Citibank 2008 Annual Report Download - page 117

TARP—Troubled Asset Relief Program established by the Emergency
Economic Stabilization Act of 2008, under which broad authority was
conferred upon the U.S. Department of the Treasury to undertake various
programs and initiatives to aid in the restoration of stability and liquidity to
U.S. financial markets and strengthen U.S. financial institutions. Among the
mechanisms employed under the Troubled Asset Relief Program to enhance
the capital of U.S. financial institutions are the Capital Purchase Program
and the Targeted Investment Program.
Tier 1 and Tier 2 Capital—Tier 1 Capital includes common stockholders’
equity (excluding certain components of accumulated other comprehensive
income), qualifying perpetual preferred stock, qualifying mandatorily
redeemable securities of subsidiary trusts, and minority interests that are
held by others, less certain intangible assets. Tier 2 Capital includes, among
other items, perpetual preferred stock to the extent that it does not qualify for
Tier 1, qualifying senior and subordinated debt, limited-life preferred stock,
and the allowance for credit losses, subject to certain limitations.
Unearned Compensation—The unamortized portion of a grant to
employees of restricted or deferred stock measured at the market value on the
date of grant. Unearned compensation is displayed as a reduction of
stockholders’ equity in the Consolidated Balance Sheet.
Unfunded Commitments—Legally binding agreements to provide
financing at a future date.
Variable Interest Entity (VIE)—An entity that does not have enough
equity to finance its activities without additional subordinated financial
support from third parties. VIEs may include entities with equity investors
that cannot make significant decisions about the entity’s operations. A VIE
must be consolidated by its primary beneficiary, if any, which is the party
that has the majority of the expected losses or residual returns of the VIE or
both.
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