(Operator Instructions) Welcome to Citi’s Fourth Quarter and Full Year 2008 Earnings Review, featuring Citi Chief Executive Officer, Vikram Pandit and Citi Chief Financial Officer Gary Crittenden. Today’s call will be hosted by Scott Freidenrich, Head of Citi Investor Relations.

Welcome to our Fourth Quarter and Full Year 2008 Earnings Review. The presentation we will be going through is available on our website at Citigroup.com. You may want to download it now if you have not already done so. The financial supplement is also available. On the call this morning is Chief Executive Officer, Vikram Pandit, followed by Chief Financial Officer, Gary Crittenden who will take you through the presentation. Afterwards we will be happy to take any questions you may have. Please limit follow up questions to one. Before we get started I would like to remind you that today’s presentation may contain forward looking statements. Citi’s financial results may differ materially from these statements so please refer to our SEC filings for a description of the factors that could cause our actual results to differ from expectations. With that said, let me turn it over to Vikram.

Our results released this morning are clearly disappointing and I can assure you that my number one priority is to return this company to profitability. In a few minutes Gary will take you through the earnings. I want to talk to you this morning about the strategic direction for Citi and really the strategic destination. Gary will then provide you a roadmap for restoring profitability and rebuilding our TCE. As you all know, the new management team has been here for a little over a year working on your behalf. As you also know, we came into this with a lot of embedded challenges. We recognize what we needed to do and we started to act quickly. For much of the year we’ve been dealing with dysfunctional markets which deteriorated even further after Labor Day. We kept working through all the dysfunctionalities. In May, at Citi Day, we outlined our three step plan; to get fit, to restructure Citi, to maximize Citi. For all of 2008 we focused on getting fit and as a result our assets were reduced from almost $2.4 trillion to $1.9 trillion. We had identified legacy assets which we have reduced to about $300 billion. Normalized expenses are down 16% to $12.8 billion in Q4 ’08 excluding one time items. We’re on track to achieving our targeted full year expense base of $50 to $52 billion. Headcount is down from 375,000 to 323,000 with defined plans to reach approximately 300,000 in the near term. Our Tier 1 capital ratio is up from 7.1% in Q4 ’07 to approximately 11.8% in Q4 ’08. We sold a number of small and large businesses and as you know, we added a lot of experienced talent to the company. It’s hard for people who are not here to truly understand…

I’m going to start on slide one for the earnings discussion for the quarter. Slide one summarizes the main drivers of our fourth quarter results. Negative Securities and Banking revenues, significantly higher credit costs and restructuring charges were the main factors this quarter. There were three main components in Securities and Banking revenues. You can see these on the left hand side of the page. First, $7.3 billion of write downs and losses. Second, negative $2.5 billion in revenues in Securities and Banking private equity and equity investments. Third, negative $5.3 billion in revenues on our non-monoline derivative positions. Outside the above mentioned items, revenues were $21.2 billion. We saw our first absolute year over year expense decline since 2005 on a reported basis and this quarters costs include approximately $2 billion of restructuring charges and $563 million of an intangible asset impairment charge. Adjusting for the restructuring charge and for other press release disclosed items in all periods, the downward expense trend since the beginning of the year has continued. Credit costs were $12.7 billion in the quarter of $5 billion higher than last year. Together, the negative revenues in Securities and Banking and credit costs largely accounted for the quarter’s performance. I think when I mentioned the revenue marks I mentioned $7.3 billion and they were actually $7.8 billion in the quarter. During the quarter we also completed the sale of our German retail operations and our interest in Citigroup Global Services for after tax gains of $3.9 billion including current quarter hedge gains and $192 million respectively. I’m going to turn now to slide number two. This shows you our consolidated results for the quarter. To summarize fourth quarter results net revenues fell 13% year over year and 66% sequentially. Expenses were down 5% year over year.…

(Operator Instructions) Your first question comes from Mike Mayo - Deutsche Bank

Can you elaborate more on Citi Holdings? I understand that helps you focus more on risk management, maybe accelerate some dispositions, maybe helps you save some expenses and really gets the firm focused on what’s core and what’s not core. Is this a step toward any eventual spin off or will there be additional capital raised so you can take mark downs? How far beyond are you going then simply separating out the bad stuff into a new structure?

As I said before this is a managerial separation and that’s where we’re starting and we believe there’s a lot of value in clarifying focus on these things and having them managed in a way to harness value. What I also said we are working on getting this separation done as quickly as possible. It may translate into us thinking through legal and tax and other implications or legal structures but that’s now where we are today. It could open up options but I want to be very clear that we’re doing this in a way that takes into account the interest of all of our stakeholders including debt holders, preferred holders and common holders.

