	cash	positions	in reference	assets	are	considered	and	after	notional	amounts	are	adjusted,	either	to a	duration-based	equivalent	basis	or	to	reflect	the	level	of	subordination	in tranched	structures.	The	ratings	of	the	credit	derivatives	portfolio	presented	in the	tables	and	used	to	evaluate	payment/performance	risk	are	based	on	the assigned	internal	or	external	ratings	of	the	reference	asset	or	entity.	Where external	ratings	are	used,	investment-grade	ratings	are	considered	to	be "Baa/BBB"	and	above,	while	anything	below	is	considered	non-investment grade.	Citi's	internal	ratings	are	in	line	with	the	related	external	rating	system. Citigroup	evaluates	the	payment/performance	risk	of	the	credit	derivatives for	which	it	stands	as	a	protection	seller	based	on	the	credit	rating	assigned	to	the underlying	reference	credit.	Credit	derivatives	written	on	an	underlying	non- investment	grade	reference	credit	represent	greater	payment	risk	to	the Company.	The	non-investment	grade	category	in	the	table	above	also	includes credit	derivatives	where	the	underlying	reference	entity	has	been	downgraded subsequent	to	the	inception	of	the	derivative.

The	maximum	potential	amount	of	future	payments	under	credit	derivative contracts	presented	in	the	table	above	is	based	on	the	notional	value	of	the derivatives.	The	Company	believes	that	the	notional	amount	for	credit	protection sold	is	not	representative	of	the	actual	loss	exposure	based	on	historical experience.	This	amount	has	not	been	reduced	by	the	value	of	the	reference assets	and	the	related	cash	flows.	In	accordance	with	most	credit	derivative contracts,	should	a	credit	event	occur,	the	Company	usually	is	liable	for	the difference	between	the	protection	sold	and	the	value	of	the	reference	assets. Furthermore,	the	notional	amount	for	credit	protection	sold	has	not	been	reduced for	any	cash	collateral	paid	to	a	given	counterparty,	as	such	payments	would	be calculated	after	netting	all	derivative	exposures,	including	any	credit	derivatives with	that	counterparty	in	accordance	with	a	related	master	netting	agreement. Due	to	such	netting	processes,	determining	the	amount	of	collateral	that corresponds	to	credit	derivative	exposures	alone	is	not	possible.	The	Company actively	monitors	open	credit-risk	exposures	and	manages	this	exposure	by	using a	variety	of	strategies,	including	purchased	credit	derivatives,	cash	collateral	or direct	holdings	of	the	referenced	assets.	This	risk	mitigation	activity	is	not captured	in	the	table	above.

# Credit	Risk-Related	Contingent	Features	in	Derivatives

Certain	derivative	instruments	contain	provisions	that	require	the	Company	to either	post	additional	collateral	or	immediately	settle	any	outstanding	liability balances	upon	the	occurrence	of	a	specified	event	related	to	the	credit	risk	of	the Company.	These	events,	which	are	defined	by	the	existing	derivative	contracts, are	primarily	downgrades	in	the	credit	ratings	of	the	Company	and	its	affiliates. The	fair	value	(excluding	CVA)	of	all	derivative	instruments	with	credit- risk-related	contingent	features	that	were	in	a	net	liability	position	at	both December	31,	2018	and	2017	was	$33	billion	and	$29	billion,	respectively.	The Company	posted	$33	billion	and	$28	billion	as	collateral	for	this	exposure	in	the normal	course	of	business	as	of	December	31,	2018	and	2017,	respectively. A	downgrade	could	trigger	additional	collateral	or	cash	settlement requirements	for	the	Company	and	certain	affiliates.	In	the	event	that	Citigroup and	Citibank	were	downgraded	a	single	notch	by	all	three	major	rating	agencies as	of	December	31,	2018,	the	Company	could	be	required	to	post	an	additional $0.6	billion	as	either	collateral	or	settlement	of	the	derivative	transactions. Additionally,	the	Company	could	be	required	to	segregate	with	third-party custodians	collateral	previously	received	from	existing	derivative	counterparties in	the	amount	of	$0.1	billion	upon	the	single	notch	downgrade,	resulting	in aggregate	cash	obligations	and	collateral	requirements	of	approximately	$0.7 billion.

# Derivatives	Accompanied	by	Financial	Asset	Transfers

The	Company	executes	total	return	swaps	that	provide	it	with	synthetic	exposure to	substantially	all	of	the	economic	return	of	the	securities	or	other	financial assets	referenced	in	the	contract.	In	certain	cases,	the	derivative	transaction	is accompanied	by	the	Company's	transfer	of	the	referenced	financial	asset	to	the derivative	counterparty,	most	typically	in	response	to	the	derivative counterparty's	desire	to	hedge,	in	whole	or	in	part,	its	synthetic	exposure	under the	derivative	contract	by	holding	the	referenced	asset	in	funded	form.	In	certain jurisdictions	these	transactions	qualify	as	sales,	resulting	in	derecognition	of	the securities	transferred	(see	Note	1	to	the	Consolidated	Financial	Statements	for further	discussion	of	the	related	sale	conditions	for	transfers	of	financial	assets). For	a	significant	portion	of	the	transactions,	the	Company	has	also	executed another	total	return	swap	where	the	Company	passes	on	substantially	all	of	the economic	return	of	the	referenced	securities	to	a	different	third	party	seeking	the exposure.	In	those	cases,	the	Company	is	not	exposed,	on	a	net	basis,	to	changes in	the	economic	return	of	the	referenced	securities.

These	transactions	generally	involve	the	transfer	of	the	Company's	liquid government	bonds,	convertible	bonds	or	publicly	traded	corporate	equity securities	from	the	trading	portfolio	and	are	executed	with	third-party	financial institutions.	The	accompanying	derivatives	are	typically	total	return	swaps.	The derivatives	are	cash	settled	and	subject	to	ongoing	margin	requirements.

When	the	conditions	for	sale	accounting	are	met,	the	Company	reports	the transfer	of	the	referenced	financial	asset	as	a	sale	and	separately	reports	the accompanying	derivative

transaction.	These	transactions	generally	do	not	result	in	a	gain	or	loss	on	the	sale of	the	security,	because	the	transferred	security	was	held	at	fair	value	in	the Company's	trading	portfolio.	For	transfers	of	financial	assets	accounted	for	as	a sale	by	the	Company,	and	for	which	the	Company	has	retained	substantially	all of	the	economic	exposure	to	the	transferred	asset	through	a	total	return	swap executed	with	the	same	counterparty	in	contemplation	of	the	initial	sale	and	still outstanding,	both	the	asset	amounts	derecognized	and	gross	cash	proceeds received	as	of	the	date	of	derecognition	were	$4.1	billion	and	$3.0	billion	as	of December	31,	2018	and	2017,	respectively.

At	December	31,	2018,	the	fair	value	of	these	previously	derecognized assets	was	$4.1	billion.	The	fair	value	of	the	total	return	swaps	as	of	December 31,	2018	was	$55	million	recorded	as	gross	derivative	assets	and	$9	million recorded	as	gross	derivative	liabilities.	At	December	31,	2017,	the	fair	value	of these	previously	derecognized	assets	was	$3.1	billion,	and	the	fair	value	of	the total	return	swaps	was	$89	million	recorded	as	gross	derivative	assets	and	$15 million	recorded	as	gross	derivative	liabilities.

The	balances	for	the	total	return	swaps	are	on	a	gross	basis,	before	the application	of	counterparty	and	cash	collateral	netting,	and	are	included primarily	as	equity	derivatives	in	the	tabular	disclosures	in	this	Note.

# 23.	CONCENTRATIONS	OF	CREDIT	RISK

Concentrations	of	credit	risk	exist	when	changes	in	economic,	industry	or geographic	factors	similarly	affect	groups	of	counterparties	whose	aggregate credit	exposure	is	material	in	relation	to	Citigroup's	total	credit	exposure. Although	Citigroup's	portfolio	of	financial	instruments	is	broadly	diversified along	industry,	product	and	geographic	lines,	material	transactions	are	completed with	other	financial	institutions,	particularly	in	the	securities	trading,	derivatives and	foreign	exchange	businesses.

In	connection	with	the	Company's	efforts	to	maintain	a	diversified	portfolio, the	Company	limits	its	exposure	to	any	one	geographic	region,	country	or individual	creditor	and	monitors	this	exposure	on	a	continuous	basis.	At December	31,	2018,	Citigroup's	most	significant	concentration	of	credit	risk	was with	the	U.S.	government	and	its	agencies.	The	Company's	exposure,	which primarily	results	from	trading	assets	and	investments	issued	by	the	U.S. government	and	its	agencies,	amounted	to	$250.0	billion	and	$227.8	billion	at December	31,	2018	and	2017,	respectively.	The	German	and	Japanese governments	and	their	agencies,	which	are	rated	investment	grade	by	both Moody's	and	S&P,	were	the	next	largest	exposures.	The	Company's	exposure	to Germany	amounted	to	$46.4	billion	and	$38.3	billion	at	December	31,	2018	and 2017,	respectively,	and	was	composed	of	investment	securities,	loans	and	trading assets.	The	Company's	exposure	to	Japan	amounted	to	$28.8	billion	and	$25.8 billion	at	December	31,	2018	and	2017,	respectively,	and	was	composed	of investment	securities,	loans	and	trading	assets.

The	Company's	exposure	to	states	and	municipalities	amounted	to	$27.9 billion	and	$30.6	billion	at	December	31,	2018	and	2017,	respectively,	and	was composed	of	trading	assets,	investment	securities,	derivatives	and	lending activities.

ASC	820-10,	Fair	Value	Measurement,	defines	fair	value,	establishes	a consistent	framework	for	measuring	fair	value	and	requires	disclosures	about	fair value	measurements.	Fair	value	is	defined	as	the	price	that	would	be	received	to sell	an	asset	or	paid	to	transfer	a	liability	in	an	orderly	transaction	between market	participants	at	the	measurement	date,	and	therefore	represents	an	exit price.	Among	other	things,	the	standard	requires	the	Company	to	maximize	the use	of	observable	inputs	and	minimize	the	use	of	unobservable	inputs	when measuring	fair	value.

Under	ASC	820-10,	the	probability	of	default	of	a	counterparty	is	factored into	the	valuation	of	derivative	and	other	positions	as	well	as	the	impact	of Citigroup's	own	credit	risk	on	derivatives	and	other	liabilities	measured	at	fair value.

# Fair	Value	Hierarchy

ASC	820-10	specifies	a	hierarchy	of	inputs	based	on	whether	the	inputs	are observable	or	unobservable.	Observable	inputs	are	developed	using	market	data and	reflect	market	participant	assumptions,	while	unobservable	inputs	reflect	the Company's	market	assumptions.	These	two	types	of	inputs	have	created	the following	fair	value	hierarchy:

•Level	1:	Quoted	prices	for	identical	instruments	in	active markets.

•Level	2:	Quoted	prices	for	similar	instruments	in	active	markets,	quoted prices	for	identical	or	similar	instruments	in	markets	that	are	not	active	and model-derived	valuations	in	which	all	significant	inputs	and	significant value	drivers	are	observable	in	active	markets. •Level	3:	Valuations	derived	from	valuation	techniques	in	which	one	or more	significant	inputs	or	significant	value	drivers	are	unobservable.

As	required	under	the	fair	value	hierarchy,	the	Company	considers	relevant and	observable	market	inputs	in	its	valuations	where	possible.	The	frequency	of transactions,	the	size	of	the	bid-ask	spread	and	the	amount	of	adjustment necessary	when	comparing	similar	transactions	are	all	factors	in	determining	the relevance	of	observed	prices	in	those	markets.

# Determination	of	Fair	Value

For	assets	and	liabilities	carried	at	fair	value,	the	Company	measures	fair	value using	the	procedures	set	out	below,	irrespective	of	whether	the	assets	and liabilities	are	measured	at	fair	value	as	a	result	of	an	election	or	whether	they	are required	to	be	measured	at	fair	value.

When	available,	the	Company	uses	quoted	market	prices	to	determine	fair value	and	classifies	such	items	as	Level	1.	In	some	specific	cases	where	a	market price	is	available,	the	Company	will	make	use	of	acceptable	practical	expedients (such	as	matrix	pricing)	to	calculate	fair	value,	in	which	case	the	items	are classified	as	Level	2.

The	Company	may	also	apply	a	price-based	methodology,	which	utilizes, where	available,	quoted	prices	or	other	market	information	obtained	from	recent trading	activity	in	positions	with	the	same	or	similar	characteristics	to	the position	being	valued.	The	frequency	and	size	of	transactions	are	among	the factors	that	are	driven	by	the	liquidity	of	markets	and	determine	the	relevance	of observed	prices	in	those	markets.	If	relevant	and	observable	prices	are	available, those	valuations	may	be	classified	as	Level	2.	When	that	is	not	the	case,	and there	are	one	or	more	significant	unobservable	"price"	inputs,	then	those valuations	will	be	classified	as	Level	3.	Furthermore,	when	less	liquidity	exists for	a	security	or	loan,	a	quoted	price	is	stale,	a	significant	adjustment	to	the	price of	a	similar	security	is	necessary	to	reflect	differences	in	the	terms	of	the	actual security	or	loan	being	valued,	or	prices	from	independent	sources	are	insufficient to	corroborate	the	valuation,	the	"price"	inputs	are	considered	unobservable	and the	fair	value	measurements	are	classified	as	Level	3.

If	quoted	market	prices	are	not	available,	fair	value	is	based	upon	internally developed	valuation	techniques	that	use,	where	possible,	current	market-based parameters,	such	as	interest	rates,	currency	rates	and	option	volatilities.	Items valued	using	such	internally	generated	valuation	techniques	are	classified according	to	the	lowest	level	input	or	value	driver	that	is	significant	to	the valuation.	Thus,	an	item	may	be	classified	as	Level	3	even	though	there	may	be some	significant	inputs	that	are	readily	observable.

Fair	value	estimates	from	internal	valuation	techniques	are	verified,	where possible,	to	prices	obtained	from	independent	vendors	or	brokers.	Vendors'	and brokers'	valuations	may	be	based	on	a	variety	of	inputs	ranging	from	observed prices	to	proprietary	valuation	models,	and	the	Company	assesses	the	quality	and relevance	of	this	information	in	determining	the	estimate	of	fair	value.	The following	section	describes	the	valuation	methodologies	used	by	the	Company to	measure	various	financial	instruments	at	fair	value,	including	an	indication	of the	level	in	the	fair	value	hierarchy	in	which	each	instrument	is	generally classified.	Where	appropriate,	the	description	includes	details	of	the	valuation models,	the	key	inputs	to	those	models	and	any	significant	assumptions.

# Market	Valuation	Adjustments

Generally,	the	unit	of	account	for	a	financial	instrument	is	the	individual financial	instrument.	The	Company	applies	market	valuation	adjustments	that	are consistent	with	the	unit	of	account,	which	does	not	include	adjustment	due	to	the size	of	the	Company's	position,	except	as	follows.	ASC	820-10	permits	an exception,	through	an	accounting	policy	election,	to	measure	the	fair	value	of	a portfolio	of	financial	assets	and	financial	liabilities	on	the	basis	of	the	net	open risk	position	when	certain	criteria	are	met.	Citi	has	elected	to	measure	certain portfolios	of	financial	instruments	that	meet	those	criteria,	such	as	derivatives, on	the	basis	of	the	net	open	risk	position.	The	Company	applies	market	valuation adjustments,	including	adjustments	to	account	for	the	size	of	the	net	open	risk position,	consistent	with	market	participant	assumptions.

Valuation	adjustments	are	applied	to	items	classified	as	Level	2	or	Level	3 in	the	fair	value	hierarchy	to	ensure	that	the	fair	value	reflects	the	price	at	which the	net	open	risk	position	could	be	exited.	These	valuation	adjustments	are	based on	the	bid/offer	spread	for	an	instrument	in	the	market.	When	Citi	has	elected	to measure	certain	portfolios	of	financial	investments,	such	as	derivatives,	on	the basis	of	the	net	open	risk	position,	the	valuation	adjustment	may	take	into account	the	size	of	the	position.

Credit	valuation	adjustments	(CVA)	and	funding	valuation	adjustments (FVA)	are	applied	to	the	relevant	population	of	over-the-counter	(OTC) derivative	instruments	where	adjustments	to	reflect	counterparty	credit	risk,	own credit	risk	and	term	funding	risk	are	required	to	estimate	fair	value.	This principally	includes	derivatives	with	a	base	valuation	(e.g.,	discounted	using overnight	indexed	swap	(OIS))	requiring	adjustment	for	these	effects,	such	as uncollateralized	interest	rate	swaps.	The	CVA	represents	a	portfolio-level adjustment	to	reflect	the	risk	premium	associated	with	the	counterparty's	(assets) or	Citi's	(liabilities)	non-performance	risk.

FVA	reflect	a	market	funding	risk	premium	inherent	in	the	uncollateralized portion	of	a	derivative	portfolio	and	in	certain	collateralized	derivative	portfolios that	do	not	include	standard	credit	support	annexes	(CSAs),	such	as	where	the CSA	does	not	permit	the	reuse	of	collateral	received.	Citi's	FVA	methodology leverages	the	existing	CVA	methodology	to	estimate	a	funding	exposure	profile. The	calculation	of	this	exposure	profile	considers	collateral	agreements	in	which the	terms	do	not	permit	the	Company	to	reuse	the	collateral	received,	including where	counterparties	post	collateral	to	third-party	custodians. Citi's	CVA	and	FVA	methodology	consists	of	two	steps:

•First,	the	exposure	profile	for	each	counterparty	is	determined	using	the terms	of	all	individual	derivative	positions	and	a	Monte	Carlo	simulation	or other	quantitative	analysis	to	generate	a	series	of	expected	cash	flows	at future	points	in	time.	The	calculation	of	this	exposure	profile	considers	the effect	of	credit	risk	mitigants	and	sources	of	funding,	including	pledged cash	or	other	collateral	and	any	legal	right	of	offset	that	exists	with	a counterparty	through	arrangements	such	as	netting	agreements.	Individual derivative	contracts	that	are	subject	to	an	enforceable	master	netting agreement	with	a	counterparty	are	aggregated	as	a	netting	set	for	this purpose,	since	it	is	those	aggregate	net	cash	flows	that	are	subject	to nonperformance	risk.	This	process	identifies	specific,	point-in-time	future cash	flows	that	are	subject	to	nonperformance	risk	and	unsecured	funding, rather	than	using	the	current	recognized	net	asset	or	liability	as	a	basis	to measure	the	CVA	and	FVA.

•Second,	for	CVA,	market-based	views	of	default	probabilities	derived	from observed	credit	spreads	in	the	credit	default	swap	(CDS)	market	are	applied to	the	expected	future	cash	flows	determined	in	step	one.	Citi's	own-credit CVA	is	determined	using	Citi-specific	CDS	spreads	for	the	relevant	tenor.

# Generally,	counterparty

CVA	is	determined	using	CDS	spread	indices	for	each	credit	rating	and tenor.	For	certain	identified	netting	sets	where	individual	analysis	is practicable	(e.g.,	exposures	to	counterparties	with	liquid	CDSs), counterparty-specific	CDS	spreads	are	used.	For	FVA,	a	term	structure	of future	liquidity	spreads	is	applied	to	the	expected	future	funding requirement.

The	CVA	and	FVA	are	designed	to	incorporate	a	market	view	of	the	credit and	funding	risk,	respectively,	inherent	in	the	derivative	portfolio.	However, most	unsecured	derivative	instruments	are	negotiated	bilateral	contracts	and	are not	commonly	transferred	to	third	parties.	Derivative	instruments	are	normally settled	contractually	or,	if	terminated	early,	are	terminated	at	a	value	negotiated bilaterally	between	the	counterparties.	Thus,	the	CVA	and	FVA	may	not	be realized	upon	a	settlement	or	termination	in	the	normal	course	of	business.	In addition,	all	or	a	portion	of	these	adjustments	may	be	reversed	or	otherwise adjusted	in	future	periods	in	the	event	of	changes	in	the	credit	or	funding	risk associated	with	the	derivative	instruments.

The	table	below	summarizes	the	CVA	and	FVA	applied	to	the	fair	value	of derivative	instruments	at	December	31,	2018	and	2017:

|  | Credit	and	funding	valuation	adjustments<br>contra-liability	(contra-asset) | Credit	and	funding	valuation	adjustments<br>contra-liability	(contra-asset) |
| :--- | :--- | :--- |
| In\tmillions\tof\tdollars | December\t31,\n2018 | December\t31,\n2017 |
| Counterparty\tCVA | $(1,085) | $(970) |
| Asset\tFVA | (544) | (447) |
| Citigroup\t(own-credit)\tCVA | 482 | 287 |
| Liability\tFVA | 135 | 47 |
| Total\tCVA—derivative\ninstruments(1) | $(1,012) | $(1,083) |

(1) FVA	is	included	with	CVA	for	presentation	purposes.

The	table	below	summarizes	pretax	gains	(losses)	related	to	changes	in CVA	on	derivative	instruments,	net	of	hedges,	FVA	on	derivatives	and	debt valuation	adjustments	(DVA)	on	Citi's	own	fair	value	option	(FVO)	liabilities for	the	years	indicated:

|  | Credit/funding/debt	valuation<br>adjustments	gain	(loss) | Credit/funding/debt	valuation<br>adjustments	gain	(loss) | Credit/funding/debt	valuation<br>adjustments	gain	(loss) |
| :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | 2018 | 2017 | 2016 |
| Counterparty\tCVA | $(109) | $276 | $157 |
| Asset\tFVA | 46 | 90 | 47 |
| Own-credit\tCVA | 178 | (153) | 17 |
| Liability\tFVA | 56 | (15) | (44) |
| Total\tCVA—derivative\ninstruments | $171 | $198 | $177 |
| DVA\trelated\tto\town\tFVO\nliabilities(1) | $1,415 | $(680) | $(538) |
| Total\tCVA\tand\tDVA(2) | $1,586 | $(482) | $(361) |

(1) See	Notes	1	and	17	to	the	Consolidated	Financial	Statements.

# Securities	Purchased	Under	Agreements	to	Resell	and	Securities	Sold	Under Agreements	to	Repurchase

No	quoted	prices	exist	for	these	instruments,	so	fair	value	is	determined	using	a discounted	cash	flow	technique.	Cash	flows	are	estimated	based	on	the	terms	of the	contract,	taking	into	account	any	embedded	derivative	or	other	features. These	cash	flows	are	discounted	using	interest	rates	appropriate	to	the	maturity of	the	instrument	as	well	as	the	nature	of	the	underlying	collateral.	Generally, when	such	instruments	are	recorded	at	fair	value,	they	are	classified	within Level	2	of	the	fair	value	hierarchy,	as	the	inputs	used	in	the	valuation	are	readily observable.	However,	certain	long-dated	positions	are	classified	within	Level	3 of	the	fair	value	hierarchy.

# Trading	Account	Assets	and	Liabilities—Trading	Securities	and	Trading Loans

When	available,	the	Company	uses	quoted	market	prices	in	active	markets	to determine	the	fair	value	of	trading	securities;	such	items	are	classified	as	Level	1 of	the	fair	value	hierarchy.	Examples	include	government	securities	and exchange-traded	equity	securities.

For	bonds	and	secondary	market	loans	traded	over	the	counter,	the Company	generally	determines	fair	value	utilizing	valuation	techniques, including	discounted	cash	flows,	price-based	and	internal	models.	Fair	value estimates	from	these	internal	valuation	techniques	are	verified,	where	possible, to	prices	obtained	from	independent	sources,	including	third-party	vendors. Vendors	compile	prices	from	various	sources	and	may	apply	matrix	pricing	for similar	bonds	or	loans	where	no	price	is	observable.	A	price-based	methodology utilizes,	where	available,	quoted	prices	or	other	market	information	obtained from	recent	trading	activity	of	assets	with	similar	characteristics	to	the	bond	or loan	being	valued.	The	yields	used	in	discounted	cash	flow	models	are	derived from	the	same	price	information.	Trading	securities	and	loans	priced	using	such methods	are	generally	classified	as	Level	2.	However,	when	less	liquidity	exists for	a	security	or	loan,	a	quoted	price	is	stale,	a	significant	adjustment	to	the	price of	a	similar	security	or	loan	is	necessary	to	reflect	differences	in	the	terms	of	the actual	security	or	loan	being	valued,	or	prices	from	independent	sources	are insufficient	to	corroborate	valuation,	a	loan	or	security	is	generally	classified	as Level	3.	The	price	input	used	in	a	price-based	methodology	may	be	zero	for	a security,	such	as	a	subprime	CDO,	that	is	not	receiving	any	principal	or	interest and	is	currently	written	down	to	zero.

When	the	Company's	principal	market	for	a	portfolio	of	loans	is	the securitization	market,	the	Company	uses	the	securitization	price	to	determine	the fair	value	of	the	portfolio.	The	securitization	price	is	determined	from	the assumed	proceeds	of	a	hypothetical	securitization	in	the	current	market,	adjusted for	transformation	costs	(i.e.,	direct	costs	other	than	transaction	costs)	and securitization	uncertainties	such	as	market	conditions	and	liquidity.	As	a	result of	the	severe	reduction	in	the	level	of	activity	in	certain	securitization	markets since	the	second	half	of	2007,

observable	securitization	prices	for	certain	directly	comparable	portfolios	of loans	have	not	been	readily	available.	Therefore,	such	portfolios	of	loans	are generally	classified	as	Level	3	of	the	fair	value	hierarchy.	However,	for	other loan	securitization	markets,	such	as	commercial	real	estate	loans,	price verification	of	the	hypothetical	securitizations	has	been	possible,	since	these markets	have	remained	active.	Accordingly,	this	loan	portfolio	is	classified	as Level	2	of	the	fair	value	hierarchy.

For	most	of	the	lending	and	structured	direct	subprime	exposures,	fair	value is	determined	utilizing	observable	transactions	where	available,	other	market data	for	similar	assets	in	markets	that	are	not	active	and	other	internal	valuation techniques.	The	valuation	of	certain	asset-backed	security	(ABS)	CDO	positions utilizes	prices	based	on	the	underlying	assets	of	the	ABS	CDO.

# Trading	Account	Assets	and	Liabilities—Derivatives

Exchange-traded	derivatives,	measured	at	fair	value	using	quoted (i.e.,	exchange)	prices	in	active	markets,	where	available,	are	classified	as Level	1	of	the	fair	value	hierarchy.

Derivatives	without	a	quoted	price	in	an	active	market	and	derivatives executed	over	the	counter	are	valued	using	internal	valuation	techniques.	These derivative	instruments	are	classified	as	either	Level	2	or	Level	3	depending	on the	observability	of	the	significant	inputs	to	the	model.

The	valuation	techniques	depend	on	the	type	of	derivative	and	the	nature	of the	underlying	instrument.	The	principal	techniques	used	to	value	these instruments	are	discounted	cash	flows	and	internal	models,	such	as	derivative pricing	models	(e.g.,	Black-Scholes	and	Monte	Carlo	simulations).

The	key	inputs	depend	upon	the	type	of	derivative	and	the	nature	of	the underlying	instrument	and	include	interest	rate	yield	curves,	foreign	exchange rates,	volatilities	and	correlation.	The	Company	typically	uses	OIS	curves	as	fair value	measurement	inputs	for	the	valuation	of	certain	derivatives.

# Investments

The	investments	category	includes	available-for-sale	debt	and	marketable	equity securities	whose	fair	values	are	generally	determined	by	utilizing	similar procedures	described	for	trading	securities	above	or,	in	some	cases,	using	vendor pricing	as	the	primary	source.

Also	included	in	investments	are	nonpublic	investments	in	private	equity and	real	estate	entities.	Determining	the	fair	value	of	nonpublic	securities involves	a	significant	degree	of	management	judgment,	as	no	quoted	prices	exist and	such	securities	are	generally	thinly	traded.	In	addition,	there	may	be	transfer restrictions	on	private	equity	securities.	The	Company's	process	for	determining the	fair	value	of	such	securities	utilizes	commonly	accepted	valuation techniques,	including	comparables	analysis.	In	determining	the	fair	value	of nonpublic	securities,	the	Company	also	considers	events	such	as	a	proposed	sale of	the	investee	company,	initial	public	offerings,	equity	issuances	or	other observable	transactions.	Private	equity	securities	are	generally	classified	as Level	3	of	the	fair	value	hierarchy.

In	addition,	the	Company	holds	investments	in	certain	alternative investment	funds	that	calculate	NAV	per	share,	including	hedge	funds,	private equity	funds	and	real	estate	funds.	Investments	in	funds	are	generally	classified as	non-marketable	equity	securities	carried	at	fair	value.	The	fair	values	of	these investments	are	estimated	using	the	NAV	per	share	of	the	Company's	ownership interest	in	the	funds	where	it	is	not	probable	that	the	investment	will	be	realized at	a	price	other	than	the	NAV.	Consistent	with	the	provisions	of	ASU	2015-07, these	investments	have	not	been	categorized	within	the	fair	value	hierarchy	and are	not	included	in	the	tables	below.	See	Note	13	to	the	Consolidated	Financial Statements	for	additional	information.

# Short-Term	Borrowings	and	Long-Term	Debt

Where	fair	value	accounting	has	been	elected,	the	fair	value	of	non-structured liabilities	is	determined	by	utilizing	internal	models	using	the	appropriate discount	rate	for	the	applicable	maturity.	Such	instruments	are	generally classified	as	Level	2	of	the	fair	value	hierarchy	when	all	significant	inputs	are readily	observable.

The	Company	determines	the	fair	value	of	hybrid	financial	instruments, including	structured	liabilities,	using	the	appropriate	derivative	valuation methodology	(described	above	in	"Trading	Account	Assets	and	Liabilities— Derivatives")	given	the	nature	of	the	embedded	risk	profile.	Such	instruments are	classified	as	Level	2	or	Level	3	depending	on	the	observability	of	significant inputs	to	the	model.

