Citibank 2008 Annual Report Download - page 143

Sale of the Life Insurance and Annuities Business
On July 1, 2005, the Company completed the sale of Citigroup’s Travelers
Life & Annuity and substantially all of Citigroup’s international insurance
businesses to MetLife, Inc. (MetLife).
During the first quarter of 2006, $15 million of the total $657 million
federal tax contingency reserve release was reported in Discontinued
operations as it related to the Life Insurance and Annuities business sold to
MetLife.
In July 2006, Citigroup recognized an $85 million after-tax gain from the
sale of MetLife shares. This gain was reported in income from continuing
operations in ICG.
In July 2006, the Company received the final closing adjustment payment
related to this sale, resulting in an after-tax gain of $75 million ($115
million pretax), which was recorded in Discontinued operations.
In addition, during the third quarter of 2006, a release of $42 million of
deferred tax liabilities was reported in Discontinued operations as it related
to the Life Insurance & Annuities business sold to MetLife.
In December 2008, the Company fulfilled its previously agreed upon
obligations with regard to its remaining 10% economic interest in the long-
term care business that it had sold to the predecessor of Genworth Financial
in 2000. Under the terms of the 2005 sales agreement of Citi’s Life Insurance
and Annuities business to MetLife, Citi agreed to reimburse MetLife for
certain liabilities related to the sale of the long-term-care business to
Genworth’s predecessor. The assumption of the final 10% block by Genworth
at December 31, 2008, resulted in a pretax loss of $50 million ($33 million
after-tax), which has been reported in Discontinued operations.
Combined Results for Discontinued Operations
The following is summarized financial information for the German retail
banking operations, CitiCapital, Life Insurance and Annuities business, Asset
Management business, and TPC:
In millions of dollars 2008 2007 2006
Total revenues, net of interest expense $6,616 $3,203 $3,507
Income from discontinued operations $1,478 $ 925 $1,177
Gain on sale 3,139 — 219
Provision (benefit) for income taxes and minority
interest, net of taxes 207 297 309
Income from discontinued operations, net of
taxes $4,410 $ 628 $1,087
Cash Flows from Discontinued Operations
In millions of dollars 2008 2007 2006
Cash flows from operating activities $ (5,006) $1,079 $ 4,842
Cash flows from investing activities 18,896 (716) (5,871)
Cash flows from financing activities (14,287) (256) 1,150
Net cash provided by (used in) discontinued
operations $ (397) $ 107 $ 121
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