U.S. 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) July 19, 1999
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Citigroup Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-9924 52-1568099
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
153 East 53rd Street, New York, New York 10043
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(Address of principal executive offices) (Zip Code)
(212) 559-1000
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(Registrant's telephone number, including area code)
<PAGE>
Citigroup Inc.
Current Report on Form 8-K
Item 5. Other Events.
On July 19, 1999, Citigroup reported core income of $2.48 billion for the
second quarter ended June 30, 1999, up 21% from $2.05 billion in the
comparable 1998 period. Core income was $0.73 per basic share and $0.71
per diluted share, up 24% and 25%, respectively, from $0.59 per basic
share and $0.57 per diluted share in the 1998 quarter. Business income
rose 34% over the prior year quarter. Fueling this second consecutive
quarter of double-digit earnings growth was a 40% increase in income from
the Global Consumer business, a 26% increase in the contribution from the
Global Corporate and Investment Bank, and a 22% increase in Asset
Management income. With returns on common equity over 23% for the quarter
and the first half, the Company is well-positioned to exceed its goal of a
20% return for the year.
Business revenues for the quarter rose 12% from the prior year period to
$14.68 billion. Revenues from the Global Consumer business increased 12%
and Asset Management revenues 16%, while revenues from the Global
Corporate and Investment Bank increased 11%.
Net income for the quarter was $2.45 billion, or $0.72 per basic share and
$0.70 per diluted share, compared to $2.24 billion, or $0.65 per basic
share and $0.63 per diluted share, in the comparable period last year.
Included in net income is a net impact of $29 million from
restructuring-related items, versus a $191 million restructuring reserve
release in the 1998 quarter.
John S. Reed and Sanford I. Weill, Chairmen and Co-Chief Executive
Officers of Citigroup, said, among other things: "As of the end of the
second quarter, we already have taken the actions necessary to realize
approximately $1.7 billion in cost reductions, and we anticipate exceeding
our stated target of realizing $2 billion in annualized pre-tax expense
savings by year-end." This paragraph contains statements which are
forward-looking within the meaning of the Private Securities Litigation
Reform Act. See "Forward-Looking Statements."
<PAGE>
Six month results
Core income for the first six months of 1999 rose 16% from the 1998 period
to a record $4.89 billion. Core earnings per share were $1.44 per basic
share and $1.40 per diluted share, up 18% and 20%, respectively, from the
$1.22 per basic share and $1.17 per diluted share reported in the prior
year period. Business income increased 33% from last year's first half.
Net income totaled $4.81 billion, a 9% increase from $4.40 billion in the
comparable 1998 period, reflecting the net impact of ($82) million in
accounting changes and restructuring-related items versus a $191 million
restructuring reserve release in the prior year.
The Company's franchise strength is supported by its strong balance sheet
and 9.2% Tier 1 capital ratio. Total assets were approximately $690
billion at quarter-end.
GLOBAL CONSUMER
2nd Quarter Core Income: $1.11 Billion, Up 40% from $792 Million in 1998 Period
Dynamic growth in core income for the Global Consumer business, which
includes North American Banking/Lending, International and Insurance, was
driven by expansion in all markets. North American Consumer
Banking/Lending performance was particularly strong, as earnings from
Cards increased 96% and Citibanking earnings nearly tripled from prior
year levels.
Revenue growth of 12%, together with increased productivity and reduced
expenses, contributed to the strong earnings performance. Controllable
expenses, excluding higher marketing expenditures and the effect of
acquisitions, have declined 8% since the expense reduction programs were
initiated in the third quarter of 1998, and the group is well on its way
toward realizing its year-end targets. As an example, within the past
year, full-time and equivalent positions have been reduced by
approximately 5,500, primarily in North America Consumer Banking and Latin
America, excluding acquisitions. Meanwhile, the group continues to invest
in new business initiatives, expansion in Japan and Eastern Europe, and
the global Card operation. During the quarter, Citigroup entered into a
co-branding alliance with Cathay Pacific Airways and launched its bankcard
product in Hungary and Guam.