# Items	Measured	at	Fair	Value	on	a	Recurring	Basis

The	following	tables	present	for	each	of	the	fair	value	hierarchy	levels	the Company's	assets	and	liabilities	that	are	measured	at	fair	value	on	a	recurring basis	at	December	31,	2018	and	2017.	The	Company	may	hedge	positions	that have	been	classified	in	the	Level	3	category	with	other	financial

instruments	(hedging	instruments)	that	may	be	classified	as	Level	3,	but	also with	financial	instruments	classified	as	Level	1	or	Level	2	of	the	fair	value hierarchy.	The	effects	of	these	hedges	are	presented	gross	in	the	following	tables:

# Fair	Value	Levels

| In	millions	of	dollars	at	December	31,	2018 | Level	1 | Level	2 | Level	3 | Gross<br>inventory | Netting(1) | Net<br>balance |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Assets |  |  |  |  |  |  |
| Federal\tfunds\tsold\tand\tsecurities\tborrowed\tand\tpurchased\tunder\tagreements\tto\nresell | $— | $214,570 | $115 | $214,685 | $(66,984) | $147,701 |
| Trading\tnon-derivative\tassets |  |  |  |  |  |  |
| Trading\tmortgage-backed\tsecurities |  |  |  |  |  |  |
| U.S.\tgovernment-sponsored\tagency\tguaranteed | — | 24,090 | 156 | 24,246 | — | 24,246 |
| Residential | — | 709 | 268 | 977 | — | 977 |
| Commercial | — | 1,323 | 77 | 1,400 | — | 1,400 |
| Total\ttrading\tmortgage-backed\tsecurities | $— | $26,122 | $501 | $26,623 | $— | $26,623 |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities | $26,439 | $4,802 | $1 | $31,242 | $— | $31,242 |
| State\tand\tmunicipal | — | 3,782 | 200 | 3,982 | — | 3,982 |
| Foreign\tgovernment | 43,309 | 21,179 | 31 | 64,519 | — | 64,519 |
| Corporate | 1,026 | 14,510 | 360 | 15,896 | — | 15,896 |
| Equity\tsecurities | 36,342 | 7,308 | 153 | 43,803 | — | 43,803 |
| Asset-backed\tsecurities | — | 1,429 | 1,484 | 2,913 | — | 2,913 |
| Other\ttrading\tassets(2) | 3 | 12,198 | 818 | 13,019 | — | 13,019 |
| Total\ttrading\tnon-derivative\tassets | $107,119 | $91,330 | $3,548 | $201,997 | $— | $201,997 |
| Trading\tderivatives |  |  |  |  |  |  |
| Interest\trate\tcontracts | $101 | $169,860 | $1,671 | $171,632 |  |  |
| Foreign\texchange\tcontracts | — | 162,108 | 346 | 162,454 |  |  |
| Equity\tcontracts | 647 | 28,903 | 343 | 29,893 |  |  |
| Commodity\tcontracts | — | 16,788 | 767 | 17,555 |  |  |
| Credit\tderivatives | — | 9,839 | 926 | 10,765 |  |  |
| Total\ttrading\tderivatives | $748 | $387,498 | $4,053 | $392,299 |  |  |
| Cash\tcollateral\tpaid(3) |  |  |  | $11,518 |  |  |
| Netting\tagreements |  |  |  |  | $(311,089) |  |
| Netting\tof\tcash\tcollateral\treceived |  |  |  |  | (38,608) |  |
| Total\ttrading\tderivatives | $748 | $387,498 | $4,053 | $403,817 | $(349,697) | $54,120 |
| Investments |  |  |  |  |  |  |
| Mortgage-backed\tsecurities |  |  |  |  |  |  |
| U.S.\tgovernment-sponsored\tagency\tguaranteed | $— | $42,988 | $32 | $43,020 | $— | $43,020 |
| Residential | — | 1,313 | — | 1,313 | — | 1,313 |
| Commercial | — | 172 | — | 172 | — | 172 |
| Total\tinvestment\tmortgage-backed\tsecurities | $— | $44,473 | $32 | $44,505 | $— | $44,505 |
| \t\tU.S.\tTreasury\tand\tfederal\tagency\tsecurities | $107,577 | $9,645 | $— | $117,222 | $— | $117,222 |
| State\tand\tmunicipal | — | 8,498 | 708 | 9,206 | — | 9,206 |
| Foreign\tgovernment | 58,252 | 42,371 | 68 | 100,691 | — | 100,691 |
| Corporate | 4,410 | 7,033 | 156 | 11,599 | — | 11,599 |
| Marketable\tequity\tsecurities | 206 | 14 | — | 220 | — | 220 |
| Asset-backed\tsecurities | — | 656 | 187 | 843 | — | 843 |
| Other\tdebt\tsecurities | — | 3,972 | — | 3,972 | — | 3,972 |
| Non-marketable\tequity\tsecurities(4) | — | 96 | 586 | 682 | — | 682 |
| Total\tinvestments | $170,445 | $116,758 | $1,737 | $288,940 | $— | $288,940 |

| In	millions	of	dollars	at	December	31,	2018 | Level	1 | Level	2 | Level	3 | Gross<br>inventory | Netting(1) | Net<br>balance |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Loans | $— | $2,946 | $277 | $3,223 | $— | $3,223 |
| Mortgage\tservicing\trights | — | — | 584 | 584 | — | 584 |
| Non-trading\tderivatives\tand\tother\tfinancial\tassets\tmeasured\ton\ta\trecurring\nbasis | $15,839 | $4,949 | $— | $20,788 | $— | $20,788 |
| Total\tassets | $294,151 | $818,051 | $10,314 | $1,134,034 | $(416,681) | $717,353 |
| Total\tas\ta\tpercentage\tof\tgross\tassets(5) | 26.2% | 72.9% | 0.9% |  |  |  |
| Liabilities |  |  |  |  |  |  |
| Interest-bearing\tdeposits | $— | $980 | $495 | $1,475 | $— | $1,475 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tand\tsold\tunder\tagreements\tto\nrepurchase | — | 110,511 | 983 | 111,494 | (66,984) | 44,510 |
| Trading\taccount\tliabilities |  |  |  |  |  |  |
| Securities\tsold,\tnot\tyet\tpurchased | 78,872 | 11,364 | 586 | 90,822 | — | 90,822 |
| Other\ttrading\tliabilities | — | 1,547 | — | 1,547 | — | 1,547 |
| Total\ttrading\tliabilities | $78,872 | $12,911 | $586 | $92,369 | $— | $92,369 |
| Trading\tderivatives |  |  |  |  |  |  |
| Interest\trate\tcontracts | $71 | $152,931 | $1,825 | $154,827 |  |  |
| Foreign\texchange\tcontracts | — | 159,003 | 352 | 159,355 |  |  |
| Equity\tcontracts | 351 | 32,330 | 1,127 | 33,808 |  |  |
| Commodity\tcontracts | — | 19,904 | 785 | 20,689 |  |  |
| Credit\tderivatives | — | 9,486 | 865 | 10,351 |  |  |
| Total\ttrading\tderivatives | $422 | $373,654 | $4,954 | $379,030 |  |  |
| Cash\tcollateral\treceived(6) |  |  |  | $13,906 |  |  |
| Netting\tagreements |  |  |  |  | $(311,089) |  |
| Netting\tof\tcash\tcollateral\tpaid |  |  |  |  | (29,911) |  |
| Total\ttrading\tderivatives | $422 | $373,654 | $4,954 | $392,936 | $(341,000) | $51,936 |
| Short-term\tborrowings | $— | $4,446 | $37 | $4,483 | $— | $4,483 |
| Long-term\tdebt | — | 25,659 | 12,570 | 38,229 | — | 38,229 |
| Total\tnon-trading\tderivatives\tand\tother\tfinancial\tliabilities\tmeasured\ton\ta\nrecurring\tbasis | $15,839 | $67 | $— | $15,906 | $— | $15,906 |
| Total\tliabilities | $95,133 | $528,228 | $19,625 | $656,892 | $(407,984) | $248,908 |
| Total\tas\ta\tpercentage\tof\tgross\tliabilities(5) | 14.8% | 82.1% | 3.1% |  |  |  |

(1) Represents	netting	of	(i)	the	amounts	due	under	securities	purchased	under	agreements	to	resell	and	the	amounts	owed	under	securities	sold	under	agreements	to	repurchase	and	(ii)	derivative exposures	covered	by	a	qualifying	master	netting	agreement	and	cash	collateral	offsetting.

(2) Includes	positions	related	to	investments	in	unallocated	precious	metals,	as	discussed	in	Note	25	to	the	Consolidated	Financial	Statements.	Also	includes	physical	commodities	accounted	for	at the	lower	of	cost	or	fair	value	and	unfunded	credit	products.

(3) Reflects	the	net	amount	of	$41,429	million	of	gross	cash	collateral	paid,	of	which	 $29,911	million	was	used	to	offset	trading	derivative	liabilities.

(4) Amounts	exclude	$0.2	billion	of	investments	measured	at	NAV	in	accordance	with	ASU	No.	2015-07,	 Fair	Value	Measurement	(Topic	820):	Disclosures	for	Investments	in	Certain	Entities	That Calculate	Net	Asset	Value	per	Share	(or	Its	Equivalent).

(5) Because	the	amount	of	the	cash	collateral	paid/received	has	not	been	allocated	to	the	Level	1,	2	and	3	subtotals,	these	percentages	are	calculated	based	on	total	assets	and	liabilities	measured	at fair	value	on	a	recurring	basis,	excluding	the	cash	collateral	paid/received	on	derivatives.

(6) Reflects	the	net	amount	of	$52,514	million	of	gross	cash	collateral	received,	of	which	 $38,608	million	was	used	to	offset	trading	derivative	assets.

| In	millions	of	dollars	at	December	31,	2017 | Level	1 | Level	2 | Level	3 | Gross<br>inventory | Netting(1) | Net<br>balance |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Assets |  |  |  |  |  |  |
| Federal\tfunds\tsold\tand\tsecurities\tborrowed\tand\tpurchased\tunder\tagreements\tto\nresell | $— | $188,571 | $16 | $188,587 | $(55,638) | $132,949 |
| Trading\tnon-derivative\tassets |  |  |  |  |  |  |
| Trading\tmortgage-backed\tsecurities |  |  |  |  |  |  |
| U.S.\tgovernment-sponsored\tagency\tguaranteed | — | 22,801 | 163 | 22,964 | — | 22,964 |
| Residential | — | 649 | 164 | 813 | — | 813 |
| Commercial | — | 1,309 | 57 | 1,366 | — | 1,366 |
| Total\ttrading\tmortgage-backed\tsecurities | $— | $24,759 | $384 | $25,143 | $— | $25,143 |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities | $17,524 | $3,613 | $— | $21,137 | $— | $21,137 |
| State\tand\tmunicipal | — | 4,426 | 274 | 4,700 | — | 4,700 |
| Foreign\tgovernment | 39,347 | 20,843 | 16 | 60,206 | — | 60,206 |
| Corporate | 301 | 15,129 | 275 | 15,705 | — | 15,705 |
| Equity\tsecurities | 53,305 | 6,794 | 120 | 60,219 | — | 60,219 |
| Asset-backed\tsecurities | — | 1,198 | 1,590 | 2,788 | — | 2,788 |
| Other\ttrading\tassets(2) | 3 | 11,105 | 615 | 11,723 | — | 11,723 |
| Total\ttrading\tnon-derivative\tassets | $110,480 | $87,867 | $3,274 | $201,621 | $— | $201,621 |
| Trading\tderivatives |  |  |  |  |  |  |
| Interest\trate\tcontracts | $145 | $203,134 | $1,708 | $204,987 |  |  |
| Foreign\texchange\tcontracts | 19 | 121,363 | 577 | 121,959 |  |  |
| Equity\tcontracts | 2,364 | 24,170 | 444 | 26,978 |  |  |
| Commodity\tcontracts | 282 | 13,252 | 569 | 14,103 |  |  |
| Credit\tderivatives | — | 19,624 | 910 | 20,534 |  |  |
| Total\ttrading\tderivatives | $2,810 | $381,543 | $4,208 | $388,561 |  |  |
| Cash\tcollateral\tpaid(3) |  |  |  | $7,541 |  |  |
| Netting\tagreements |  |  |  |  | $(306,401) |  |
| Netting\tof\tcash\tcollateral\treceived |  |  |  |  | (38,532) |  |
| Total\ttrading\tderivatives | $2,810 | $381,543 | $4,208 | $396,102 | $(344,933) | $51,169 |
| Investments |  |  |  |  |  |  |
| Mortgage-backed\tsecurities |  |  |  |  |  |  |
| U.S.\tgovernment-sponsored\tagency\tguaranteed | $— | $41,717 | $24 | $41,741 | $— | $41,741 |
| Residential | — | 2,884 | — | 2,884 | — | 2,884 |
| Commercial | — | 329 | 3 | 332 | — | 332 |
| Total\tinvestment\tmortgage-backed\tsecurities | $— | $44,930 | $27 | $44,957 | $— | $44,957 |
| U.S.\tTreasury\tand\tfederal\tagency\tsecurities | $106,964 | $11,182 | $— | $118,146 | $— | $118,146 |
| State\tand\tmunicipal | — | 8,028 | 737 | 8,765 | — | 8,765 |
| Foreign\tgovernment | 56,456 | 43,985 | 92 | 100,533 | — | 100,533 |
| Corporate | 1,911 | 12,127 | 71 | 14,109 | — | 14,109 |
| Marketable\tequity\tsecurities | 176 | 11 | 2 | 189 | — | 189 |
| Asset-backed\tsecurities | — | 3,091 | 827 | 3,918 | — | 3,918 |
| Other\tdebt\tsecurities | — | 297 | — | 297 | — | 297 |
| Non-marketable\tequity\tsecurities(4) | — | 121 | 681 | 802 | — | 802 |
| Total\tinvestments | $165,507 | $123,772 | $2,437 | $291,716 | $— | $291,716 |

| In	millions	of	dollars	at	December	31,	2017 | Level	1 | Level	2 | Level	3 | Gross<br>inventory | Netting(1) | Net<br>balance |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Loans | $— | $3,824 | $550 | $4,374 | $— | $4,374 |
| Mortgage\tservicing\trights | — | — | 558 | 558 | — | 558 |
| Non-trading\tderivatives\tand\tother\tfinancial\tassets\tmeasured\ton\ta\trecurring\tbasis | $13,903 | $4,640 | $16 | $18,559 | $— | $18,559 |
| Total\tassets | $292,700 | $790,217 | $11,059 | $1,101,517 | $(400,571) | $700,946 |
| Total\tas\ta\tpercentage\tof\tgross\tassets(5) | 26.8% | 72.2% | 1.0% |  |  |  |
| Liabilities |  |  |  |  |  |  |
| Interest-bearing\tdeposits | $— | $1,179 | $286 | $1,465 | $— | $1,465 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tand\tsold\tunder\tagreements\tto\nrepurchase | — | 95,550 | 726 | 96,276 | (55,638) | 40,638 |
| Trading\taccount\tliabilities |  |  |  |  |  |  |
| Securities\tsold,\tnot\tyet\tpurchased | 65,843 | 10,306 | 22 | 76,171 | — | 76,171 |
| Other\ttrading\tliabilities | — | 1,409 | 5 | 1,414 | — | 1,414 |
| Total\ttrading\tliabilities | $65,843 | $11,715 | $27 | $77,585 | $— | $77,585 |
| Trading\taccount\tderivatives |  |  |  |  |  |  |
| Interest\trate\tcontracts | $137 | $182,372 | $2,130 | $184,639 |  |  |
| Foreign\texchange\tcontracts | 9 | 120,316 | 447 | 120,772 |  |  |
| Equity\tcontracts | 2,430 | 26,472 | 2,471 | 31,373 |  |  |
| Commodity\tcontracts | 115 | 14,482 | 2,430 | 17,027 |  |  |
| Credit\tderivatives | — | 19,824 | 1,709 | 21,533 |  |  |
| Total\ttrading\tderivatives | $2,691 | $363,466 | $9,187 | $375,344 |  |  |
| Cash\tcollateral\treceived(6) |  |  |  | $14,308 |  |  |
| Netting\tagreements |  |  |  |  | $(306,401) |  |
| Netting\tof\tcash\tcollateral\tpaid |  |  |  |  | (35,666) |  |
| Total\ttrading\tderivatives | $2,691 | $363,466 | $9,187 | $389,652 | $(342,067) | $47,585 |
| Short-term\tborrowings | $— | $4,609 | $18 | $4,627 | $— | $4,627 |
| Long-term\tdebt | — | 18,310 | 13,082 | 31,392 | — | 31,392 |
| Non-trading\tderivatives\tand\tother\tfinancial\tliabilities\tmeasured\ton\ta\trecurring\tbasis | $13,903 | $50 | $8 | $13,961 | $— | $13,961 |
| Total\tliabilities | $82,437 | $494,879 | $23,334 | $614,958 | $(397,705) | $217,253 |
| Total\tas\ta\tpercentage\tof\tgross\tliabilities(5) | 13.7% | 82.4% | 3.9% |  |  |  |

(3) Reflects	the	net	amount	of	$43,207	million	of	gross	cash	collateral	paid,	of	which	 $35,666	million	was	used	to	offset	trading	derivative	liabilities.

(4) Amounts	exclude	$0.4	billion	of	investments	measured	at	NAV	in	accordance	with	ASU	2015-07 .

(6) Reflects	the	net	amount	of	$52,840	million	of	gross	cash	collateral	received,	of	which	 $38,532	million	was	used	to	offset	trading	derivative	assets.

# Changes	in	Level	3	Fair	Value	Category

The	following	tables	present	the	changes	in	the	Level	3	fair	value	category	for the	years	ended	December	31,	2018	and	2017.	The	gains	and	losses	presented below	include	changes	in	the	fair	value	related	to	both	observable	and unobservable	inputs.

The	Company	often	hedges	positions	with	offsetting	positions	that	are classified	in	a	different	level.	For	example,	the	gains	and	losses	for	assets	and liabilities	in	the	Level	3

category	presented	in	the	tables	below	do	not	reflect	the	effect	of	offsetting losses	and	gains	on	hedging	instruments	that	may	be	classified	in	the	Level	1 and	Level	2	categories.	In	addition,	the	Company	hedges	items	classified	in	the Level	3	category	with	instruments	also	classified	in	Level	3	of	the	fair	value hierarchy.	The	hedged	items	and	related	hedges	are	presented	gross	in	the following	tables:

# Level	3	Fair	Value	Rollforward

| In	millions	of	dollars | Dec.	31,<br>2017 | Net	realized/unrealized<br>gains	(losses)	included	in<br>Principal<br>transactions | Other(1)(2) | Transfers<br>into<br>Level	3 | out	of<br>Level	3 | Purchases | Issuances | Sales | Settlements | Dec.	31,<br>2018 | Unrealized<br>gains<br>(losses)<br>still	held(3) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Assets |  |  |  |  |  |  |  |  |  |  |  |
| Federal\tfunds\tsold\tand |  |  |  |  |  |  |  |  |  |  |  |
| securities\tborrowed\tand |  |  |  |  |  |  |  |  |  |  |  |
| purchased\tunder |  |  |  |  |  |  |  |  |  |  |  |
| agreements\tto\tresell | $16 | $17 | $— | $50 | $— | $95 | $— | $16 | $(79) | $115 | $9 |
| Trading\tnon-derivative\nassets |  |  |  |  |  |  |  |  |  |  |  |
| Trading\tmortgage-\nbacked\tsecurities |  |  |  |  |  |  |  |  |  |  |  |
| U.S.\tgovernment- |  |  |  |  |  |  |  |  |  |  |  |
| sponsored\tagency |  |  |  |  |  |  |  |  |  |  |  |
| guaranteed | 163 | 5 | — | 92 | (107) | 281 | — | (278) | — | 156 | 186 |
| Residential | 164 | 112 | — | 124 | (133) | 154 | — | (153) | — | 268 | 4 |
| Commercial | 57 | (7) | — | 24 | (49) | 110 | — | (58) | — | 77 | — |
| Total\ttrading\tmortgage-\nbacked\tsecurities | $384 | $110 | $— | $240 | $(289) | $545 | $— | $(489) | $— | $501 | $190 |
| U.S.\tTreasury\tand\nfederal\tagency\tsecurities | $— | $— | $— | $6 | $(4) | $1 | $— | $— | $(2) | $1 | $— |
| State\tand\tmunicipal | 274 | 22 | — | — | (96) | 45 | — | (45) | — | 200 | 9 |
| Foreign\tgovernment | 16 | (2) | — | 5 | (13) | 75 | — | (50) | — | 31 | (28) |
| Corporate | 275 | (72) | — | 138 | (122) | 596 | (40) | (415) | — | 360 | (32) |
| Equity\tsecurities | 120 | 2 | — | 25 | (62) | 290 | — | (222) | — | 153 | (56) |
| Asset-backed\tsecurities | 1,590 | 28 | — | 77 | (90) | 1,238 | — | (1,359) | — | 1,484 | (21) |
| Other\ttrading\tassets | 615 | 276 | — | 197 | (82) | 598 | 8 | (777) | (17) | 818 | 91 |
| Total\ttrading\tnon-\nderivative\tassets | $3,274 | $364 | $— | $688 | $(758) | $3,388 | $(32) | $(3,357) | $(19) | $3,548 | $153 |
| Trading\tderivatives,\tnet(4) |  |  |  |  |  |  |  |  |  |  |  |
| Interest\trate\tcontracts | $(422) | $414 | $— | $(6) | $(193) | $8 | $17 | $(32) | $60 | $(154) | $336 |
| Foreign\texchange\ncontracts | 130 | (99) | — | (29) | 77 | 11 | — | (89) | (7) | (6) | (72) |
| Equity\tcontracts | (2,027) | 479 | — | (131) | 1,114 | 25 | (44) | (17) | (183) | (784) | 52 |
| Commodity\tcontracts | (1,861) | (505) | — | (32) | 2,180 | 62 | — | (19) | 157 | (18) | (171) |
| Credit\tderivatives | (799) | 261 | — | (7) | 391 | 2 | — | 1 | 212 | 61 | 87 |
| Total\ttrading\tderivatives,\nnet(4) | $(4,979) | $550 | $— | $(205) | $3,569 | $108 | $(27) | $(156) | $239 | $(901) | $232 |

| In	millions	of	dollars | Dec.	31,<br>2017 | Net	realized/unrealized<br>gains	(losses)	included	in<br>Principal<br>transactions | Other(1)(2) | Transfers<br>into<br>Level	3 | out	of<br>Level	3 | Purchases | Issuances | Sales | Settlements | Dec.	31,<br>2018 | Unrealized<br>gains<br>(losses)<br>still	held(3) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Investments |  |  |  |  |  |  |  |  |  |  |  |
| Mortgage-backed\nsecurities |  |  |  |  |  |  |  |  |  |  |  |
| U.S.\tgovernment- |  |  |  |  |  |  |  |  |  |  |  |
| sponsored\tagency |  |  |  |  |  |  |  |  |  |  |  |
| guaranteed | $24 | $— | $10 | $— | $— | $— | $— | $(2) | $— | $32 | $14 |
| Residential | — | — | — | — | — | — | — | — | — | — | — |
| Commercial | 3 | — | 2 | 1 | (1) | — | — | (5) | — | — | — |
| Total\tinvestment\nmortgage-backed\tsecurities | $27 | $— | $12 | $1 | $(1) | $— | $— | $(7) | $— | $32 | $14 |
| U.S.\tTreasury\tand\tfederal\nagency\tsecurities | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| State\tand\tmunicipal | 737 | — | (20) | — | (18) | 211 | — | (202) | — | 708 | (29) |
| Foreign\tgovernment | 92 | — | (3) | 3 | (4) | 141 | — | (161) | — | 68 | 4 |
| Corporate | 71 | — | (1) | 61 | (66) | 101 | — | (10) | — | 156 | — |
| Marketable\tequity\nsecurities | 2 | — | 1 | — | — | — | — | (2) | (1) | — | — |
| Asset-backed\tsecurities | 827 | — | (21) | 10 | (524) | 63 | — | (168) | — | 187 | — |
| Other\tdebt\tsecurities | — | — | — | — | — | — | — | — | — | — | — |
| Non-marketable\tequity\nsecurities | 681 | — | (95) | 193 | — | 91 | — | (234) | (50) | 586 | 55 |
| Total\tinvestments | $2,437 | $— | $(127) | $268 | $(613) | $607 | $— | $(784) | $(51) | $1,737 | $44 |
| Loans | $550 | $— | $(319) | $— | $13 | $140 | $— | $(103) | $(4) | $277 | $236 |
| Mortgage\tservicing\trights | 558 | — | 54 | — | — | — | 58 | (18) | (68) | 584 | 59 |
| Other\tfinancial\tassets |  |  |  |  |  |  |  |  |  |  |  |
| measured\ton\ta\trecurring |  |  |  |  |  |  |  |  |  |  |  |
| basis | 16 | — | 51 | — | (11) | 4 | 12 | (12) | (60) | — | 63 |
| Liabilities |  |  |  |  |  |  |  |  |  |  |  |
| Interest-bearing\tdeposits | $286 | $— | $14 | $13 | $(1) | $— | $215 | $— | $(4) | $495 | $(355) |
| Federal\tfunds\tpurchased\tand |  |  |  |  |  |  |  |  |  |  |  |
| securities\tloaned\tand\tsold |  |  |  |  |  |  |  |  |  |  |  |
| under\tagreements\tto |  |  |  |  |  |  |  |  |  |  |  |
| repurchase | 726 | (8) | — | 1 | — | — | 243 | (31) | 36 | 983 | 24 |
| Trading\taccount\tliabilities |  |  |  |  |  |  |  |  |  |  |  |
| Securities\tsold,\tnot\tyet\npurchased | 22 | (454) | — | 187 | (172) | 7 | 226 | (39) | (99) | 586 | (238) |
| Other\ttrading\tliabilities | 5 | 5 | — | — | — | — | — | — | — | — | — |
| Short-term\tborrowings | 18 | 53 | — | 72 | (46) | — | 86 | — | (40) | 37 | 25 |
| Long-term\tdebt | 13,082 | (182) | — | 2,850 | (3,514) | 36 | (18) | (45) | (3) | 12,570 | (2,871) |
| Other\tfinancial\tliabilities |  |  |  |  |  |  |  |  |  |  |  |
| measured\ton\ta\trecurring |  |  |  |  |  |  |  |  |  |  |  |
| basis | 8 | — | (2) | 1 | (10) | — | 2 | — | (3) | — | (8) |

(1) Changes	in	fair	value	for	available-for-sale	investments	are	recorded	in	AOCI,	unless	related	to	other-than-temporary	impairment,	while	gains	and	losses	from	sales	are	recorded	in	 Realized	gains (losses)	from	sales	of	investments	in	the	Consolidated	Statement	of	Income.

(2) Unrealized	gains	(losses)	on	MSRs	are	recorded	in	Other	revenue	in	the	Consolidated	Statement	of	Income.

(3) Represents	the	amount	of	total	gains	or	losses	for	the	period,	included	in	earnings	(and	AOCI	for	changes	in	fair	value	of	available-for-sale	investments),	attributable	to	the	change	in	fair	value relating	to	assets	and	liabilities	classified	as	Level	3	that	are	still	held	at	December	31,	2018.

(4) Total	Level	3	trading	derivative	assets	and	liabilities	have	been	netted	in	these	tables	for	presentation	purposes	only.

|  |  | Net	realized/unrealized | Net	realized/unrealized |  |  |  |  |  |  |  |  | Unrealized |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | gains\t(losses)\tincluded\tin | gains\t(losses)\tincluded\tin | gains\t(losses)\tincluded\tin | Transfers |  |  |  |  |  |  | gains |
| In\tmillions\tof\tdollars | Dec.\t31,\n2016 | transactions | Principal | Other(1)(2) | into\nLevel\t3 | out\tof\nLevel\t3 | Purchases | Issuances | Sales | Settlements | Dec.\t31,\n2017 | (losses)\nstill\theld(3) |
| Assets |  |  |  |  |  |  |  |  |  |  |  |  |
| Federal\tfunds\tsold\tand\tsecurities |  |  |  |  |  |  |  |  |  |  |  |  |
| borrowed\tand\tpurchased\tunder |  |  |  |  |  |  |  |  |  |  |  |  |
| agreements\tto\tresell | $1,496 | $(281) | $— | $— | $— | $(1,198) | $— | $— | $— | $(1) | $16 | $1 |
| Trading\tnon-derivative\tassets |  |  |  |  |  |  |  |  |  |  |  |  |
| Trading\tmortgage-backed\nsecurities |  |  |  |  |  |  |  |  |  |  |  |  |
| U.S.\tgovernment-sponsored\nagency\tguaranteed | 176 | 23 | 23 | — | 176 | (174) | 463 | — | (504) | 3 | 163 | 2 |
| Residential | 399 | 86 | 86 | — | 95 | (118) | 126 | — | (424) | — | 164 | 14 |
| Commercial | 206 | 15 | 15 | — | 69 | (57) | 450 | — | (626) | — | 57 | (5) |
| Total\ttrading\tmortgage-backed\nsecurities | $781 | $124 | $— | $— | $340 | $(349) | $1,039 | $— | $(1,554) | $3 | $384 | $11 |
| U.S.\tTreasury\tand\tfederal\nagency\tsecurities | $1 | $— | $— | $— | $— | $— | $— | $— | $(1) | $— | $— | $— |
| State\tand\tmunicipal | 296 | 28 | 28 | — | 24 | (48) | 161 | (23) | (164) | — | 274 | 8 |
| Foreign\tgovernment | 40 | 1 | 1 | — | 89 | (228) | 291 | — | (177) | — | 16 | — |
| Corporate | 324 | 344 | 344 | — | 140 | (185) | 482 | (8) | (828) | 6 | 275 | 81 |
| Equity\tsecurities | 127 | 54 | 54 | — | 210 | (58) | 51 | (3) | (261) | — | 120 | — |
| Asset-backed\tsecurities | 1,868 | 284 | 284 | — | 44 | (178) | 1,457 | — | (1,885) | — | 1,590 | 36 |
| Other\ttrading\tassets | 2,814 | 117 | 117 | — | 474 | (2,691) | 2,195 | 11 | (2,285) | (20) | 615 | 60 |
| Total\ttrading\tnon-derivative\nassets | $6,251 | $952 | $— | $— | $1,321 | $(3,737) | $5,676 | $(23) | $(7,155) | $(11) | $3,274 | $196 |
| Trading\tderivatives,\tnet(4) |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest\trate\tcontracts | $(663) | $(44) | $— | $— | $(28) | $610 | $154 | $(13) | $(322) | $(116) | $(422) | $77 |
| Foreign\texchange\tcontracts | 413 | (438) | (438) | — | 54 | (60) | 33 | 14 | (21) | 135 | 130 | (139) |
| Equity\tcontracts | (1,557) | 129 | 129 | — | (159) | 28 | 184 | (216) | (333) | (103) | (2,027) | (214) |
| Commodity\tcontracts | (1,945) | (384) | (384) | — | 77 | 35 | — | 23 | (3) | 336 | (1,861) | 149 |
| Credit\tderivatives | (1,001) | (484) | (484) | — | (28) | 18 | 6 | 16 | (6) | 680 | (799) | (169) |
| Total\ttrading\tderivatives,\tnet(4) | $(4,753) | $(1,221) | $— | $— | $(84) | $631 | $377 | $(176) | $(685) | $932 | $(4,979) | $(296) |
| Investments |  |  |  |  |  |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities |  |  |  |  |  |  |  |  |  |  |  |  |
| U.S.\tgovernment-sponsored\nagency\tguaranteed | $101 | $— | $16 | $16 | $1 | $(94) | $— | $— | $— | $— | $24 | $(2) |
| Residential | 50 | — | 2 | 2 | — | (47) | — | — | (5) | — | — | — |
| Commercial | — | — | — | — | 3 | — | 12 | — | (12) | — | 3 | — |
| Total\tinvestment\tmortgage-\nbacked\tsecurities | $151 | $— | $18 | $18 | $4 | $(141) | $12 | $— | $(17) | $— | $27 | $(2) |
| U.S.\tTreasury\tand\tfederal\nagency\tsecurities | $2 | $— | $— | $— | $— | $— | $— | $— | $(2) | $— | $— | $— |
| State\tand\tmunicipal | 1,211 | — | 58 | 58 | 70 | (517) | 127 | — | (212) | — | 737 | 44 |
| Foreign\tgovernment | 186 | — | — | — | 2 | (284) | 523 | — | (335) | — | 92 | 1 |
| Corporate | 311 | — | 9 | 9 | 77 | (47) | 227 | — | (506) | — | 71 | — |
| Marketable\tequity\tsecurities | 9 | — | — | (1) | — | — | — | — | (6) | — | 2 | — |
| Asset-backed\tsecurities | 660 | — | — | (89) | 31 | (32) | 883 | — | (626) | — | 827 | 12 |
| Other\tdebt\tsecurities | — | — | — | — | — | — | 21 | — | (21) | — | — | — |
| Non-marketable\tequity\nsecurities | 1,331 | — | — | (170) | 2 | — | 19 | — | (233) | (268) | 681 | 44 |
| Total\tinvestments | $3,861 | $— | $(175) | $(175) | $186 | $(1,021) | $1,812 | $— | $(1,958) | $(268) | $2,437 | $99 |

|  |  | Net	realized/unrealized |  |  |  |  |  |  |  |  | Unrealized |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | gains\t(losses)\tincluded\tin |  | Transfers |  |  |  |  |  |  | gains |
| In\tmillions\tof\tdollars | Dec.\t31,\n2016 | Principal\ntransactions | Other(1)(2) | into\nLevel\t3 | out\tof\nLevel\t3 | Purchases | Issuances | Sales | Settlements | Dec.\t31,\n2017 | (losses)\nstill\theld(3) |
| Loans | $568 | $— | $75 | $80 | $(16) | $188 | $— | $(337) | $(8) | $550 | $211 |
| Mortgage\tservicing\trights | 1,564 | — | 65 | — | — | — | 96 | (1,057) | (110) | 558 | 74 |
| Other\tfinancial\tassets\nmeasured\ton\ta\trecurring\tbasis | 34 | — | (128) | 10 | (8) | 1 | 318 | (14) | (197) | 16 | (152) |
| Liabilities |  |  |  |  |  |  |  |  |  |  |  |
| Interest-bearing\tdeposits | $293 | $— | $25 | $40 | $— | $— | $2 | $— | $(24) | $286 | $22 |
| Federal\tfunds\tpurchased\tand |  |  |  |  |  |  |  |  |  |  |  |
| securities\tloaned\tand\tsold |  |  |  |  |  |  |  |  |  |  |  |
| under\tagreements\tto |  |  |  |  |  |  |  |  |  |  |  |
| repurchase | 849 | 14 | — | — | — | — | 36 | — | (145) | 726 | 10 |
| Trading\taccount\tliabilities |  |  |  |  |  |  |  |  |  |  |  |
| Securities\tsold,\tnot\tyet\npurchased | 1,177 | 385 | — | 22 | (796) | — | 17 | 277 | (290) | 22 | 8 |
| Other\ttrading\tliabilities | 1 | — | — | 4 | — | — | — | — | — | 5 | — |
| Short-term\tborrowings | 42 | 32 | — | 4 | (7) | — | 31 | — | (20) | 18 | (3) |
| Long-term\tdebt | 9,744 | (1,083) | — | 1,251 | (1,836) | 44 | 2,712 | — | 84 | 13,082 | (1,554) |
| Other\tfinancial\tliabilities\nmeasured\ton\ta\trecurring\tbasis | 8 | — | — | 5 | — | — | 5 | (1) | (9) | 8 | (1) |

(1) Changes	in	fair	value	of	available-for-sale	investments	are	recorded	in	AOCI,	unless	related	to	other-than-temporary	impairment,	while	gains	and	losses	from	sales	are	recorded	in	 Realized	gains (losses)	from	sales	of	investments	in	the	Consolidated	Statement	of	Income.

(4) Total	Level	3	derivative	assets	and	liabilities	have	been	netted	in	these	tables	for	presentation	purposes	only.

The	following	were	the	significant	Level	3	transfers	for	the	period	December	31, 2017	to	December	31,	2018:

•Transfers	of	Equity	Contract	Derivatives	of	$1.1	billion	from	Level	3	to Level	2	related	to	equity	derivatives	where	the	unobservable	components were	deemed	insignificant.

