Welcome to Citigroup’s first quarter 2010 earnings review with Chief Executive Officer Vikram Pandit and Chief Financial Officer John Gerspach. Today’s call will be hosted by John Andrews, Head of Citi Investor Relations. We ask that you please hold all questions until the completion of the formal remarks at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time.

On our call today are CEO Vikram Pandit will speak first. Then, John Gerspach, our CFO will take you through the earnings presentation which is available for download on our website www.Citigroup.com. Afterwards, we would be happy to take your questions. 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.

You’ve seen our results. They were clearly helped by strong capital markets and improving credit but net income of $4.4 billion also reflects the hard work we’ve done to put the company in order. We’ve been completely focused on serving our clients’ needs and that has helped drive revenue growth. We retained our expense discipline and we continued to reduce the risk and size of many of our legacy portfolios. The results of these efforts combined with an improved operating environment are reflected in these first quarter results. $25.4 billion in revenue and operating costs of $11.5 billion, net credit losses were down for the third consecutive quarter, non-performing assets were down for the second consecutive quarter and we had no net build or net release of our loan loss reserves. Securities and banking produced a net income of $3.2 billion. As you know, we have significantly restructured this business and today I believe we have the right business model and we’re executing well. I see further opportunities in securities and banking in the future. GGS made almost $1 billion of net income this quarter and continues to operate at or near record levels despite the low interest rate environment. International regional consumer banking business also made almost $1 billion of net income. Revenues were up 11% versus a year ago and credit costs declined by 47%. We like the client momentum and the credit trends we see in our international markets. North America regional consumer banking was about breakeven as credit losses on cards remained high. Our core businesses in Citicorp produced over $5 billion of net income this quarter earning attractive financial returns. Our non-core businesses in Citi Holdings loss $887 million. Those losses were far less than the $2.6 billion loss last quarter and the $5.5 billion…

Let me start with our quarterly results on Slide Two. As you know, results for the first quarter of 2010 include the impact of the adoption of FAS 166, 167 which resulted in the consolidation of certain off balance sheet assets including securitized credit card receivables. Therefore, GAAP results for the first quarter should be compared to managed numbers for prior quarters. In the first quarter we reported revenues of $25.4 billion. Operating expenses were $11.5 billion, down 6% from the fourth quarter. Provisions for credit losses, claims and benefits were $8.6 billion consisting primarily of net credit losses of $8.4 billion. Net credit losses were down 16% from the fourth quarter on a comparable basis and we recorded a modest net loan loss reserve release of $53 million in the first quarter. We reported net income of $4.4 billion or earnings per share of $0.15 based on average diluted shares outstanding of $29.3 billion. This $4.4 billion represents the highest quarterly net income since the second quarter of 2007. On Slide Three, we summarize the balance sheet impact of FAS 166, 167. As of January 1, 2010 we consolidated approximately $137 billion of assets and $146 billion of liabilities on to our balance sheet, the majority of which was related to credit card securitizations. This translated to $10 billion of additional risk weighted assets. We also added $13.4 billion to our loan loss reserves which decreased our tangible common equity by $8.4 billion and in total these adjustments lowered our Tier-1 common ratio by 138 basis points. Importantly, we were able to largely offset the impact on TCE and Tier-1 common during the quarter. On Slide Four, we show the results for Citicorp and Citi Holdings. Citicorp reported $5.1 billion of net income in the first quarter while the…

This is an important quarter for us, we’ve come a long way. The most important thing is that we’re continuing to execute well across the entire company and that is due to the great people of Citi who have worked extremely hard. We have more work to do, particularly to deliver on the potential of this great franchise and that’s exactly what we’re going to be focused on. With that operator, can we open up the lines to questions.

Guy Moszkowski – Bank of America Merrill Lynch: Guy Moszkowski – Bank of America Merrill Lynch: My first question is on expenses. You did have another significant decline but it was only about 1% lower in aggregate terms than first quarter a year ago. After the first quarter expenses did rise off that level for the remainder of the year. Where should we look for the expense run rate to be? Where are you finding any further cut backs that we’re seeing here in the first quarter? And, maybe you can give us a sense for what sort of compensation accrual rate you are using in securities and banking as a percentage of revenues?

