Citigroup Inc.

28. PLEDGED SECURITIES, COLLATERAL,COMMITMENTS AND GUARANTEESPledged SecuritiesAt December 31, 2010 and 2009, the approximate fair values of securities soldunder agreements to repurchase and other securities pledged, excluding theimpact of allowable netting, were as follows:In millions of dollars 2010 2009For securities sold under agreements to repurchase $227,967 $237,707As collateral for securities borrowed for approximatelyequivalent value 40,741 44,095As collateral on bank loans 196,477 188,160To clearing organizations or segregated under securities lawsand regulations 21,466 21,385For securities loaned 37,965 36,767Other 15,136 30,000Total $539,752 $558,114In addition, included in cash and due from banks at December 31, 2010and 2009 are $15.6 billion and $11.2 billion, respectively, of cash segregatedunder federal and other brokerage regulations or deposited with clearingorganizations.At December 31, 2010 and 2009, the Company had $1.1 billion and$1.9 billion, respectively, of outstanding letters of credit from third-partybanks to satisfy various collateral and margin requirements.CollateralAt December 31, 2010 and 2009, the approximate market value of collateralreceived by the Company that may be sold or repledged by the Company,excluding the impact of allowable netting, was $335.3 billion and$346.2 billion, respectively. This collateral was received in connection withresale agreements, securities borrowings and loans, derivative transactionsand margined broker loans.At December 31, 2010 and 2009, a substantial portion of the collateralreceived by the Company had been sold or repledged in connection withrepurchase agreements, securities sold, not yet purchased, securitiesborrowings and loans, pledges to clearing organizations, segregationrequirements under securities laws and regulations, derivative transactionsand bank loans.In addition, at December 31, 2010 and 2009, the Company had pledged$246 billion and $253 billion, respectively, of collateral that may not be soldor repledged by the secured parties.Lease CommitmentsRental expense (principally for offices and computer equipment) was$1.6 billion, $2.0 billion and $2.7 billion for the years ended December 31,2010, 2009 and 2008, respectively.Future minimum annual rentals under noncancelable leases, net ofsublease income, are as follows:In millions of dollars2011 $1,1372012 1,0302013 9392014 8562015 763Thereafter 2,440Total $7,165GuaranteesThe Company provides a variety of guarantees and indemnifications toCitigroup customers to enhance their credit standing and enable themto complete a wide variety of business transactions. For certain contractsmeeting the definition of a guarantee, the guarantor must recognize, atinception, a liability for the fair value of the obligation undertaken in issuingthe guarantee.In addition, the guarantor must disclose the maximum potentialamount of future payments the guarantor could be required to make underthe guarantee, if there were a total default by the guaranteed parties. Thedetermination of the maximum potential future payments is based onthe notional amount of the guarantees without consideration of possiblerecoveries under recourse provisions or from collateral held or pledged.Such amounts bear no relationship to the anticipated losses, if any, onthese guarantees.The following tables present information about the Company’s guarantees at December 31, 2010 and December 31, 2009:In billions of dollars at December 31,except carrying value in millionsMaximum potential amount of future paymentsExpire within Expire after Total amount1 year 1 year outstandingCarrying value(in millions)2010Financial standby letters of credit $ 19.5 $ 75.3 $ 94.8 $ 225.9Performance guarantees 9.1 4.6 13.7 35.8Derivative instruments considered to be guarantees 3.1 5.0 8.1 850.4Loans sold with recourse — 0.4 0.4 134.3Securities lending indemnifications (1) 70.4 — 70.4 —Credit card merchant processing (1) 65.0 — 65.0 —Custody indemnifications and other — 40.2 40.2 253.8Total $167.1 $125.5 $292.6 $1,500.2(1) The carrying values of securities lending indemnifications and credit card merchant processing are not material, as the Company has determined that the amount and probability of potential liabilities arising from theseguarantees are not significant.277