•Transfers	of	Commodity	Contract	Derivatives	of	$2.2	billion	from	Level	3 to	Level	2	related	to	commodity	derivatives	where	the	unobservable component	of	the	derivatives	were	deemed	insignificant.

•Transfers	of	Long-Term	Debt	of	$2.9	billion	from	Level	2	to	Level	3,	and	of $3.5	billion	from	Level	3	to	Level	2,	mainly	related	to	structured	debt, reflecting	changes	in	the	significance	of	unobservable	inputs	as	well	as certain	underlying	market	inputs	becoming	less	or	more	observable.

•Transfers	of	Federal	funds	sold	and	securities	borrowed	or	purchased under	agreements	to	resell	of	$1.2	billion	from	Level	3	to	Level	2,	related	to the	significance	of	unobservable	inputs	as	well	as	certain	underlying	market inputs	becoming	more	observable	and	shortening	of	the	remaining	tenor	of certain	reverse	repos.	There	is	more	transparency	and	observability	for	repo curves	used	in	the	valuation	of	structured	reverse	repos	with	tenors	up	to five	years.

•Transfers	of	Other	trading	assets	of	$2.7	billion	from	Level	3	to	Level	2, related	to	trading	loans,	reflecting	changes	in	the	volume	of	market quotations	changes	in	the	significance	of	unobservable	inputs	for	certain portfolios	of	trading	loans	economically	hedging	derivatives,	and	certain underlying	market	inputs	becoming	more	observable	as	a	result	of secondary	market	transactions	for	portfolios	of	residential	mortgage	loans with	similar	characteristics.

# Valuation	Techniques	and	Inputs	for	Level	3	Fair Value	Measurements

The	Company's	Level	3	inventory	consists	of	both	cash instruments	and	derivatives	of	varying	complexity.	The valuation	methodologies	used	to	measure	the	fair	value	of these	positions	include	discounted	cash	flow	analysis,	internal models	and	comparative	analysis.	A	position	is	classified within	Level	3	of	the	fair	value	hierarchy	when	at	least	one input	is	unobservable	and	is	considered	significant	to	its valuation.	The	specific	reason	an	input	is	deemed unobservable	varies;	for	example,	at	least	one	significant input	to	the	pricing	model	is	not	observable	in	the	market,	at

least	one	significant	input	has	been	adjusted	to	make	it	more representative	of	the	position	being	valued	or	the	price	quote available	does	not	reflect	sufficient	trading	activities.

The	following	tables	present	the	valuation	techniques	covering	the	majority of	Level	3	inventory	and	the	most	significant	unobservable	inputs	used	in Level	3	fair	value	measurements.	Differences	between	this	table	and	amounts presented	in	the	Level	3	Fair	Value	Rollforward	table	represent	individually immaterial	items	that	have	been	measured	using	a	variety	of	valuation techniques	other	than	those	listed.

|  | Fair	value(1) |  |  |  |  | Weighted |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| As\tof\tDecember\t31,\t2018 | \t(in\tmillions) | Methodology | Input | Low(2)(3) | High(2)(3) | average(4) |
| Assets |  |  |  |  |  |  |
| Federal\tfunds\tsold\tand\tsecurities |  |  |  |  |  |  |
| borrowed\tand\tpurchased\tunder |  |  |  |  |  |  |
| agreements\tto\tresell | $115 | Model-based | Interest\trate | 2.52\t% | 7.43% | 5.08\t% |
| Mortgage-backed\tsecurities | $313 | Price-based | Price | $11.25 | $110.35 | $90.07 |
|  | 198 | Yield\tanalysis | Yield | 2.27\t% | 8.70% | 3.74\t% |
| State\tand\tmunicipal,\tforeign |  |  |  |  |  |  |
| government,\tcorporate\tand\tother |  |  |  |  |  |  |
| debt\tsecurities | $1,212 | Price-based | Price | $— | $103.75 | $91.39 |
|  | 938 | Model-based | Credit\tspread | 35\tbps | 446\tbps | 238\tbps |
| Equity\tsecurities(5) | $108 | Price-based | Price | $— | $20,255.00 | $1,247.85 |
|  | 45 | Model-based | WAL | 1.47\tyears | 1.47\tyears | 1.47\tyears |
| Asset-backed\tsecurities | $1,608 | Price-based | Price | $2.75 | $101.03 | $66.18 |
| Non-marketable\tequity | $293 | Comparables\tanalysis | Discount\tto\tprice | —\t% | 100.00% | 0.66\t% |
|  | 255 | Price-based | EBITDA\tmultiples | 5.00x | 34.00x | 9.73x |
|  |  |  | Net\toperating\tincome\tmultiple | 24.70x | 24.70x | 24.70x |
|  |  |  | Price | $2.38 | $1,073.80 | $420.24 |
|  |  |  | Revenue\tmultiple | 2.25x | 16.50x | 7.06x |
| Derivatives—gross(6)\nInterest\trate\tcontracts\t(gross) | $3,467 | Model-based | Mean\treversion | 1.00\t% | 20.00% | 10.50\t% |
|  |  |  | Inflation\tvolatility | 0.22\t% | 2.65% | 0.77\t% |
|  |  |  | IR\tnormal\tvolatility | 0.16\t% | 86.31% | 56.24\t% |
|  |  |  | Foreign\texchange\t(FX) |  |  |  |
| Foreign\texchange\tcontracts\t(gross) | $626 | Model-based | volatility | 3.15\t% | 17.35% | 11.37\t% |
|  | 73 | Cash\tflow | IR-IR\tcorrelation | (51.00)% | 40.00% | 32.69\t% |
|  |  |  | IR-FX\tcorrelation | 40.00\t% | 60.00% | 50.00\t% |
|  |  |  | Credit\tspread | 39\tbps | 676\tbps | 423\tbps |
|  |  |  | IR\tbasis | (0.65)% | 0.11% | (0.17)% |
|  |  |  | Yield | 6.98\t% | 7.48% | 7.23\t% |
| Equity\tcontracts\t(gross)(7) | $1,467 | Model-based | Equity\tvolatility | 3.00\t% | 78.39% | 37.53\t% |
|  |  |  | Forward\tprice | 64.66\t% | 144.45% | 98.55\t% |
|  |  |  | Equity-Equity\tcorrelation | (81.39)% | 100.00% | 35.49\t% |
|  |  |  | Equity-FX\tcorrelation | (86.27)% | 70.00% | (1.20)% |
|  |  |  | WAL | 1.47\tyears | 1.47\tyears | 1.47\tyears |
| Commodity\tcontracts\t(gross) | $1,552 | Model-based | Forward\tprice | 15.30\t% | 585.07% | 145.08\t% |
|  |  |  | Commodity\tvolatility | 8.92\t% | 59.86% | 20.34\t% |
|  |  |  | Commodity\tcorrelation | (51.90)% | 92.11% | 40.71\t% |

(1) The	fair	value	amounts	presented	in	these	tables	represent	the	primary	valuation	technique	or	techniques	for	each	class	of	assets	or	liabilities.

(2) Some	inputs	are	shown	as	zero	due	to	rounding.

(3) When	the	low	and	high	inputs	are	the	same,	there	is	either	a	constant	input	applied	to	all	positions	or	the	methodology	involving	the	input	applies	to	only	one	large	position.

(4) Weighted	averages	are	calculated	based	on	the	fair	values	of	the	instruments.

(5) For	equity	securities,	the	price	and	fund	NAV	inputs	are	expressed	on	an	absolute	basis,	not	as	a	percentage	of	the	notional	amount.

(6) Both	trading	and	nontrading	account	derivatives—assets	and	liabilities—are	presented	on	a	gross	absolute	value	basis.

(7) Includes	hybrid	products.

# Uncertainty	of	Fair	Value	Measurements	Relating	to	Unobservable	Inputs

Valuation	uncertainty	arises	when	there	is	insufficient	or	disperse	market	data	to allow	a	precise	determination	of	the	exit	value	of	a	fair-valued	position	or portfolio	in	today's	market.	This	is	especially	prevalent	in	Level	3	fair	value instruments,	where	uncertainty	exists	in	valuation	inputs	that	may	be	both unobservable	and	significant	to	the	instrument's	(or	portfolio's)	overall	fair	value measurement.	The	uncertainties	associated	with	key	unobservable	inputs	on	the Level	3	fair	value	measurements	may	not	be	independent	of	one	another.	In addition,	the	amount	and	direction	of	the	uncertainty	on	a	fair	value measurement	for	a	given	change	in	an	unobservable	input	depends	on	the	nature of	the	instrument	as	well	as	whether	the	Company	holds	the	instrument	as	an asset	or	a	liability.	For	certain	instruments,	the	pricing,	hedging	and	risk management	are	sensitive	to	the	correlation	between	various	inputs	rather	than on	the	analysis	and	aggregation	of	the	individual	inputs.

The	following	section	describes	some	of	the	most	significant	unobservable inputs	used	by	the	Company	in	Level	3	fair	value	measurements.

# Correlation

Correlation	is	a	measure	of	the	extent	to	which	two	or	more	variables	change	in relation	to	each	other.	A	variety	of	correlation-related	assumptions	are	required for	a	wide	range	of	instruments,	including	equity	and	credit	baskets,	foreign exchange	options,	CDOs	backed	by	loans	or	bonds,	mortgages,	subprime mortgages	and	many	other	instruments.	For	almost	all	of	these	instruments, correlations	are	not	directly	observable	in	the	market	and	must	be	calculated using	alternative	sources,	including	historical	information.	Estimating correlation	can	be	especially	difficult	where	it	may	vary	over	time,	and calculating	correlation	information	from	market	data	requires	significant assumptions	regarding	the	informational	efficiency	of	the	market	(e.g.,	swaption markets).	Uncertainty	therefore	exists	when	an	estimate	of	the	appropriate	level of	correlation	as	an	input	into	some	fair	value	measurements	is	required.

Changes	in	correlation	levels	can	have	a	substantial	impact,	favorable	or unfavorable,	on	the	value	of	an	instrument,	depending	on	its	nature.	A	change	in the	default	correlation	of	the	fair	value	of	the	underlying	bonds	comprising	a CDO	structure	would	affect	the	fair	value	of	the	senior	tranche.	For	example,	an increase	in	the	default	correlation	of	the	underlying	bonds	would	reduce	the	fair value	of	the	senior	tranche,	because	highly	correlated	instruments	produce greater	losses	in	the	event	of	default	and	a	portion	of	these	losses	would	become attributable	to	the	senior	tranche.	That	same	change	in	default	correlation	would have	a	different	impact	on	junior	tranches	of	the	same	structure.

# Volatility

Volatility	represents	the	speed	and	severity	of	market	price	changes	and	is	a	key factor	in	pricing	options.	Volatility	generally	depends	on	the	tenor	of	the underlying	instrument	and	the	strike	price	or	level	defined	in	the	contract. Volatilities

for	certain	combinations	of	tenor	and	strike	are	not	observable	and	need	to	be estimated	using	alternative	methods,	such	as	using	comparable	instruments, historical	analysis	or	other	sources	of	market	information.	This	leads	to uncertainty	around	the	final	fair	value	measurement	of	instruments	with unobservable	volatilities.

The	general	relationship	between	changes	in	the	value	of	a	portfolio	to changes	in	volatility	also	depends	on	changes	in	interest	rates	and	the	level	of	the underlying	index.	Generally,	long	option	positions	(assets)	benefit	from	increases in	volatility,	whereas	short	option	positions	(liabilities)	will	suffer	losses.	Some instruments	are	more	sensitive	to	changes	in	volatility	than	others.	For	example, an	at-the-money	option	would	experience	a	greater	percentage	change	in	its	fair value	than	a	deep-in-the-money	option.	In	addition,	the	fair	value	of	an	option with	more	than	one	underlying	security	(e.g.,	an	option	on	a	basket	of	bonds) depends	on	the	volatility	of	the	individual	underlying	securities	as	well	as	their correlations.

# Yield

In	some	circumstances,	the	yield	of	an	instrument	is	not	observable	in	the	market and	must	be	estimated	from	historical	data	or	from	yields	of	similar	securities. This	estimated	yield	may	need	to	be	adjusted	to	capture	the	characteristics	of	the security	being	valued.	In	other	situations,	the	estimated	yield	may	not	represent sufficient	market	liquidity	and	must	be	adjusted	as	well.	Whenever	the	amount of	the	adjustment	is	significant	to	the	value	of	the	security,	the	fair	value measurement	is	classified	as	Level	3.

Adjusted	yield	is	generally	used	to	discount	the	projected	future	principal and	interest	cash	flows	on	instruments,	such	as	asset-backed	securities.	Adjusted yield	is	impacted	by	changes	in	the	interest	rate	environment	and	relevant	credit spreads.

# Prepayment

Voluntary	unscheduled	payments	(prepayments)	change	the	future	cash	flows	for the	investor	and	thereby	change	the	fair	value	of	the	security.	The	effect	of prepayments	is	more	pronounced	for	residential	mortgage-backed	securities.	An increase	in	prepayments—in	speed	or	magnitude—generally	creates	losses	for the	holder	of	these	securities.	Prepayment	is	generally	negatively	correlated	with delinquency	and	interest	rate.	A	combination	of	low	prepayment	and	high delinquencies	amplifies	each	input's	negative	impact	on	mortgage	securities' valuation.	As	prepayment	speeds	change,	the	weighted	average	life	of	the security	changes,	which	impacts	the	valuation	either	positively	or	negatively, depending	upon	the	nature	of	the	security	and	the	direction	of	the	change	in	the weighted	average	life.

# Recovery

Recovery	is	the	proportion	of	the	total	outstanding	balance	of	a	bond	or	loan	that is	expected	to	be	collected	in	a	liquidation	scenario.	For	many	credit	securities (such	as	asset-backed	securities),	there	is	no	directly	observable	market	input	for recovery,	but	indications	of	recovery	levels	are	available	from	pricing	services. The	assumed	recovery	of	a	security	may	differ	from	its	actual	recovery	that	will be	observable	in	the	future.	The	recovery	rate	impacts	the	valuation	of	credit

securities.	Generally,	an	increase	in	the	recovery	rate	assumption	increases	the fair	value	of	the	security.	An	increase	in	loss	severity,	the	inverse	of	the	recovery rate,	reduces	the	amount	of	principal	available	for	distribution	and,	as	a	result, decreases	the	fair	value	of	the	security.

# Credit	Spread

Credit	spread	is	a	component	of	the	security	representing	its	credit	quality. Credit	spread	reflects	the	market	perception	of	changes	in	prepayment, delinquency	and	recovery	rates,	therefore	capturing	the	impact	of	other	variables on	the	fair	value.	Changes	in	credit	spread	affect	the	fair	value	of securities	differently	depending	on	the	characteristics	and	maturity	profile	of	the security.	For	example,	credit	spread	is	a	more	significant	driver	of	the	fair	value measurement	of	a	high	yield	bond	as	compared	to	an	investment	grade	bond. Generally,	the	credit	spread	for	an	investment	grade	bond	is	also	more observable	and	less	volatile	than	its	high	yield	counterpart.

# Items	Measured	at	Fair	Value	on	a	Nonrecurring	Basis

Certain	assets	and	liabilities	are	measured	at	fair	value	on	a	nonrecurring	basis and	therefore	are	not	included	in	the	tables	above.	These	include	assets measured	at	cost	that	have	been	written	down	to	fair	value	during	the	periods	as a	result	of	an	impairment.	These	also	include	non-marketable	equity	securities that	have	been	measured	using	the	measurement	alternative	and	are	either	(i) written	down	to	fair	value	during	the	periods	as	a	result	of	an	impairment	or	(ii) adjusted	upward	or	downward	to	fair	value	as	a	result	of	a	transaction	observed during	the	periods	for	the	identical	or	similar	investment	of	the	same	issuer.	In addition,	these	assets	include	loans	HFS	and	other	real	estate	owned	that	are measured	at	the	lower	of	cost	or	market.

The	following	tables	present	the	carrying	amounts	of	all	assets	that	were still	held	for	which	a	nonrecurring	fair	value	measurement	was	recorded:

| In	millions	of	dollars | Fair	value | Level	2 | Level	3 |
| :--- | :--- | :--- | :--- |
| December\t31,\t2018 |  |  |  |
| Loans\tHFS(1) | $5,055 | $3,261 | $1,794 |
| Other\treal\testate\towned | 78 | 62 | 16 |
| Loans(2) | 390 | 139 | 251 |
| Non-marketable\tequity |  |  |  |
| securities\tmeasured\tusing\tthe |  |  |  |
| measurement\talternative | 261 | 192 | 69 |
| Total\tassets\tat\tfair\tvalue\ton\ta\nnonrecurring\tbasis | $5,784 | $3,654 | $2,130 |

| In	millions	of	dollars | Fair	value | Level	2 | Level	3 |
| :--- | :--- | :--- | :--- |
| December\t31,\t2017 |  |  |  |
| Loans\tHFS(1) | $5,675 | $2,066 | $3,609 |
| Other\treal\testate\towned | 54 | 10 | 44 |
| Loans(2) | 630 | 216 | 414 |
| Total\tassets\tat\tfair\tvalue\ton\ta\nnonrecurring\tbasis | $6,359 | $2,292 | $4,067 |

(1) Net	of	fair	value	amounts	on	the	unfunded	portion	of	loans	HFS,	recognized	within	 Other liabilities	on	the	Consolidated	Balance	Sheet.

(2) Represents	impaired	loans	held	for	investment	whose	carrying	amount	is	based	on	the	fair value	of	the	underlying	collateral,	primarily	real	estate	secured	loans.

The	fair	value	of	loans	HFS	is	determined	where	possible	using	quoted secondary-market	prices.	If	no	such	quoted	price	exists,	the	fair	value	of	a	loan	is determined	using	quoted	prices	for	a	similar	asset	or	assets,	adjusted	for	the specific	attributes	of	that	loan.	Fair	value	for	the	other	real	estate	owned	is	based on	appraisals.	For	loans	whose	carrying	amount	is	based	on	the	fair	value	of	the underlying	collateral,	the	fair	values	depend	on	the	type	of	collateral.	Fair	value of	the	collateral	is	typically	estimated	based	on	quoted	market	prices	if	available, appraisals	or	other	internal	valuation	techniques.

Where	the	fair	value	of	the	related	collateral	is	based	on	an	unadjusted appraised	value,	the	loan	is	generally	classified	as	Level	2.	Where	significant adjustments	are	made	to	the	appraised	value,	the	loan	is	classified	as	Level	3. Additionally,

for	corporate	loans,	appraisals	of	the	collateral	are	often	based	on	sales	of	similar assets;	however,	because	the	prices	of	similar	assets	require	significant adjustments	to	reflect	the	unique	features	of	the	underlying	collateral,	these	fair value	measurements	are	generally	classified	as	Level	3.

The	fair	value	of	non-marketable	equity	securities	under	the	measurement alternative	is	based	on	observed	transaction	prices	for	the	identical	or	similar investment	of	the	same	issuer,	or	an	internal	valuation	technique	in	the	case	of an	impairment.	Where	significant	adjustments	are	made	to	the	observed transaction	price	or	when	an	internal	valuation	technique	is	used,	the	security	is classified	as	Level	3.	Fair	value	may	differ	from	the	observed	transaction	price due	to	a	number	of	factors,	including	marketability	adjustments	and	differences in	rights	and	obligations	when	the	observed	transaction	is	not	for	the	identical investment	held	by	Citi.

# Valuation	Techniques	and	Inputs	for	Level	3	Nonrecurring	Fair	Value	Measurements

The	following	tables	present	the	valuation	techniques	covering	the	majority	of	Level	3	nonrecurring	fair	value	measurements	and	the	most	significant	unobservable inputs	used	in	those	measurements:

(1) The	fair	value	amounts	presented	in	this	table	represent	the	primary	valuation	technique	or	techniques	for	each	class	of	assets	or	liabilities.

(4) Appraised	values	are	disclosed	in	whole	dollars.

(5) Includes	estimated	costs	to	sell.

(6) Represents	impaired	loans	held	for	investment	whose	carrying	amounts	are	based	on	the	fair	value	of	the	underlying	collateral,	primarily	real	estate	secured	loans.

# Nonrecurring	Fair	Value	Changes

The	following	tables	present	total	nonrecurring	fair	value	measurements	for	the period,	included	in	earnings,	attributable	to	the	change	in	fair	value	relating	to assets	that	were	still	held:

|  | Year	ended	December	31, |
| :--- | :--- |
| In\tmillions\tof\tdollars | 2017 |
| Loans\tHFS | $(26) |
| Other\treal\testate\towned | (4) |
| Loans(1) | (87) |
| Non-marketable\tequity\tsecurities\tmeasured\tusing\tthe\nmeasurement\talternative | — |
| Total\tnonrecurring\tfair\tvalue\tgains\t(losses) | $(117) |

(1) Represents	loans	held	for	investment	whose	carrying	amount	is	based	on	the	fair	value	of the	underlying	collateral,	primarily	real	estate	loans.

# Estimated	Fair	Value	of	Financial	Instruments	not	Carried	at	Fair	Value

The	following	tables	present	the	carrying	value	and	fair	value	of	Citigroup's financial	instruments	that	are	not	carried	at	fair	value.	The	tables	below	therefore exclude	items	measured	at	fair	value	on	a	recurring	basis	presented	in	the	tables above.

The	disclosure	also	excludes	leases,	affiliate	investments,	pension	and benefit	obligations,	certain	insurance	contracts	and	tax-related	items.	Also,	as required,	the	disclosure	excludes	the	effect	of	taxes,	any	premium	or	discount that	could	result	from	offering	for	sale	at	one	time	the	entire	holdings	of	a particular	instrument,	excess	fair	value	associated	with	deposits	with	no	fixed maturity	and	other	expenses	that	would	be	incurred	in	a	market	transaction.	In addition,	the	tables	exclude	the	values	of	non-financial	assets	and	liabilities,	as well	as	a	wide	range	of	franchise,	relationship	and	intangible	values,	which	are integral	to	a	full	assessment	of	Citigroup's	financial	position	and	the	value	of	its net	assets.

Fair	values	vary	from	period	to	period	based	on	changes	in	a	wide	range	of factors,	including	interest	rates,	credit	quality	and	market	perceptions	of	value, and	as	existing	assets	and	liabilities	run	off	and	new	transactions	are	entered into.

|  | December	31,	2018 | December	31,	2018 | Estimated	fair	value | Estimated	fair	value |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars | Carrying\nvalue | Estimated\nfair\tvalue | Level\t1 | Level\t2 | Level\t3 |
| Assets |  |  |  |  |  |
| Investments | $68.9 | $68.5 | $1.0 | $65.4 | $2.1 |
| Federal\tfunds\tsold\tand\tsecurities\tborrowed\tand\tpurchased\tunder\tagreements\tto\tresell | 123.0 | 123.0 | — | 121.6 | 1.4 |
| Loans(1)(2) | 667.1 | 666.9 | — | 5.6 | 661.3 |
| Other\tfinancial\tassets(2)(3) | 249.7 | 250.1 | 172.3 | 15.8 | 62.0 |
| Liabilities |  |  |  |  |  |
| Deposits | $1,011.7 | $1,009.5 | $— | $847.1 | $162.4 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\tagreements\tto\trepurchase | 133.3 | 133.3 | — | 133.3 | — |
| Long-term\tdebt(4) | 193.8 | 193.7 | — | 178.4 | 15.3 |
| Other\tfinancial\tliabilities(5) | 103.8 | 103.8 | — | 17.2 | 86.6 |

|  | December	31,	2017 | December	31,	2017 | Estimated	fair	value | Estimated	fair	value |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars | Carrying\nvalue | Estimated\nfair\tvalue | Level\t1 | Level\t2 | Level\t3 |
| Assets |  |  |  |  |  |
| Investments | $60.2 | $60.6 | $0.5 | $57.5 | $2.6 |
| Federal\tfunds\tsold\tand\tsecurities\tborrowed\tand\tpurchased\tunder\tagreements\tto\tresell | 99.5 | 99.5 | — | 94.4 | 5.1 |
| Loans(1)(2) | 648.6 | 644.9 | — | 6.0 | 638.9 |
| Other\tfinancial\tassets(2)(3) | 242.6 | 243.0 | 166.4 | 14.1 | 62.5 |
| Liabilities |  |  |  |  |  |
| Deposits | $958.4 | $955.6 | $— | $816.1 | $139.5 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tand\tsold\tunder\tagreements\tto\trepurchase | 115.6 | 115.6 | — | 115.6 | — |
| Long-term\tdebt(4) | 205.3 | 214.0 | — | 187.2 | 26.8 |
| Other\tfinancial\tliabilities(5) | 129.9 | 129.9 | — | 15.5 | 114.4 |

(1) The	carrying	value	of	loans	is	net	of	the	Allowance	for	loan	losses	of	$12.3	billion	for	December	31,	2018	and	$12.4	billion	for	December	31,	2017.	In	addition,	the	carrying	values	exclude	$1.6 billion	and	$1.7	billion	of	lease	finance	receivables	at	December	31,	2018	and	2017,	respectively.

(2) Includes	items	measured	at	fair	value	on	a	nonrecurring	basis.

(3) Includes	cash	and	due	from	banks,	deposits	with	banks,	brokerage	receivables,	reinsurance	recoverable	and	other	financial	instruments	included	in Other	assets	on	the	Consolidated	Balance Sheet,	for	all	of	which	the	carrying	value	is	a	reasonable	estimate	of	fair	value.

(4) The	carrying	value	includes	long-term	debt	balances	under	qualifying	fair	value	hedges.

(5) Includes	brokerage	payables,	short-term	borrowings	(carried	at	cost)	and	other	financial	instruments	included	in	 Other	liabilities	on	the	Consolidated	Balance	Sheet,	for	all	of	which	the	carrying value	is	a	reasonable	estimate	of	fair	value.

The	estimated	fair	values	of	the	Company's	corporate	unfunded	lending commitments	at	December	31,	2018	and	2017	were	liabilities	of	$7.8	billion	and $3.2	billion,	respectively,	substantially	all	of	which	are	classified	as	Level	3.	The Company	does	not	estimate	the	fair	values	of	consumer	unfunded	lending commitments,	which	are	generally	cancelable	by	providing	notice	to	the borrower.

# 25.			FAIR	VALUE	ELECTIONS

The	Company	may	elect	to	report	most	financial	instruments	and	certain	other items	at	fair	value	on	an	instrument-by-instrument	basis	with	changes	in	fair value	reported	in	earnings,	other	than	DVA	(see	below).	The	election	is	made upon	the	initial	recognition	of	an	eligible	financial	asset,	financial	liability	or firm	commitment	or	when	certain	specified	reconsideration	events	occur.	The fair	value	election	may	not	be	revoked	once	an	election	is	made.	The	changes	in

fair	value	are	recorded	in	current	earnings,	other	than	DVA,	which	is	reported	in AOCI.	Additional	discussion	regarding	the	applicable	areas	in	which	fair	value elections	were	made	is	presented	in	Note	24	to	the	Consolidated	Financial Statements.

The	Company	has	elected	fair	value	accounting	for	its	mortgage	servicing rights.	See	Note	21	to	the	Consolidated	Financial	Statements	for	further discussions	regarding	the	accounting	and	reporting	of	MSRs.

The	following	table	presents	the	changes	in	fair	value	of	those	items	for	which	the	fair	value	option	has	been	elected:

|  | Changes	in	fair	value	gains	(losses)	for | Changes	in	fair	value	gains	(losses)	for |
| :--- | :--- | :--- |
|  | the\tyears\tended\nDecember\t31, |  |
| In\tmillions\tof\tdollars | 2018 | 2017 |
| Assets |  |  |
| Federal\tfunds\tsold\tand\tsecurities\tborrowed\tand\tpurchased\tunder\tagreements\tto\tresell | $(6) | $(133) |
| Trading\taccount\tassets | (337) | 1,622 |
| Investments | — | (3) |
| Loans |  |  |
| Certain\tcorporate\tloans | (116) | (537) |
| Certain\tconsumer\tloans | — | 3 |
| Total\tloans | $(116) | $(534) |
| Other\tassets |  |  |
| MSRs | $54 | $65 |
| Certain\tmortgage\tloans\tHFS(1) | 38 | 142 |
| \t\tOther\tassets | — | — |
| Total\tother\tassets | $92 | $207 |
| Total\tassets | $(367) | $1,159 |
| Liabilities |  |  |
| Interest-bearing\tdeposits | $20 | $(69) |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tand\tsold\tunder\tagreements\tto\trepurchase |  |  |
|  | (118) | 223 |
| Trading\taccount\tliabilities | (13) | 70 |
| Short-term\tborrowings | 150 | (116) |
| Long-term\tdebt(2) | 3,048 | (1,491) |
| Total\tliabilities | $3,087 | $(1,383) |

(1) Includes	gains	(losses)	associated	with	interest	rate	lock-commitments	for	those	loans	that	have	been	originated	and	elected	under	the	fair	value	option.

# Own	Debt	Valuation	Adjustments	(DVA)

Own	debt	valuation	adjustments	are	recognized	on	Citi's	liabilities	for	which	the fair	value	option	has	been	elected	using	Citi's	credit	spreads	observed	in	the bond	market.	Effective	January	1,	2016,	changes	in	fair	value	of	fair	value	option liabilities	related	to	changes	in	Citigroup's	own	credit	spreads	(DVA)	are reflected	as	a	component	of	AOCI.	See	Note	1	to	the	Consolidated	Financial Statements	for	additional	information.

Among	other	variables,	the	fair	value	of	liabilities	for	which	the	fair	value option	has	been	elected	(other	than	non-recourse	and	similar	liabilities)	is impacted	by	the	narrowing	or	widening	of	the	Company's	credit	spreads. The	estimated	change	in	the	fair	value	of	these	liabilities	due	to	such changes	in	the	Company's	own	credit	spread	(or	instrument-specific	credit	risk) were	a	gain	of	$1,415	million	and	a	loss	of	$680	million	for	the	years	ended December	31,	2018	and	2017,	respectively.	Changes	in	fair	value	resulting	from changes	in	instrument-specific	credit	risk	were	estimated	by	incorporating	the Company's	current	credit	spreads	observable	in	the	bond	market	into	the	relevant valuation	technique	used	to	value	each	liability	as	described	above.

# The	Fair	Value	Option	for	Financial	Assets	and	Financial	Liabilities

# Selected	Portfolios	of	Securities	Purchased	Under	Agreements	to	Resell, Securities	Borrowed,	Securities	Sold	Under	Agreements	to	Repurchase, Securities	Loaned	and	Certain	Non-Collateralized	Short-Term	Borrowings

The	Company	elected	the	fair	value	option	for	certain	portfolios	of	fixed	income securities	purchased	under	agreements	to	resell	and	fixed	income	securities	sold under	agreements	to	repurchase,	securities	borrowed,	securities	loaned	and certain	non-collateralized	short-term	borrowings	held	primarily	by	broker-dealer entities	in	the	United	States,	United	Kingdom	and	Japan.	In	each	case,	the election	was	made	because	the	related	interest	rate	risk	is	managed	on	a	portfolio basis,	primarily	with	offsetting	derivative	instruments	that	are	accounted	for	at fair	value	through	earnings.

Changes	in	fair	value	for	transactions	in	these	portfolios	are	recorded	in Principal	transactions.	The	related	interest	revenue	and	interest	expense	are measured	based	on	the	contractual	rates	specified	in	the	transactions	and	are reported	as	Interest	revenue	and	Interest	expense	in	the	Consolidated	Statement of	Income.

# Certain	Loans	and	Other	Credit	Products

Citigroup	has	also	elected	the	fair	value	option	for	certain	other	originated	and purchased	loans,	including	certain	unfunded	loan	products,	such	as	guarantees and	letters	of	credit,	executed	by	Citigroup's	lending	and	trading	businesses. None	of	these	credit	products	are	highly	leveraged	financing	commitments. Significant	groups	of	transactions	include	loans	and	unfunded	loan	products	that are	expected	to	be	either	sold	or	securitized	in	the	near	term,	or	transactions where	the	economic	risks	are	hedged	with	derivative	instruments,	such	as purchased	credit	default	swaps	or	total	return	swaps	where	the	Company	pays the	total	return	on	the	underlying	loans	to	a	third	party.	Citigroup	has	elected	the fair	value	option	to	mitigate	accounting	mismatches	in	cases	where	hedge accounting	is	complex	and	to	achieve	operational	simplifications.	Fair	value	was not	elected	for	most	lending	transactions	across	the	Company.

