Citibank 2009 Annual Report Download - page 250

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29. PLEDGED ASSETS, COLLATERAL, COMMITMENTS
AND GUARANTEES
Pledged Assets
At December 31, 2009 and 2008, the approximate fair values of securities
sold under agreements to repurchase and other assets pledged, excluding the
impact of allowable netting, were as follows:
In millions of dollars 2009 2008
For securities sold under agreements to repurchase $237,707 $237,055
As collateral for securities borrowed for approximately
equivalent value 44,095 81,740
As collateral on bank loans 188,160 144,982
To clearing organizations or segregated under securities laws
and regulations 21,385 41,312
For securities loaned 36,767 51,158
Other 30,000 52,576
Total $558,114 $608,823
In addition, included in cash and due from banks at December 31, 2009
and 2008 are $11.2 billion and $11.7 billion, respectively, of cash segregated
under federal and other brokerage regulations or deposited with clearing
organizations.
At December 31, 2009 and 2008, the Company had $1.9 billion and $3.1
billion, respectively, of outstanding letters of credit from third-party banks to
satisfy various collateral and margin requirements.
Collateral
At December 31, 2009 and 2008, the approximate market value of collateral
received by the Company that may be sold or repledged by the Company,
excluding amounts netted was $346.2 billion and $340.2 billion, respectively.
This collateral was received in connection with resale agreements, securities
borrowings and loans, derivative transactions and margined broker loans.
At December 31, 2009 and 2008, a substantial portion of the collateral
received by the Company had been sold or repledged in connection with
repurchase agreements, securities sold, not yet purchased, securities
borrowings and loans, pledges to clearing organizations, segregation
requirements under securities laws and regulations, derivative transactions
and bank loans.
In addition, at December 31, 2009 and 2008, the Company had pledged
$253 billion and $236 billion, respectively, of collateral that may not be sold
or repledged by the secured parties.
Lease Commitments
Rental expense (principally for offices and computer equipment) was $2.0
billion, $2.7 billion and $2.3 billion for the years ended December 31, 2009,
2008 and 2007, respectively.
Future minimum annual rentals under noncancelable leases, net of
sublease income, are as follows:
In millions of dollars
2010 $ 1,247
2011 1,110
2012 1,007
2013 900
2014 851
Thereafter 2,770
Total $ 7,885
Guarantees
The Company provides a variety of guarantees and indemnifications to
Citigroup customers to enhance their credit standing and enable them
to complete a wide variety of business transactions. For certain contracts
meeting the definition of a guarantee, the guarantor must recognize, at
inception, a liability for the fair value of the obligation undertaken in issuing
the guarantee.
In addition, the guarantor must disclose the maximum potential
amount of future payments the guarantor could be required to make under
the guarantee, if there were a total default by the guaranteed parties. The
determination of the maximum potential future payments is based on
the notional amount of the guarantees without consideration of possible
recoveries under recourse provisions or from collateral held or pledged.
Such amounts bear no relationship to the anticipated losses, if any, on these
guarantees.
The following tables present information about the Company’s guarantees at December 31, 2009 and December 31, 2008:
Maximum potential amount of future payments
In billions of dollars at December 31,
except carrying value in millions
Expire within
1 year
Expire after
1 year
Total amount
outstanding
Carrying value
(in millions)
2009
Financial standby letters of credit $ 41.4 $48.0 $ 89.4 $ 438.8
Performance guarantees 9.4 4.5 13.9 32.4
Derivative instruments considered to be guarantees 4.1 3.6 7.7 569.2
Loans sold with recourse — 0.3 0.3 76.6
Securities lending indemnifications (1) 64.5 — 64.5 —
Credit card merchant processing (1) 59.7 — 59.7 —
Custody indemnifications and other — 33.5 33.5 121.4
Total $ 179.1 $89.9 $ 269.0 $1,238.4
(1) The carrying values of guarantees of collections of contractual cash flows, securities lending indemnifications and credit card merchant processing are not material, as the Company has determined that the amount
and probability of potential liabilities arising from these guarantees are not significant.