Of the $850 billion of assets $300 billion is the ring fence assets and the rest of it if you could just break it down in the major chunks by assets?

I will, and if you have a little of patience when we get to the Citi Financial Services day you’ll have a lot of information.

To be clear, you said Citi Holdings would include Consumer Mortgages, Private Label, Credit Cards and then the banking asset management business.

Not banking, brokerage.

That includes all the subsets?

Yes, it includes all of that that is correct.

Your next question comes from John McDonald – Sanford Bernstein John McDonald – Sanford Bernstein: A question on the covered asset pool will you use normal loan loss reserve accounting for that or it seems like you have a $9.5 billion reserve for those loans. As losses start coming in will you start drawing down that reserve?

No, we’ll have a normal loss reserving against this pool. Obviously over time as we exhaust the first loss associated with these assets and actually work through that and we have no exposure on the remaining amount of assets then the asset reserve that we have remaining against the assets against which we don’t have any loss exposure comes into play and allows us to use some of that loan loss reserve. For the initial period here hopefully we don’t go through that $30 billion. For the initial period it will be just normal loan loss reserving against that portfolio. John McDonald – Sanford Bernstein: That $9.5 billion you’ll keep that and provide as you would as if they weren’t covered?

That’s correct. John McDonald – Sanford Bernstein: Under the new structure would there be any change in the scope for the investment bank under the separation under Citicorp, risk activities, the scope of activities?

I talked about that briefly particularly in the sales and trading business I took you through the facts that our focus is going to be much more streamlined, market maintaining, prop trading only where we do have the right teams and really in advantage. Overall, effort to manage it with a much smaller amount of assets compared to where we’ve been. All that focus is still there. Don’t forget the true distinctiveness of our corporate investment banks comes from the multi-national clients we have around the world. Therefore we’re going to have an increased focus on some of the larger companies that need our services even more. The overall focus is that our distinctiveness is our globality and we want to serve those clients that value it most. John McDonald – Sanford Bernstein: Aside from the write downs and we know it was a difficult quarter for everybody could you give us a little bit of color on the core trends at your investment bank this quarter where you saw signs that maybe you’re getting some market share with the dislocation of the investment banks?

There are frozen ponds on both of those. There are certain businesses that actually did extremely well around the world. Then there were others that were challenged because the market conditions. You know which ones they are but things like our emerging market businesses did extremely well particularly in FX areas etc. By and large, what I will say to you is that this is an environment where a lot of clients need a lot of things and a lot of services and we’ve been lucky enough that they’ve been turning to us in investment banking. Those dialogues continue to be extremely active. We’ve benefited by that. John McDonald – Sanford Bernstein: Are you going to be restating your financial supplement and the way you present yourself in the near term will we get a new update on how you look at yourself managerially differently?

We are. We know you look forward to having a change in the supplement layout. We apologize for making that change but we really do think it’s very fundamental to the understanding of the company to split it along the lines of Citicorp and Citi Holdings. By the time we report at the end of the second quarter we hope to have made that split in our accounting. John McDonald – Sanford Bernstein: By the end of the second quarter?

By the end of the second quarter, correct.

Your next question comes from Guy Moszkowski – Bank of America - Merrill Lynch Guy Moszkowski – Bank of America - Merrill Lynch: I want to revisit a question that came up a couple minutes ago but maybe ask it a little differently. As you split this managerially and people start to think about the core businesses versus what will over time be managed down or separated it seems to me that it does highlight for people the need for capital for both and with, as you pointed out, your TCE down to about $29 billion this quarter notwithstanding the fact that some of it’s the OCI stuff that you talked about and there is some new capital rolling in over the next couple of years. It does seem thin and it seems basically as if all of that capital needs to be directed towards Citi Holdings and it kind of articulates the need for capital for the ongoing businesses. Do you have any capital raising plans? How do you think you can avoid that type of thought process for people?

