Citibank 2008 Annual Report Download - page 220

30. CONTINGENCIES
As described in the “Legal Proceedings” discussion on page 229, the
Company has been a defendant in numerous lawsuits and other legal
proceedings arising out of alleged misconduct in connection with:
(i) underwritings for, and research coverage of, WorldCom;
(ii) underwritings for Enron and other transactions and activities
related to Enron;
(iii) transactions and activities related to research coverage of
companies other than WorldCom; and
(iv) transactions and activities related to the IPO Securities
Litigation.
As of December 31, 2008, the Company’s litigation reserve for these
matters, net of amounts previously paid or not yet paid but committed to be
paid in connection with the Enron class action settlement and other
settlements arising out of these matters, was approximately $0.8 billion. The
Company believes that this reserve is adequate to meet all of its remaining
exposure for these matters.
As described in the “Legal Proceedings” discussion on page 229, the
Company is also a defendant in numerous lawsuits and other legal
proceedings arising out of alleged misconduct in connection with other
matters. In view of the large number of litigation matters, the uncertainties
of the timing and outcome of this type of litigation, the novel issues
presented, and the significant amounts involved, it is possible that the
ultimate costs of these matters may exceed or be below the Company’s
litigation reserves. The Company will continue to defend itself vigorously in
these cases, and seek to resolve them in the manner management believes is
in the best interests of the Company.
In addition, in the ordinary course of business, Citigroup and its
subsidiaries are defendants or co-defendants or parties in various litigation
and regulatory matters incidental to and typical of the businesses in which
they are engaged. In the opinion of the Company’s management, the
ultimate resolution of these legal and regulatory proceedings would not be
likely to have a material adverse effect on the consolidated financial
condition of the Company but, if involving monetary liability, may be
material to the Company’s operating results for any particular period.
31. CITIBANK, N.A. STOCKHOLDER’S EQUITY
Statement of Changes in Stockholder’s Equity
In millions of dollars, except shares
Year ended December 31
2008 2007 2006
Preferred stock ($100 par value)
Balance, beginning of year $—$—$—
Redemption or retirement of preferred stock ———
Balance, end of year $ — $—$—
Common stock ($20 par value)
Balance, beginning of year — shares:
37,534,553 in 2008, 2007 and 2006 $ 751 $ 751 $ 751
Balance, end of year — shares:
37,534,553 in 2008, 2007 and 2006 $ 751 $ 751 $ 751
Surplus
Balance, beginning of year $ 69,135 $43,753 $37,978
Capital contribution from parent company 6,177 25,267 5,589
Employee benefit plans 183 85 176
Other (1) (728) 30 10
Balance, end of year $ 74,767 $69,135 $43,753
Retained earnings
Balance, beginning of year $ 31,915 $30,358 $24,062
Adjustment to opening balance, net of taxes (2) —(96) —
Adjusted balance, beginning of period $ 31,915 $30,262 $24,062
Net income (loss) (6,215) 2,304 9,338
Dividends paid (41) (651) (3,042)
Other (1) (3,924) ——
Balance, end of year $ 21,735 $31,915 $30,358
Accumulated other comprehensive
income (loss)
Balance, beginning of year $ (2,495) $ (1,709) $ (2,550)
Adjustment to opening balance, net of taxes (3) —(1) —
Adjusted balance, beginning of period $ (2,495) $ (1,710) $ (2,550)
Net change in unrealized gains (losses) on
investment securities available-for-sale, net
of taxes (6,746) (1,142) 234
Net change in foreign currency translation
adjustment, net of taxes (5,651) 2,143 1,926
Net change in cash flow hedges, net of taxes (1,162) (1,954) (430)
Pension liability adjustment, net of taxes 159 168 (3)
Adjustment to initially apply SFAS 158, net of
taxes —— (886)
Net change in Accumulated other
comprehensive income (loss) $(13,400) $ (785) $ 841
Balance, end of year $(15,895) $ (2,495) $ (1,709)
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