The	following	table	provides	information	about	certain	credit	products	carried	at	fair	value:

|  | December	31,	2018 | December	31,	2018 | December	31,	2017 | December	31,	2017 |
| :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Trading\tassets | Loans | Trading\tassets | Loans |
| Carrying\tamount\treported\ton\tthe\tConsolidated\tBalance\tSheet | $10,108 | $3,224 | $8,851 | $4,374 |
| Aggregate\tunpaid\tprincipal\tbalance\tin\texcess\tof\tfair\tvalue | 435 | 741 | 623 | 682 |
| Balance\tof\tnon-accrual\tloans\tor\tloans\tmore\tthan\t90\tdays\tpast\tdue | — | 1 | — | 1 |
| Aggregate\tunpaid\tprincipal\tbalance\tin\texcess\tof\tfair\tvalue\tfor\tnon-accrual\tloans\tor\tloans\tmore\tthan\t90\tdays\npast\tdue | — | — | — | 1 |

Changes	in	the	fair	value	of	funded	and	unfunded	credit	products	are classified	in	Principal	transactions	in	Citi's	Consolidated	Statement	of	Income. Related	interest	revenue	is	measured	based	on	the	contractual	interest	rates	and reported	as	Interest	revenue	on	Trading	account	assets	or	loan	interest	depending on	the	balance	sheet	classifications	of	the	credit	products.	The	changes	in	fair value	for	the	years	ended	December	31,	2018	and	2017	due	to	instrument- specific	credit	risk	totaled	to	a	loss	of	$27	million	and	a	gain	of	$10	million, respectively.

# Certain	Investments	in	Unallocated	Precious	Metals

Citigroup	invests	in	unallocated	precious	metals	accounts	(gold,	silver,	platinum and	palladium)	as	part	of	its	commodity	and	foreign	currency	trading	activities or	to	economically	hedge	certain	exposures	from	issuing	structured	liabilities. Under	ASC	815,	the	investment	is	bifurcated	into	a	debt	host	contract	and	a commodity	forward	derivative	instrument.	Citigroup	elects	the	fair	value	option for	the	debt	host	contract,	and	reports	the	debt	host	contract	within	Trading account	assets	on	the	Company's	Consolidated	Balance	Sheet.	The	total	carrying amount	of	debt	host	contracts	across	unallocated	precious	metals	accounts	was approximately	$0.4	billion	and	$0.9	billion	at	December	31,	2018	and	2017, respectively.	The	amounts	are	expected	to	fluctuate	based	on	trading	activity	in future	periods.

As	part	of	its	commodity	and	foreign	currency	trading	activities,	Citi	trades unallocated	precious	metals	investments	and	executes	forward	purchase	and forward	sale	derivative	contracts	with	trading	counterparties.	When	Citi	sells	an unallocated	precious	metals	investment,	Citi's	receivable	from	its	depository bank	is	repaid	and	Citi	derecognizes	its	investment	in	the	unallocated	precious metal.	The	forward	purchase	or	sale	contract	with	the	trading	counterparty indexed	to	unallocated	precious	metals	is	accounted	for	as	a	derivative,	at	fair value	through	earnings.	As	of	December	31,	2018,	there	were	approximately $13.7	billion	and	$10.3	billion	in	notional	amounts	of	such	forward	purchase	and forward	sale	derivative	contracts	outstanding,	respectively.

# Certain	Investments	in	Private	Equity	and	Real	Estate	Ventures	and	Certain Equity	Method	and	Other	Investments

Citigroup	invests	in	private	equity	and	real	estate	ventures	for	the	purpose	of earning	investment	returns	and	for	capital	appreciation.	The	Company	has elected	the	fair	value	option	for	certain	of	these	ventures,	because	such investments	are	considered	similar	to	many	private	equity	or	hedge	fund activities	in	Citi's	investment	companies,	which	are	reported	at	fair	value.	The fair	value	option	brings	consistency	in	the	accounting	and	evaluation	of	these investments.	All	investments	(debt	and	equity)	in	such	private	equity	and	real estate	entities	are	accounted	for	at	fair	value.	These	investments	are	classified	as Investments	on	Citigroup's	Consolidated	Balance	Sheet.

Changes	in	the	fair	values	of	these	investments	are	classified	in	Other revenue	in	the	Company's	Consolidated	Statement	of	Income.

Citigroup	also	elected	the	fair	value	option	for	certain	non-marketable equity	securities	whose	risk	is	managed	with	derivative	instruments	that	are accounted	for	at	fair	value	through	earnings.	These	securities	are	classified	as Trading	account	assets	on	Citigroup's	Consolidated	Balance	Sheet.	Changes	in the	fair	value	of	these	securities	and	the	related	derivative	instruments	are recorded	in	Principal	transactions.	Effective	January	1,	2018	under	ASU	2016- 01	and	ASU	2018-03,	a	fair	value	option	election	is	no	longer	required	to measure	these	non-marketable	equity	securities	through	earnings.	See	Note	1	to the	Consolidated	Financial	Statements	for	additional	details.

# Certain	Mortgage	Loans	Held-for-Sale

Citigroup	has	elected	the	fair	value	option	for	certain	purchased	and	originated prime	fixed-rate	and	conforming	adjustable-rate	first	mortgage	loans	HFS.	These loans	are	intended	for	sale	or	securitization	and	are	hedged	with	derivative instruments.	The	Company	has	elected	the	fair	value	option	to	mitigate accounting	mismatches	in	cases	where	hedge	accounting	is	complex	and	to achieve	operational	simplifications.

The	following	table	provides	information	about	certain	mortgage	loans	HFS	carried	at	fair	value:

| In	millions	of	dollars | December	31,<br>2018 | December	31,	2017 |
| :--- | :--- | :--- |
| Carrying\tamount\treported\ton\tthe\tConsolidated\tBalance\tSheet | $556 | $426 |
| Aggregate\tfair\tvalue\tin\texcess\tof\t(less\tthan)\tunpaid\tprincipal\tbalance | 21 | 14 |
| Balance\tof\tnon-accrual\tloans\tor\tloans\tmore\tthan\t90\tdays\tpast\tdue | — | — |
| Aggregate\tunpaid\tprincipal\tbalance\tin\texcess\tof\tfair\tvalue\tfor\tnon-accrual\tloans\tor\tloans\tmore\tthan\t90\tdays\tpast\tdue | — | — |

The	changes	in	the	fair	values	of	these	mortgage	loans	are	reported	in	Other revenue	in	the	Company's	Consolidated	Statement	of	Income.	There	was	no	net change	in	fair	value	during	the	years	ended	December	31,	2018	and	2017	due	to instrument-specific	credit	risk.	Related	interest	income	continues	to	be	measured based	on	the	contractual	interest	rates	and	reported	as	Interest	revenue	in	the Consolidated	Statement	of	Income.

# Certain	Structured	Liabilities

The	Company	has	elected	the	fair	value	option	for	certain	structured	liabilities whose	performance	is	linked	to	structured	interest	rates,	inflation,	currency, equity,	referenced	credit	or	commodity	risks.	The	Company	elected	the	fair	value option,	because	these	exposures	are	considered	to	be	trading-related	positions and,	therefore,	are	managed	on	a	fair	value	basis.	These	positions	will	continue	to be	classified	as	debt,	deposits	or	derivatives	(Trading	account	liabilities)	on	the Company's	Consolidated	Balance	Sheet	according	to	their	legal	form.

The	following	table	provides	information	about	the	carrying	value	of	structured	notes,	disaggregated	by	type	of	embedded	derivative	instrument:

| In	billions	of	dollars | December	31,	2018 | December	31,	2017 |
| :--- | :--- | :--- |
| Interest\trate\tlinked | $17.3 | $13.9 |
| Foreign\texchange\tlinked | 0.5 | 0.3 |
| Equity\tlinked | 14.8 | 13.0 |
| Commodity\tlinked | 1.2 | 0.2 |
| Credit\tlinked | 1.9 | 1.9 |
| Total | $35.7 | $29.3 |

Prior	to	2016,	the	total	change	in	the	fair	value	of	these	structured	liabilities was	reported	in	Principal	transactions	in	the	Company's	Consolidated	Statement of	Income.	Beginning	in	the	first	quarter	of	2016,	the	portion	of	the	changes	in fair	value	attributable	to	changes	in	Citigroup's	own	credit	spreads	(DVA)	is reflected	as	a	component	of	AOCI	while	all	other	changes	in	fair	value	will continue	to	be	reported	in	Principal	transactions.	Changes	in	the	fair	value	of these	structured	liabilities	include	accrued	interest,	which	is	also	included	in	the change	in	fair	value	reported	in	Principal	transactions.

# Certain	Non-Structured	Liabilities

The	Company	has	elected	the	fair	value	option	for	certain	non-structured liabilities	with	fixed	and	floating	interest	rates.	The	Company	has	elected	the	fair value	option	where	the	interest

rate	risk	of	such	liabilities	may	be	economically	hedged	with	derivative	contracts or	the	proceeds	are	used	to	purchase	financial	assets	that	will	also	be	accounted for	at	fair	value	through	earnings.	The	elections	have	been	made	to	mitigate accounting	mismatches	and	to	achieve	operational	simplifications.	These positions	are	reported	in	Short-term	borrowings	and	Long-term	debt	on	the Company's	Consolidated	Balance	Sheet.	The	portion	of	the	changes	in	fair	value attributable	to	changes	in	Citigroup's	own	credit	spreads	(DVA)	is	reflected	as	a component	of	AOCI	while	all	other	changes	in	fair	value	will	continue	to	be reported	in	Principal	transactions.

Interest	expense	on	non-structured	liabilities	is	measured	based	on	the contractual	interest	rates	and	reported	as	Interest	expense	in	the	Consolidated Statement	of	Income.

The	following	table	provides	information	about	long-term	debt	carried	at	fair	value:

| In	millions	of	dollars | December	31,	2018 | December	31,	2017 |
| :--- | :--- | :--- |
| Carrying\tamount\treported\ton\tthe\tConsolidated\tBalance\tSheet | $38,229 | $31,392 |
| Aggregate\tunpaid\tprincipal\tbalance\tin\texcess\tof\t(less\tthan)\tfair\tvalue | 3,814 | (579) |

| In	millions	of	dollars | December	31,	2018 | December	31,	2017 |
| :--- | :--- | :--- |
| Carrying\tamount\treported\ton\tthe\tConsolidated\tBalance\tSheet | $4,483 | $4,627 |
| Aggregate\tunpaid\tprincipal\tbalance\tin\texcess\tof\t(less\tthan)\tfair\tvalue | 861 | 74 |

# 26.			PLEDGED	ASSETS,	COLLATERAL,	GUARANTEES	AND COMMITMENTS

# Pledged	Assets

In	connection	with	Citi's	financing	and	trading	activities,	Citi	has	pledged	assets to	collateralize	its	obligations	under	repurchase	agreements,	secured	financing agreements,	secured	liabilities	of	consolidated	VIEs	and	other	borrowings.	The approximate	carrying	values	of	the	significant	components	of	pledged	assets recognized	on	Citi's	Consolidated	Balance	Sheet	included	the	following:

| In	millions	of	dollars | December	31,	2018 | December	31,<br>2017 |
| :--- | :--- | :--- |
| Investment\tsecurities | $148,756 | $138,807 |
| Loans | 227,840 | 229,552 |
| Trading\taccount\tassets | 120,292 | 104,360 |
| Total | $496,888 | $472,719 |

# Restricted	Cash

Citigroup	defines	restricted	cash	(as	cash	subject	to	withdrawal	restrictions)	to include	cash	deposited	with	central	banks	that	must	be	maintained	to	meet minimum	regulatory	requirements,	and	cash	set	aside	for	the	benefit	of customers	or	for	other	purposes	such	as	compensating	balance	arrangements	or debt	retirement.	Restricted	cash	includes	minimum	reserve	requirements	with	the Federal

Reserve	Bank	and	certain	other	central	banks	and	cash	segregated	to	satisfy rules	regarding	the	protection	of	customer	assets	as	required	by	Citigroup broker-dealers'	primary	regulators,	including	the	United	States	Securities	and Exchange	Commission	(SEC),	the	Commodities	Futures	Trading	Commission and	the	United	Kingdom's	Prudential	Regulation	Authority.

Restricted	cash	is	included	on	the	Consolidated	Balance	Sheet	within	the following	balance	sheet	lines:

| In	millions	of	dollars | December	31,<br>2018 | December	31,<br>2017 |
| :--- | :--- | :--- |
| Cash\tand\tdue\tfrom\tbanks | $4,000 | $3,151 |
| Deposits\twith\tbanks | 27,208 | 27,664 |
| Total | $31,208 | $30,815 |

In	addition,	included	in	Cash	and	due	from	banks	and	Deposits	with	banks at	December	31,	2018	and	2017	were	$8.3	billion	and	$7.4	billion,	respectively, of	cash	segregated	under	federal	and	other	brokerage	regulations	or	deposited with	clearing	organizations.

# Collateral

At	December	31,	2018	and	2017,	the	approximate	fair	value	of	collateral received	by	Citi	that	may	be	resold	or	repledged,	excluding	the	impact	of allowable	netting,	was	$526.0	billion	and	$457.5	billion,	respectively.	This collateral	was	received	in	connection	with	resale	agreements,	securities borrowings	and	loans,	securities	for	securities	lending	transactions,	derivative transactions	and	margined	broker	loans.

At	December	31,	2018	and	2017,	a	substantial	portion	of	the	collateral received	by	Citi	had	been	sold	or	repledged	in	connection	with	repurchase agreements,	securities	sold,	not	yet	purchased,	securities	borrowings	and	loans, pledges	to	clearing	organizations,	segregation	requirements	under	securities	laws and	regulations,	derivative	transactions	and	bank	loans.

In	addition,	at	December	31,	2018	and	2017,	Citi	had	pledged	$373.7	billion and	$363.3	billion,	respectively,	of	collateral	that	may	not	be	sold	or	repledged by	the	secured	parties.

# Lease	Commitments

Rental	expense	(principally	for	offices,	branches	and	computer	equipment)	was $1.0	billion,	$1.1	billion	and	$1.1	billion	for	the	years	ended	December	31,	2018, 2017	and	2016,	respectively.

Future	minimum	annual	rentals	under	non-cancelable	leases,	net	of	sublease income,	are	as	follows:

# Guarantees

Citi	provides	a	variety	of	guarantees	and	indemnifications	to	its	customers	to enhance	their	credit	standing	and	enable	them	to	complete	a	wide	variety	of business	transactions.	For

certain	contracts	meeting	the	definition	of	a	guarantee,	the	guarantor	must recognize,	at	inception,	a	liability	for	the	fair	value	of	the	obligation	undertaken in	issuing	the	guarantee.

In	addition,	the	guarantor	must	disclose	the	maximum	potential	amount	of future	payments	that	the	guarantor	could	be	required	to	make	under	the guarantee,	if	there	were	a	total

default	by	the	guaranteed	parties.	The	determination	of	the	maximum	potential future	payments	is	based	on	the	notional	amount	of	the	guarantees	without consideration	of	possible	recoveries	under	recourse	provisions	or	from	collateral held	or	pledged.	As	such,	Citi	believes	such	amounts	bear	no	relationship	to	the anticipated	losses,	if	any,	on	these	guarantees.

# The	following	tables	present	information	about	Citi's	guarantees:

# Maximum	potential	amount	of	future	payments

|  | Maximum	potential	amount	of	future	payments | Maximum	potential	amount	of	future	payments | Maximum	potential	amount	of	future	payments |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars\tat\tDecember\t31,\t2018,\texcept\tcarrying\tvalue\tin\tmillions | Expire\twithin\n1\tyear | Expire\tafter\n1\tyear | Total\tamount\noutstanding | Carrying\tvalue\n(in\tmillions\tof\tdollars) |
| Financial\tstandby\tletters\tof\tcredit | $31.8 | $65.3 | $97.1 | $131 |
| Performance\tguarantees | 7.7 | 4.2 | 11.9 | 29 |
| Derivative\tinstruments\tconsidered\tto\tbe\tguarantees | 23.5 | 87.4 | 110.9 | 567 |
| Loans\tsold\twith\trecourse | — | 1.2 | 1.2 | 9 |
| Securities\tlending\tindemnifications(1) | 98.3 | — | 98.3 | — |
| Credit\tcard\tmerchant\tprocessing(1)(2) | 95.0 | — | 95.0 | — |
| Credit\tcard\tarrangements\twith\tpartners | 0.3 | 0.8 | 1.1 | 162 |
| Custody\tindemnifications\tand\tother | — | 35.4 | 35.4 | 41 |
| Total | $256.6 | $194.3 | $450.9 | $939 |

| In	billions	of	dollars	at	December	31,	2017,	except	carrying	value	in	millions | Expire	within<br>1	year | Expire	after<br>1	year | Total	amount<br>outstanding | (in	millions	of	dollars) |
| :--- | :--- | :--- | :--- | :--- |
| Financial\tstandby\tletters\tof\tcredit | $27.9 | $65.9 | $93.8 | $93 |
| Performance\tguarantees | 7.2 | 4.1 | 11.3 | 20 |
| Derivative\tinstruments\tconsidered\tto\tbe\tguarantees | 11.0 | 84.9 | 95.9 | 423 |
| Loans\tsold\twith\trecourse | — | 1.4 | 1.4 | 9 |
| Securities\tlending\tindemnifications(1) | 103.7 | — | 103.7 | — |
| Credit\tcard\tmerchant\tprocessing(1)(2) | 85.5 | — | 85.5 | — |
| Credit\tcard\tarrangements\twith\tpartners |  |  |  |  |
|  | 0.3 | 1.1 | 1.4 | 205 |
| Custody\tindemnifications\tand\tother | — | 36.0 | 36.0 | 59 |
| Total | $235.6 | $193.4 | $429.0 | $809 |

(1) The	carrying	values	of	securities	lending	indemnifications	and	credit	card	merchant	processing	were	not	material	for	either	period	presented,	as	the	probability	of	potential	liabilities	arising	from these	guarantees	is	minimal.

(2) At	December	31,	2018	and	2017,	this	maximum	potential	exposure	was	estimated	to	be	 $95	billion	and	$86	billion,	respectively.	However,	Citi	believes	that	the	maximum	exposure	is	not representative	of	the	actual	potential	loss	exposure	based	on	its	historical	experience.	This	contingent	liability	is	unlikely	to	arise,	as	most	products	and	services	are	delivered	when	purchased	and amounts	are	refunded	when	items	are	returned	to	merchants.

# Financial	Standby	Letters	of	Credit

Citi	issues	standby	letters	of	credit,	which	substitute	its	own	credit	for	that	of	the borrower.	If	a	letter	of	credit	is	drawn	down,	the	borrower	is	obligated	to	repay Citi.	Standby	letters	of	credit	protect	a	third	party	from	defaults	on	contractual obligations.	Financial	standby	letters	of	credit	include	(i)	guarantees	of	payment of	insurance	premiums	and	reinsurance	risks	that	support	industrial	revenue	bond underwriting,	(ii)	settlement	of	payment	obligations	to	clearing	houses,	including futures	and	over-the-counter	derivatives	clearing	(see	further	discussion	below), (iii)	support	options	and	purchases	of	securities	in	lieu	of	escrow	deposit accounts	and	(iv)	letters	of	credit	that	backstop	loans,	credit	facilities, promissory	notes	and	trade	acceptances.

# Performance	Guarantees

Performance	guarantees	and	letters	of	credit	are	issued	to	guarantee	a	customer's tender	bid	on	a	construction	or	systems-installation	project	or	to	guarantee completion	of	such	projects	in	accordance	with	contract	terms.	They	are	also issued	to	support	a	customer's	obligation	to	supply	specified	products, commodities	or	maintenance	or	warranty	services	to	a	third	party.

# Derivative	Instruments	Considered	to	Be	Guarantees

Derivatives	are	financial	instruments	whose	cash	flows	are	based	on	a	notional amount	and	an	underlying	instrument,	reference	credit	or	index,	where	there	is little	or	no	initial	investment,	and	whose	terms	require	or	permit	net	settlement. For	a	discussion	of	Citi's	derivatives	activities,	see	Note	22	to	the	Consolidated Financial	Statements.

Derivative	instruments	considered	to	be	guarantees	include	only	those instruments	that	require	Citi	to	make	payments	to	the	counterparty	based	on changes	in	an	underlying	instrument	that	is	related	to	an	asset,	a	liability	or	an equity	security	held	by	the	guaranteed	party.	More	specifically,	derivative instruments	considered	to	be

guarantees	include	certain	over-the-counter	written	put	options	where	the counterparty	is	not	a	bank,	hedge	fund	or	broker-dealer	(such	counterparties	are considered	to	be	dealers	in	these	markets	and	may,	therefore,	not	hold	the underlying	instruments).	Credit	derivatives	sold	by	Citi	are	excluded	from	the tables	above	as	they	are	disclosed	separately	in	Note	22	to	the	Consolidated Financial	Statements.	In	instances	where	Citi's	maximum	potential	future payment	is	unlimited,	the	notional	amount	of	the	contract	is	disclosed.

# Loans	Sold	with	Recourse

Loans	sold	with	recourse	represent	Citi's	obligations	to	reimburse	the	buyers	for loan	losses	under	certain	circumstances.	Recourse	refers	to	the	clause	in	a	sales agreement	under	which	a	seller/lender	will	fully	reimburse	the	buyer/investor	for any	losses	resulting	from	the	purchased	loans.	This	may	be	accomplished	by	the seller	taking	back	any	loans	that	become	delinquent.

In	addition	to	the	amounts	shown	in	the	tables	above,	Citi	has	recorded	a repurchase	reserve	for	its	potential	repurchases	or	make-whole	liability regarding	residential	mortgage	representation	and	warranty	claims	related	to	its whole	loan	sales	to	the	U.S.	government-sponsored	enterprises	(GSEs)	and,	to	a lesser	extent,	private	investors.	The	repurchase	reserve	was	approximately	$49 million	and	$66	million	at	December	31,	2018	and	2017,	respectively,	and	these amounts	are	included	in	Other	liabilities	on	the	Consolidated	Balance	Sheet.

# Securities	Lending	Indemnifications

Owners	of	securities	frequently	lend	those	securities	for	a	fee	to	other	parties who	may	sell	them	short	or	deliver	them	to	another	party	to	satisfy	some	other obligation.	Banks	may	administer	such	securities	lending	programs	for	their clients.	Securities	lending	indemnifications	are	issued	by	the	bank	to	guarantee that	a	securities	lending	customer	will	be	made	whole	in	the	event	that	the security	borrower	does	not	return	the	security	subject	to	the	lending	agreement and	collateral	held	is	insufficient	to	cover	the	market	value	of	the	security.

# Credit	Card	Merchant	Processing

Credit	card	merchant	processing	guarantees	represent	the	Company's	indirect obligations	in	connection	with	(i)	providing	transaction	processing	services	to various	merchants	with	respect	to	its	private	label	cards	and	(ii)	potential liability	for	bank	card	transaction	processing	services.	The	nature	of	the	liability in	either	case	arises	as	a	result	of	a	billing	dispute	between	a	merchant	and	a cardholder	that	is	ultimately	resolved	in	the	cardholder's	favor.	The	merchant	is liable	to	refund	the	amount	to	the	cardholder.	In	general,	if	the	credit	card processing	company	is	unable	to	collect	this	amount	from	the	merchant,	the credit	card	processing	company	bears	the	loss	for	the	amount	of	the	credit	or refund	paid	to	the	cardholder.

With	regard	to	(i)	above,	Citi	has	the	primary	contingent	liability	with respect	to	its	portfolio	of	private	label	merchants.	The	risk	of	loss	is	mitigated	as the	cash	flows	between	Citi	and	the	merchant	are	settled	on	a	net	basis,	and

Citi	has	the	right	to	offset	any	payments	with	cash	flows	otherwise	due	to	the merchant.	To	further	mitigate	this	risk,	Citi	may	delay	settlement,	require	a merchant	to	make	an	escrow	deposit,	include	event	triggers	to	provide	Citi	with more	financial	and	operational	control	in	the	event	of	the	financial	deterioration of	the	merchant	or	require	various	credit	enhancements	(including	letters	of credit	and	bank	guarantees).	In	the	unlikely	event	that	a	private	label	merchant	is unable	to	deliver	products,	services	or	a	refund	to	its	private	label	cardholders, Citi	is	contingently	liable	to	credit	or	refund	cardholders.

With	regard	to	(ii)	above,	Citi	has	a	potential	liability	for	bank	card transactions	where	Citi	provides	the	transaction	processing	services	as	well	as those	where	a	third	party	provides	the	services	and	Citi	acts	as	a	secondary guarantor,	should	that	processor	fail	to	perform.

Citi's	maximum	potential	contingent	liability	related	to	both	bank	card	and private	label	merchant	processing	services	is	estimated	to	be	the	total	volume	of credit	card	transactions	that	meet	the	requirements	to	be	valid	charge-back transactions	at	any	given	time.	At	December	31,	2018	and	2017,	this	maximum potential	exposure	was	estimated	to	be	$95	billion	and	$86	billion,	respectively. However,	Citi	believes	that	the	maximum	exposure	is	not	representative	of the	actual	potential	loss	exposure	based	on	its	historical	experience.	This contingent	liability	is	unlikely	to	arise,	as	most	products	and	services	are delivered	when	purchased	and	amounts	are	refunded	when	items	are	returned	to merchants.	Citi	assesses	the	probability	and	amount	of	its	contingent	liability related	to	merchant	processing	based	on	the	financial	strength	of	the	primary guarantor,	the	extent	and	nature	of	unresolved	charge-backs	and	its	historical loss	experience.	At	December	31,	2018	and	2017,	the	losses	incurred	and	the carrying	amounts	of	Citi's	contingent	obligations	related	to	merchant	processing activities	were	immaterial.

# Credit	Card	Arrangements	with	Partners

Citi,	in	certain	of	its	credit	card	partner	arrangements,	provides	guarantees	to	the partner	regarding	the	volume	of	certain	customer	originations	during	the	term	of the	agreement.	To	the	extent	that	such	origination	targets	are	not	met,	the guarantees	serve	to	compensate	the	partner	for	certain	payments	that	otherwise would	have	been	generated	in	connection	with	such	originations.

# Custody	Indemnifications

Custody	indemnifications	are	issued	to	guarantee	that	custody	clients	will	be made	whole	in	the	event	that	a	third-party	subcustodian	or	depository	institution fails	to	safeguard	clients'	assets.

# Other	Guarantees	and	Indemnifications

# Credit	Card	Protection	Programs

Citi,	through	its	credit	card	businesses,	provides	various cardholder	protection	programs	on	several	of	its	card products,	including	programs	that	provide	insurance coverage	for	rental	cars,	coverage	for	certain	losses associated	with	purchased	products,	price	protection	for certain	purchases	and	protection	for	lost	luggage.	These guarantees	are	not	included	in	the	table,	since	the	total outstanding	amount	of	the	guarantees	and	Citi's	maximum exposure	to	loss	cannot	be	quantified.	The	protection	is limited	to	certain	types	of	purchases	and	losses,	and	it	is	not possible	to	quantify	the	purchases	that	would	qualify	for these	benefits	at	any	given	time.	Citi	assesses	the	probability and	amount	of	its	potential	liability	related	to	these	programs based	on	the	extent	and	nature	of	its	historical	loss experience.	At	December	31,	2018	and	2017,	the	actual	and	estimated	losses incurred	and	the	carrying	value of	Citi's	obligations	related	to	these	programs	were immaterial.

# Other	Representation	and	Warranty	Indemnifications

In	the	normal	course	of	business,	Citi	provides	standard	representations	and warranties	to	counterparties	in	contracts	in	connection	with	numerous transactions	and	also	provides	indemnifications,	including	indemnifications	that protect	the	counterparties	to	the	contracts	in	the	event	that	additional	taxes	are owed,	due	either	to	a	change	in	the	tax	law	or	an	adverse	interpretation	of	the	tax law.	Counterparties	to	these	transactions	provide	Citi	with	comparable indemnifications.	While	such	representations,	warranties	and	indemnifications are	essential	components	of	many	contractual	relationships,	they	do	not represent	the	underlying	business	purpose	for	the	transactions.	The indemnification	clauses	are	often	standard	contractual	terms	related	to	Citi's	own performance	under	the	terms	of	a	contract	and	are	entered	into	in	the	normal course	of	business	based	on	an	assessment	that	the	risk	of	loss	is	remote.	Often these	clauses	are	intended	to	ensure	that	terms	of	a	contract	are	met	at	inception. No	compensation	is	received	for	these	standard	representations	and	warranties, and	it	is	not	possible	to	determine	their	fair	value	because	they	rarely,	if	ever, result	in	a	payment.	In	many	cases,	there	are	no	stated	or	notional	amounts included	in	the	indemnification	clauses,	and	the	contingencies	potentially triggering	the	obligation	to	indemnify	have	not	occurred	and	are	not	expected	to occur.	As	a	result,	these	indemnifications	are	not	included	in	the	tables	above.

# Value-Transfer	Networks	(VTNs)

Citi	is	a	member	of,	or	shareholder	in,	hundreds	of	value-transfer	networks (VTNs)	(payment,	clearing	and	settlement	systems	as	well	as	exchanges)	around the	world.	As	a	condition	of	membership,	many	of	these	VTNs	require	that members	stand	ready	to	pay	a	pro	rata	share	of	the	losses	incurred	by	the organization	due	to	another	member's	default	on	its	obligations.	Citi's	potential obligations	may	be	limited	to	its	membership	interests	in	the	VTNs, contributions	to	a	VTN's	funds,	or,	in	limited	cases,	the	obligation	may	be

unlimited.	The	maximum	exposure	cannot	be	estimated	as	this	would	require	an assessment	of	future	claims	that	have	not	yet	occurred.	Citi	believes	the	risk	of loss	is	remote	given	historical	experience	with	the	VTNs.	Accordingly,	Citi's participation	in	VTNs	is	not	reported	in	the	guarantees	tables	above,	and	there are	no	amounts	reflected	on	the	Consolidated	Balance	Sheet	as	of	December	31, 2018	or	2017	for	potential	obligations	that	could	arise	from	Citi's	involvement with	VTNs	associations.

# Long-Term	Care	Insurance	Indemnification

In	2000,	Travelers	Life	&	Annuity	(Travelers),	then	a	subsidiary	of	Citi,	entered into	a	reinsurance	agreement	to	transfer	the	risks	and	rewards	of	its	long-term care	(LTC)	business	to	GE	Life	(now	Genworth	Financial	Inc.,	or	Genworth), then	a	subsidiary	of	the	General	Electric	Company	(GE).	As	part	of	this transaction,	the	reinsurance	obligations	were	provided	by	two	regulated insurance	subsidiaries	of	GE	Life,	which	funded	two	collateral	trusts	with securities.	Presently,	as	discussed	below,	the	trusts	are	referred	to	as	the Genworth	Trusts.

As	part	of	GE's	spin-off	of	Genworth	in	2004,	GE	retained	the	risks	and rewards	associated	with	the	2000	Travelers	reinsurance	agreement	by	providing a	reinsurance	contract	to	Genworth	through	its	Union	Fidelity	Life	Insurance Company	(UFLIC)	subsidiary	that	covers	the	Travelers	LTC	policies.	In addition,	GE	provided	a	capital	maintenance	agreement	in	favor	of	UFLIC, which	is	designed	to	assure	that	UFLIC	will	have	the	funds	to	pay	its	reinsurance obligations.	As	a	result	of	these	reinsurance	agreements	and	the	spin-off	of Genworth,	Genworth	has	reinsurance	protection	from	UFLIC	(supported	by	GE) and	has	reinsurance	obligations	in	connection	with	the	Travelers	LTC	policies. As	noted	below,	the	Genworth	reinsurance	obligations	now	benefit	Brighthouse Financial,	Inc.	(Brighthouse).	While	neither	Brighthouse	nor	Citi	are	direct beneficiaries	of	the	capital	maintenance	agreement	between	GE	and	UFLIC, Brighthouse	and	Citi	benefit	indirectly	from	the	existence	of	the	capital maintenance	agreement,	which	helps	assure	that	UFLIC	will	continue	to	have funds	necessary	to	pay	its	reinsurance	obligations	to	Genworth.

In	connection	with	Citi's	2005	sale	of	Travelers	to	MetLife	Inc.	(MetLife), Citi	provided	an	indemnification	to	MetLife	for	losses	(including	policyholder claims)	relating	to	the	LTC	business	for	the	entire	term	of	the	Travelers	LTC policies,	which,	as	noted	above,	are	reinsured	by	subsidiaries	of	Genworth.	In 2017,	MetLife	spun	off	its	retail	insurance	business	to	Brighthouse.		As	a	result, the	Travelers	LTC	policies	now	reside	with	Brighthouse.		The	original reinsurance	agreement	between	Travelers	(now	Brighthouse)	and	Genworth remains	in	place	and	Brighthouse	is	the	sole	beneficiary	of	the	Genworth	Trusts. The	fair	value	of	the	Genworth	Trusts	is	approximately	$7.5	billion	as	of December	31,	2018	and	2017.	The	Genworth	Trusts	are	designed	to	provide collateral	to	Brighthouse	in	an	amount	equal	to	the	statutory	liabilities	of Brighthouse	in	respect	of	the	Travelers	LTC	policies.	The	assets	in	the	Genworth Trusts	are	evaluated	and	adjusted	periodically	to	ensure	that	the	fair	value	of	the assets	continues	to	provide	collateral	in

an	amount	equal	to	these	estimated	statutory	liabilities,	as	the	liabilities	change over	time.