The first thing I would say is that it’s always better to have more capital than less capital in general terms. We clearly think about it that way. We believe that we have very strong Tier 1 capital. As Vikram said in his introductory comments we view the Tier 1 capital that we have received from the Government as the primary way that we think about our capital and it obviously provides us a bridge as we increase the amount of tangible common equity that we have. If you think about these businesses there’s a very strong deposit base associated with the left hand side or with the Citicorp side of this entity. Then obviously you have asset rich businesses that are part of Citi Holdings. If you think about how this could evolve over time and if you think of Smith Barney as an analog for the kinds of things that could happen on that side of the business there are ways by focusing on these assets that we could generate capital, we could generate capital in the case of Smith Barney without taking a material impact on our earnings going forward at least based on the projections that we have done so far. We’ve made pretty good progress in reducing assets. Since we announced the legacy asset pool back in May I think we’ve reduced the total legacy assets by about $160 billion or something like that. That was roughly 25% of the total. A significant percentage of that total came down over the course of the last seven months and we’re going to do the same thing on those assets that are in the special asset category. Finally I would say that some of these asset categories simply roll off with time. You’ve got mortgages here, you’ve got auto loans here, you’ve got student loans here, and you have categories on that right hand side that mature with time. We think we’ve got a very strong capital base today. We think we’ve got a good plan for how to think about the business going forward. We think better transparency about the business is always a plus and you’re going to have better transparency about the individual components of the company with both having a very clear plan for how we’re going to manage them. Guy Moszkowski – Bank of America - Merrill Lynch: Have you begun exploring the potential sale of Primerica or is that a process that presumably only just now gets started.

We never talk, as you know, about what we have with individual businesses. What I can tell you is that’s a terrific business. It’s got a great leadership team. We value Rick and John enormously and the contribution that they make to the company. That’s a great business. There are other great businesses in the Citi Holdings franchise. It includes Nikko cordial; it includes our Citi Financial business in North America. There are some really outstanding businesses in Citi Holdings. We’re in no rush to necessarily separate ourselves from these businesses but we clearly have a long term plan and today is the first step in the process of clarifying how the company evolves over time. Guy Moszkowski – Bank of America - Merrill Lynch: I know you did explain it but there where a lot of things to capture I’d love it if you could explain how you had a $2 billion positive value adjustment on Structured Liabilities when your spreads actually narrowed?

I probably had you misunderstand me a little bit. Let me explain exactly what happened. As regards the normal derivative contracts, I’ll start with that then I’ll move to the second piece. Regarding our normal derivative contracts we had an overall loss there because the spreads on our own CDS widened out and the spreads on assets also widened. The combination of those two things together contributed to a higher loss. On our own debt we have transitioned the way we are calculating the credit value adjustment to utilize our cash bond spreads. Our cash bond spreads were significantly narrower in the quarter. As a result of that you can see that on the chart that I showed in the deck we have the $2 billion pick up. Guy Moszkowski – Bank of America - Merrill Lynch: On the Lyondell reserve the $1.2 billion that’s obviously a pre-tax number isn’t that less than what you said in the press release last week?

I believe that’s the same number but we’ll double check and let you know. Guy Moszkowski – Bank of America - Merrill Lynch: The net interest margin improvement that you talk about I was wondering if you could go over the sources again because is it primarily within S&B when you look at it on a business line basis because I’m certainly having trouble seeing it when I look at the consumer unit.

Yes, it is primarily in S&B. There was some yield compression as you property point out. That was offset by the benefit that we got from lower funding costs. There was the lower funding cost that we’ve now had happen throughout the course of this quarter and the net of that lower funding cost delivered the wider net interest margin for the quarter.

Your next question comes from Meredith Whitney – Oppenheimer Meredith Whitney – Oppenheimer: Had you done anything differently this quarter with your charge off, meaning did you sell them early, have you been working them out? The recovery rate dropped again and that’s an industry wide problem but I was wondering if you were doing anything different with that?

We haven’t done anything differently with our charge off rate methodology. Meredith Whitney – Oppenheimer: No, in terms of how you’re managing the charge off. I’m talking accounting I’m talking about an operations standpoint.

Operationally we’re doing a lot. We’re doing a lot on loan modifications on the mortgage portfolio. We’re doing a lot with credit card customers. There’s a very significant effort within the company. I think Vikram used the term to try and bend the curve that is to try and have a positive influence on where we think loss rates would go over time. Those loan modification programs obviously could be having the impact that you’re seeing. Meredith Whitney – Oppenheimer: I’m referring to, in loan modifications in terms of cram downs or the loan modifications because that’s still working out as far as I understand. I’m talking about in terms of cards, are you working these loans out yourself or are you using third party agent?

In general we work these loans out ourselves. It depends on where a loan is in its life. I don’t know the specifics of the detail here. Generally we work these loans out ourselves. There are certain loan categories when they get to be very, very old and past due then we occasionally bring in third parties or sell these assets to third parties that kind of activity takes place. Meredith Whitney – Oppenheimer: Of the things that are in the Holding company specifically the private label portfolio anything up for sale, is that a good understanding?