I’ll try to take it from the top down. If you take a look at the expense run rate, what is being impacted by it, I think you clearly see declines in Citi Holdings which you should expect as we continue to work our way out of those assets. We are, as I think we’ve been mentioning for the past couple of quarters, continuing to invest in our Citicorp businesses. On a going forward basis, I think that for the balance of the year you can expect that you’ll continue to see some rise in Citigroup expenses and how much Citi Holdings comes down depends really upon additional actions we would have against these assets. But, given where we are right now, I would say that you could expect expenses to sort of stay within the $11.5 to $12 billion range for the balance of the year. Guy Moszkowski – Bank of America Merrill Lynch: Now, you alluded to some of that being driven by a further reduction in assets by holdings and actually a follow up question that I have is in special asset pool you did complete $6 billion in asset sales and your assets fell I think $12 billion on a pro forma basis. But, it was a quarter in which pricing on distressed assets seemed to improve quite a bit and obviously you reflected some of that on a mark-to-market basis. I wonder why we didn’t see more asset sales given the improvement in the market. Are there sales under negotiation where we might expect to see a pickup in asset dispositions in the second quarter?

You can sort of assume that we are active with all of our assets in City Holdings, particularly that with the special asset pool so there are always discussion underway. Obviously, each quarter is somewhat dependent upon what we can actually close on in the quarter as well as the depth of markets to accept various types of assets. The marks that you noted, those marks also reflect some realized gains. For instance, you’ll note none of the appendixes that we provide to the deck, I think the numbers – we took the subprime asset marks up by about $800 million this quarter. But, somewhere between 15% and 20% of that number actually represents realized gains so it’s a combination of both marks and realized gains in all of these portfolios. Guy Moszkowski – Bank of America Merrill Lynch: Would you say that the depth of markets and the marketability of some of those assets increased towards the end of the quarter? Again, just trying to look forward and see whether we might expect an acceleration of disposition as the year progresses?

I can’t comment Guy as to whether or not something improved in the last two weeks of March, declined in the first two weeks of February. As I said, you can expect that we are actively working all of the assets at Citi Holdings. Guy Moszkowski – Bank of America Merrill Lynch: Then I’m just going to ask one final question on the sort of central corporate treasury portfolio in the corporate and other unit. You had about $350 million of net rev, most of the swing obviously as you pointed out came from the TARP costs not being there as they were in the fourth quarter but we have seen at JP Morgan significant realized gains on that central treasury portfolio over the last couple of quarters as they batten down the hatches for higher rates. Are you doing something similar to try to reduce your exposure to rates? And, was there within that unit in the quarter significant realized gains from taking some of that rate risk off the table?

You can count the fact that we always monitor our exposure to interest rates but there was not some unusual amount of gains that resided in corporate other for this quarter.

Your next question comes from Glenn Schorr – UBS. Glenn Schorr – UBS: Could you provide any other color on card repricing? I mean I kind of know what it is conceptually but just curious on average rate going from what to what or dollar impact on the quarter on net interest income on card?

I’m trying to think about it going from what to what. I mean we have repriced the entire now branded cards portfolio and our rates have gone up across the portfolio. I don’t have in my head right now Glenn, what the increase is overall. It’s just in general it’s a pricing up and don’t forget as we were pricing up we also introduced the fact that consumers who made their payments would then see in effect a rebate of their interest so there’s a lot of ups and downs across the portfolio but I just can’t give you on average what the rate increase was. Glenn Schorr – UBS: How about revenue contribute in the quarter because you did note it but is it big, small, medium?

Well, it was enough to offset the impact of the Card Act in the first quarter so the net of the two was clearly a plus in this first quarter. Glenn Schorr – UBS: Normally not a question that I focus on but 20% tax rate, historically it’s much higher than that but you have a huge DTA that people should feel better about. How do you think about the tax rate on the go forward?

I think as we’ve seen for the last several quarters, our tax rate right now is still being impacted by the geographic distribution of our earnings and our earnings now are still more concentrated in low tax rate geographies and so we’re getting an increased benefit from there. Some 20% arguably is not a rate that we would think would be sustainable over time. I think that as we work our way through this transition period, somewhere out in the future you would expect the more normalized tax rate for us to be in the 28% to 29% range. Glenn Schorr – UBS: IB revenues were great for all the reasons that you mentioned but actually expenses were down. I don’t know how to read that because in the first quarter usually comp accrual would kind of go in line with the direction of revenues. Fat chance on this but I’ll ask it anyway, anyway to distinguish between marks versus just strong flows in revenues booked?