If	both	(i)	Genworth	fails	to	perform	under	the	original	Travelers/GE	Life reinsurance	agreement	for	any	reason,	including	insolvency	or	the	failure	of UFLIC	to	perform	in	a	timely	manner,	and	(ii)	the	assets	of	the	two	Genworth Trusts	are	insufficient	or	unavailable,	then	Citi,	through	its	LTC	reinsurance indemnification,	must	reimburse	Brighthouse	for	any	losses	incurred	in connection	with	the	LTC	policies.	Since	both	events	would	have	to	occur	before Citi	would	become	responsible	for	any	payment	to	Brighthouse	pursuant	to	its indemnification	obligation,	and	the	likelihood	of	such	events	occurring	is currently	not	probable,	there	is	no	liability	reflected	on	the	Consolidated	Balance Sheet	as	of	December	31,	2018	and	2017	related	to	this	indemnification.	Citi continues	to	closely	monitor	its	potential	exposure	under	this	indemnification obligation.

Separately,	Genworth	announced	that	it	had	agreed	to	be	purchased	by China	Oceanwide	Holdings	Co.,	Ltd,	subject	to	a	series	of	conditions	and regulatory	approvals.	Citi	is	monitoring	these	developments.

# Futures	and	Over-the-Counter	Derivatives	Clearing

Citi	provides	clearing	services	on	central	clearing	parties	(CCPs)	for	clients	that need	to	clear	exchange	traded	and	over-the-counter	(OTC)	derivatives	contracts. Based	on	all	relevant	facts	and	circumstances,	Citi	has	concluded	that	it	acts	as an	agent	for	accounting	purposes	in	its	role	as	clearing	member	for	these	client transactions.	As	such,	Citi	does	not	reflect	the	underlying	exchange	traded	or OTC	derivatives	contracts	in	its	Consolidated	Financial	Statements.	See	Note	22 for	a	discussion	of	Citi's	derivatives	activities	that	are	reflected	in	its Consolidated	Financial	Statements.

As	a	clearing	member,	Citi	collects	and	remits	cash	and	securities	collateral (margin)	between	its	clients	and	the	respective	CCP.	In	certain	circumstances, Citi	collects	a	higher	amount	of	cash	(or	securities)	from	its	clients	than	it	needs to	remit	to	the	CCPs.	This	excess	cash	is	then	held	at	depository	institutions	such as	banks	or	carry	brokers.

There	are	two	types	of	margin:	initial	and	variation.	Where	Citi	obtains benefits	from	or	controls	cash	initial	margin	(e.g.,	retains	an	interest	spread), cash	initial	margin	collected	from	clients	and	remitted	to	the	CCP	or	depository institutions	is	reflected	within	Brokerage	payables	(payables	to	customers)	and Brokerage	receivables	(receivables	from	brokers,	dealers	and	clearing organizations)	or	Cash	and	due	from	banks,	respectively.

However,	for	exchange	traded	and	OTC-cleared	derivatives	contracts	where Citi	does	not	obtain	benefits	from	or	control	the	client	cash	balances,	the	client cash	initial	margin	collected	from	clients	and	remitted	to	the	CCP	or	depository institutions	is	not	reflected	on	Citi's	Consolidated	Balance	Sheet.	These conditions	are	met	when	Citi	has	contractually	agreed	with	the	client	that	(i)	Citi will	pass	through	to	the	client	all	interest	paid	by	the	CCP	or	depository institutions	on	the	cash	initial	margin,	(ii)	Citi	will	not	utilize	its	right	as	a clearing	member	to	transform	cash	margin	into	other	assets,	(iii)	Citi	does	not guarantee

and	is	not	liable	to	the	client	for	the	performance	of	the	CCP	or	the	depository institution	and	(iv)	the	client	cash	balances	are	legally	isolated	from	Citi's bankruptcy	estate.	The	total	amount	of	cash	initial	margin	collected	and	remitted in	this	manner	was	approximately	$13.8	billion	and	$10.7	billion	as	of December	31,	2018	and	2017,	respectively.

Variation	margin	due	from	clients	to	the	respective	CCP,	or	from	the	CCP to	clients,	reflects	changes	in	the	value	of	the	client's	derivative	contracts	for each	trading	day.	As	a	clearing	member,	Citi	is	exposed	to	the	risk	of	non- performance	by	clients	(e.g.,	failure	of	a	client	to	post	variation	margin	to	the CCP	for	negative	changes	in	the	value	of	the	client's	derivative	contracts).	In	the event	of	non-performance	by	a	client,	Citi	would	move	to	close	out	the	client's positions.	The	CCP	would	typically	utilize	initial	margin	posted	by	the	client	and held	by	the	CCP,	with	any	remaining	shortfalls	required	to	be	paid	by	Citi	as clearing	member.	Citi	generally	holds	incremental	cash	or	securities	margin posted	by	the	client,	which	would	typically	be	expected	to	be	sufficient	to mitigate	Citi's	credit	risk	in	the	event	that	the	client	fails	to	perform.

As	required	by	ASC	860-30-25-5,	securities	collateral	posted	by	clients	is not	recognized	on	Citi's	Consolidated	Balance	Sheet.

# Carrying	Value—Guarantees	and	Indemnifications

At	December	31,	2018	and	2017,	the	total	carrying	amounts	of	the	liabilities related	to	the	guarantees	and	indemnifications	included	in	the	tables	above amounted	to	approximately	$0.9	billion	and	$0.8	billion,	respectively.	The carrying	value	of	financial	and	performance	guarantees	is	included	in	Other liabilities.	For	loans	sold	with	recourse,	the	carrying	value	of	the	liability	is included	in	Other	liabilities.

Cash	collateral	available	to	Citi	to	reimburse	losses	realized	under	these guarantees	and	indemnifications	amounted	to	$55	billion	and	$46	billion	at December	31,	2018	and	2017,	respectively.	Securities	and	other	marketable assets	held	as	collateral	amounted	to	$55	billion	and	$70	billion	at	December	31, 2018	and	2017,	respectively.	The	majority	of	collateral	is	held	to	reimburse losses	realized	under	securities	lending	indemnifications.	Additionally,	letters	of credit	in	favor	of	Citi	held	as	collateral	amounted	to	$4.1	billion	and	$3.7	billion at	December	31,	2018	and	2017,	respectively.	Other	property	may	also	be available	to	Citi	to	cover	losses	under	certain	guarantees	and	indemnifications; however,	the	value	of	such	property	has	not	been	determined.

# Performance	Risk

Citi	evaluates	the	performance	risk	of	its	guarantees	based	on	the	assigned referenced	counterparty	internal	or	external	ratings.	Where	external	ratings	are used,	investment-grade	ratings	are	considered	to	be	Baa/BBB	and	above,	while anything	below	is	considered	non-investment	grade.	Citi's	internal	ratings	are	in line	with	the	related	external	rating	system.	On	certain	underlying	referenced assets	or	entities,	ratings	are	not	available.	Such	referenced	assets	are	included	in the	"not	rated"	category.	The	maximum	potential	amount	of	the	future	payments related	to	the	outstanding	guarantees	is	determined	to	be	the	notional	amount	of these	contracts,	which	is	the	par	amount	of	the	assets	guaranteed.

Presented	in	the	tables	below	are	the	maximum	potential	amounts	of	future payments	that	are	classified	based	upon	internal	and	external	credit	ratings.	As previously	mentioned,	the	determination	of	the	maximum	potential	future payments	is	based	on	the	notional	amount	of	the	guarantees	without consideration	of	possible	recoveries	under	recourse	provisions	or	from	collateral held	or	pledged.	As	such,	Citi	believes	such	amounts	bear	no	relationship	to	the anticipated	losses,	if	any,	on	these	guarantees.

|  |  | Maximum	potential	amount	of	future	payments | Maximum	potential	amount	of	future	payments |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars\tat\tDecember\t31,\t2018 | Investment\ngrade | Non-investment\ngrade | Not\nrated | Total |
| Financial\tstandby\tletters\tof\tcredit | $68.3 | $11.8 | $17.0 | $97.1 |
| Performance\tguarantees | 9.2 | 2.1 | 0.6 | 11.9 |
| Derivative\tinstruments\tdeemed\tto\tbe\tguarantees | — | — | 110.9 | 110.9 |
| Loans\tsold\twith\trecourse | — | — | 1.2 | 1.2 |
| Securities\tlending\tindemnifications | — | — | 98.3 | 98.3 |
| Credit\tcard\tmerchant\tprocessing | — | — | 95.0 | 95.0 |
| Credit\tcard\tarrangements\twith\tpartners | — | — | 1.1 | 1.1 |
| Custody\tindemnifications\tand\tother | 22.2 | 13.2 | — | 35.4 |
| Total | $99.7 | $27.1 | $324.1 | $450.9 |

|  |  | Maximum	potential	amount	of	future	payments | Maximum	potential	amount	of	future	payments |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tbillions\tof\tdollars\tat\tDecember\t31,\t2017 | Investment\ngrade | Non-investment\ngrade | Not\nrated | Total |
| Financial\tstandby\tletters\tof\tcredit | $68.1 | $10.9 | $14.8 | $93.8 |
| Performance\tguarantees | 7.9 | 2.4 | 1.0 | 11.3 |
| Derivative\tinstruments\tdeemed\tto\tbe\tguarantees | — | — | 95.9 | 95.9 |
| Loans\tsold\twith\trecourse | — | — | 1.4 | 1.4 |
| Securities\tlending\tindemnifications | — | — | 103.7 | 103.7 |
| Credit\tcard\tmerchant\tprocessing | — | — | 85.5 | 85.5 |
| Credit\tcard\tarrangements\twith\tpartners |  |  |  |  |
|  | — | — | 1.4 | 1.4 |
| Custody\tindemnifications\tand\tother | 23.7 | 12.3 | — | 36.0 |
| Total | $99.7 | $25.6 | $303.7 | $429.0 |

# Credit	Commitments	and	Lines	of	Credit

# The	table	below	summarizes	Citigroup's	credit	commitments:

| In	millions	of	dollars | U.S. | Outside	of<br>U.S. | December	31,<br>2018 | December	31,<br>2017 |
| :--- | :--- | :--- | :--- | :--- |
| Commercial\tand\tsimilar\tletters\tof\tcredit | $823 | $4,638 | $5,461 | $5,000 |
| One-\tto\tfour-family\tresidential\tmortgages | 1,056 | 1,615 | 2,671 | 2,674 |
| Revolving\topen-end\tloans\tsecured\tby\tone-\tto\tfour-family\tresidential\tproperties | 10,019 | 1,355 | 11,374 | 12,323 |
| Commercial\treal\testate,\tconstruction\tand\tland\tdevelopment | 9,565 | 1,728 | 11,293 | 11,151 |
| Credit\tcard\tlines | 605,857 | 90,150 | 696,007 | 678,300 |
| Commercial\tand\tother\tconsumer\tloan\tcommitments | 185,849 | 102,918 | 288,767 | 272,655 |
| Other\tcommitments\tand\tcontingencies | 2,560 | 761 | 3,321 | 3,071 |
| Total | $815,729 | $203,165 | $1,018,894 | $985,174 |

The	majority	of	unused	commitments	are	contingent	upon	customers maintaining	specific	credit	standards.

Commercial	commitments	generally	have	floating	interest	rates	and	fixed expiration	dates	and	may	require	payment	of	fees.	Such	fees	(net	of	certain	direct costs)	are	deferred	and,	upon	exercise	of	the	commitment,	amortized	over	the	life of	the	loan	or,	if	exercise	is	deemed	remote,	amortized	over	the	commitment period.

# Commercial	and	Similar	Letters	of	Credit

A	commercial	letter	of	credit	is	an	instrument	by	which	Citigroup	substitutes	its credit	for	that	of	a	customer	to	enable	the	customer	to	finance	the	purchase	of goods	or	to	incur	other	commitments.	Citigroup	issues	a	letter	on	behalf	of	its client	to	a	supplier	and	agrees	to	pay	the	supplier	upon	presentation	of documentary	evidence	that	the	supplier	has	performed	in	accordance	with	the terms	of	the	letter	of	credit.	When	a	letter	of	credit	is	drawn,	the	customer	is	then required	to	reimburse	Citigroup.

# One-	to	Four-Family	Residential	Mortgages

A	one-	to	four-family	residential	mortgage	commitment	is	a	written	confirmation from	Citigroup	to	a	seller	of	a	property	that	the	bank	will	advance	the	specified sums	enabling	the	buyer	to	complete	the	purchase.

# Revolving	Open-End	Loans	Secured	by	One-	to	Four-Family	Residential Properties

Revolving	open-end	loans	secured	by	one-	to	four-family	residential	properties are	essentially	home	equity	lines	of	credit.	A	home	equity	line	of	credit	is	a	loan secured	by	a	primary	residence	or	second	home	to	the	extent	of	the	excess	of	fair market	value	over	the	debt	outstanding	for	the	first	mortgage.

# Commercial	Real	Estate,	Construction	and	Land	Development

Commercial	real	estate,	construction	and	land	development	include	unused portions	of	commitments	to	extend	credit	for	the	purpose	of	financing commercial	and	multifamily	residential	properties	as	well	as	land	development projects.

Both	secured-by-real-estate	and	unsecured	commitments	are	included	in	this line,	as	well	as

undistributed	loan	proceeds,	where	there	is	an	obligation	to	advance	for construction	progress	payments.	However,	this	line	only	includes	those extensions	of	credit	that,	once	funded,	will	be	classified	as	Total	loans,	net	on the	Consolidated	Balance	Sheet.

# Credit	Card	Lines

Citigroup	provides	credit	to	customers	by	issuing	credit	cards.	The	credit	card lines	are	cancelable	by	providing	notice	to	the	cardholder	or	without	such	notice as	permitted	by	local	law.

# Commercial	and	Other	Consumer	Loan	Commitments

Commercial	and	other	consumer	loan	commitments	include	overdraft	and liquidity	facilities	as	well	as	commercial	commitments	to	make	or	purchase loans,	purchase	third-party	receivables,	provide	note	issuance	or	revolving underwriting	facilities	and	invest	in	the	form	of	equity.

# Other	Commitments	and	Contingencies

Other	commitments	and	contingencies	include	committed	or	unsettled	regular- way	reverse	repurchase	agreements	and	all	other	transactions	related	to commitments	and	contingencies	not	reported	on	the	lines	above.

# Unsettled	Reverse	Repurchase	and	Securities	Lending	Agreements	and Unsettled	Repurchase	and	Securities	Borrowing	Agreements

In	addition,	in	the	normal	course	of	business,	Citigroup	enters	into	reverse repurchase	and	securities	borrowing	agreements,	as	well	as	repurchase	and securities	lending	agreements,	which	settle	at	a	future	date.	At	December	31, 2018,	and	2017,	Citigroup	had	$36.1	billion	and	$35.0	billion	unsettled	reverse repurchase	and	securities	borrowing	agreements,	respectively,	and	$30.7	billion and	$19.1	billion	unsettled	repurchase	and	securities	lending	agreements, respectively.	For	a	further	discussion	of	securities	purchased	under	agreements	to resell	and	securities	borrowed,	and	securities	sold	under	agreements	to repurchase	and	securities	loaned,	including	the	Company's	policy	for	offsetting repurchase	and	reverse	repurchase	agreements,	see	Note	11	to	the	Consolidated Financial	Statements.

# 27.			CONTINGENCIES

# Accounting	and	Disclosure	Framework

ASC	450	governs	the	disclosure	and	recognition	of	loss	contingencies,	including potential	losses	from	litigation	and	regulatory	matters.	ASC	450	defines	a	"loss contingency"	as	"an	existing	condition,	situation,	or	set	of	circumstances involving	uncertainty	as	to	possible	loss	to	an	entity	that	will	ultimately	be resolved	when	one	or	more	future	events	occur	or	fail	to	occur."	It	imposes different	requirements	for	the	recognition	and	disclosure	of	loss	contingencies based	on	the	likelihood	of	occurrence	of	the	contingent	future	event	or	events.	It distinguishes	among	degrees	of	likelihood	using	the	following	three	terms: "probable,"	meaning	that	"the	future	event	or	events	are	likely	to	occur"; "remote,"	meaning	that	"the	chance	of	the	future	event	or	events	occurring	is slight";	and	"reasonably	possible,"	meaning	that	"the	chance	of	the	future	event or	events	occurring	is	more	than	remote	but	less	than	likely."	These	three	terms are	used	below	as	defined	in	ASC	450.

Accruals.	ASC	450	requires	accrual	for	a	loss	contingency	when	it	is "probable	that	one	or	more	future	events	will	occur	confirming	the	fact	of	loss" and	"the	amount	of	the	loss	can	be	reasonably	estimated."	In	accordance	with ASC	450,	Citigroup	establishes	accruals	for	contingencies,	including	the litigation	and	regulatory	matters	disclosed	herein,	when	Citigroup	believes	it	is probable	that	a	loss	has	been	incurred	and	the	amount	of	the	loss	can	be reasonably	estimated.	When	the	reasonable	estimate	of	the	loss	is	within	a	range of	amounts,	the	minimum	amount	of	the	range	is	accrued,	unless	some	higher amount	within	the	range	is	a	better	estimate	than	any	other	amount	within	the range.	Once	established,	accruals	are	adjusted	from	time	to	time,	as	appropriate, in	light	of	additional	information.	The	amount	of	loss	ultimately	incurred	in relation	to	those	matters	may	be	substantially	higher	or	lower	than	the	amounts accrued	for	those	matters.

Disclosure.	ASC	450	requires	disclosure	of	a	loss	contingency	if	"there	is	at least	a	reasonable	possibility	that	a	loss	or	an	additional	loss	may	have	been incurred"	and	there	is	no	accrual	for	the	loss	because	the	conditions	described above	are	not	met	or	an	exposure	to	loss	exists	in	excess	of	the	amount	accrued. In	accordance	with	ASC	450,	if	Citigroup	has	not	accrued	for	a	matter	because Citigroup	believes	that	a	loss	is	reasonably	possible	but	not	probable,	or	that	a loss	is	probable	but	not	reasonably	estimable,	and	the	reasonably	possible	loss	is material,	it	discloses	the	loss	contingency.	In	addition,	Citigroup	discloses matters	for	which	it	has	accrued	if	it	believes	a	reasonably	possible	exposure	to material	loss	exists	in	excess	of	the	amount	accrued.	In	accordance	with	ASC 450,	Citigroup's	disclosure	includes	an	estimate	of	the	reasonably	possible	loss or	range	of	loss	for	those	matters	as	to	which	an	estimate	can	be	made.	ASC	450 does	not	require	disclosure	of	an	estimate	of	the	reasonably	possible	loss	or range	of	loss	where	an	estimate	cannot	be	made.	Neither	accrual	nor	disclosure is	required	for	losses	that	are	deemed	remote.

# Litigation	and	Regulatory	Contingencies

Overview.	In	addition	to	the	matters	described	below,	in	the	ordinary	course	of business,	Citigroup,	its	affiliates	and	subsidiaries,	and	current	and	former officers,	directors	and	employees	(for	purposes	of	this	section,	sometimes collectively	referred	to	as	Citigroup	and	Related	Parties)	routinely	are	named	as defendants	in,	or	as	parties	to,	various	legal	actions	and	proceedings.	Certain	of these	actions	and	proceedings	assert	claims	or	seek	relief	in	connection	with alleged	violations	of	consumer	protection,	fair	lending,	securities,	banking, antifraud,	antitrust,	anti-money	laundering,	employment	and	other	statutory	and common	laws.	Certain	of	these	actual	or	threatened	legal	actions	and	proceedings include	claims	for	substantial	or	indeterminate	compensatory	or	punitive damages,	or	for	injunctive	relief,	and	in	some	instances	seek	recovery	on	a	class- wide	basis.

In	the	ordinary	course	of	business,	Citigroup	and	Related	Parties	also	are subject	to	governmental	and	regulatory	examinations,	information-gathering requests,	investigations	and	proceedings	(both	formal	and	informal),	certain	of which	may	result	in	adverse	judgments,	settlements,	fines,	penalties,	restitution, disgorgement,	injunctions	or	other	relief.	In	addition,	certain	affiliates	and subsidiaries	of	Citigroup	are	banks,	registered	broker-dealers,	futures commission	merchants,	investment	advisors	or	other	regulated	entities	and,	in those	capacities,	are	subject	to	regulation	by	various	U.S.,	state	and	foreign securities,	banking,	commodity	futures,	consumer	protection	and	other regulators.	In	connection	with	formal	and	informal	inquiries	by	these	regulators, Citigroup	and	such	affiliates	and	subsidiaries	receive	numerous	requests, subpoenas	and	orders	seeking	documents,	testimony	and	other	information	in connection	with	various	aspects	of	their	regulated	activities.	From	time	to	time Citigroup	and	Related	Parties	also	receive	grand	jury	subpoenas	and	other requests	for	information	or	assistance,	formal	or	informal,	from	federal	or	state law	enforcement	agencies	including,	among	others,	various	United	States Attorneys'	Offices,	the	Asset	Forfeiture	and	Money	Laundering	Section	and other	divisions	of	the	Department	of	Justice,	the	Financial	Crimes	Enforcement Network	of	the	United	States	Department	of	the	Treasury,	and	the	Federal Bureau	of	Investigation	relating	to	Citigroup	and	its	customers.

Because	of	the	global	scope	of	Citigroup's	operations,	and	its	presence	in countries	around	the	world,	Citigroup	and	Related	Parties	are	subject	to	litigation and	governmental	and	regulatory	examinations,	information-gathering	requests, investigations	and	proceedings	(both	formal	and	informal)	in	multiple jurisdictions	with	legal	and	regulatory	regimes	that	may	differ	substantially,	and present	substantially	different	risks,	from	those	Citigroup	and	Related	Parties	are subject	to	in	the	United	States.	In	some	instances,	Citigroup	and	Related	Parties may	be	involved	in	proceedings	involving	the	same	subject	matter	in	multiple jurisdictions,	which	may	result	in	overlapping,	cumulative	or	inconsistent outcomes.

Citigroup	seeks	to	resolve	all	litigation	and	regulatory	matters	in	the	manner management	believes	is	in	the	best	interests	of	Citigroup	and	its	shareholders, and	contests	liability,	allegations	of	wrongdoing	and,	where	applicable,	the

amount	of	damages	or	scope	of	any	penalties	or	other	relief	sought	as appropriate	in	each	pending	matter.

Inherent	Uncertainty	of	the	Matters	Disclosed.	Certain	of	the	matters disclosed	below	involve	claims	for	substantial	or	indeterminate	damages.	The claims	asserted	in	these	matters	typically	are	broad,	often	spanning	a	multi-year period	and	sometimes	a	wide	range	of	business	activities,	and	the	plaintiffs'	or claimants'	alleged	damages	frequently	are	not	quantified	or	factually	supported in	the	complaint	or	statement	of	claim.	Other	matters	relate	to	regulatory investigations	or	proceedings,	as	to	which	there	may	be	no	objective	basis	for quantifying	the	range	of	potential	fine,	penalty	or	other	remedy.	As	a	result, Citigroup	is	often	unable	to	estimate	the	loss	in	such	matters,	even	if	it	believes that	a	loss	is	probable	or	reasonably	possible,	until	developments	in	the	case	or investigation	have	yielded	additional	information	sufficient	to	support	a quantitative	assessment	of	the	range	of	reasonably	possible	loss.	Such developments	may	include,	among	other	things,	discovery	from	adverse	parties or	third	parties,	rulings	by	the	court	on	key	issues,	analysis	by	retained	experts and	engagement	in	settlement	negotiations.	Depending	on	a	range	of	factors, such	as	the	complexity	of	the	facts,	the	novelty	of	the	legal	theories,	the	pace	of discovery,	the	court's	scheduling	order,	the	timing	of	court	decisions	and	the adverse	party's	willingness	to	negotiate	in	good	faith	toward	a	resolution,	it	may be	months	or	years	after	the	filing	of	a	case	or	commencement	of	an investigation	before	an	estimate	of	the	range	of	reasonably	possible	loss	can	be made.

Matters	as	to	Which	an	Estimate	Can	Be	Made.	For	some	of	the	matters disclosed	below,	Citigroup	is	currently	able	to	estimate	a	reasonably	possible loss	or	range	of	loss	in	excess	of	amounts	accrued	(if	any).	For	some	of	the matters	included	within	this	estimation,	an	accrual	has	been	made	because	a	loss is	believed	to	be	both	probable	and	reasonably	estimable,	but	an	exposure	to	loss exists	in	excess	of	the	amount	accrued.	In	these	cases,	the	estimate	reflects	the reasonably	possible	range	of	loss	in	excess	of	the	accrued	amount.	For	other matters	included	within	this	estimation,	no	accrual	has	been	made	because	a	loss, although	estimable,	is	believed	to	be	reasonably	possible,	but	not	probable;	in these	cases,	the	estimate	reflects	the	reasonably	possible	loss	or	range	of	loss.	As of	December	31,	2018,	Citigroup	estimates	that	the	reasonably	possible unaccrued	loss	for	these	matters	ranges	up	to	approximately	$1.0	billion	in	the aggregate.

These	estimates	are	based	on	currently	available	information.	As	available information	changes,	the	matters	for	which	Citigroup	is	able	to	estimate	will change,	and	the	estimates	themselves	will	change.	In	addition,	while	many estimates	presented	in	financial	statements	and	other	financial	disclosures involve	significant	judgment	and	may	be	subject	to	significant	uncertainty, estimates	of	the	range	of	reasonably	possible	loss	arising	from	litigation	and regulatory	proceedings	are	subject	to	particular	uncertainties.	For	example,	at	the time	of	making	an	estimate,	(i)	Citigroup	may	have	only	preliminary, incomplete,	or	inaccurate	information	about	the	facts	underlying	the	claim,	(ii) its	assumptions	about	the	future	rulings	of	the	court	or	other	tribunal	on significant	issues,	or	the	behavior	and	incentives	of	adverse	parties	or	regulators, may	prove	to	be	wrong	and	(iii)	the	outcomes	it	is

attempting	to	predict	are	often	not	amenable	to	the	use	of	statistical	or	other quantitative	analytical	tools.	In	addition,	from	time	to	time	an	outcome	may occur	that	Citigroup	had	not	accounted	for	in	its	estimate	because	it	had	deemed such	an	outcome	to	be	remote.	For	all	of	these	reasons,	the	amount	of	loss	in excess	of	accruals	ultimately	incurred	for	the	matters	as	to	which	an	estimate	has been	made	could	be	substantially	higher	or	lower	than	the	range	of	loss	included in	the	estimate.

Matters	as	to	Which	an	Estimate	Cannot	Be	Made.	For	other	matters disclosed	below,	Citigroup	is	not	currently	able	to	estimate	the	reasonably possible	loss	or	range	of	loss.	Many	of	these	matters	remain	in	very	preliminary stages	(even	in	some	cases	where	a	substantial	period	of	time	has	passed	since the	commencement	of	the	matter),	with	few	or	no	substantive	legal	decisions	by the	court	or	tribunal	defining	the	scope	of	the	claims,	the	class	(if	any)	or	the potentially	available	damages,	and	fact	discovery	is	still	in	progress	or	has	not yet	begun.	In	many	of	these	matters,	Citigroup	has	not	yet	answered	the complaint	or	statement	of	claim	or	asserted	its	defenses,	nor	has	it	engaged	in any	negotiations	with	the	adverse	party	(whether	a	regulator	or	a	private	party). For	all	these	reasons,	Citigroup	cannot	at	this	time	estimate	the	reasonably possible	loss	or	range	of	loss,	if	any,	for	these	matters.

Opinion	of	Management	as	to	Eventual	Outcome.	Subject	to	the	foregoing,	it is	the	opinion	of	Citigroup's	management,	based	on	current	knowledge	and	after taking	into	account	its	current	legal	accruals,	that	the	eventual	outcome	of	all matters	described	in	this	Note	would	not	be	likely	to	have	a	material	adverse effect	on	the	consolidated	financial	condition	of	Citigroup.	Nonetheless,	given the	substantial	or	indeterminate	amounts	sought	in	certain	of	these	matters,	and the	inherent	unpredictability	of	such	matters,	an	adverse	outcome	in	certain	of these	matters	could,	from	time	to	time,	have	a	material	adverse	effect	on Citigroup's	consolidated	results	of	operations	or	cash	flows	in	particular quarterly	or	annual	periods.

# ANZ	Underwriting	Matter

On	June	1,	2018,	charges	were	filed	by	the	Australian Commonwealth	Director	of	Public	Prosecutions	(CDPP) against	Citigroup	Global	Markets	Australia	Pty	Limited (CGMA)	for	alleged	criminal	cartel	offenses	following	a referral	by	the	Australian	Competition	and	Consumer Commission.	CDPP	alleges	that	the	cartel	conduct	took	place following	an	institutional	share	placement	by	Australia	and New	Zealand	Banking	Group	Limited	(ANZ)	in	August	2015, where	CGMA	acted	as	joint	underwriter	and	lead	manager with	other	banks.	CDPP	has	also	charged	other	banks	and individuals,	including	current	and	former	Citi	employees. Charges	relating	to	CGMA	are	captioned	R	v.	CITIGROUP GLOBAL	MARKETS	AUSTRALIA	PTY	LIMITED (2018/00175168).	The	matter	is	before	the	Downing	Centre Local	Court	in	Sydney,	Australia.	Separately,	the	Australian Securities	and	Investments	Commission	is	conducting	an investigation,	and	CGMA	is	cooperating	with	the investigation.

# Credit	Crisis-Related	Litigation	and	Other	Matters

Citigroup	and	Related	Parties	were	named	as	defendants	in	numerous	legal actions	and	other	proceedings	asserting	claims	for	damages	and	related	relief	for losses	arising	from	the	global	financial	credit	crisis	that	began	in	2007. Citigroup	also	received	subpoenas	and	requests	for	information	from	various regulatory	agencies	and	other	government	authorities	concerning	certain businesses	impacted	by	the	credit	crisis.	The	vast	majority	of	these	matters	have been	resolved	as	of	December	31,	2018.

# Mortgage-Related	Litigation	and	Other	Matters

# Mortgage-Backed	Securities	and	CDO	Investor	Actions:	Beginning	in	2010,

Citigroup	and	Related	Parties	were	named	as	defendants	in	complaints	filed	by purchasers	of	mortgage-backed	securities	(MBS)	and	credit	default	obligations (CDOs)	sold	or	underwritten	by	Citigroup.		The	complaints	generally	assert	that defendants	made	material	misrepresentations	and	omissions	about	the	credit quality	of	the	assets	underlying	the	securities	or	the	manner	in	which	those	assets were	selected,	and	typically	assert	claims	under	Section	11	of	the	Securities	Act of	1933,	state	blue	sky	laws,	and/or	common-law	misrepresentation-based causes	of	action.

All	but	one	of	these	matters	have	been	resolved	through	motion	practice	or settlement.	As	of	December	31,	2018,	the	aggregate	original	purchase	amount	of the	purchases	covered	by	a	tolling	agreement	with	an	investor threatening	litigation	is	approximately	$500	million.

Mortgage-Backed	Securities	Trustee	Actions:	In	2014,	investors	in	27 residential	MBS	trusts	for	which	Citibank	served	or	currently	serves	as	trustee filed	an	action	in	the	United	States	District	Court	for	the	Southern	District	of New	York,	captioned	FIXED	INCOME	SHARES:	SERIES	M	ET	AL.	v. CITIBANK	N.A.,	alleging	claims	that	Citibank	failed	to	pursue	contractual remedies	against	securitization	sponsors	and	servicers.	Subsequently,	all	claims were	dismissed	as	to	26	of	the	27	trusts.		On	March	22,	2018,	the	court	granted Citibank's	motion	for	summary	judgment	and	denied	plaintiffs'	motions	for partial	summary	judgment	and	class	certification,	which	plaintiffs	have	appealed. Additional	information	concerning	this	action	is	publicly	available	in	court filings	under	the	docket	number	14-cv-9373	(S.D.N.Y.)	(Furman,	J.)	and	18- 1196	(2d	Cir.).

In	2015,	largely	the	same	group	of	investors	filed	an	action	in	the	New York	State	Supreme	Court,	captioned	FIXED	INCOME	SHARES:	SERIES	M, ET	AL.	v.	CITIBANK	N.A.,	related	to	24	trusts	initially	dismissed	from	the federal	court	action	and	one	additional	trust,	asserting	claims	similar	to	the	action filed	in	federal	court.	In	2017,	the	court	granted	in	part	and	denied	in	part Citibank's	motion	to	dismiss	plaintiffs'	amended	complaint.	Citibank	appealed	as to	the	sustained	claims,	and	on	January	16,	2018,	the	New	York	State	appeals court	dismissed	all	of	the	remaining	claims	except	the	claim	for	breach	of contract	related	to	purported	discovery	of	alleged	underwriter	breaches	of representations	and	warranties.		Additional	information	concerning	this	action	is publicly	available	in	court	filings	under	the	docket	number	653891/2015	(N.Y. Sup.	Ct.)	(Ramos,	J.).

