SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 8, 1998
Citicorp
(Exact name of registrant as specified in charter)
Delaware 1-5738 06-1515595
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
399 Park Avenue, New York, New York 10043
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (212) 559-1000
<PAGE>
Item 5. Other Events.
At 12:01 a.m., Eastern time, on October 8, 1998 (the "Effective Time"),
pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated as
of April 5, 1998, between Travelers Group Inc., a Delaware corporation
("Travelers" or "Citigroup") and Citicorp, a Delaware corporation, as modified,
Citicorp merged with and into Citi Merger Sub Inc. (the "Subsidiary"), a
Delaware corporation and a wholly owned subsidiary of Travelers (the "Merger").
In connection with the Merger, the Subsidiary, which continued as the surviving
corporation in the Merger, changed its name to Citicorp, and Travelers changed
its name to Citigroup Inc. The Merger was a tax-free exchange.
As a result of the Merger, (i) each issued and outstanding share of common
stock, par value $1.00 per share, of Citicorp ("Citicorp Common Stock") was
converted into the right to receive 2.5 shares of common stock, par value $.01
per share, of Citigroup ("Citigroup Common Stock"), with cash being paid in lieu
of fractional shares of Citigroup Common Stock and (ii) each issued and
outstanding share of preferred stock, without par value, of Citicorp ("Citicorp
Preferred Stock"), of the series identified in the left-handed column below was
converted into the right to receive one share of preferred stock, par value
$1.00 per share, of Citigroup ("Citigroup Preferred Stock"), of the
corresponding series identified in the right-hand column below:
Series of Citigroup Preferred Stock
Series of Citicorp Preferred Stock Issued in Exchange
---------------------------------- -----------------------------------
Graduated Rate Cumulative Graduated Rate Cumulative
Preferred Stock, Series 8B Preferred Stock, Series O
Adjustable Rate Cumulative Adjustable Rate Cumulative
Preferred Stock, Series 18 Preferred Stock, Series Q
Adjustable Rate Cumulative Adjustable Rate Cumulative
Preferred Stock, Series 19 Preferred Stock, Series R
8.30% Noncumulative Preferred 8.30% Noncumulative Preferred
Stock, Series 20 Stock, Series S
8 1/2% Noncumulative Preferred 8 1/2% Noncumulative Preferred
Stock, Series 21 Stock, Series T
7 3/4% Cumulative Preferred 7 3/4% Cumulative Preferred
Stock, Series 22 Stock, Series U
Fixed/Adjustable Rate Cumulative Fixed/Adjustable Rate Cumulative
Preferred Stock, Series 23 Preferred Stock, Series V
Each share of each series of Citigroup Preferred Stock identified above,
other than the Citigroup Series O Preferred Stock, will be represented by
depositary shares, each representing a one-tenth interest in a share of the
corresponding series of Citigroup Preferred Stock.
As of the Effective Time, Paul J. Collins, Robert I. Lipp, Victor J.
Menezes, John S. Reed, William R. Rhodes and H. Onno Ruding have been elected as
the directors of Citicorp.
<PAGE>
As of October 8, 1998, the shares of Citicorp Common Stock held in
treasury were retired, and the outstanding shares of Citicorp Common Stock and
Citicorp Preferred Stock were converted as described above. The effect of these
transactions is an elimination of Citicorp Common Stock and Citicorp Preferred
Stock, with an offsetting adjustment to surplus, resulting in no change in the
amount of Citicorp's total stockholders' equity. Following the Merger, Citicorp
is authorized to issue 10,000 shares of common stock, par value $.01 each, of
which 1,000 shares are outstanding and owned by Citigroup, and 1,000 shares of
preferred stock, par value $1.00 each, of which none are outstanding. Citicorp's
stock repurchase program was terminated immediately prior to consummation of the
Merger.
On October 8, 1998, Citigroup issued a press release, a copy of which is
annexed hereto as Exhibit 99.01 and incorporated herein by reference.
Certain of the statements contained in the press release that are not
historical facts are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act. Citigroup's actual results may differ
materially from those included in the forward-looking statements.
Forward-looking statements are typically identified by words or phrases such as
"believe," "expect," "anticipate," "intend," "estimate," "are likely to be," and
similar expressions. These forward-looking statements involve risks and
uncertainties including, but not limited to, the following: changes in general
economic conditions, including the performance of financial markets and interest
rates; customer responsiveness to both new products and distribution channels;
and competitive, regulatory, or tax changes that affect the cost of or demand
for Citigroup's products.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits:
Exhibit No. Description
- ----------- -----------
99.01 Press Release dated October 8, 1998
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CITICORP
(Registrant)
By: /s/ Roger W. Trupin
-------------------
Roger W. Trupin
Vice President
and Controller
Dated: October 8, 1998
Exhibit 99.01
[CITIGROUP LOGO]
PUBLIC INFORMATION
For Immediate Release
October 8, 1998
CITIGROUP (CCI) TO BEGIN TRADING TODAY,
FOLLOWING COMPLETION OF MERGER OF CITICORP AND TRAVELERS GROUP
COMPANY DISCLOSES IMPACT OF ECONOMIC TURBULENCE ON THIRD QUARTER EARNINGS
New York - Common shares of Citigroup Inc. (NYSE: CCI) begin trading today
with the merger of Citicorp and Travelers Group Inc. taking effect before the
opening of business.
