Citibank 2009 Annual Report Download - page 256

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30. CONTINGENCIES
As described in “Legal Proceedings,” Citigroup and its affiliates and
subsidiaries and current and former officers, directors and employees have
been named, and routinely are named in the ordinary course of business,
as defendants in, or as parties to, various legal actions and proceedings. In
accordance with ASC 450 (formerly SFAS 5), Citigroup establishes reserves
for litigation and regulatory matters when those matters present loss
contingencies that both are probable and can be reasonably estimated. In
view of the inherent unpredictability of litigation and regulatory matters,
particularly where the damages sought are substantial or indeterminate, the
investigations or proceedings are in the early stages, or the matters involve
novel legal theories or a large number of parties, Citigroup cannot state
with certainty the timing or ultimate resolution of litigations and regulatory
matters, and the actual costs of resolving litigations and regulatory
matters may be substantially higher or lower than the amounts reserved
for those matters.
Subject to the foregoing, it is the opinion of Citigroup’s management,
based on current knowledge and after taking into account available
insurance coverage and its current legal reserves, that the eventual outcome
of such matters, including the matters described in “Legal Proceedings,”
would not be likely to have a material adverse effect on the consolidated
financial condition of Citi. Nonetheless, given the substantial or
indeterminate amounts sought in certain of these matters, and the inherent
unpredictability of such matters, an adverse outcome in certain of these
matters could, from time to time, have a material adverse effect on Citi’s
consolidated results of operations or cash flows in particular quarterly or
annual periods.