In	2015,	the	Federal	Deposit	Insurance	Corporation	(FDIC),	as	receiver	for a	financial	institution,	filed	a	civil	action	against	Citibank	in	the	United	States District	Court	for	the	Southern	District	of	New	York,	captioned	FEDERAL DEPOSIT	INSURANCE	CORPORATION	AS	RECEIVER	FOR	GUARANTY BANK	v.	CITIBANK	N.A.	The	complaint	concerns	one	residential	MBS	trust for	which	Citibank	formerly	served	as	trustee,	and	alleges	that	Citibank	failed	to pursue	contractual	remedies	against	the	sponsor	and	servicers	of	that	trust.	After the	court	granted	Citibank's	motion	to	dismiss	on	grounds	that	the	FDIC	lacked standing	to	pursue	its	claims,	the	FDIC	filed	an	amended	complaint.	In	2018, Citibank	filed	a	motion	to	dismiss	the	amended	complaint.	Additional information	concerning	this	action	is	publicly	available	in	court	filings	under	the docket	number	15-cv-6574	(S.D.N.Y.)	(Carter,	J.).

# Tribune	Company	Bankruptcy

Certain	Citigroup	affiliates	(along	with	numerous	other	parties)	have	been named	as	defendants	in	adversary	proceedings	related	to	the	Chapter	11	cases	of Tribune	Company	(Tribune)	filed	in	the	United	States	Bankruptcy	Court, asserting	claims	arising	out	of	the	approximately	$11	billion	leveraged	buyout	of Tribune	in	2007.	The	actions	were	consolidated	as	IN	RE	TRIBUNE COMPANY	FRAUDULENT	CONVEYANCE	LITIGATION	and	transferred	to the	United	States	District	Court	for	the	Southern	District	of	New	York.

In	the	adversary	proceeding	captioned	KIRSCHNER	v.	FITZSIMONS,	ET AL.,	the	litigation	trustee,	as	successor	plaintiff	to	the	Official	Committee	of Unsecured	Creditors,	seeks	to	avoid	and	recover	as	actual	fraudulent	transfers the	transfers	of	Tribune	stock	that	occurred	as	a	part	of	the	leveraged	buyout. Several	Citigroup	affiliates,	along	with	numerous	other	parties,	are	named	as shareholder	defendants	and	are	alleged	to	have	tendered	Tribune	stock	to Tribune	as	a	part	of	the	buyout.	In	2017,	the	United	States	District	Court	for	the Southern	District	of	New	York	dismissed	the	actual	fraudulent	transfer	claim against	the	shareholder	defendants,	including	the	Citigroup	affiliates.

Several	Citigroup	affiliates,	along	with	numerous	other	parties,	are	named as	defendants	in	certain	actions	brought	by	Tribune	noteholders,	which	seek	to recover	the	transfers	of	Tribune	stock	that	occurred	as	a	part	of	the	leveraged buyout,	as	state	law	constructive	fraudulent	conveyances.	The	noteholders' claims	were	previously	dismissed,	which	was	affirmed	on	appeal.	On	May	15, 2018,	the	United	States	Court	of	Appeals	for	the	Second	Circuit	withdrew	its 2016	transfer	of	jurisdiction	to	the	district	court.

# Depositary	Receipts	Matters

Regulatory	Actions:	On	November	7,	2018,	the	SEC	entered	an	order	accepting an	offer	of	settlement	from	Citibank	concerning	the	SEC's	investigation	into activity	relating	to	pre-released	American	Depositary	Receipts	from	2011	to 2015.	Pursuant	to	the	settlement,	Citibank	paid	$38.7	million	in	disgorgement and	interest.

Other	Litigation:	In	2015,	Citibank	was	sued	by	a	purported	class	of	persons or	entities	who,	from	January	2000	to	the	present,	are	or	were	holders	of depositary	receipts	for	which	Citibank	served	as	the	depositary	bank	and converted,	or	caused	to	be	converted,	foreign	currency	dividends	or	other distributions	into	U.S.	dollars.		On	March	23,	2018,	the	court	granted	in	part	and denied	in	part	plaintiffs'	motion	for	class	certification,	certifying	only	a	class	of holders	of	Citi-sponsored	American	depositary	receipts	that	plaintiffs	own.	On September	6,	2018,	the	court	granted	preliminary	approval	of	a	class	action settlement.		On	January	2,	2019,	the	court	granted	plaintiffs'	request	to	adjourn the	final	approval	hearing	for	the	settlement.		Additional	information	concerning this	action	is	publicly	available	in	court	filings	under	the	docket	number	15	Civ. 9185	(S.D.N.Y.)	(McMahon,	C.).

# Foreign	Exchange	Matters

Regulatory	Actions:	Government	and	regulatory	agencies	in	the	U.S.	and	in	other jurisdictions	are	conducting	investigations	or	making	inquiries	regarding Citigroup's	foreign	exchange	business.	Citigroup	is	fully	cooperating	with	these and	related	investigations	and	inquiries.

Antitrust	and	Other	Litigation:	Numerous	foreign	exchange	dealers	and their	affiliates,	including	Citigroup,	Citibank,	Citicorp	and	CGMI,	were	named as	defendants	in	putative	class	actions	consolidated	in	the	United	States	District Court	for	the	Southern	District	of	New	York	under	the	caption	IN	RE	FOREIGN EXCHANGE	BENCHMARK	RATES	ANTITRUST	LITIGATION.	Plaintiffs allege	that	they	suffered	losses	as	a	result	of	defendants'	alleged	manipulation of,	and	collusion	with	respect	to,	the	foreign	exchange	market.	Plaintiffs	assert claims	under	the	Commodity	Exchange	Act,	Sherman	Act,	and	Clayton	Act,	and seek	compensatory	damages,	treble	damages,	and	declaratory	and	injunctive relief.

On	November	7,	2018,	some	of	the	institutional	investors	who	opted	out	of an	August	2018	settlement	with	Citi	defendants	filed	a	lawsuit	against	Citigroup, Citibank,	CGMI,	and	other	defendants	under	the	caption	ALLIANZ	GLOBAL INVESTORS,	ET	AL.	v.	BANK	OF	AMERICA	CORPORATION,	ET	AL. Plaintiffs	allege	that	defendants	manipulated,	and	colluded	to	manipulate,	the foreign	exchange	market.	Plaintiffs	assert	Sherman	Act	and	unjust	enrichment claims	and	seek	consequential	and	punitive	damages	and	other	forms	of	relief. Additional	information	concerning	this	action	is	publicly	available	in	court filings	under	the	docket	number	18	Civ.	10364	(S.D.N.Y.)	(Schofield,	J.). On	December	31,	2018,	a	group	of	institutional	investors	issued	(but	did	not serve)	a	claim	in	the	High	Court	in	London	against	Citibank,	Citigroup,	and other	defendants,	alleging	that	defendants	manipulated,	and	colluded	to manipulate,	the	foreign	exchange	market.	Claimants	allege	breaches	of	EU

and	UK	competition	law.	The	case	is	ALLIANZ	GLOBAL	INVESTORS GMBH	AND	OTHERS	v.	BARCLAYS	BANK	PLC	AND	OTHERS,	case number	CL-2018-000840,	and	will	not	commence	unless	and	until	it	is	served. In	2018,	two	motions	for	certification	of	class	actions	alleging	manipulation of	foreign	exchange	markets	were	filed	in	the	Tel	Aviv	Central	District	Court	in Israel	against	Citigroup	and	CGMI,	and	Citibank,	respectively.	The	cases	are LANUEL,	ET	AL.	v.	BANK	OF	AMERICA	CORPORATION,	ET	AL.,	CA 29013-09-18,	and	GERTLER,	ET	AL.	v.	DEUTSCHE	BANK	AG,	C1A	1657- 10-18.

In	2015,	an	action	captioned	NYPL	v.	JPMORGAN	CHASE	&	CO.,	ET AL.	was	brought	in	the	United	States	District	Court	for	the	Northern	District	of California	(later	transferred	to	the	United	States	District	Court	for	the	Southern District	of	New	York)	against	Citigroup,	as	well	as	numerous	other	foreign exchange	dealers.	Subsequently,	plaintiffs	filed	a	third	amended	class	action complaint,	naming	Citigroup,	Citibank,	and	Citicorp	as	defendants.	Plaintiffs seek	to	represent	a	putative	class	of	"consumers	and	businesses	in	the	United States	who	directly	purchased	supracompetitive	foreign	currency	at	Benchmark exchange	rates"	from	defendants.	Plaintiffs	allege	claims	under	federal	and California	antitrust	and	consumer	protection	laws,	and	are	seeking	compensatory damages,	treble	damages,	and	declaratory	and	injunctive	relief.	Additional information	concerning	this	action	is	publicly	available	in	court	filings	under	the docket	numbers	15	Civ.	2290	(N.D.	Cal.)	(Chhabria,	J.)	and	15	Civ.	9300 (S.D.N.Y.)	(Schofield,	J.).

In	2017,	certain	plaintiffs	filed	a	consolidated	amended	complaint	on behalf	of	purported	classes	of	indirect	purchasers	of	foreign	exchange instruments	sold	by	defendants,	including	Citigroup,	Citibank,	Citicorp,	and CGMI	as	defendants,	captioned	CONTANT,	ET	AL.	v.	BANK	OF	AMERICA CORPORATION,	ET	AL.	Plaintiffs	allege	that	defendants	engaged	in	a conspiracy	to	fix	currency	prices	in	violation	of	the	Sherman	Act	and	various state	antitrust	laws.	On	November	15,	2018,	the	court	denied	plaintiffs'	motion for	preliminary	approval	of	a	proposed	class	settlement	with	the	Citi	defendants and	requested	plaintiffs	to	provide	additional	information.	Additional information	concerning	these	actions	is	publicly	available	in	court	filings	under the	docket	numbers	16	Civ.	7512	(S.D.N.Y.)	(Schofield,	J.),	17	Civ.	4392 (S.D.N.Y.)	(Schofield,	J.),	and	17	Civ.	3139	(S.D.N.Y.)	(Schofield,	J.).

# Interbank	Offered	Rates-Related	Litigation	and	Other	Matters

Antitrust	and	Other	Litigation:	Citigroup	and	Citibank,	along	with	other	U.S. Dollar	(USD)	LIBOR	panel	banks,	are	defendants	in	a	multi-district	litigation proceeding	before	the	United	States	District	Court	for	the	Southern	District	of New	York	captioned	IN	RE	LIBOR-BASED	FINANCIAL	INSTRUMENTS ANTITRUST	LITIGATION.	Plaintiffs,	on	behalf	of	different	putative	classes and	individually,	assert	claims	under	the	Sherman	Act,	the	Commodities Exchange	Act,	and	state	antitrust,	unfair	competition,	and	restraint-of-trade	laws, as	well	as	various	common	law	claims,	based	on	allegations	that	defendants suppressed	or	otherwise

manipulated	USD	LIBOR.	Plaintiffs	seek	compensatory	damages,	restitution, treble	damages	where	authorized	by	statute,	and	injunctive	relief.

On	December	5,	2018,	a	court	granted	preliminary	approval	of	a	settlement among	Citigroup,	Citibank	and	a	class	of	investors	who	purchased	USD	LIBOR debt	securities	from	non-defendant	sellers,	pursuant	to	which	the	Citi	defendants paid	$7.025	million.	On	December	20,	2018,	a	court	granted	final	approval	of	a settlement	among	Citigroup,	Citibank	and	a	class	of	lending	institutions	with interests	in	loans	tied	to	USD	LIBOR,	pursuant	to	which	the	Citi	defendants	paid $23	million.	Additional	information	concerning	these	actions	and	related	actions and	appeals	is	publicly	available	in	court	filings	under	the	docket	numbers	11 MD	2262	(S.D.N.Y.)	(Buchwald,	J.)	and	17-1569	(2d	Cir.).

In	2015,	plaintiffs	in	the	class	action	SULLIVAN	v.	BARCLAYS	PLC,	ET AL.,	pending	in	the	United	States	District	Court	for	the	Southern	District	of	New York,	filed	a	fourth	amended	complaint	naming	Citigroup,	Citibank,	and	various other	banks	as	defendants.	Plaintiffs	claim	to	have	suffered	losses	as	a	result	of purported	EURIBOR	manipulation	and	assert	claims	under	the	Commodity Exchange	Act,	the	Sherman	Act,	and	the	federal	civil	Racketeer	Influenced	and Corrupt	Organizations	(RICO)	Act	and	for	unjust	enrichment.	In	2017,	the	court granted	in	part	and	denied	in	part	defendants'	motion	to	dismiss.	On	December 19,	2018,	the	court	preliminarily	approved	a	settlement	among	the	Citi	and JPMorgan	defendants	and	plaintiffs	pursuant	to	which	the	settling	defendants collectively	agreed	to	pay	a	total	of	$182.5	million.	Additional	information concerning	this	action	is	publicly	available	in	court	filings	under	the	docket number	13	Civ.	2811	(S.D.N.Y.)	(Castel,	J.).

In	2016,	a	putative	class	action	captioned	FRONTPOINT	ASIAN	EVENT DRIVEN	FUND,	LTD.,	ET	AL	v.	CITIBANK,	N.A.,	ET	AL.	was	filed	in	the United	States	District	Court	for	the	Southern	District	of	New	York	against Citibank,	Citigroup	and	various	other	banks.	Plaintiffs	assert	claims	for violations	of	the	Sherman	Act,	Clayton	Act,	and	RICO	Act,	as	well	as	state	law claims	for	alleged	manipulation	of	the	Singapore	Interbank	Offered	Rate	and Singapore	Swap	Offer	Rate.	On	May	22,	2018,	the	Citi	defendants	and	plaintiffs entered	into	a	settlement	under	which	Citi	agreed	to	pay	$9.99	million. Additional	information	concerning	this	action	is	publicly	available	in	court filings	under	the	docket	number	16	Civ.	5263	(S.D.N.Y.)	(Hellerstein,	J.). In	2016,	Banque	Delubac	filed	a	summons	against	Citigroup,	Citigroup Global	Markets	Limited	(CGML),	and	Citigroup	Europe	Plc	with	the Commercial	Court	of	Aubenas,	France,	alleging	that	defendants	suppressed LIBOR	submissions	between	2005	and	2012,	and	that	Banque	Delubac's EURIBOR-linked	lending	activity	was	negatively	impacted	as	a	result.	Plaintiff is	seeking	compensatory	damages	for	losses	on	LIBOR-linked	loans	to customers	and	for	alleged	consequential	losses	to	its	business.	On	November	6, 2018,	the	Aubenas	Court	found	that	it	lacked	subject	matter	jurisdiction	and transferred	the	case	to	the	Commercial	Court	of	Marseille.	An	appeal	on jurisdiction	is	pending	before	the	Court	of	Appeal	of	Nîmes.	Proceedings	before the	Commercial	Court	of	Marseille	are	stayed	pending	the	appeal.

The	case	is	SCS	BANQUE	DELUBAC	&	CIE	v.	CITIGROUP	INC.	ET	AL., Commercial	Court	of	Marseille,	RG	no.	2018F02750.

On	January	15,	2019,	a	putative	class	action	captioned	PUTNAM	BANK	v. INTERCONTINENTAL	EXCHANGE,	INC.,	ET	AL.,	was	filed	in	the	United States	District	Court	for	the	Southern	District	of	New	York	against	the Intercontinental	Exchange,	Inc.	(ICE),	Citigroup,	Citibank,	CGMI,	and	various other	banks.	Plaintiff	asserts	claims	for	violations	of	the	Sherman	Act	and Clayton	Act	and	unjust	enrichment	based	on	alleged	suppression	of	the	ICE LIBOR	and	seeks	compensatory	damages,	disgorgement	and	treble	damages where	authorized	by	statute.	Additional	information	relating	to	this	action	is publicly	available	in	court	filings	under	the	docket	number	19-cv-00439 (S.D.N.Y.)	(Marrero,	J.).

# Interchange	Fee	Litigation

Beginning	in	2005,	several	putative	class	actions	were	filed	against	Citigroup and	Related	Parties,	together	with	Visa,	MasterCard	and	other	banks	and	their affiliates,	in	various	federal	district	courts	and	consolidated	with	other	related individual	cases	in	a	multi-district	litigation	proceeding	in	the	United	States District	Court	for	the	Eastern	District	of	New	York.	This	proceeding	is	captioned IN	RE	PAYMENT	CARD	INTERCHANGE	FEE	AND	MERCHANT DISCOUNT	ANTITRUST	LITIGATION.

The	plaintiffs,	merchants	that	accept	Visa	and	MasterCard	branded	payment cards	as	well	as	membership	associations	that	claim	to	represent	certain	groups of	merchants,	allege,	among	other	things,	that	defendants	have	engaged	in conspiracies	to	set	the	price	of	interchange	and	merchant	discount	fees	on	credit and	debit	card	transactions	and	to	restrain	trade	unreasonably	through	various Visa	and	MasterCard	rules	governing	merchant	conduct,	all	in	violation	of Section	1	of	the	Sherman	Act	and	certain	California	statutes.	Plaintiffs	further alleged	violations	of	Section	2	of	the	Sherman	Act.		Supplemental	complaints also	were	filed	against	defendants	in	the	putative	class	actions	alleging	that Visa's	and	MasterCard's	respective	initial	public	offerings	were	anticompetitive and	violated	Section	7	of	the	Clayton	Act,	and	that	MasterCard's	initial	public offering	constituted	a	fraudulent	conveyance.

In	2014,	the	district	court	entered	a	final	judgment	approving	the	terms	of	a class	settlement	providing	for,	among	other	things,	a	total	payment	to	the	class	of $6.05	billion;	a	rebate	to	merchants	participating	in	the	damages	class	settlement of	10	bps	on	interchange	collected	for	a	period	of	eight	months	by	the	Visa	and MasterCard	networks;	and	changes	to	certain	network	rules.	Various	objectors appealed	from	the	final	class	settlement	approval	order	to	the	United	States Court	of	Appeals	for	the	Second	Circuit.

In	2016,	the	Court	of	Appeals	reversed	the	district	court's	approval	of	the class	settlement	and	remanded	for	further	proceedings.		The	district	court thereafter	appointed	separate	interim	counsel	for	a	putative	class	seeking damages	and	a	putative	class	seeking	injunctive	relief.		Amended	or	new complaints	on	behalf	of	the	putative	classes	and	various	individual	merchants were	subsequently	filed,	including	a	further	amended	complaint	on	behalf	of	a putative	damages

class	and	a	new	complaint	on	behalf	of	a	putative	injunctive	class,	both	of	which named	Citigroup	and	affiliates.		In	addition,	numerous	merchants	have	filed amended	or	new	complaints	against	Visa,	MasterCard,	and	in	some	instances one	or	more	issuing	banks.	Three	of	these	suits—7-ELEVEN,	INC.,	ET	AL.	v. VISA	INC.,	ET	AL.;	ROUNDY'S	SUPERMARKETS,	INC.	v.	VISA	INC.	ET AL.;	and	LUBY'S	FUDDRUCKERS	RESTAURANTS,	LLC,	v.	VISA	INC., ET	AL—brought	on	behalf	of	numerous	individual	merchants,	name	Citigroup and	affiliates	as	defendants.

On	January	24,	2019,	the	court	granted	the	damages	class	plaintiffs'	motion for	preliminary	approval	of	a	settlement	with	the	defendants,	including Citigroup.		The	settlement	involves	the	damages	class	only	and	does	not	settle the	claims	of	the	injunctive	relief	class	or	any	actions	brought	on	a	non-class basis	by	individual	merchants.		Additional	information	concerning	these consolidated	actions	is	publicly	available	in	court	filings	under	the	docket number	MDL	05-1720	(E.D.N.Y.)	(Brodie,	J.).

# Interest	Rate	Swaps	Matters

Regulatory	Actions:	The	Commodity	Futures	Trading	Commission	(CFTC)	is conducting	an	investigation	into	alleged	anticompetitive	conduct	in	the	trading and	clearing	of	interest	rate	swaps	(IRS)	by	investment	banks.		Citigroup	is cooperating	with	the	investigation.

Antitrust	and	Other	Litigation:	Beginning	in	2015,	IRS	market	participants, including	Citigroup,	Citibank,	CGMI,	CGML	and	numerous	other	parties,	were named	as	defendants	in	a	number	of	industry-wide	putative	class	actions.		These actions	have	been	consolidated	in	the	United	States	District	Court	for	the Southern	District	of	New	York	under	the	caption	IN	RE	INTEREST	RATE SWAPS	ANTITRUST	LITIGATION.	Plaintiffs	in	these	actions	allege	that defendants	colluded	to	prevent	the	development	of	exchange-like	trading	for IRS,	thereby	causing	the	putative	classes	to	suffer	losses	in	connection	with	their IRS	transactions.	Plaintiffs	assert	federal	antitrust	claims	and	claims	for	unjust enrichment.	Also	consolidated	under	the	same	caption	are	two	individual	actions filed	by	swap	execution	facilities,	asserting	federal	and	state	antitrust	claims	as well	as	claims	for	unjust	enrichment	and	tortious	interference	with	business relations.	Plaintiffs	in	all	of	these	actions	seek	treble	damages,	fees,	costs	and injunctive	relief.	On	October	25,	2018,	the	putative	class	plaintiffs	moved	for leave	to	file	a	fourth	consolidated	class	action	complaint.	On	November	20, 2018,	the	district	court	granted	in	part	and	denied	in	part	defendants'	motion	to dismiss	in	TRUEEX	LLC	v.	BANK	OF	AMERICA	CORPORATION,	ET AL.	Additional	information	concerning	these	actions	is	publicly	available	in court	filings	under	the	docket	numbers	18-CV-5361	(S.D.N.Y.)	(Engelmayer,	J.) and	16-MD-2704	(S.D.N.Y.)	(Engelmayer,	J.).

# Money	Laundering	Inquiries

Regulatory	Actions:	Citibank	has	received	subpoenas	from	the	United	States Attorney	for	the	Eastern	District	of	New	York	in	connection	with	its investigation	of	alleged	bribery,	corruption	and	money	laundering	associated with	the	Fédération	Internationale	de	Football	Association	(FIFA),	and	the

potential	involvement	of	financial	institutions	in	that	activity.	The	subpoenas request	information	relating	to,	among	other	things,	banking	relationships	and transactions	at	Citibank	and	its	affiliates	associated	with	certain	individuals	and entities	identified	as	having	had	involvement	with	the	alleged	corrupt	conduct. Citi	is	cooperating	with	the	authorities	in	this	matter.

# Oceanografía	Fraud	and	Related	Matters

Regulatory	Actions:	On	August	16,	2018,	Citi	resolved	an	SEC	investigation into	Citigroup's	announcement	in	the	first	quarter	of	2014	of	a	fraud	discovered in	a	Petróleos

Mexicanos	(Pemex)	supplier	program	involving	Oceanografía	S.A.	de	C.V. (OSA),	a	Mexican	oil	services	company	and	a	key	supplier	to	Pemex.	As	part	of the	resolution,	Citi	agreed	to	pay	a	civil	penalty	of	$4.75	million.

Other	Litigation:	In	2016,	a	complaint	was	filed	against	Citigroup	in	the United	States	District	Court	for	the	Southern	District	of	Florida	alleging	that	it conspired	with	OSA	and	others	with	respect	to	receivable	financings	and	other financing	arrangements	related	to	OSA	in	a	manner	that	injured	bondholders	and other	creditors	of	OSA.	The	complaint	asserts	claims	on	behalf	of	39	plaintiffs that	are	characterized	variously	as	trade	creditors	of,	investors	in,	or	lenders	to OSA.	Plaintiffs	collectively	claim	to	have	lost	$1.1	billion	as	a	result	of	OSA's bankruptcy.	The	complaint	asserts	claims	under	the	federal	civil	RICO	law	and seeks	treble	damages	and	other	relief	pursuant	to	that	statute.	The	complaint	also asserts	claims	for	fraud	and	breach	of	fiduciary	duty.

Subsequently,	plaintiffs	filed	an	amended	complaint	adding	common	law claims	for	fraud,	aiding	and	abetting	fraud,	and	conspiracy	on	behalf	of	all plaintiffs.	On	January	30,	2018,	the	court	granted	Citigroup's	motion	to	dismiss the	amended	complaint,	which	plaintiffs	appealed.	Additional	information concerning	this	action	is	publicly	available	in	court	filings	under	the	docket number	16-20725	(S.D.	Fla.)	(Gayles,	J.).

In	2017,	a	complaint	was	filed	against	Citigroup	in	the	United	States	District Court	for	the	Southern	District	of	New	York	by	OSA	and	its	controlling shareholder,	Amado	Yáñez	Osuna.		The	complaint	alleges	that	plaintiffs	were injured	when	Citigroup	made	certain	public	statements	about	receivable financings	and	other	financing	arrangements	related	to	OSA.	The	complaint asserts	claims	for	malicious	prosecution	and	tortious	interference	with	existing and	prospective	business	relationships.	Plaintiffs	later	filed	an	amended complaint	adding	CGMI,	Citibank	and	Banco	Nacional	de	México,	or	Banamex, as	defendants	and	adding	causes	of	action	for	fraud	and	breach	of	contract.	On September	28,	2018,	the	court	granted	defendants	motion	to	dismiss,	which plaintiffs	have	appealed.		Additional	information	concerning	this	action	is publicly	available	in	court	filings	under	the	docket	number	1:17-cv-01434 (S.D.N.Y.)	(Sullivan,	J.).

# Parmalat	Litigation

In	2004,	an	Italian	commissioner	appointed	to	oversee	the	administration	of various	Parmalat	companies,	filed	a	complaint	against	Citigroup	and	Related Parties	alleging	that

the	defendants	facilitated	a	number	of	frauds	by	Parmalat	insiders.	In	2008,	a jury	rendered	a	verdict	in	Citigroup's	favor	and	awarded	Citi	$431	million. Citigroup	has	taken	steps	to	enforce	the	judgment	in	Italian	court.	In	2014,	an Italian	court	of	appeal	affirmed	the	decision	in	the	full	amount	of	$431	million, which	Parmalat	has	appealed	to	the	Italian	Supreme	Court.	Additional information	concerning	this	action	is	publicly	available	in	court	filings	under	the docket	number	27618/2014.

In	2015,	Parmalat	filed	a	claim	in	an	Italian	civil	court	in	Milan	claiming damages	of	€1.8	billion	against	Citigroup	and	Related	Parties.	On	January	25, 2018,	the	Milan	court	dismissed	Parmalat's	claim	on	grounds	that	it	was duplicative	of	Parmalat's	previously	unsuccessful	claims.	On	March	2,	2018, Parmalat	filed	an	appeal	to	the	Milan	Court	of	Appeal.	Additional	information concerning	this	action	is	publicly	available	in	court	filings	under	the	docket number	1009/2018.

# Referral	Hiring	Practices	Investigations

Government	and	regulatory	agencies	in	the	U.S.,	including	the	SEC,	are conducting	investigations	or	making	inquiries	concerning	compliance	with	the Foreign	Corrupt	Practices	Act	and	other	laws	with	respect	to	the	hiring	of candidates	referred	by	or	related	to	foreign	government	officials.	Citigroup	is cooperating	with	the	investigations	and	inquiries.

# Sovereign	Securities	Matters

Regulatory	Actions:	Government	and	regulatory	agencies	in	the	United	States and	in	other	jurisdictions	are	conducting	investigations	or	making	inquiries regarding	Citigroup's	sales	and	trading	activities	in	connection	with	sovereign and	other	government-related	securities.	Citigroup	is	fully	cooperating	with these	investigations	and	inquiries.

Antitrust	and	Other	Litigation:	Beginning	in	2015,	CGMI	and	numerous other	U.S.	Treasury	primary	dealer	banks	were	named	as	defendants	in	a	number of	substantially	similar	putative	class	actions	involving	allegations	that	they colluded	to	manipulate	U.S.	Treasury	securities	markets.	The	cases	were	later consolidated	in	the	United	States	District	Court	for	the	Southern	District	of	New York.	Plaintiffs	then	filed	a	consolidated	complaint,	which	alleges	that	CGMI and	other	primary	dealer	defendants	colluded	to	fix	Treasury	auction	bids	by sharing	competitively	sensitive	information	ahead	of	the	auctions,	in	violation	of the	antitrust	laws.	The	consolidated	complaint	also	alleges	that	CGMI	and	other primary	dealer	defendants	colluded	to	boycott	and	prevent	the	emergence	of	an anonymous,	all-to-all	electronic	trading	platform	in	the	Treasuries	secondary market,	and	seeks	damages,	including	treble	damages	where	authorized	by statute,	and	injunctive	relief.		Defendants	filed	motions	to	dismiss	on	February 23,	2018.	Additional	information	relating	to	this	action	is	publicly	available	in court	filings	under	the	docket	number	15-MD-2673	(S.D.N.Y.)	(Gardephe,	J.). Beginning	in	2016,	a	number	of	substantially	similar	putative	class	action complaints	were	filed	against	a	number	of	financial	institutions	and	traders related	to	the	supranational,	sub-sovereign,	and	agency	(SSA)	bond	market.	The actions	are	based	upon	defendants'	roles	as	market	makers	and	traders	of	SSA bonds	and	assert	claims	of	alleged	collusion	under	the

antitrust	laws	and	unjust	enrichment	and	seek	damages,	including	treble damages	where	authorized	by	statute,	and	disgorgement.	These	actions	were	later consolidated	in	the	United	States	District	Court	for	the	Southern	District	of	New York.	Subsequently,	plaintiffs	filed	a	consolidated	complaint	that	names Citigroup,	Citibank,	CGMI	and	CGML	among	the	defendants.	Plaintiffs	filed	a second	amended	consolidated	complaint	on	November	6,	2018,	which defendants	moved	to	dismiss.	Additional	information	relating	to	this	action	is publicly	available	in	court	filings	under	the	docket	number	16-cv-03711 (S.D.N.Y.)	(Ramos,	J.).

In	2017,	a	class	action	related	to	the	SSA	bond	market	was	filed	in	the Ontario	Court	of	Justice	against	Citigroup,	Citibank,	CGMI,	CGML,	Citibank Canada	and	Citigroup	Global	Markets	Canada,	Inc.,	among	other	defendants, asserting	claims	for	breach	of	contract,	breach	of	the	competition	act,	breach	of foreign	law,	unjust	enrichment,	and	civil	conspiracy.	Plaintiffs	seek compensatory	and	punitive	damages,	as	well	as	declaratory	relief.	Additional information	relating	to	this	action	is	publicly	available	in	court	filings	under	the docket	number	CV-17-586082-00CP	(Ont.	S.C.J.).

Also	in	2017,	a	second	similar	action	was	initiated	in	Canadian	Federal Court	by	the	same	law	firm	against	the	same	Citi	entities	as	the	Ontario	action, in	addition	to	other	defendants.	The	action	asserts	claims	for	breach	of	the competition	act	and	breach	of	foreign	law.	Additional	information	relating	to	this action	is	publicly	available	in	court	filings	under	the	docket	number	T-1871-17 (Fed.	Ct.).

Beginning	in	March	2018,	six	complaints	(later	consolidated)	were	filed	in the	United	States	District	Court	for	the	Southern	District	of	New	York	against numerous	defendants,	including	Citigroup,	CGMI,	Citigroup	Financial	Products Inc.,	Citigroup	Global	Markets	Holdings	Inc.,	Citibanamex,	and	Grupo Banamex,	related	to	the	Mexican	sovereign	bond	market.	The	complaints	allege a	conspiracy	to	fix	prices	in	the	Mexican	sovereign	bond	market	from	January	1, 2006	to	April	19,	2017,	and	assert	antitrust	and	unjust	enrichment	claims	against the	Citi	defendants,	as	well	as	a	number	of	other	banks.	Plaintiffs	seek	statutory treble	damages,	restitution,	and	injunctive	relief.	Defendants	moved	to	dismiss the	consolidated	amended	complaint.	Additional	information	relating	to	this consolidated	action	is	publicly	available	in	court	filings	under	the	docket	number 18	Civ.	2830	(S.D.N.Y.)	(Oetken,	J.).

# Settlement	Payments

Payments	required	in	settlement	agreements	described	above	have	been	made	or are	covered	by	existing	litigation	accruals.

# 28.			CONDENSED	CONSOLIDATING	FINANCIAL	STATEMENTS

Citigroup	amended	its	Registration	Statement	on	Form	S-3	on	file	with	the	SEC (File	No.	33-192302)	to	add	its	wholly	owned	subsidiary,	Citigroup	Global Markets	Holdings	Inc.	(CGMHI),	as	a	co-registrant.	Any	securities	issued	by CGMHI	under	the	Form	S-3	will	be	fully	and	unconditionally	guaranteed	by Citigroup.

The	following	are	the	Condensed	Consolidating	Statements	of	Income	and Comprehensive	Income	for	the	years	ended	December	31,	2018,	2017	and	2016, Condensed	Consolidating	Balance	Sheet	as	of	December	31,	2018	and	2017	and Condensed	Consolidating	Statement	of	Cash	Flows	for	the	years	ended December	31,	2018,	2017	and	2016	for	Citigroup	Inc.,	the	parent	holding company	(Citigroup	parent	company),	CGMHI,	other	Citigroup	subsidiaries	and eliminations	and	total	consolidating	adjustments.	"Other	Citigroup	subsidiaries and	eliminations"	includes	all	other	subsidiaries	of	Citigroup,	intercompany eliminations	and	income	(loss)	from	discontinued	operations.	"Consolidating adjustments"	includes	Citigroup	parent	company	elimination	of	distributed	and undistributed	income	of	subsidiaries	and	investment	in	subsidiaries.

