Citigroup Inc.

The following table provides information about certain credit products carried at fair value at December 31, 2010 and 2009:December 31, 2010 December 31, 2009In millions of dollars Trading assets Loans Trading assets LoansCarrying amount reported on the Consolidated Balance Sheet $14,241 $1,748 $14,338 $945Aggregate unpaid principal balance in excess of fair value 167 (88) 390 (44)Balance of non-accrual loans or loans more than 90 days past due 221 — 312 —Aggregate unpaid principal balance in excess of fair value for non-accrual loans or loans more than 90 days past due 57 — 267 —In addition to the amounts reported above, $621 million and$200 million of unfunded loan commitments related to certain creditproducts selected for fair value accounting was outstanding as ofDecember 31, 2010 and 2009, respectively.Changes in fair value of funded and unfunded credit products areclassified in Principal transactions in the Company’s ConsolidatedStatement of Income. Related interest revenue is measured based onthe contractual interest rates and reported as Interest revenue onTrading account assets or loan interest depending on the balance sheetclassifications of the credit products. The changes in fair value for the yearsended December 31, 2010 and 2009 due to instrument-specific credit risktotaled to a loss of $6 million and a gain of $5.9 billion, respectively.Certain investments in private equity and real estateventures and certain equity method investmentsCitigroup invests in private equity and real estate ventures for the purposeof earning investment returns and for capital appreciation. The Companyhas elected the fair value option for certain of these ventures, because suchinvestments are considered similar to many private equity or hedge fundactivities in Citi’s investment companies, which are reported at fair value.The fair value option brings consistency in the accounting and evaluation ofthese investments. All investments (debt and equity) in such private equityand real estate entities are accounted for at fair value. These investments areclassified as Investments on Citigroup’s Consolidated Balance Sheet.Citigroup also holds various non-strategic investments in leveragedbuyout funds and other hedge funds for which the Company elected fairvalue accounting to reduce operational and accounting complexity. Sincethe funds account for all of their underlying assets at fair value, the impactof applying the equity method to Citigroup’s investment in these funds wasequivalent to fair value accounting. These investments are classified asOther assets on Citigroup’s Consolidated Balance Sheet.Changes in the fair values of these investments are classified in Otherrevenue in the Company’s Consolidated Statement of Income.Certain mortgage loans (HFS)Citigroup has elected the fair value option for certain purchased andoriginated prime fixed-rate and conforming adjustable-rate first mortgageloans HFS. These loans are intended for sale or securitization and are hedgedwith derivative instruments. The Company has elected the fair value optionto mitigate accounting mismatches in cases where hedge accounting iscomplex and to achieve operational simplifications.273