Citibank 2009 Annual Report Download - page 157

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CitiCapital
On July 31, 2008, Citigroup sold substantially all of CitiCapital, the
equipment finance unit in North America. The total proceeds from the
transaction were approximately $12.5 billion and resulted in an after-tax
loss to Citigroup of $305 million. This loss is included in Income from
discontinued operations on the Company’s Consolidated Statement
of Income for the second quarter of 2008. The assets and liabilities for
CitiCapital totaled approximately $12.9 billion and $0.5 billion, respectively,
at June 30, 2008.
This transaction encompassed seven CitiCapital equipment finance
business lines, including Healthcare Finance, Private Label Equipment
Finance, Material Handling Finance, Franchise Finance, Construction
Equipment Finance, Bankers Leasing, and CitiCapital Canada. CitiCapital’s
Tax Exempt Finance business was not part of the transaction and was
retained by Citigroup.
CitiCapital had approximately 1,400 employees and 160,000 customers
throughout North America.
Results for all of the CitiCapital businesses sold, as well as the net loss
recognized in 2008 from this sale, are reported as Discontinued operations
for all periods presented.
Summarized financial information for Discontinued operations,
including cash flows, related to the sale of CitiCapital is as follows:
In millions of dollars 2009 2008 2007
Total revenues, net of interest expense $46 $ 24 $ 991
Income (loss) from discontinued operations $ (8) $ 40 $ 273
Loss on sale 17 (506) —
Provision (benefit) for income taxes 4(202) 83
Income (loss) from discontinued
operations, net of taxes $ 5 $ (264) $ 190
In millions of dollars 2009 2008 2007
Cash flows from operating activities $— $(287) $(1,148)
Cash flows from investing activities —349 1,190
Cash flows from financing activities —(61) (43)
Net cash provided by (used in)
discontinued operations $— $ 1 $ (1)
Combined Results for Discontinued Operations
The following is summarized financial information for the Nikko Cordial
business, German retail banking operations and CitiCapital business.
Additionally, contingency consideration payments of $29 million pretax
($19 million after-tax) were received during 2009 related to the sale of
Citigroup’s Asset Management business, which was sold in December 2005.
Also, in relation to the sale of its Life Insurance and Annuity business in
2005, 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. The
reimbursement resulted in a pretax loss of $50 million ($33 million after-
tax) at December 31, 2008. Both the Asset Management payment received
and the Life Insurance and Annuity payment made are included in these
balances.
In millions of dollars 2009 2008 2007
Total revenues, net of interest expense $ 779 $ 7,810 $ 4,398
Income from discontinued operations $ (653) $ 784 $ 1,053
Gain on sale 102 3,139 —
Provision (benefit) for income taxes (106) (79) 345
Income from discontinued
operations, net of taxes $ (445) $ 4,002 $ 708
Cash Flows from Discontinued Operations
In millions of dollars 2009 2008 2007
Cash flows from operating activities $ 13,872 $ (7,859) $ 12,248
Cash flows from investing activities (20,085) 15,590 (14,581)
Cash flows from financing activities 6,227 (8,108) 2,454
Net cash provided by (used in)
discontinued operations $ 14 $ (377) $ 121