These	Condensed	Consolidating	Financial	Statements	have	been	prepared and	presented	in	accordance	with	SEC	Regulation	S-X	Rule	3-10,	"Financial Statements	of	Guarantors	and	Issuers	of	Guaranteed	Securities	Registered	or Being	Registered."

These	Condensed	Consolidating	Financial	Statements	schedules	are presented	for	purposes	of	additional	analysis,	but	should	be	considered	in relation	to	the	Consolidated	Financial	Statements	of	Citigroup	taken	as	a	whole.

# Condensed	Consolidating	Statements	of	Income	and	Comprehensive	Income

|  |  |  | Year	ended	December	31,	2018 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Citigroup\nparent\ncompany | CGMHI | Other\tCitigroup\nsubsidiaries\tand\neliminations | Consolidating\nadjustments | Citigroup\nconsolidated |
| Revenues |  |  |  |  |  |
| Dividends\tfrom\tsubsidiaries | $22,854 | $— | $— | $(22,854) | $— |
| Interest\trevenue | 67 | 8,732 | 62,029 | — | 70,828 |
| Interest\trevenue—intercompany | 4,933 | 1,659 | (6,592) | — | — |
| Interest\texpense | 4,783 | 5,430 | 14,053 | — | 24,266 |
| Interest\texpense—intercompany | 1,198 | 3,539 | (4,737) | — | — |
| Net\tinterest\trevenue | $(981) | $1,422 | $46,121 | $— | $46,562 |
| Commissions\tand\tfees | $— | $5,146 | $6,711 | $— | $11,857 |
| Commissions\tand\tfees—intercompany | (2) | 237 | (235) | — | — |
| Principal\ttransactions | (1,310) | 1,599 | 8,773 | — | 9,062 |
| Principal\ttransactions—intercompany | (929) | 1,328 | (399) | — | — |
| Other\tincome | 1,373 | 710 | 3,290 | — | 5,373 |
| Other\tincome—intercompany | (107) | 143 | (36) | — | — |
| Total\tnon-interest\trevenues | $(975) | $9,163 | $18,104 | $— | $26,292 |
| Total\trevenues,\tnet\tof\tinterest\texpense | $20,898 | $10,585 | $64,225 | $(22,854) | $72,854 |
| Provisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\tclaims | $— | $(22) | $7,590 | $— | $7,568 |
| Operating\texpenses |  |  |  |  |  |
| Compensation\tand\tbenefits | $4 | $4,484 | $16,666 | $— | $21,154 |
| Compensation\tand\tbenefits—intercompany | 115 | — | (115) | — | — |
| Other\toperating | (192) | 2,224 | 18,655 | — | 20,687 |
| Other\toperating—intercompany | 49 | 2,312 | (2,361) | — | — |
| Total\toperating\texpenses | $(24) | $9,020 | $32,845 | $— | $41,841 |
| Equity\tin\tundistributed\tincome\tof\tsubsidiaries | $(2,163) | $— | $— | $2,163 | $— |
| Income\t(loss)\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | $18,759 | $1,587 | $23,790 | $(20,691) | $23,445 |
| Provision\tfor\tincome\ttaxes | $714 | $1,123 | $3,520 | $— | $5,357 |
| Income\t(loss)\tfrom\tcontinuing\toperations | $18,045 | $464 | $20,270 | $(20,691) | $18,088 |
| Loss\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes | — | — | (8) | — | (8) |
| Net\tincome\t(loss)\tbefore\tattribution\tof\tnoncontrolling\tinterests | $18,045 | $464 | $20,262 | $(20,691) | $18,080 |
| Noncontrolling\tinterests | — | — | 35 | — | 35 |
| Net\tincome\t(loss) | $18,045 | $464 | $20,227 | $(20,691) | $18,045 |
| Comprehensive\tincome |  |  |  |  |  |
| Add:\tOther\tcomprehensive\tincome\t(loss) | $(2,499) | $257 | $3,500 | $(3,757) | $(2,499) |
| Total\tCitigroup\tcomprehensive\tincome\t(loss) | $15,546 | $721 | $23,727 | $(24,448) | $15,546 |
| Add:\tOther\tcomprehensive\tincome\t(loss)\tattributable\tto\tnoncontrolling\ninterests | $— | $— | $(43) | $— | $(43) |
| Add:\tNet\tincome\tattributable\tto\tnoncontrolling\tinterests | — | — | 35 | — | 35 |
| Total\tcomprehensive\tincome\t(loss) | $15,546 | $721 | $23,719 | $(24,448) | $15,538 |

|  |  |  | Year	ended	December	31,	2017 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Citigroup\tparent\ncompany | CGMHI | Other\tCitigroup\nsubsidiaries\tand\neliminations | Consolidating\nadjustments | Citigroup\nconsolidated |
| Revenues |  |  |  |  |  |
| Dividends\tfrom\tsubsidiaries | $22,499 | $— | $— | $(22,499) | $— |
| Interest\trevenue | 1 | 5,279 | 56,299 | — | 61,579 |
| Interest\trevenue—intercompany | 3,972 | 1,178 | (5,150) | — | — |
| Interest\texpense | 4,766 | 2,340 | 9,412 | — | 16,518 |
| Interest\texpense—intercompany | 829 | 2,297 | (3,126) | — | — |
| Net\tinterest\trevenue | $(1,622) | $1,820 | $44,863 | $— | $45,061 |
| Commissions\tand\tfees | $— | $5,366 | $7,341 | $— | $12,707 |
| Commissions\tand\tfees—intercompany | (2) | 182 | (180) | — | — |
| Principal\ttransactions | 1,654 | 1,183 | 6,638 | — | 9,475 |
| Principal\ttransactions—intercompany | 934 | 1,200 | (2,134) | — | — |
| Other\tincome | (2,581) | 867 | 6,915 | — | 5,201 |
| Other\tincome—intercompany | 5 | 170 | (175) | — | — |
| Total\tnon-interest\trevenues | $10 | $8,968 | $18,405 | $— | $27,383 |
| Total\trevenues,\tnet\tof\tinterest\texpense | $20,887 | $10,788 | $63,268 | $(22,499) | $72,444 |
| Provisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\tclaims | $— | $— | $7,451 | $— | $7,451 |
| Operating\texpenses |  |  |  |  |  |
| Compensation\tand\tbenefits | $(107) | $4,403 | $16,885 | $— | $21,181 |
| Compensation\tand\tbenefits—intercompany | 120 | — | (120) | — | — |
| Other\toperating | (318) | 2,184 | 19,185 | — | 21,051 |
| Other\toperating—intercompany | (35) | 2,231 | (2,196) | — | — |
| Total\toperating\texpenses | $(340) | $8,818 | $33,754 | $— | $42,232 |
| Equity\tin\tundistributed\tincome\tof\tsubsidiaries | $(19,088) | $— | $— | $19,088 | $— |
| Income\t(loss)\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | $2,139 | $1,970 | $22,063 | $(3,411) | $22,761 |
| Provision\tfor\tincome\ttaxes | $8,937 | $873 | $19,578 | $— | $29,388 |
| Income\t(loss)\tfrom\tcontinuing\toperations | $(6,798) | $1,097 | $2,485 | $(3,411) | $(6,627) |
| Loss\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes | — | — | (111) | — | (111) |
| Net\tincome\t(loss)\tbefore\tattribution\tof\tnoncontrolling\tinterests | $(6,798) | $1,097 | $2,374 | $(3,411) | $(6,738) |
| Noncontrolling\tinterests | — | (1) | 61 | — | 60 |
| Net\tincome\t(loss) | $(6,798) | $1,098 | $2,313 | $(3,411) | $(6,798) |
| Comprehensive\tincome |  |  |  |  |  |
| Add:\tOther\tcomprehensive\tincome\t(loss) | $(2,791) | $(117) | $(4,160) | $4,277 | $(2,791) |
| Total\tCitigroup\tcomprehensive\tincome\t(loss) | $(9,589) | $981 | $(1,847) | $866 | $(9,589) |
| Add:\tOther\tcomprehensive\tincome\t(loss)\tattributable\tto\tnoncontrolling\ninterests | $— | $— | $114 | $— | $114 |
| Add:\tNet\tincome\tattributable\tto\tnoncontrolling\tinterests | — | (1) | 61 | — | 60 |
| Total\tcomprehensive\tincome\t(loss) | $(9,589) | $980 | $(1,672) | $866 | $(9,415) |

|  |  |  | Year	ended	December	31,	2016 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Citigroup\tparent\ncompany | CGMHI | Other\tCitigroup\nsubsidiaries\tand\neliminations | Consolidating\nadjustments | Citigroup\nconsolidated |
| Revenues |  |  |  |  |  |
| Dividends\tfrom\tsubsidiaries | $15,570 | $— | $— | $(15,570) | $— |
| Interest\trevenue | 7 | 4,590 | 53,391 | — | 57,988 |
| Interest\trevenue—intercompany | 3,008 | 545 | (3,553) | — | — |
| Interest\texpense | 4,419 | 1,418 | 6,675 | — | 12,512 |
| Interest\texpense—intercompany | 209 | 1,659 | (1,868) | — | — |
| Net\tinterest\trevenue | $(1,613) | $2,058 | $45,031 | $— | $45,476 |
| Commissions\tand\tfees | $— | $4,536 | $7,142 | $— | $11,678 |
| Commissions\tand\tfees—intercompany | (20) | 246 | (226) | — | — |
| Principal\ttransactions | (1,025) | 5,718 | 3,164 | — | 7,857 |
| Principal\ttransactions—intercompany | 24 | (2,842) | 2,818 | — | — |
| Other\tincome | 2,599 | 191 | 2,996 | — | 5,786 |
| Other\tincome—intercompany | (2,095) | 306 | 1,789 | — | — |
| Total\tnon-interest\trevenues | $(517) | $8,155 | $17,683 | $— | $25,321 |
| Total\trevenues,\tnet\tof\tinterest\texpense | $13,440 | $10,213 | $62,714 | $(15,570) | $70,797 |
| Provisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\tclaims | $— | $— | $6,982 | $— | $6,982 |
| Operating\texpenses |  |  |  |  |  |
| Compensation\tand\tbenefits | $22 | $4,719 | $16,229 | $— | $20,970 |
| Compensation\tand\tbenefits—intercompany | 36 | — | (36) | — | — |
| Other\toperating | 482 | 1,983 | 18,903 | — | 21,368 |
| Other\toperating—intercompany | 217 | 1,335 | (1,552) | — | — |
| Total\toperating\texpenses | $757 | $8,037 | $33,544 | $— | $42,338 |
| Equity\tin\tundistributed\tincome\tof\tsubsidiaries | $871 | $— | $— | $(871) | $— |
| Income\t(loss)\tfrom\tcontinuing\toperations\tbefore\tincome\ttaxes | $13,554 | $2,176 | $22,188 | $(16,441) | $21,477 |
| Provision\t(benefit)\tfor\tincome\ttaxes | $(1,358) | $746 | $7,056 | $— | $6,444 |
| Income\t(loss)\tfrom\tcontinuing\toperations | $14,912 | $1,430 | $15,132 | $(16,441) | $15,033 |
| Loss\tfrom\tdiscontinued\toperations,\tnet\tof\ttaxes | — | — | (58) | — | (58) |
| Net\tincome\t(loss)\tbefore\tattribution\tof\tnoncontrolling\tinterests | $14,912 | $1,430 | $15,074 | $(16,441) | $14,975 |
| Noncontrolling\tinterests | — | (13) | 76 | — | 63 |
| Net\tincome\t(loss) | $14,912 | $1,443 | $14,998 | $(16,441) | $14,912 |
| Comprehensive\tincome |  |  |  |  |  |
| Add:\tOther\tcomprehensive\tincome\t(loss) | $(3,022) | $(26) | $2,364 | $(2,338) | $(3,022) |
| Total\tCitigroup\tcomprehensive\tincome\t(loss) | $11,890 | $1,417 | $17,362 | $(18,779) | $11,890 |
| Add:\tOther\tcomprehensive\tincome\t(loss)\tattributable\tto\tnoncontrolling\ninterests | $— | $— | $(56) | $— | $(56) |
| Add:\tNet\tincome\tattributable\tto\tnoncontrolling\tinterests | — | (13) | 76 | — | 63 |
| Total\tcomprehensive\tincome\t(loss) | $11,890 | $1,404 | $17,382 | $(18,779) | $11,897 |

# Condensed	Consolidating	Balance	Sheet

|  |  |  | December	31,	2018 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Citigroup\nparent\ncompany | CGMHI | Other\nCitigroup\nsubsidiaries\nand\neliminations | Consolidating\nadjustments | Citigroup\nconsolidated |
| Assets |  |  |  |  |  |
| Cash\tand\tdue\tfrom\tbanks | $1 | $689 | $22,955 | $— | $23,645 |
| Cash\tand\tdue\tfrom\tbanks—intercompany | 19 | 3,545 | (3,564) | — | — |
| Deposits\twith\tbanks | — | 4,915 | 159,545 | — | 164,460 |
| Deposits\twith\tbanks—intercompany | 3,000 | 6,528 | (9,528) | — | — |
| Federal\tfunds\tsold\tand\tresale\tagreements | — | 212,720 | 57,964 | — | 270,684 |
| Federal\tfunds\tsold\tand\tresale\tagreements—intercompany | — | 20,074 | (20,074) | — | — |
| Trading\taccount\tassets | 302 | 146,233 | 109,582 | — | 256,117 |
| Trading\taccount\tassets—intercompany | 627 | 1,728 | (2,355) | — | — |
| Investments | 7 | 224 | 358,376 | — | 358,607 |
| Loans,\tnet\tof\tunearned\tincome | — | 1,292 | 682,904 | — | 684,196 |
| Loans,\tnet\tof\tunearned\tincome—intercompany | — | — | — | — | — |
| Allowance\tfor\tloan\tlosses | — | — | (12,315) | — | (12,315) |
| Total\tloans,\tnet | $— | $1,292 | $670,589 | $— | $671,881 |
| Advances\tto\tsubsidiaries | $143,119 | $— | $(143,119) | $— | $— |
| Investments\tin\tsubsidiaries | 205,337 | — | — | (205,337) | — |
| Other\tassets(1) | 9,861 | 59,734 | 102,394 | — | 171,989 |
| Other\tassets—intercompany | 3,037 | 44,255 | (47,292) | — | — |
| Total\tassets | $365,310 | $501,937 | $1,255,473 | $(205,337) | $1,917,383 |
| Liabilities\tand\tequity |  |  |  |  |  |
| Deposits | $— | $— | $1,013,170 | $— | $1,013,170 |
| Deposits—intercompany | — | — | — | — | — |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tand\tsold | — | 155,830 | 21,938 | — | 177,768 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tand\tsold—intercompany | — | 21,109 | (21,109) | — | — |
| Trading\taccount\tliabilities | 1 | 95,571 | 48,733 | — | 144,305 |
| Trading\taccount\tliabilities—intercompany | 410 | 1,398 | (1,808) | — | — |
| Short-term\tborrowings | 207 | 3,656 | 28,483 | — | 32,346 |
| Short-term\tborrowings—intercompany | — | 11,343 | (11,343) | — | — |
| Long-term\tdebt | 143,768 | 25,986 | 62,245 | — | 231,999 |
| Long-term\tdebt—intercompany | — | 73,884 | (73,884) | — | — |
| Advances\tfrom\tsubsidiaries | 21,471 | — | (21,471) | — | — |
| Other\tliabilities | 3,010 | 66,732 | 50,979 | — | 120,721 |
| Other\tliabilities—intercompany | 223 | 13,763 | (13,986) | — | — |
| Stockholders'\tequity | 196,220 | 32,665 | 173,526 | (205,337) | 197,074 |
| Total\tliabilities\tand\tequity | $365,310 | $501,937 | $1,255,473 | $(205,337) | $1,917,383 |

(1) Other	assets	for	Citigroup	parent	company	at	December	31,	2018	included	$34.7	billion	of	placements	to	Citibank	and	its	branches,	of	which	$ 22.4	billion	had	a	remaining	term	of	less	than	30 days.

| In	millions	of	dollars | Citigroup	parent<br>company | CGMHI | Other	Citigroup<br>subsidiaries	and<br>eliminations | Consolidating<br>adjustments | Citigroup<br>consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Assets |  |  |  |  |  |
| Cash\tand\tdue\tfrom\tbanks | $— | $378 | $23,397 | $— | $23,775 |
| Cash\tand\tdue\tfrom\tbanks—intercompany | 13 | 3,750 | (3,763) | — | — |
| Deposits\twith\tbanks | — | 3,348 | 153,393 | — | 156,741 |
| Deposits\twith\tbanks—intercompany | 11,000 | 5,219 | (16,219) | — | — |
| Federal\tfunds\tsold\tand\tresale\tagreements | — | 182,685 | 49,793 | — | 232,478 |
| Federal\tfunds\tsold\tand\tresale\tagreements—intercompany | — | 16,091 | (16,091) | — | — |
| Trading\taccount\tassets | — | 139,462 | 113,328 | — | 252,790 |
| Trading\taccount\tassets—intercompany | 38 | 2,711 | (2,749) | — | — |
| Investments | 27 | 181 | 352,082 | — | 352,290 |
| Loans,\tnet\tof\tunearned\tincome | — | 900 | 666,134 | — | 667,034 |
| Loans,\tnet\tof\tunearned\tincome—intercompany | — | — | — | — | — |
| Allowance\tfor\tloan\tlosses | — | — | (12,355) | — | (12,355) |
| Total\tloans,\tnet | $— | $900 | $653,779 | $— | $654,679 |
| Advances\tto\tsubsidiaries | $139,722 | $— | $(139,722) | $— | $— |
| Investments\tin\tsubsidiaries | 210,537 | — | — | (210,537) | — |
| Other\tassets(1) | 10,844 | 58,299 | 100,569 | — | 169,712 |
| Other\tassets—intercompany | 3,428 | 43,613 | (47,041) | — | — |
| Total\tassets | $375,609 | $456,637 | $1,220,756 | $(210,537) | $1,842,465 |
| Liabilities\tand\tequity |  |  |  |  |  |
| Deposits | $— | $— | $959,822 | $— | $959,822 |
| Deposits—intercompany | — | — | — | — | — |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tand\tsold | — | 134,888 | 21,389 | — | 156,277 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tand\tsold—intercompany | — | 18,597 | (18,597) | — | — |
| Trading\taccount\tliabilities | — | 80,801 | 44,369 | — | 125,170 |
| Trading\taccount\tliabilities—intercompany | 15 | 2,182 | (2,197) | — | — |
| Short-term\tborrowings | 251 | 3,568 | 40,633 | — | 44,452 |
| Short-term\tborrowings—intercompany | — | 32,871 | (32,871) | — | — |
| Long-term\tdebt | 152,163 | 18,048 | 66,498 | — | 236,709 |
| Long-term\tdebt—intercompany | — | 60,765 | (60,765) | — | — |
| Advances\tfrom\tsubsidiaries | 19,136 | — | (19,136) | — | — |
| Other\tliabilities | 2,673 | 62,113 | 53,577 | — | 118,363 |
| Other\tliabilities—intercompany | 631 | 9,753 | (10,384) | — | — |
| Stockholders'\tequity | 200,740 | 33,051 | 178,418 | (210,537) | 201,672 |
| Total\tliabilities\tand\tequity | $375,609 | $456,637 | $1,220,756 | $(210,537) | $1,842,465 |

# Condensed	Consolidating	Statement	of	Cash	Flows

|  |  |  | Year	ended	December	31,	2018 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Citigroup\nparent\ncompany | CGMHI | Other\nCitigroup\nsubsidiaries\tand\neliminations | Consolidating\nadjustments | Citigroup\nconsolidated |
| Net\tcash\tprovided\tby\toperating\tactivities\tof\tcontinuing\toperations | $21,314 | $13,287 | $2,351 | $— | $36,952 |
| Cash\tflows\tfrom\tinvesting\tactivities\tof\tcontinuing\toperations |  |  |  |  |  |
| Purchases\tof\tinvestments | $(7,955) | $(18) | $(179,014) | $— | $(186,987) |
| Proceeds\tfrom\tsales\tof\tinvestments | 7,634 | 3 | 53,854 | — | 61,491 |
| Proceeds\tfrom\tmaturities\tof\tinvestments | — | — | 118,104 | — | 118,104 |
| Change\tin\tloans | — | — | (29,002) | — | (29,002) |
| Proceeds\tfrom\tsales\tand\tsecuritizations\tof\tloans | — | — | 4,549 | — | 4,549 |
| Proceeds\tfrom\tsignificant\tdisposals | — | — | 314 | — | 314 |
| Change\tin\tfederal\tfunds\tsold\tand\tresales | — | (34,018) | (4,188) | — | (38,206) |
| Changes\tin\tinvestments\tand\tadvances—intercompany | (5,566) | (832) | 6,398 | — | — |
| Other\tinvesting\tactivities | 556 | (59) | (3,878) | — | (3,381) |
| Net\tcash\tused\tin\tinvesting\tactivities\tof\tcontinuing\toperations | $(5,331) | $(34,924) | $(32,863) | $— | $(73,118) |
| Cash\tflows\tfrom\tfinancing\tactivities\tof\tcontinuing\toperations |  |  |  |  |  |
| Dividends\tpaid | $(5,020) | $— | $— | $— | $(5,020) |
| Redemption\tof\tpreferred\tstock | (793) | — | — | — | (793) |
| Treasury\tstock\tacquired | (14,433) | — | — | — | (14,433) |
| Proceeds\t(repayments)\tfrom\tissuance\tof\tlong-term\tdebt,\tnet | (5,099) | 10,278 | (2,656) | — | 2,523 |
| Proceeds\t(repayments)\tfrom\tissuance\tof\tlong-term\tdebt—intercompany,\tnet | — | 10,708 | (10,708) | — | — |
| Change\tin\tdeposits | — | — | 53,348 | — | 53,348 |
| Change\tin\tfederal\tfunds\tpurchased\tand\trepos | — | 23,454 | (1,963) | — | 21,491 |
| Change\tin\tshort-term\tborrowings | 32 | 88 | (12,226) | — | (12,106) |
| Net\tchange\tin\tshort-term\tborrowings\tand\tother\tadvances—intercompany | 1,819 | (19,111) | 17,292 | — | — |
| Capital\tcontributions\tfrom\tparent | — | (798) | 798 | — | — |
| Other\tfinancing\tactivities | (482) | — | — | — | (482) |
| Net\tcash\tprovided\tby\t(used\tin)\tfinancing\tactivities\tof\tcontinuing\noperations | $(23,976) | $24,619 | $43,885 | $— | $44,528 |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tdue\tfrom\tbanks | $— | $— | $(773) | $— | $(773) |
| Change\tin\tcash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks | $(7,993) | $2,982 | $12,600 | $— | $7,589 |
| Cash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\nbeginning\tof\tperiod | 11,013 | 12,695 | 156,808 | — | 180,516 |
| Cash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\tend\tof\tperiod | $3,020 | $15,677 | $169,408 | $— | $188,105 |
| Cash\tand\tdue\tfrom\tbanks | $20 | $4,234 | $19,391 | $— | $23,645 |
| Deposits\twith\tbanks | 3,000 | 11,443 | 150,017 | — | 164,460 |
| Cash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\tend\tof\tperiod | $3,020 | $15,677 | $169,408 | $— | $188,105 |
| Supplemental\tdisclosure\tof\tcash\tflow\tinformation\tfor\tcontinuing\noperations |  |  |  |  |  |
| Cash\tpaid\tduring\tthe\tyear\tfor\tincome\ttaxes | $(783) | $458 | $4,638 | $— | $4,313 |
| Cash\tpaid\tduring\tthe\tyear\tfor\tinterest | 3,854 | 8,671 | 10,438 | — | 22,963 |
| Non-cash\tinvesting\tactivities |  |  |  |  |  |
| Transfers\tto\tloans\tHFS\tfrom\tloans | $— | $— | $4,200 | $— | $4,200 |
| Transfers\tto\tOREO\tand\tother\trepossessed\tassets | — | — | 151 | — | 151 |

|  |  |  | Year	ended	December	31,	2017 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Citigroup\tparent\ncompany | CGMHI | Other\tCitigroup\nsubsidiaries\tand\neliminations | Consolidating\nadjustments | Citigroup\nconsolidated |
| Net\tcash\tprovided\tby\t(used\tin)\toperating\tactivities\tof\tcontinuing\toperations | $25,270 | $(33,365) | $(679) | $— | $(8,774) |
| Cash\tflows\tfrom\tinvesting\tactivities\tof\tcontinuing\toperations |  |  |  |  |  |
| Purchases\tof\tinvestments | $— | $(14) | $(185,726) | $— | $(185,740) |
| Proceeds\tfrom\tsales\tof\tinvestments | 132 | 18 | 107,218 | — | 107,368 |
| Proceeds\tfrom\tmaturities\tof\tinvestments | — | — | 84,369 | — | 84,369 |
| Change\tin\tloans | — | — | (58,062) | — | (58,062) |
| Proceeds\tfrom\tsales\tand\tsecuritizations\tof\tloans | — | — | 8,365 | — | 8,365 |
| Proceeds\tfrom\tsignificant\tdisposals | — | — | 3,411 | — | 3,411 |
| Change\tin\tfederal\tfunds\tsold\tand\tresales | — | 9,731 | (5,396) | — | 4,335 |
| Changes\tin\tinvestments\tand\tadvances—intercompany | (899) | 9,755 | (8,856) | — | — |
| Other\tinvesting\tactivities | — | (24) | (2,773) | — | (2,797) |
| Net\tcash\tprovided\tby\t(used\tin)\tinvesting\tactivities\tof\tcontinuing\toperations | $(767) | $19,466 | $(57,450) | $— | $(38,751) |
| Cash\tflows\tfrom\tfinancing\tactivities\tof\tcontinuing\toperations |  |  |  |  |  |
| Dividends\tpaid | $(3,797) | $— | $— | $— | $(3,797) |
| Issuance\tof\tpreferred\tstock | — | — | — | — | — |
| Treasury\tstock\tacquired | (14,541) | — | — | — | (14,541) |
| Proceeds\t(repayments)\tfrom\tissuance\tof\tlong-term\tdebt,\tnet | 6,544 | 4,909 | 15,521 | — | 26,974 |
| Proceeds\t(repayments)\tfrom\tissuance\tof\tlong-term\tdebt—intercompany,\tnet | — | (2,031) | 2,031 | — | — |
| Change\tin\tdeposits | — | — | 30,416 | — | 30,416 |
| Change\tin\tfederal\tfunds\tpurchased\tand\trepos | — | 5,748 | 8,708 | — | 14,456 |
| Change\tin\tshort-term\tborrowings | 49 | 2,212 | 11,490 | — | 13,751 |
| Net\tchange\tin\tshort-term\tborrowings\tand\tother\tadvances—intercompany | (22,152) | (8,615) | 30,767 | — | — |
| Capital\tcontributions\tfrom\tparent | — | (748) | 748 | — | — |
| Other\tfinancing\tactivities | (405) | — | — | — | (405) |
| Net\tcash\tprovided\tby\t(used\tin)\tfinancing\tactivities\tof\tcontinuing\toperations | $(34,302) | $1,475 | $99,681 | $— | $66,854 |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tdue\tfrom\tbanks | $— | $— | $693 | $— | $693 |
| Change\tin\tcash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks | $(9,799) | $(12,424) | $42,245 | $— | $20,022 |
| Cash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\nbeginning\tof\tperiod | 20,812 | 25,119 | 114,563 | — | 160,494 |
| Cash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\tend\tof\tperiod | $11,013 | $12,695 | $156,808 | $— | $180,516 |
| Cash\tand\tdue\tfrom\tbanks | $13 | $4,128 | $19,634 | $— | $23,775 |
| Deposits\twith\tbanks | 11,000 | 8,567 | 137,174 | — | 156,741 |
| Cash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\tend\tof\tperiod | $11,013 | $12,695 | $156,808 | $— | $180,516 |
| Supplemental\tdisclosure\tof\tcash\tflow\tinformation\tfor\tcontinuing\noperations |  |  |  |  |  |
| Cash\tpaid\tduring\tthe\tyear\tfor\tincome\ttaxes | $(3,730) | $678 | $5,135 | $— | $2,083 |
| Cash\tpaid\tduring\tthe\tyear\tfor\tinterest | 4,151 | 4,513 | 7,011 | — | 15,675 |
| Non-cash\tinvesting\tactivities |  |  |  |  |  |
| Transfers\tto\tloans\tHFS\tfrom\tloans | $— | $— | $5,900 | $— | $5,900 |
| Transfers\tto\tOREO\tand\tother\trepossessed\tassets | — | — | 113 | — | 113 |

# Condensed	Consolidating	Statements	of	Cash	Flows

|  |  |  | Year	ended	December	31,	2016 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars | Citigroup\tparent\ncompany | CGMHI | Other\tCitigroup\nsubsidiaries\tand\neliminations | Consolidating\nadjustments | Citigroup\nconsolidated |
| Net\tcash\tprovided\tby\toperating\tactivities\tof\tcontinuing\toperations | $11,605 | $20,610 | $21,518 | $— | $53,733 |
| Cash\tflows\tfrom\tinvesting\tactivities\tof\tcontinuing\toperations |  |  |  |  |  |
| Purchases\tof\tinvestments | $— | $(14) | $(211,388) | $— | $(211,402) |
| Proceeds\tfrom\tsales\tof\tinvestments | 3,024 | — | 129,159 | — | 132,183 |
| Proceeds\tfrom\tmaturities\tof\tinvestments | 234 | — | 65,291 | — | 65,525 |
| Change\tin\tloans | — | — | (39,761) | — | (39,761) |
| Proceeds\tfrom\tsales\tand\tsecuritizations\tof\tloans | — | — | 18,140 | — | 18,140 |
| Change\tin\tfederal\tfunds\tsold\tand\tresales | — | (15,294) | (1,844) | — | (17,138) |
| Proceeds\tfrom\tsignificant\tdisposals | — | — | 265 | — | 265 |
| Payments\tdue\tto\ttransfers\tof\tnet\tliabilities\tassociated\twith\tsignificant\tdisposals | — | — | — | — | — |
| Changes\tin\tinvestments\tand\tadvances—intercompany | (18,083) | (5,574) | 23,657 | — | — |
| Other\tinvesting\tactivities | — | 57 | (2,004) | — | (1,947) |
| Net\tcash\tused\tin\tinvesting\tactivities\tof\tcontinuing\toperations | $(14,825) | $(20,825) | $(18,485) | $— | $(54,135) |
| Cash\tflows\tfrom\tfinancing\tactivities\tof\tcontinuing\toperations |  |  |  |  |  |
| Dividends\tpaid | $(2,287) | $— | $— | $— | $(2,287) |
| Issuance\tof\tpreferred\tstock | 2,498 | — | — | — | 2,498 |
| Treasury\tstock\tacquired | (9,290) | — | — | — | (9,290) |
| Proceeds\t(repayments)\tfrom\tissuance\tof\tlong-term\tdebt,\tnet | 7,005 | 5,916 | (4,575) | — | 8,346 |
| Proceeds\t(repayments)\tfrom\tissuance\tof\tlong-term\tdebt—intercompany,\tnet | — | (9,453) | 9,453 | — | — |
| Change\tin\tdeposits | — | — | 24,394 | — | 24,394 |
| Change\tin\tfederal\tfunds\tpurchased\tand\trepos | — | 3,236 | (7,911) | — | (4,675) |
| Change\tin\tshort-term\tborrowings | (164) | 1,168 | 8,618 | — | 9,622 |
| Net\tchange\tin\tshort-term\tborrowings\tand\tother\tadvances—intercompany | 4,620 | 680 | (5,300) | — | — |
| Other\tfinancing\tactivities | (316) | — | — | — | (316) |
| Net\tcash\tprovided\tby\tfinancing\tactivities\tof\tcontinuing\toperations | $2,066 | $6,557 | $19,669 | $— | $28,292 |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tdue\tfrom\tbanks | $— | $— | $(493) | $— | $(493) |
| Change\tin\tcash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks | $(1,154) | $6,342 | $22,209 | $— | $27,397 |
| Cash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\nbeginning\tof\tperiod | 21,966 | 18,777 | 92,354 | — | 133,097 |
| Cash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\tend\tof\tperiod | $20,812 | $25,119 | $114,563 | $— | $160,494 |
| Cash\tand\tdue\tfrom\tbanks | $142 | $4,690 | $18,211 | $— | $23,043 |
| Deposits\twith\tbanks | 20,670 | 20,429 | 96,352 | — | 137,451 |
| Cash\tand\tdue\tfrom\tbanks\tand\tdeposits\twith\tbanks\tat\tend\tof\tperiod | $20,812 | $25,119 | $114,563 | $— | $160,494 |
| Supplemental\tdisclosure\tof\tcash\tflow\tinformation\tfor\tcontinuing\noperations |  |  |  |  |  |
| Cash\tpaid\tduring\tthe\tyear\tfor\tincome\ttaxes | $351 | $92 | $3,916 | $— | $4,359 |
| Cash\tpaid\tduring\tthe\tyear\tfor\tinterest | 4,397 | 3,115 | 4,555 | — | 12,067 |
| Non-cash\tinvesting\tactivities |  |  |  |  |  |
| Transfers\tto\tloans\theld-for-sale\tfrom\tloans | $— | $— | $13,900 | $— | $13,900 |
| Transfers\tto\tOREO\tand\tother\trepossessed\tassets | — | — | 165 | — | 165 |

# 29.	SELECTED	QUARTERLY	FINANCIAL	DATA	(UNAUDITED)

|  |  | 2018 |  |  |  | 2017 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars,\texcept\tper\tshare\tamounts | Fourth | Third | Second | First | Fourth(1) | Third | Second | First |
| Revenues,\tnet\tof\tinterest\texpense | $17,124 | $18,389 | $18,469 | $18,872 | $17,504 | $18,419 | $18,155 | $18,366 |
| Operating\texpenses | 9,893 | 10,311 | 10,712 | 10,925 | 10,332 | 10,417 | 10,760 | 10,723 |
| Provisions\tfor\tcredit\tlosses\tand\tfor\tbenefits\tand\nclaims | 1,925 | 1,974 | 1,812 | 1,857 | 2,073 | 1,999 | 1,717 | 1,662 |
| Income\tfrom\tcontinuing\toperations\tbefore\nincome\ttaxes | $5,306 | $6,104 | $5,945 | $6,090 | $5,099 | $6,003 | $5,678 | $5,981 |
| Income\ttaxes | 1,001 | 1,471 | 1,444 | 1,441 | 23,864 | 1,866 | 1,795 | 1,863 |
| Income\t(loss)\tfrom\tcontinuing\toperations | $4,305 | $4,633 | $4,501 | $4,649 | $(18,765) | $4,137 | $3,883 | $4,118 |
| Income\t(loss)\tfrom\tdiscontinued\toperations,\tnet\tof\ntaxes | (8) | (8) | 15 | (7) | (109) | (5) | 21 | (18) |
| Net\tincome\tbefore\tattribution\tof\tnoncontrolling\ninterests | $4,297 | $4,625 | $4,516 | $4,642 | $(18,874) | $4,132 | $3,904 | $4,100 |
| Noncontrolling\tinterests | (16) | 3 | 26 | 22 | 19 | (1) | 32 | 10 |
| Citigroup's\tnet\tincome\t(loss) | $4,313 | $4,622 | $4,490 | $4,620 | $(18,893) | $4,133 | $3,872 | $4,090 |
| Earnings\tper\tshare(2) |  |  |  |  |  |  |  |  |
| Basic |  |  |  |  |  |  |  |  |
| Income\t(loss)\tfrom\tcontinuing\toperations | $1.65 | $1.74 | $1.62 | $1.68 | $(7.33) | $1.42 | $1.27 | $1.36 |
| Net\tincome\t(loss) | 1.65 | 1.73 | 1.63 | 1.68 | (7.38) | 1.42 | 1.28 | 1.35 |
| Diluted |  |  |  |  |  |  |  |  |
| Income\t(loss)\tfrom\tcontinuing\toperations | 1.65 | 1.74 | 1.62 | 1.68 | (7.33) | 1.42 | 1.27 | 1.36 |
| Net\tincome\t(loss) | 1.64 | 1.73 | 1.63 | 1.68 | (7.38) | 1.42 | 1.28 | 1.35 |

This	Note	to	the	Consolidated	Financial	Statements	is	unaudited	due	to	the	Company's	individual	quarterly	results	not	being	subject	to	an	audit.