No, I’m not going to comment on that. But, obviously the market volumes were up, our customer flows I thought were excellent this quarter and our underlying comp accruals reflect the performance of this quarter. Glenn Schorr – UBS: It’s different though, you’re saying it reflects but revenues are up huge and expenses were flat. It is a break from the past when you’ve had huge flows especially customer related flows, usually comp would drift up with it.

I think if you take a look certainly year-on-year our expenses have been up. I probably should mention that in the first quarter we did have in this business a release of historic litigation reserve which tended to drive the expenses down below the fourth quarter levels and maybe that’s what you’re seeing in the numbers. Glenn Schorr – UBS: Last quickie, do you have any Wells’ notices outstanding? I feel like I’m suppose to ask every company I cover that now.

I think Glenn I probably covered everything that we’re going to say by my opening comments.

Your next question comes from Betsy Graseck – Morgan Stanley. Betsy Graseck – Morgan Stanley: A couple of questions, ones on I just want a clarification on the Card Act impact, you made $400 to $600 pre-tax this year versus ’09. How much of that is in the run rate in 1Q?

Obviously the impact of Card Act will increase as the year goes on. The $400 to $600 is a net impact, so net of the impact of our repricing. The first quarter as I mentioned, we actually saw a slightly increase, a benefit where our pricing, our change in terms impact outweighed the impact of Card Act in the first quarter. What you’re going to see for the remaining quarters is Card Act will eventually catch up and then probably over take the impact of the increased pricing. Betsy Graseck – Morgan Stanley: But you didn’t indicate how much the benefit was on a net basis in the 1Q, right?

No, I didn’t. All of these things if you take a look at the static portfolios, they’re somewhat tough to lay out with any sort of specificity. So I think the best guidance we can give right now is that on a full year basis, our expectation is exactly what we’ve said, the net impact of all of this will be about a $400 to $600 million negative impact on revenues. Betsy Graseck – Morgan Stanley: Then on common Tier-1 ratio, up very nicely relative to the FAS 166, 167. Then you also indicated that you’re shifting from cash in to higher yielding assets at the margin, I just want to kind of square the circle here and understand how you lowered the RWA in the quarter at the same time were able to reinvest cash in to higher yielding assets. Can you just give us some color as to what was the back drop to all of that?

Don’t forget the risk weighted assets are exactly what they say they are, risk weighted. So as our loan portfolios continue to decline you’re taking off 100% risk weighted assets and so even substituting them with high quality interest earning assets you can still get a pick up or a decline in your net risk weighted assets. Betsy Graseck – Morgan Stanley: Cards is what, 100% risk weighted and mortgage is 50%?

Well, it also depends upon the mortgage, and where it is, and aging and everything else. Betsy Graseck – Morgan Stanley: Could you just give us a little bit of color as to how much more room you have for reinvesting the cash in to the higher yielding assets? How far along in that process do you feel you are?

Well, I think some of that really depends on obviously how our cash generation continues to be paced. That’s also somewhat driven by our ability to then actually grow more earning assets in our Citicorp businesses. I personally would think we would be more focused on growing those interest earning assets in the near future as the most natural outlet for increased cash that we would generate. Betsy Graseck – Morgan Stanley: Lastly, when does capital management start to kick in with 9.1% common Tier-1? What are the triggers that you see for dividend reinstatement or share buybacks?

I haven’t heard dividend reinstatement in a while. I have to absorb that for a second. Right now, I think what everybody is waiting for is some sort of clarity as to where the capital requirements settle out. I think that’s probably an answer you’re getting from every institution at this point in time. Betsy Graseck – Morgan Stanley: That was the BIS stated out there today, or over the weekend, what everybody’s commentary was so I read through your commentary that Citigroup indicated. There’s obviously a lot of moving parts and challenges to the BIS or questions with regard to how they’re triangulating. Maybe you can just give us a sense as to what you think your common Tier-1 ratios are that you feel you need to run the business and absorb the risk in the business?

Well, right now we’re very happy at 9.1% and if we continue with the performance, any sort of performance like this, you’re going to see our Tier-1 common ratio grow. Betsy Graseck – Morgan Stanley: Right, but you have to triangulate against returns versus capital. I guess you’re not going to give an answer at this stage.