"The new company has an unparalleled capacity to serve the financial needs
of customers around the world with a broad array of products and services
through multiple distribution channels," said John S. Reed and Sanford I. Weill,
who share duties as Chairmen, in a statement on the completion of the merger.
"The recent economic turbulence in the world further underscores our shared
conviction in the strategic rationale of the merger."
"Today major financial companies need not only customer, product and
geographic diversity but also unprecedented capital strength to deal with the
economic upheavals that can occur. Citigroup is unmatched in possessing all
these resources, including $44 billion of stockholders' equity. They are the
cornerstone of our stability and reliability for customers around the world.
They also enable us to deliver exceptional value to shareholders over time,"
their statement continued.
The Chairmen said that conditions in financial markets would cause a
decline in the new company's combined net income for the 1998 third quarter, to
be reported later in the month. They said that results would be better than last
year for the Citibank consumer business and the Travelers Group insurance and
consumer activities, reflecting continued strength in those areas as well as in
Asset Management. But, they noted, the almost unprecedented instability of
global fixed income and emerging markets had a severe effect on both Salomon
Smith Barney and Citibank's corporate banking activities in the quarter.
The merged company, they estimated, will have net income of approximately
$700 million for the 1998 third quarter, compared with pro forma net income in
the same 1997 quarter of $1.5 billion ($2.1 billion excluding a 1997
restructuring charge) for the two predecessor companies.
-more-
<PAGE>
CITIGROUP (CCI) TRADING BEGINS OCTOBER 8, 1998
Among the factors affecting earnings in the quarter, they cited:
Salomon Smith Barney will report a net loss in the quarter of
approximately $325 million, reflecting after-tax losses of
approximately $700 million related to Global Arbitrage and Russia
credit losses, which includes amounts previously announced.
Citibank's corporate banking will report a net loss of approximately
$130 million largely due to approximately $240 million in after-tax
losses related to Russia, which includes amounts previously
announced, as well as approximately $100 million related to marking
to market fixed income inventories. Revenues understandably were
also running lower than normal. Venture capital and the sale of
Brady bonds, which have contributed significantly in past quarters,
were essentially break-even.
They also noted that the unrealized appreciation in the Travelers
Insurance portfolio increased to approximately $2 billion after taxes in the
quarter.
The Chairmen indicated: "Our focus is on bringing the two companies and
their managements together around a fully integrated 1999 business plan. On a
preliminary basis - subject to all the uncertainties of market conditions -- we
expect 1999 core business results to be substantially above the pro forma
actuals for both 1998 and 1997, driven by strong performance in the consumer and
insurance franchises. The corporate businesses are likely to be operating in
choppy conditions, but their core franchises remain strong. We will continue to
reduce risk and associated assets as appropriate, but to stay in positions that
represent good value in these markets as we work to integrate the
organizations."
"Because the near-term economic outlook remains uncertain and third
quarter results are disappointing, the path we must take is clear," they said.
"We will expand our reach and increase our efforts to serve our customers better
by taking every opportunity to cross-market products and services throughout our
distribution networks. We will continue to build those businesses that provide
our company with a stream of predictable and recurring earnings, to mitigate the
effects of the inevitable business cycles and geographic disruptions. We will
also manage our risk vigilantly on a worldwide basis and strengthen control of
operating expenses, so that we deliver on the promise of the unique global
franchise that is Citigroup. We are convinced that its value and power will
become increasingly evident," they stated.
The Chairmen added they would recommend to the Citigroup directors, who
will hold their first meeting on October 20, that they declare an initial
quarterly dividend of $0.18 per common share to be paid in November ($0.72 on an
annual basis).
-more-
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CITIGROUP (CCI) TRADING BEGINS OCTOBER 8, 1998
The common shares of Citigroup will trade on the New York and Pacific
Stock Exchanges. As a result of the merger, Citicorp shares are converted into
Citigroup shares at the ratio of 2-1/2 Citigroup shares for each Citicorp share;
each Travelers Group share equals one Citigroup share.
Citigroup businesses produce a broad range of financial services -- asset
management, banking and consumer finance, credit and charge cards, insurance,
investments, investment banking and trading -- and use diverse channels to make
them available to consumer and corporate customers around the world. Among its
businesses are Citibank, Commercial Credit, Primerica Financial Services,
Salomon Smith Barney, Salomon Smith Barney Asset Management, Travelers Life &
Annuity, and Travelers Property Casualty.
The merger followed approval by the Board of Governors of the Federal
Reserve System, as well as approvals by relevant banking, insurance, and other
regulatory authorities and approvals by the stockholders of both companies.
# # #
Media contacts: Jack Morris (212) 559-4285
Dick Howe (212) 559-9425
Investor contacts: Bill Pike (212) 816-8874
Sheri Ptashek (212) 559-4658
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