Citigroup Inc.

During 2010, average Consumer loans (net of unearned income) of$495 billion yielded an average rate of 9.4%, compared to $456 billion and7.8%, respectively, in the prior year. Average Corporate loans of $189 billionyielded an average rate of 4.5% during 2010, compared to $190 billion and6.3%, respectively, in the prior year.For further information on Citi’s loan portfolios, see generally “ManagingGlobal Risk—Credit Risk” and Notes 1 and 16 to the ConsolidatedFinancial Statements.Trading Account Assets and LiabilitiesTrading account assets includes debt and marketable equity securities,derivatives in a receivable position, residual interests in securitizations andphysical commodities inventory. In addition, certain assets that Citigroup haselected to carry at fair value, such as certain loans and purchase guarantees,are also included in Trading account assets. Trading account liabilitiesincludes securities sold, not yet purchased (short positions), and derivativesin a net payable position, as well as certain liabilities that Citigroup haselected to carry at fair value.During 2010, Trading account assets decreased by $26 billion, or 8%,primarily due to decreases in debt securities ($17 billion, or 53%), derivativeassets ($9 billion, or 15%), equity securities ($8 billion, or 17%) and U.S.Treasury and federal agency securities ($7 billion, or 24%), partially offsetby a $16 billion, or 21%, increase in foreign government securities. AverageTrading account assets were $337 billion in 2010, compared to $350 billionin 2009.During 2010, Trading account liabilities decreased by $9 billion, or7%, primarily due to a $4 billion, or 7%, decrease in derivative liabilities,and a $4 billion, or 6%, decrease in securities short positions (primarilyU.S. Treasury securities). In 2010, average Trading account liabilities were$128 billion, compared to $139 billion in 2009.For further information on Citi’s Trading account assets and Tradingaccount liabilities, see Note 14 to the Consolidated Financial Statements.Federal Funds Sold (Purchased) and SecuritiesBorrowed (Loaned) or Purchased (Sold) UnderAgreements to Resell (Repurchase)Securities sold under agreements to repurchase (repos) and securitieslending transactions generally do not constitute a sale of the underlyingsecurities for accounting purposes and, as such, are treated as collateralizedfinancing transactions. Similarly, securities purchased under agreements toresell (reverse repos) and securities borrowing transactions generally do notconstitute a purchase of the underlying securities for accounting purposesand so are treated as collateralized lending transactions. Reverse repos andsecurities borrowing transactions increased by $25 billion, or 11%, during2010. For further information on repos and securities lending transactions,see “Capital Resources and Liquidity—Funding and Liquidity” below.Federal funds sold and federal funds purchased consist of unsecuredadvances of excess balances in reserve accounts held at the Federal ReserveBanks to and from third parties. During 2009 and 2010, Citi’s federal fundssold and federal funds purchased were not significant.For further information regarding these balance sheet categories, seeNotes 1 and 12 to the Consolidated Financial Statements.InvestmentsInvestments consists of debt and equity securities that are available-for-sale,debt securities that are held-to-maturity, non-marketable equity securitiesthat are carried at fair value, and non-marketable equity securities carried atcost. Debt securities include bonds, notes and redeemable preferred stock, aswell as certain loan-backed securities (such as mortgage-backed securities)and other structured notes. Marketable and non-marketable equity securitiescarried at fair value include common and nonredeemable preferred stock.Non-marketable equity securities carried at cost primarily include equityshares issued by the Federal Reserve Bank and the Federal Home Loan Banksthat Citigroup is required to hold.During 2010, investments increased by $12 billion, or 4%, primarily dueto a $34 billion, or 14%, increase in available-for-sale (predominantly U.S.Treasury and federal agency securities), offset by a $22 billion decrease inheld-to-maturity securities (predominantly asset-backed and mortgagebackedsecurities).For further information regarding Investments, see Notes 1 and 15 to theConsolidated Financial Statements.Other AssetsOther assets consists of Brokerage receivables, Goodwill, Intangibles andMortgage servicing rights in addition to Other assets as presented on theConsolidated Balance Sheet (including, among other items, loans heldfor-sale,deferred tax assets, equity-method investments, interest and feesreceivable, premises and equipment, end-user derivatives in a net receivableposition, repossessed assets, and other receivables). During 2010, Otherassets decreased $4 billion, or 2%, primarily due to a $2 billion decrease inbrokerage receivables, a $2 billion decrease in mortgage servicing rightsand a $1 billion decrease in intangible assets, partially offset by a $1 billionincrease in goodwill and a $1 billion increase in other assets.55