Citibank 2012 Annual Report Download - page 183

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2. BUSINESS DIVESTITURES
The following divestitures occurred in 2011 and 2010 and did not qualify
as Discontinued operations. Divestitures that qualified as Discontinued
operations are discussed in Note 3 to the Consolidated Financial Statements.
In April 2010, Citi completed the IPO of Primerica, which was part of
Citi Holdings, and sold approximately 34% to public investors. Also in April
2010, Citi completed the sale of approximately 22% of Primerica to Warburg
Pincus, a private equity firm. Citi contributed 4% of the Primerica shares to
Primerica for employee and agent stock-based awards immediately prior to
the sales. Citi retained an approximate 40% interest in Primerica after the
sales and recorded the investment under the equity method. Citi recorded an
after-tax gain on sale of $26 million. Concurrent with the sale of the shares,
Citi entered into co-insurance agreements with Primerica to reinsure up to
90% of the risk associated with the in-force insurance policies.
During 2011, Citi sold its remaining shares in Primerica for an after-tax
loss of $11 million.
3. DISCONTINUED OPERATIONS
Sale of Certain Citi Capital Advisors Business
During the third quarter of 2012, the Company executed definitive
agreements to transition a carve-out of its liquid strategies business within
Citi Capital Advisors (CCA), which is part of the Institutional Clients Group
segment, to certain employees responsible for managing those operations.
This transition will occur pursuant to two separate transactions, creating
two separate management companies. Each transaction will be accounted
for as a sale. The first transaction closed on February 28, 2013 and Citigroup
retained a 24.9% passive equity interest in the management company (which
will continue to be held in Citi’s Institutional Clients Group segment). The
second transaction is expected to be completed in the first half of 2013.
This sale is reported as discontinued operations for the second half of
2012 only. Prior periods were not reclassified due to the immateriality of the
impact in those periods.
The following is a summary as of December 31, 2012 of the assets held for
sale on the Consolidated Balance Sheet for the operations related to the CCA
business to be sold:
In millions of dollars 2012
Assets
Deposits at interest with banks $ 4
Goodwill 13
Intangible assets 19
Total assets $ 36
Summarized financial information for Discontinued operations for the
operations related to CCA follows:
In millions of dollars 2012
Total revenues, net of interest expense $ 60
Income (loss) from discontinued operations $ (123)
Gain on sale —
Benefit for income taxes (44)
Income (loss) from discontinued operations, net of taxes $ (79)
Sale of Egg Banking plc Credit Card Business
On March 1, 2011, the Company announced that Egg Banking plc (Egg),
an indirect subsidiary that was part of Citi Holdings, entered into a definitive
agreement to sell its credit card business to Barclays PLC. The sale closed on
April 28, 2011.
This sale is reported as discontinued operations for 2011 and 2012 only.
2010 was not reclassified, due to the immateriality of the impact in that
period. An after-tax gain on sale of $126 million was recognized upon
closing. Egg operations had total assets and total liabilities of approximately
$2.7 billion and $39 million, respectively, at the time of sale.