Citibank 2009 Annual Report Download - page 54

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Components of Capital Under Regulatory Guidelines
In millions of dollars at year end 2009 2008 (1)
Tier 1 Common
Citigroup common stockholders’ equity $ 152,388 $ 70,966
Less: Net unrealized losses on securities available-for-sale, net of tax (2) (4,347) (9,647)
Less: Accumulated net losses on cash flow hedges, net of tax (3,182) (5,189)
Less: Pension liability adjustment, net of tax (3) (3,461) (2,615)
Less: Cumulative effect included in fair value of financial liabilities attributable to the change in own credit worthiness, net of tax (4) 760 3,391
Less: Disallowed deferred tax assets (5) 26,044 23,520
Less: Intangible assets:
Goodwill 25,392 27,132
Other disallowed intangible assets 5,899 10,607
Other (788) (840)
Total Tier 1 Common $ 104,495 $ 22,927
Qualifying perpetual preferred stock $ 312 $ 70,664
Qualifying mandatorily redeemable securities of subsidiary trusts 19,217 23,899
Qualifying noncontrolling interests 1,135 1,268
Other 1,875 —
Total Tier 1 Capital $ 127,034 $118,758
Tier 2 Capital
Allowance for credit losses (6) $ 13,934 $ 12,806
Qualifying subordinated debt (7) 24,242 24,791
Net unrealized pretax gains on available-for-sale equity securities (2) 773 43
Total Tier 2 Capital $ 38,949 $ 37,640
Total Capital (Tier 1 Capital and Tier 2 Capital) $ 165,983 $156,398
Risk-weighted assets (8) $1,088,526 $996,247
(1) Reclassified to conform to the current period presentation.
(2) Tier 1 Capital excludes net unrealized gains (losses) on available-for-sale debt securities and net unrealized gains on available-for-sale equity securities with readily determinable fair values, in accordance with
risk-based capital guidelines. In arriving at Tier 1 Capital, banking organizations are required to deduct net unrealized losses on available-for-sale equity securities with readily determinable fair values, net of tax.
Banking organizations are permitted to include in Tier 2 Capital up to 45% of net unrealized pretax gains on available-for-sale equity securities with readily determinable fair values.
(3) The Federal Reserve Board granted interim capital relief for the impact of ASC 715-20, Compensation—Retirement Benefits—Defined Benefits Plans (formerly SFAS 158).
(4) The impact of including Citigroup’s own credit rating in valuing financial liabilities for which the fair value option has been elected is excluded from Tier 1 Capital, in accordance with risk-based capital guidelines.
(5) Of Citi’s approximately $46 billion of net deferred tax assets at December 31, 2009, approximately $15 billion of such assets were includable without limitation in regulatory capital pursuant to risk-based capital
guidelines, while approximately $26 billion of such assets exceeded the limitation imposed by these guidelines and, as “disallowed deferred tax assets,” were deducted in arriving at Tier 1 Capital. Citigroup’s other
approximately $5 billion of net deferred tax assets primarily represented approximately $3 billion of deferred tax effects of unrealized gains and losses on available-for-sale debt securities and approximately $2 billion
of deferred tax effects of the pension liability adjustment, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines. Citi had approximately $24
billion of disallowed deferred tax assets at December 31, 2008.
(6) Includable up to 1.25% of risk-weighted assets. Any excess allowance is deducted in arriving at risk-weighted assets.
(7) Includes qualifying subordinated debt in an amount not exceeding 50% of Tier 1 Capital.
(8) Includes risk-weighted credit equivalent amounts, net of applicable bilateral netting agreements, of $64.5 billion for interest rate, commodity, and equity derivative contracts, foreign exchange contracts, and credit
derivatives as of December 31, 2009, compared with $102.9 billion as of December 31, 2008. Market risk equivalent assets included in risk-weighted assets amounted to $80.8 billion at December 31, 2009 and
$101.8 billion at December 31, 2008. Risk-weighted assets also include the effect of certain other off-balance-sheet exposures, such as unused lending commitments and letters of credit, and reflect deductions such
as certain intangible assets and any excess allowance for credit losses.