(1) The	fourth	quarter	of	2017	includes	the	one-time	impact	of	Tax	Reform.	See	Notes	1	and	9	to	the	Consolidated	Financial	Statements.

(2) Due	to	averaging	of	shares,	quarterly	earnings	per	share	may	not	sum	to	the	totals	reported	for	the	full	year.

# [End	of	Consolidated	Financial	Statements	and	Notes	to	Consolidated	Financial	Statements]

# FINANCIAL	DATA	SUPPLEMENT

|  | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Citigroup's\tnet\tincome\tto\taverage\nassets(1) | 0.94% | 0.84% | 0.82% |
| Return\ton\taverage\tcommon\tstockholders'\nequity(1)(2) | 9.4 | 7.0 | 6.6 |
| Return\ton\taverage\ttotal\tstockholders'\nequity(1)(3) | 9.1 | 7.0 | 6.5 |
| Total\taverage\tequity\tto\taverage\tassets(4) | 10.3 | 12.1 | 12.6 |
| Dividend\tpayout\tratio(1)(5) | 23.1 | 18.0 | 8.9 |

(1) 2017	excludes	the	one-time	impact	of	Tax	Reform.	See	"Significant	Accounting	Policies and	Estimates—Income	Taxes"	above.

(2) Based	on	Citigroup's	net	income	less	preferred	stock	dividends	as	a	percentage	of	average common	stockholders'	equity.

(3) Based	on	Citigroup's	net	income	as	a	percentage	of	average	total	Citigroup	stockholders'

equity.

(4) Based	on	average	Citigroup	stockholders'	equity	as	a	percentage	of	average	assets.

# AVERAGE	DEPOSIT	LIABILITIES	IN	OFFICES	OUTSIDE	THE	U.S.(1)

|  |  | 2018 |  | 2017 |  | 2016 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tmillions\tof\tdollars\tat\tyear\tend,\texcept\tratios | Average\ninterest\trate | Average\nbalance | Average\ninterest\trate | Average\nbalance | Average\ninterest\trate | Average\nbalance |
| Banks | 1.35% | $44,426 | 0.49% | $36,063 | 0.34% | $36,983 |
| Other\tdemand\tdeposits | 0.61 | 287,665 | 0.52 | 293,389 | 0.49 | 278,745 |
| Other\ttime\tand\tsavings\tdeposits(2) | 1.31 | 209,410 | 1.23 | 191,363 | 1.16 | 189,049 |
| Total | 0.94% | $541,501 | 0.78% | $520,815 | 0.73% | $504,777 |

(1) Interest	rates	and	amounts	include	the	effects	of	risk	management	activities	and	also	reflect	the	impact	of	the	local	interest	rates	prevailing	in	certain	countries.

(2) Primarily	consists	of	certificates	of	deposit	and	other	time	deposits	in	denominations	of	$100,000	or	more.

# MATURITY	PROFILE	OF	TIME	DEPOSITS	IN	U.S.	OFFICES

| In	millions	of	dollars	at	December	31,	2018 | Under	3<br>months | Over	3	to	6<br>months | Over	6	to	12<br>months | Over	12<br>months |
| :--- | :--- | :--- | :--- | :--- |
| Over\t$100,000 |  |  |  |  |
| Certificates\tof\tdeposit | $18,858 | $6,952 | $4,761 | $2,755 |
| Other\ttime\tdeposits | 6,007 | — | — | 717 |
| Over\t$250,000 |  |  |  |  |
| Certificates\tof\tdeposit | $18,368 | $5,455 | $2,458 | $1,613 |
| Other\ttime\tdeposits | 6,022 | — | — | 60 |

# SUPERVISION,	REGULATION	AND	OTHER

# SUPERVISION	AND	REGULATION

Citi	is	subject	to	regulation	under	U.S.	federal	and	state	laws,	as	well	as applicable	laws	in	the	other	jurisdictions	in	which	it	does	business.

# General

Citigroup	is	a	registered	bank	holding	company	and	financial	holding	company and	is	regulated	and	supervised	by	the	Federal	Reserve	Board.	Citigroup's nationally	chartered	subsidiary	banks,	including	Citibank,	are	regulated	and supervised	by	the	Office	of	the	Comptroller	of	the	Currency	(OCC).	The	Federal Deposit	Insurance	Corporation	(FDIC)	also	has	examination	authority	for banking	subsidiaries	whose	deposits	it	insures.	Overseas	branches	of	Citibank are	regulated	and	supervised	by	the	Federal	Reserve	Board	and	OCC	and overseas	subsidiary	banks	by	the	Federal	Reserve	Board.	These	overseas branches	and	subsidiary	banks	are	also	regulated	and	supervised	by	regulatory authorities	in	the	host	countries.	In	addition,	the	Consumer	Financial	Protection Bureau	(CFPB)	regulates	consumer	financial	products	and	services.	Citi	is	also subject	to	laws	and	regulations	concerning	the	collection,	use,	sharing	and disposition	of	certain	customer,	employee	and	other	personal	and	confidential information,	including	those	imposed	by	the	Gramm-Leach-Bliley	Act,	the	Fair Credit	Reporting	Act	and	the	EU	General	Data	Protection	Regulation.	For	more information	on	U.S.	and	foreign	regulation	affecting	or	potentially	affecting	Citi, see	"Risk	Factors"	above.

# Other	Bank	and	Bank	Holding	Company	Regulation

Citi,	including	its	banking	subsidiaries,	is	subject	to	regulatory	limitations, including	requirements	for	banks	to	maintain	reserves	against	deposits, requirements	as	to	liquidity,	risk-based	capital	and	leverage	(see	"Capital Resources"	above	and	Note	18	to	the	Consolidated	Financial	Statements), restrictions	on	the	types	and	amounts	of	loans	that	may	be	made	and	the	interest that	may	be	charged	and	limitations	on	investments	that	can	be	made	and services	that	can	be	offered.	The	Federal	Reserve	Board	may	also	expect	Citi	to commit	resources	to	its	subsidiary	banks	in	certain	circumstances.	Citi	is	also subject	to	anti-money	laundering	and	financial	transparency	laws,	including standards	for	verifying	client	identification	at	account	opening	and	obligations	to monitor	client	transactions	and	report	suspicious	activities.

# Securities	and	Commodities	Regulation

Citi	conducts	securities	underwriting,	brokerage	and	dealing	activities	in	the	U.S. through	Citigroup	Global	Markets	Inc.	(CGMI),	its	primary	broker-dealer,	and other	broker-dealer	subsidiaries,	which	are	subject	to	regulations	of	the	U.S. Securities	and	Exchange	Commission	(SEC),	the	Financial	Industry	Regulatory Authority	and	certain	exchanges.	Citi	conducts	similar	securities	activities outside	the	U.S.,	subject	to	local	requirements,	through	various	subsidiaries	and affiliates,	principally	Citigroup	Global	Markets	Limited	in	London	(CGML), which	is	regulated	principally	by	the	U.K.	Financial	Conduct	Authority	(FCA), and	Citigroup	Global

Markets	Japan	Inc.	in	Tokyo,	which	is	regulated	principally	by	the	Financial Services	Agency	of	Japan.

Citi	also	has	subsidiaries	that	are	members	of	futures	exchanges.	In	the U.S.,	CGMI	is	a	member	of	the	principal	U.S.	futures	exchanges,	and	Citi	has subsidiaries	that	are	registered	as	futures	commission	merchants	and	commodity pool	operators	with	the	Commodity	Futures	Trading	Commission	(CFTC). Citibank,	CGMI,	Citigroup	Energy	Inc.	and	CGML,	also	are	registered	as	swap dealers	with	the	CFTC.	CGMI	is	also	subject	to	SEC	and	CFTC	rules	that specify	uniform	minimum	net	capital	requirements.	Compliance	with	these	rules could	limit	those	operations	of	CGMI	that	require	the	intensive	use	of	capital and	also	limits	the	ability	of	broker-dealers	to	transfer	large	amounts	of	capital	to parent	companies	and	other	affiliates.	See	also	"Capital	Resources"	and	Note	18 to	the	Consolidated	Financial	Statements	for	a	further	discussion	of	capital considerations	of	Citi's	non-banking	subsidiaries.

# Transactions	with	Affiliates

Transactions	between	Citi's	U.S.	subsidiary	depository	institutions	and	their non-bank	affiliates	are	regulated	by	the	Federal	Reserve	Board,	and	are	generally required	to	be	on	arm's-length	terms.	See	also	"Managing	Global	Risk— Liquidity	Risk"	above.

# COMPETITION

The	financial	services	industry	is	highly	competitive.	Citi's	competitors	include a	variety	of	financial	services	and	advisory	companies.	Citi	competes	for	clients and	capital	(including	deposits	and	funding	in	the	short-	and	long-term	debt markets)	with	some	of	these	competitors	globally	and	with	others	on	a	regional or	product	basis.	Citi's	competitive	position	depends	on	many	factors,	including, among	others,	the	value	of	Citi's	brand	name,	reputation,	the	types	of	clients	and geographies	served;	the	quality,	range,	performance,	innovation	and	pricing	of products	and	services;	the	effectiveness	of	and	access	to	distribution	channels, technology	advances,	customer	service	and	convenience;	the	effectiveness	of transaction	execution,	interest	rates	and	lending	limits;	and	regulatory constraints.	Citi's	ability	to	compete	effectively	also	depends	upon	its	ability	to attract	new	employees	and	retain	and	motivate	existing	employees,	while managing	compensation	and	other	costs.	For	additional	information	on competitive	factors	and	uncertainties	impacting	Citi's	businesses,	see	"Risk Factors—Operational	Risks"	above.

# PROPERTIES

Citi's	principal	executive	offices	are	currently	in	New	York	City	at	388 Greenwich	Street	and	are	owned	and	fully	occupied	by	Citi.

Citigroup	Global	Markets	Holdings	Inc.'s	principal	executive	offices	are	in New	York	City	at	388	Greenwich	Street	and	are	owned	and	fully	occupied	by Citi.

Citigroup's	principal	executive	offices	in	EMEA	are	at	25	and	33	Canada Square	in	London's	Canary	Wharf,	with	both	buildings	subject	to	long-term leases.

In	Asia,	Citi's	principal	executive	offices	are	in	leased	premises	at Champion	Tower	in	Hong	Kong.	Citi	has	other	significant	leased	premises, including	in	Singapore,	Manila	and	Japan.	Citi	has	major	or	full	ownership interests	in	country	headquarter	locations	in	Shanghai,	Seoul,	Kuala	Lumpur	and Mumbai.

Citi's	principal	executive	offices	in	Mexico,	which	also	serve	as	the headquarters	of	Citibanamex,	are	owned	and	located	in	Mexico	City.	Citi's principal	executive	offices	for	Latin	America	(other	than	Mexico)	are	in	leased premises	in	Miami.

Citi	also	owns	or	leases	over	52	million	square	feet	of	real	estate	in	95 countries,	consisting	of	over	7,500	properties.

Citi	continues	to	evaluate	its	global	real	estate	footprint	and	space requirements	and	may	determine	from	time	to	time	that	certain	of	its	premises are	no	longer	necessary.	There	is	no	assurance	that	Citi	will	be	able	to	dispose	of any	excess	premises	or	that	it	will	not	incur	charges	in	connection	with	such dispositions,	which	could	be	material	to	Citi's	operating	results	in	a	given	period. Citi	has	developed	programs	for	its	properties	to	achieve	long-term	energy efficiency	objectives	and	reduce	its	greenhouse	gas	emissions	to	lessen	its impact	on	climate	change.	These	activities	could	help	to	mitigate,	but	will	not eliminate,	Citi's	potential	risk	from	future	climate	change	regulatory requirements.

For	further	information	concerning	leases,	see	Note	26	to	the	Consolidated Financial	Statements.

# DISCLOSURE	PURSUANT	TO	SECTION	219	OF	THE	IRAN	THREAT REDUCTION	AND	SYRIA	HUMAN	RIGHTS	ACT

Pursuant	to	Section	219	of	the	Iran	Threat	Reduction	and	Syria	Human	Rights Act	of	2012	(Section	219),	which	added	Section	13(r)	to	the	Securities	Exchange Act	of	1934,	as	amended,	Citi	is	required	to	disclose	in	its	annual	or	quarterly reports,	as	applicable,	whether	it	or	any	of	its	affiliates	knowingly	engaged	in certain	activities,	transactions	or	dealings	relating	to	Iran	or	with	individuals	or entities	that	are	subject	to	sanctions	under	U.S.	law.	Disclosure	is	generally required	even	where	the	activities,	transactions	or	dealings	were	conducted	in compliance	with	applicable	law.	Citi,	in	its	related	quarterly	report	on	Form	10- Q,	previously	disclosed	reportable	activities	pursuant	to	Section	219	for	the second	and	third	quarters	of	2018.

	During	the	fourth	quarter	of	2018,	Citibank	Europe	plc,	a	subsidiary	of Citibank,	acting	as	an	intermediary	bank	processed	a	transaction	between	two Irish	banks	involving	the	Iranian	Embassy	in	Ireland.	The	total	value	of	the payment	was	EUR	90.00	(USD	104.24).	This	transaction	was	for	visa-related fees	and	is	exempt	pursuant	to	the	travel	exemption	of	the	Iranian	Transactions and	Sanctions	Regulations.	Citibank	Europe	plc	realized	nominal	fees	for	the processing	of	this	payment.

# UNREGISTERED	SALES	OF	EQUITY,	PURCHASES	OF	EQUITY	SECURITIES,	DIVIDENDS

# Unregistered	Sales	of	Equity	Securities

# None.

# Equity	Security	Repurchases

The	following	table	summarizes	Citi's	common	stock	repurchases	during	the	three	months	ended	December	31,	2018:

| In	millions,	except	per	share	amounts | Total	shares<br>purchased | Average<br>price	paid<br>per	share | Approximate	dollar<br>value	of	shares	that<br>may	yet	be	purchased<br>under	the	plan	or<br>programs |
| :--- | :--- | :--- | :--- |
| October\t2018 |  |  |  |
| Open\tmarket\trepurchases(1) | 32.0 | $68.78 | $10,127 |
| Employee\ttransactions(2) | — | — | N/A |
| November\t2018 |  |  |  |
| Open\tmarket\trepurchases(1) | 20.7 | 64.81 | 8,784 |
| Employee\ttransactions(2) | — | — | N/A |
| December\t2018 |  |  |  |
| Open\tmarket\trepurchases(1) | 21.1 | 54.87 | 7,630 |
| Employee\ttransactions(2) | — | — | N/A |
| Total\tfor\t4Q18\tand\tremaining\tprogram\tbalance\tas\tof\tDecember\t31,\t2018 | 73.8 | $63.70 | $7,630 |

(1) Represents	repurchases	under	the	$17.6	billion	2018	common	stock	repurchase	program	(2018	Repurchase	Program)	that	was	approved	by	Citigroup's	Board	of	Directors	and	announced	on	June 28,	2018.	The	2018	Repurchase	Program	was	part	of	the	planned	capital	actions	included	by	Citi	in	its	2018	Comprehensive	Capital	Analysis	and	Review	(CCAR).	The	2018	Repurchase Program	expires	on	June	30,	2019.	Shares	repurchased	under	the	2018	Repurchase	Program	were	added	to	treasury	stock.

(2) Consisted	of	shares	added	to	treasury	stock	related	to	(i)	certain	activity	on	employee	stock	option	program	exercises	where	the	employee	delivers	existing	shares	to	cover	the	option	exercise,	or (ii)	under	Citi's	employee	restricted	or	deferred	stock	programs	where	shares	are	withheld	to	satisfy	tax	requirements.

# Dividends

In	addition	to	Board	of	Directors'	approval,	Citi's	ability	to	pay	common	stock dividends	substantially	depends	on	regulatory	approval,	including	an	annual regulatory	review	of	the	results	of	the	CCAR	process	required	by	the	Federal Reserve	Board	and	the	supervisory	stress	tests	required	under	the	Dodd-Frank Act.	For	additional	information	regarding	Citi's	capital	planning	and	stress testing,	see	"Capital	Resources—Current	Regulatory	Capital	Standards—Stress Testing	Component	of	Capital	Planning"	and	"Risk	Factors—Strategic	Risks" above.	Any	dividend	on	Citi's	outstanding	common	stock	would	also	need	to	be made	in	compliance	with	Citi's	obligations	to	its	outstanding	preferred	stock. For	information	on	the	ability	of	Citigroup's	subsidiary	depository institutions	to	pay	dividends,	see	Note	18	to	the	Consolidated	Financial Statements.

# PERFORMANCE	GRAPH

# Comparison	of	Five-Year	Cumulative	Total	Return

The	following	graph	and	table	compare	the	cumulative	total	return	on	Citi's common	stock	with	the	cumulative	total	return	of	the	S&P	500	Index	and	the S&P	Financial	Index	over	the	five-year	period	through	December	31,	2018.	The graph	and	table	assume	that	$100	was	invested	on	December	31,	2013	in	Citi's common	stock,	the	S&P	500	Index	and	the	S&P	Financial	Index,	and	that	all dividends	were	reinvested.

For	the	years	ended

| DATE | CITI | S&amp;P	500 | S&amp;P<br>FINANCIALS |
| :--- | :--- | :--- | :--- |
| 31-Dec-2013 | 100.0 | 100.0 | 100.0 |
| 31-Dec-2014 | 103.9 | 113.7 | 115.2 |
| 31-Dec-2015 | 99.7 | 115.3 | 113.4 |
| 31-Dec-2016 | 115.5 | 129.0 | 139.3 |
| 31-Dec-2017 | 146.8 | 157.2 | 170.2 |
| 31-Dec-2018 |  |  |  |
|  | 105.0 | 150.3 | 148.0 |

Note:	Citi's	common	stock	is	listed	on	the	NYSE	under	the	ticker	symbol	"C"

# CORPORATE	INFORMATION

# CITIGROUP	EXECUTIVE	OFFICERS

Citigroup's	executive	officers	as	of	February	22,	2019	are:

| Name | Age | Position	and	office	held |
| :--- | :--- | :--- |
| Raja\tJ.\tAkram | 46 | Controller\tand\tChief\tAccounting\tOfficer |
| Francisco\tAristeguieta | 53 | CEO,\tAsia\tPacific |
| Stephen\tBird | 52 | CEO,\tGlobal\tConsumer\tBanking |
| Michael\tL.\tCorbat | 58 | Chief\tExecutive\tOfficer |
| James\tC.\tCowles | 63 | CEO,\tEurope,\tMiddle\tEast\tand\tAfrica |
| Barbara\tDesoer | 66 | CEO,\tCitibank,\tN.A. |
| James\tA.\tForese | 55 | President; |
|  |  | CEO,\tInstitutional\tClients\tGroup |
| Jane\tFraser | 51 | CEO,\tLatin\tAmerica |
| John\tC.\tGerspach | 65 | Chief\tFinancial\tOfficer |
| Bradford\tHu | 55 | Chief\tRisk\tOfficer |
| Sara\tWechter | 38 | Head\tof\tHuman\tResources |
| Rohan\tWeerasinghe | 68 | General\tCounsel\tand\tCorporate\tSecretary |
|  |  | Head\tof\tOperations\tand\tTechnology |
| Mike\tWhitaker | 55 |  |

Each	executive	officer	has	held	executive	or	management	positions	with Citigroup	for	at	least	five	years,	except	that:

•Ms.	Wechter	joined	Citi	in	2004	and	assumed	her	current	position	in	July 2018.	Previously,	she	had	served	as	Citi's	Head	of	Talent	and	Diversity	as well	as	Chief	of	Staff	to	Citi	CEO	Michael	Corbat.	She	served	as	Chief	of Staff	to	both	Michael	O'Neill	and	Richard	Parsons	during	their	terms	as Chairman	of	Citi's	Board	of	Directors.	In	addition,	she	held	roles	in	Citi's Institutional	Clients	Group,	including	Corporate	M&A	and	Strategy	and Investment	Banking,

•Mr.	Akram	joined	Citi	in	2006	and	assumed	his	current	position	in November	2017.	Previously,	he	had	served	as	Deputy	Controller	since April	2017.	He	held	a	number	of	other	roles	in	Citi	Finance,	including	Lead Finance	Officer	for	Treasury	and	Trade	Solutions,	Brazil	Country Controller,	Brazil	Country	Finance	Officer	and	head	of	the	Corporate Accounting	Policy	team	supporting	M&A	activities.

# Code	of	Conduct,	Code	of	Ethics

Citi	has	a	Code	of	Conduct	that	maintains	its	commitment	to	the	highest standards	of	conduct.	The	Code	of	Conduct	is	supplemented	by	a	Code	of	Ethics for	Financial	Professionals	(including	accounting,	controllers,	financial reporting	operations,	financial	planning	and	analysis,	treasury,	tax,	strategy	and M&A,	investor	relations	and	regional/product	finance	professionals	and administrative	staff)	that	applies	worldwide.	The	Code	of	Ethics	for	Financial Professionals	applies	to	Citi's	principal	executive	officer,	principal	financial officer	and	principal	accounting	officer.	Amendments	and	waivers,	if	any,	to	the Code	of	Ethics	for	Financial	Professionals	will	be	disclosed	on	Citi's	website, www.citigroup.com.

Both	the	Code	of	Conduct	and	the	Code	of	Ethics	for	Financial Professionals	can	be	found	on	the	Citi	website	by	clicking	on	"About	Us,"	and then	"Corporate	Governance."	Citi's	Corporate	Governance	Guidelines	can	also be	found	there,	as	well	as	the	charters	for	the	Audit	Committee,	the	Ethics	and Culture	Committee,	the	Nomination,	Governance	and	Public	Affairs	Committee, the	Operations	and	Technology	Committee,	the	Personnel	and	Compensation Committee	and	the	Risk	Management	Committee	of	the	Board.	These	materials are	also	available	by	writing	to	Citigroup	Inc.,	Corporate	Governance,	388 Greenwich	Street,	17th	Floor,	New	York,	New	York	10013.

# CITIGROUP	BOARD	OF	DIRECTORS

Michael	L.	Corbat Chief	Executive	Officer Citigroup	Inc.

Ellen	M.	Costello Former	President	and	CEO BMO	Financial	Corporation	and	Former U.S.	Country	Head BMO	Financial	Group

John	C.	Dugan Chair Citigroup	Inc.

Duncan	P.	Hennes Co-Founder	and	Partner Atrevida	Partners,	LLC

Peter	Blair	Henry Dean	Emeritus	and	W.	R.	Berkley Professor	of	Economics	and	Finance New	York	University Stern	School	of	Business

Franz	B.	Humer Former	Chairman Roche	Holding	Ltd.

S.	Leslie	Ireland

Former	Assistant	Secretary	for	Intelligence and	Analysis U.S.	Department	of	the	Treasury

Lew	W.	(Jay)	Jacobs,	IV Former	President	and	Managing	Director Pacific	Investment	Management	Company LLC	(PIMCO)

Renée	J.	James Chairman	and	CEO Ampere	Computing	and	Operating	Executive The	Carlyle	Group

# Eugene	M.	McQuade

Former	Chief	Executive	Officer	Citibank,	N.A. and Former	Vice	Chairman Citigroup	Inc.

Gary	M.	Reiner Operating	Partner General	Atlantic	LLC

Anthony	M.	Santomero Former	President Federal	Reserve	Bank	of Philadelphia

Diana	L.	Taylor Former	Superintendent	of	Banks State	of	New	York

James	S.	Turley Former	Chairman	and	CEO Ernst	&	Young

# Deborah	C.	Wright

Managing	Director	of	U.S.	Jobs	and Economic	Opportunity	Rockefeller Foundation

Ernesto	Zedillo	Ponce	de	Leon Director,	Center	for	the Study	of	Globalization	and Professor	in	the	Field of	International Economics	and	Politics Yale	University

# Signatures

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	its	behalf by	the	undersigned,	thereunto	duly	authorized,	on	the	22nd	day	of	February, 2019.

Citigroup	Inc. (Registrant)

# /s/	John	C.	Gerspach

John	C.	Gerspach Chief	Financial	Officer

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report has	been	signed	below	by	the	following	persons	on	behalf	of	the	registrant	and	in the	capacities	indicated	on	the	22nd	day	of	February,	2019.

Citigroup's	Principal	Executive	Officer	and	a	Director:

# /s/	Michael	L.	Corbat

# Michael	L.	Corbat

# Citigroup's	Principal	Financial	Officer:

# John	C.	Gerspach

# Citigroup's	Principal	Accounting	Officer:

# Raja	J.	Akram

The	Directors	of	Citigroup	listed	below	executed	a	power	of	attorney	appointing John	C.	Gerspach	their	attorney-in-fact,	empowering	him	to	sign	this	report	on their	behalf.

Ellen	M.	Costello John	C.	Dugan Duncan	P.	Hennes Peter	Blair	Henry Franz	B.	Humer S.	Leslie	Ireland Lew	W.	(Jay)	Jacobs,	IV Renée	J.	James

Eugene	M.	McQuade Gary	M.	Reiner Anthony	M.	Santomero Diana	L.	Taylor James	S.	Turley Deborah	C.	Wright Ernesto	Zedillo	Ponce	de	Leon

# EXHIBIT	INDEX

# Exhibit

4.24 Form	of	Capital	Securities	Guarantee	Agreement	between	the	Company,	as	Guarantor,	and	The	Bank	of	New	York	Mellon,	as	Guarantee	Trustee, incorporated	by	reference	to	Exhibit	4.32	to	the	Company's	Registration	Statement	on	Form	S-3	filed	July	2,	2004	(File	No.	333-117615).

10.09.1* Supplemental	ERISA	Compensation	Plan	of	Citibank,	N.A.	and	Affiliates,	as	amended	and	restated	(the	"Citibank	Supplemental	ERISA	Plan"), incorporated	by	reference	to	Exhibit	10.(G)	to	Citicorp's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31,	1997	(File	No. 001-05378). 10.09.2* Amendment	to	the	Citibank	Supplemental	ERISA	Plan,	effective	January	1,	2000,	incorporated	by	reference	to	Exhibit	10.21.2	to	the	Company's 1999	10-K. 10.09.3* Resolution	Amending	the	Citibank	Supplemental	ERISA	Plan,	incorporated	by	reference	to	Exhibit	10.04.1	to	the	Company's	Annual	Report	on Form	10-K	for	the	fiscal	year	ended	December	31,	2005	(File	No.	001-09924). 10.09.4* Amendment	to	the	Citibank	Supplemental	ERISA	Plan,	effective	January	1,	2009,	incorporated	by	reference	to	Exhibit	10.01.4	to	the	Company's 2009	10-K.

10.09.5* Amendment	to	the	Citibank	Supplemental	ERISA	Plan,	effective	November	22,	2009,	incorporated	by	reference	to	Exhibit	10.01.5	to	the Company's	2009	10-K.

10.09.6* Amendment	to	the	Citibank	Supplemental	ERISA	Plan,	effective	December	31,	2012,	incorporated	by	reference	to	Exhibit	10.01.6	to	the Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31,	2012	(File	No.	001-09924).

10.09.7+ Amendment	to	the	Citibank	Supplemental	ERISA	Plan,	effective	December	31,	2018.

10.10* Citigroup	Inc.	Omnibus	Non-Qualified	Plan	Amendment,	effective	as	of	June	2,	2014,	incorporated	by	reference	to	Exhibit	10.01	to	the Company's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended	June	30,	2014	(File	No.	001-09924).

10.11* Letter	Agreement,	dated	December	21,	2011,	between	Citigroup	Inc.	and	Michael	Corbat,	incorporated	by	reference	to	Exhibit	10.1	to	the Company's	Current	Report	on	Form	8-K	filed	December	22,	2011	(File	No.	001-09924).

32.01+ Certification	pursuant	to	18	U.S.C.	Section	1350,	as	adopted	pursuant	to	Section	906	of	the	Sarbanes-Oxley	Act	of	2002.

99.01+ List	of	Securities	Registered	Pursuant	to	Section	12(b)	of	the	Securities	Exchange	Act	of	1934.

101.01+ Financial	statements	from	the	Annual	Report	on	Form	10-K	of	the	Company	for	the	fiscal	year	ended	December	31,	2018,	filed	February	22, 2019,	formatted	in	XBRL:	(i)	the	Consolidated	Statement	of	Income,	(ii)	the	Consolidated	Balance	Sheet,	(iii)	the	Consolidated	Statement	of Changes	in	Equity,	(iv)	the	Consolidated	Statement	of	Cash	Flows	and	(v)	the	Notes	to	Consolidated	Financial	Statements.

The	total	amount	of	securities	authorized	pursuant	to	any	instrument	defining	rights	of	holders	of	long-term	debt	of	the	Company	does	not	exceed	10%	of	the	total	assets of	the	Company	and	its	consolidated	subsidiaries.	The	Company	will	furnish	copies	of	any	such	instrument	to	the	SEC	upon	request.

Copies	of	any	of	the	exhibits	referred	to	above	will	be	furnished	at	a	cost	of	$0.25	per	page	(although	no	charge	will	be	made	for	the	2018	Annual	Report	on	Form	10-K) to	security	holders	who	make	written	request	to	Citigroup	Inc.,	Corporate	Governance,	388	Greenwich	Street,	New	York,	NY	10013.

*	Denotes	a	management	contract	or	compensatory	plan	or	arrangement.

+	Filed	herewith.



Question: what was the percent change of the principal transactions revenue associated with interest rate risks from 2016 to 2017
Calculation: principal_transactions_revenue_2017 = 5301
principal_transactions_revenue_2016 = 4229
principal_transactions_revenue_change = principal_transactions_revenue_2017 - principal_transactions_revenue_2016
percent_change = principal_transactions_revenue_change / principal_transactions_revenue_2016
answer = percent_change * 100
Answer: 25.3%