Here’s the way I would think about it. I would put it in the context of what I just said. There are some very good assets in the Citi Holding side of the portfolio, assets that we feel very positively about. I think Vikram used the terms that we’re not in a rush to sell anything. That accurately captures this. These are good businesses that we have as part of the company. What we’ve tried to do with this is provide strategic clarity and managerial clarity for these businesses going forward. What we’re going to try to do is over time manage them to ensure that we protect the shareholders and that we enhance the value that we have for our shareholders and protect other key stakeholders like bond holders and debt holders. Meredith Whitney – Oppenheimer: Given the fact that the Government has obviously put a lot of money into the company, have they in any way said they want you to limit your risk exposure overseas and is that why loan balances have pulled back dramatically. Otherwise you’re taking on risk beyond the US and providing liquidity beyond the US consumer.

The answer to that is no. I don’t even know I would qualify that but its no.

Your next question comes from Glenn Schorr – UBS Glenn Schorr – UBS: Did the Government have anything to say about the Smith Barney decision? Was the Smith Barney deal decision solely that of Citi management team?

We made that decision, that’s clearly true. It was our decision very clearly. You know about regulated banks and financial institutions we constantly talk to our regulators. That conversation is different from decision making we made this decision. Glenn Schorr – UBS: The split is interesting between Citicorp and Citi Holdings is the main reason you’re not there yet from a tax and regulatory and legal perspective the funding and how you split out assets is that the obvious reason that that takes a lot more time?

The way I would think about it is that there’s a whole series of reasons. The first and primary reason to do this is to ensure that we have real strategic clarity about the long term destination of Citicorp. That was the first think Vikram said, have real strategic clarity about what it is. To allow those of you who follow us very closely to have a clear picture in your mind of what the structure is going to look like, what that business looks like and the characteristics of it and how attractive that underlying franchise is. There are, as you correctly point out, lots of things that would have to happen before you would ever consider having these businesses operate independently. There’s intertwined legal entities, Meredith just mentioned the private label card business, I’m sure there is combined legal entities between the various parts of our card business. All of that will take a very long time to sort out. You have to start that process at some point. What we’re doing actually today is taking the first step in that process. The first step in the process is to separate organizationally. The second step in the process is to make sure that we have the accounting separated properly. The third step in the process could lead us to do legal entity separation. Then that opens up a broad range of options for us. All being conscious during the entire time of the broad range of stakeholders that we have here; the employees, the bond holders, and the shareholders. That’s the way we’re thinking about this. Glenn Schorr – UBS: A quick thought on the loan modification bill and the overall feel for what that means for the potential to accelerate losses and then the impact on the securitization markets that you feel, if the bill gets passed in current form what that would mean?

We have been very active in loan modification for a while now. The numbers of loans that we’ve modified are quite large. Those loan modifications can vary from very minor kinds of things to much more significant factors. The impact that has on us and the way we account for it depends a little bit on where in the process you actually intervene and have the loan modified. Without putting two fine a point on it I could say that our efforts are very targeted on trying to have an impact on bending what our loan loss curve is over time not increasing that. As you can see, there have been some pretty substantial increases in our loan losses in the mortgage portfolio so we’ve got a lot of work to do there. We’re actively engaged in that and as you know are supportive of that bill. Clearly our overall effort is to try as much as we possibly can to eventually bend the curve on these losses. Glenn Schorr – UBS: At current levels, you might not want to tell me, do you have a process of being able to track that original $29 billion of first loss position in the $301 billion where that mark to market is, how much of that first loss position is starting to move through, do you have the ability to track that?

There’s going to be rigorous reporting requirements around the $301 billion as you might imagine. There is a head of this business that’s been appointed; Rick Stuckey actually runs this business. It will have normal reporting around that. We’ll share that reporting with you. Obviously the US government is very interested in that reporting. We obviously signed the agreement last night and finalized the last assets that are going to be part of that portfolio last night. We will have very specific reporting around this and that will be available to you and to others. Glenn Schorr – UBS: Is it possible to do any sort of debt for equity swap for you guys or for anybody else for that matter anywhere part of the capital structure that you can push a consolidation where you flip the script on the cap structure?

Theoretically you are aware obviously of circumstances where people have done that in the past so theoretically possible. What we described today I think is clearly how we’re thinking about the business. The way we’re thinking about our Tier 1 capital, the way we plan to manage our Tier 1 capital, the way we’re thinking about our tangible column and what we have on the horizon for managing our tangible common. That’s where our thinking currently is.

That concludes our call today. Thank you all for joining and if you have any follow up questions please feel free to contact Investor Relations.