Citigroup Inc.

The following table presents the corporate credit portfolio by facility riskrating at December 31, 2010 and 2009, as a percentage of the total portfolio:Direct outstandings andunfunded commitmentsDecember 31, December 31,20102009AAA/AA/A 56% 58%BBB 26 24BB/B 13 11CCC or below 5 7Unrated — —Total 100% 100%The corporate credit portfolio is diversified by industry, with aconcentration only in the financial sector, including banks, other financialinstitutions, insurance companies, investment banks and government andcentral banks. The following table shows the allocation of direct outstandingsand unfunded commitments to industries as a percentage of the totalcorporate portfolio:December 31,2010Direct outstandings andunfunded commitmentsDecember 31,2009Government and central banks 12% 12%Banks 10 9Other financial institutions 10 12Investment banks 8 5Petroleum 5 4Insurance 4 4Utilities 4 4Agriculture and food preparation 4 4Real estate 3 3Telephone and cable 3 3Industrial machinery and equipment 3 2Global information technology 2 2Metals 2 2Other industries (1) 30 34Total 100% 100%(1) Includes all other industries, none of which exceeds 2% of total outstandings.Credit Risk MitigationAs part of its overall risk management activities, Citigroup uses creditderivatives and other risk mitigants to hedge portions of the credit risk in itsportfolio, in addition to outright asset sales. The purpose of these transactionsis to transfer credit risk to third parties. The results of the mark to market andany realized gains or losses on credit derivatives are reflected in the Principaltransactions line on the Consolidated Statement of Income.At December 31, 2010 and 2009, $49.0 billion and $59.6 billion,respectively, of credit risk exposures were economically hedged. Citigroup’sexpected loss model used in the calculation of its loan loss reserve does notinclude the favorable impact of credit derivatives and other risk mitigants.In addition, the reported amounts of direct outstandings and unfundedcommitments in this report do not reflect the impact of these hedgingtransactions. At December 31, 2010 and 2009, the credit protection waseconomically hedging underlying credit exposure with the following riskrating distribution, respectively:Rating of Hedged ExposureDecember 31,2010December 31,2009AAA/AA/A 53% 45%BBB 32 37BB/B 11 11CCC or below 4 7Total 100% 100%At December 31, 2010 and 2009, the credit protection was economicallyhedging underlying credit exposures with the following industry distribution,respectively:Industry of Hedged ExposureDecember 31,2010December 31,2009Government 12% 0%Other financial institutions 8 4Agriculture and food preparation 7 8Telephone and cable 6 9Utilities 6 9Autos 6 6Metals 5 4Chemicals 5 8Petroleum 5 6Retail 4 4Insurance 4 4Industrial machinery and equipment 3 6Investment banks 3 1Pharmaceuticals 3 5Natural gas distribution 2 3Global information technology 2 3Other industries (1) 19 20Total 100% 100%(1) Includes all other industries, none of which is greater than 2% of the total hedged amount.115