Citibank 2013 Annual Report Download - page 62

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Components of Citigroup Capital Under Current Regulatory Guidelines
In millions of dollars
December 31,
2013
December 31,
2012
Tier 1 Common Capital
Citigroup common stockholders’ equity (1) $ 197,694 $186,487
Regulatory Capital Adjustments and Deductions:
Less: Net unrealized gains (losses) on securities AFS, net of tax (2)(3) (1,724) 597
Less: Accumulated net unrealized losses on cash flow hedges, net of tax (4) (1,245) (2,293)
Less: Defined benefit plans liability adjustment, net of tax (5) (3,989) (5,270)
Less: Cumulative effect included in fair value of financial liabilities attributable to the change in
own creditworthiness, net of tax (6) (224) 18
Less: Disallowed deferred tax assets (7) 39,384 41,800
Less: Intangible assets:
Goodwill, net of related deferred tax liability (DTL) 23,362 24,170
Other disallowed intangible assets, net of related DTL 3,625 3,868
Less: Net unrealized losses on AFS equity securities, net of tax (2) 66 —
Other (369) (502)
Total Tier 1 Common Capital $ 138,070 $123,095
Tier 1 Capital
Qualifying perpetual preferred stock (1) $ 6,645 $ 2,562
Qualifying trust preferred securities 3,858 9,983
Qualifying noncontrolling interests 871 892
Total Tier 1 Capital $ 149,444 $136,532
Tier 2 Capital
Allowance for credit losses (8) $ 13,756 $ 12,330
Qualifying subordinated debt (9) 18,758 18,689
Net unrealized pretax gains on AFS equity securities (2) —135
Total Tier 2 Capital $ 32,514 $ 31,154
Total Capital (Tier 1 Capital + Tier 2 Capital) $ 181,958 $167,686
Citigroup Risk-Weighted Assets
In millions of dollars
December 31,
2013 (11)
December 31,
2012 (12)
Credit Risk-Weighted Assets (10) $ 963,949 $929,722
Market Risk-Weighted Assets 128,758 41,531
Total Risk-Weighted Assets $1,092,707 $971,253
(1) Issuance costs of $93 million related to preferred stock outstanding at December 31, 2013 are excluded from common stockholders’ equity and netted against preferred stock in accordance with Federal Reserve
Board regulatory reporting requirements, which differ from those under U.S. GAAP.
(2) Tier 1 Capital excludes net unrealized gains (losses) on available-for-sale (AFS) debt securities and net unrealized gains on AFS equity securities with readily determinable fair values, in accordance with current
risk-based capital guidelines. Further, in arriving at Tier 1 Capital, banking organizations are required to deduct net unrealized losses on AFS 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 AFS equity securities with readily determinable fair values.
(3) In addition, includes the net amount of unamortized loss on held-to-maturity (HTM) securities. This amount relates to securities that were previously transferred from AFS to HTM, and non-credit-related factors such as
changes in interest rates and liquidity spreads for HTM securities with other-than-temporary impairment.
(4) Accumulated net unrealized gains (losses) on cash flow hedges recorded in Accumulated other comprehensive income (AOCI) as a result of the adoption and application of ASC 815, Derivatives and Hedging (formerly
FAS 133), are excluded from Tier 1 Capital, in accordance with current risk-based capital guidelines.
(5) The Federal Reserve Board granted interim capital relief, allowing banking organizations to exclude from regulatory capital any amounts recorded in AOCI resulting from the adoption and application of ASC 715-20,
Compensation—Retirement Benefits—Defined Benefits Plans (formerly SFAS 158).
(6) The impact of changes in Citi’s own creditworthiness in valuing liabilities for which the fair value option has been elected is excluded from Tier 1 Capital, in accordance with current risk-based capital guidelines.
(7) Of Citi’s approximately $52.8 billion of net deferred tax assets at December 31, 2013, approximately $10.9 billion of such assets were includable in regulatory capital pursuant to current risk-based capital guidelines,
while approximately $39.4 billion of such assets exceeded the limitation imposed by these guidelines and were deducted in arriving at Tier 1 Capital. Citi’s approximately $2.5 billion of other net deferred tax assets
primarily represented deferred tax assets related to the regulatory capital adjustments for defined benefit plans liability, unrealized gains (losses) on AFS securities and cash flow hedges, partially offset by deferred tax
liabilities related to the deductions for goodwill and certain other intangible assets, which are permitted to be excluded prior to deriving the amount of net deferred tax assets subject to limitation under the guidelines.
(8) Includable up to 1.25% of risk-weighted assets. Any excess allowance for credit losses is deducted in arriving at risk-weighted assets.
(9) Includes qualifying subordinated debt in an amount not exceeding 50% of Tier 1 Capital.
(10) Includes risk-weighted credit equivalent amounts, net of applicable bilateral netting agreements, of approximately $61 billion for interest rate, commodity, equity, foreign exchange and credit derivative contracts as
of December 31, 2013, compared with approximately $62 billion as of December 31, 2012. Credit risk-weighted assets also include those deriving from certain other off-balance-sheet exposures, such as financial
guarantees, unfunded lending commitments and letters of credit, and reflect deductions such as for certain intangible assets and any excess allowance for credit losses.
(11) Risk-weighted assets as computed under Basel I credit risk capital rules and final (revised) market risk capital rules (Basel II.5) effective on January 1, 2013.
(12) Risk-weighted assets as computed under Basel I credit risk and market risk capital rules. Total risk-weighted assets at December 31, 2012, including estimated market risk-weighted assets of approximately
$169.3 billion assuming application of the Basel II.5 rules, would have been approximately $1.11 trillion.