Citigroup Inc.

BROKERAGE AND ASSET MANAGEMENTBrokerage and Asset Management (BAM), which constituted approximately 8% of Citi Holdings by assets as of December 31, 2010, consists of Citi’s globalretail brokerage and asset management businesses. This segment was substantially reduced in size due to the sale in 2009 of Smith Barney to the MorganStanley Smith Barney joint venture (MSSB JV) and of Nikko Cordial Securities (reported as discontinued operations within Corporate/Other for all periodspresented). At December 31, 2010, BAM had approximately $27 billion of assets, primarily consisting of Citi’s investment in, and assets related to, the MSSB JV.Morgan Stanley has options to purchase Citi’s remaining stake in the MSSB JV over three years starting in 2012.In millions of dollars 2010 2009 2008% Change2010 vs. 2009% Change2009 vs. 2008Net interest revenue $(277) $ 390 $ 1,280 NM (70)%Non-interest revenue 886 14,233 6,683 (94)% NMTotal revenues, net of interest expense $ 609 $14,623 $ 7,963 (96)% 84%Total operating expenses $ 951 $ 3,141 $ 8,973 (70)% (65)%Net credit losses $ 17 $ 1 $ 9 NM (89)%Credit reserve build (release) (18) 36 8 NM NMProvision for unfunded lending commitments (6) (5) — (20)% —Provision (release) for benefits and claims 38 40 36 (5) 11Provisions for credit losses and for benefits and claims $ 31 $ 72 $ 53 (57)% 36%Income (loss) from continuing operations before taxes $(373) $11,410 $(1,063) NM NMIncome taxes (benefits) (170) 4,473 (212) NM NMIncome (loss) from continuing operations $(203) $ 6,937 $ (851) NM NMNet income attributable to noncontrolling interests 11 12 (179) (8)% NMNet income (loss) $(214) $ 6,925 $ (672) NM NMEOP assets reflecting the sale of Nikko Cordial Securities(in billions of dollars) $ 27 $ 30 $ 31 (10)% (3)%EOP deposits (in billions of dollars) 58 60 58 (3) 3NM Not meaningful2010 vs. 2009Revenues, net of interest expense decreased 96% versus the prior yearmainly driven by the absence of the $11.1 billion pretax gain on sale($6.7 billion after tax) related to the MSSB JV transaction in the secondquarter of 2009 and a $320 million pretax gain on the sale of the managedfutures business to the MSSB JV in the third quarter of 2009. Excluding thesegains, revenue decreased primarily due to the absence of Smith Barney fromMay 2009 onwards and the absence of Nikko Asset Management, partiallyoffset by higher revenues from the MSSB JV and an improvement in marks inRetail Alternative Investments.Operating expenses decreased 70% from the prior year, mainly drivenby the absence of Smith Barney from May 2009 onwards, lower MSSB JVseparation-related costs and the absence of Nikko and Colfondos, partiallyoffset by higher legal settlements and reserves associated with Smith Barney.Provisions for credit losses and for benefits and claims decreased 57%,mainly due to the absence of credit reserve builds.Assets decreased 10% versus the prior year, mostly driven by the sales of theCiti private equity business and the run-off of tailored loan portfolios.2009 vs. 2008Revenues, net of interest expense increased 84% versus the prior yearmainly driven by the gain on sale related to the MSSB JV transaction and thegain on the sale of the managed futures business to the MSSB JV. Excludingthese gains, revenue decreased primarily due to the absence of Smith Barneyfrom May 2009 onwards and the absence of 2009 fourth-quarter revenue ofNikko Asset Management, partially offset by an improvement in marks inRetail Alternative Investments. Revenues in 2008 included a $347 millionpretax gain on the sale of CitiStreet and charges related to the settlement ofauction rate securities of $393 million pretax.Operating expenses decreased 65% from 2008, mainly driven by the absenceof Smith Barney and Nikko Asset Management expenses, re-engineeringefforts and the absence of 2008 one-time expenses ($0.9 billion intangibleimpairment, $0.2 billion of restructuring and $0.5 billion of write-downs andother charges).Provisions for credit losses and for benefits and claims increased 36%,mainly reflecting an increase in reserve builds of $28 million.Assets decreased 3% versus the prior year, mostly driven by the impact ofthe sale of Nikko Asset Management.47