North America Consumer
* Banking/Lending's core income rose 81% in the quarter on a 10%
increase in revenues.
- Core income for Cards increased 96% to $267 million,
reflecting core business expansion and the contributions of
the acquired UCS and Mellon portfolios since last April.
Revenues rose 10%, driven by risk-based fee increases, a 15%
rise in sales volume and 13% growth in receivables in U.S.
bankcards over the prior year quarter. Receivables reached
$70.3 billion and accounts rose 4%, or 1.7 million. Credit
continued to improve, as net charge-offs as a percentage of
average receivables in the U.S. bankcard portfolio fell to
4.63% from 5.65% in the prior year period and 4.72% in the
1999 first quarter.
- Citibanking core income increased 186% to $106 million in the
quarter. Continued successful implementation of cost reduction
initiatives drove a 25% or $109 million decline in total
expenses from the prior year quarter, including an $82 million
reduction in fixed expenses. Revenues rose slightly to $532
million,
<PAGE>
excluding the impact of a special item related to a lease
buyout in the 1998 quarter. Higher fees from the sale of
investment products and continued growth in client accounts
were offset by lower yields versus the year ago period.
- Commercial Credit's core income grew 45% to $87 million in the
quarter, with revenues rising 26% to $410 million. Receivables
rose 29% from the 1998 period as a result of healthy business
flow at Commercial Credit branches, cross-selling of
Commercial Credit products through Primerica distribution
channels, and the addition of certain U.S. and Canadian
branches acquired from Associates First Capital this year. The
total number of Commercial Credit branches rose to 1,177 from
1,005 last year.
- Core income from Mortgage Banking, which includes the Student
Loan business, increased 6% from the prior year quarter to $53
million. The results include the acquisition of Source One
Mortgage Services Corporation as of April 30, 1999. This
acquisition is expected to be accretive to earnings in 1999.
Higher student loan and mortgage volumes, continued
improvements in the credit quality of the mortgage portfolio
and flat expenses, excluding the acquisition, contributed to
positive overall trends.
* The Insurance sector reported a 17% increase in core income in the
quarter, despite a challenging market environment.
- Travelers Life & Annuity's income rose 36% from the prior year
period to $173 million. This was primarily attributable to
increased business volume and particularly strong investment
income. The business achieved double-digit growth in annuity
account balances and direct periodic life and long-term care
premiums, reflecting both greater popularity of these products
with an aging American population and strong momentum from
cross-selling through Primerica and Citibank branches.
- Primerica's core income rose 10% to $113 million as a result
of growth in life insurance in-force, record contributions
from cross-selling mutual funds and variable annuities, and
increased investment income. The proportion of Primerica's
income related to cross-selling was approximately 21% in the
period, contributing to the revenue growth of affiliated
companies. Less favorable mortality was partially offset by
disciplined expense management.
- Travelers Property Casualty's Personal Lines core income was
$79 million, down $2.5 million from the prior year quarter.
Catastrophe losses were $10.1 million higher. Lower prior-year
favorable reserve development and higher loss ratios in the
Travelers SECURE business also affected second quarter
results. The statutory combined ratio was 94.8% compared to
92.9% in the 1998 quarter. Net written premiums increased 9%
over the prior year, driven by higher production through all
distribution channels, with independent agents accounting for
more than 40% of the growth. During the period, the company
realigned its underwriting standards for its Travelers SECURE
product to offset a more competitive rate environment and
generally lower margins in this business. These changes should
improve future profitability.
International Consumer
The International Consumer business reported a 25% increase in core income
from last year's second quarter to $303 million, on 19% growth in
accounts. Deposits rose 17% versus the 1998 period.
* Asia Pacific core income rose 26% for the quarter to $108 million,
while revenue increased 19%. Accounts and customer deposits
continued to grow at rates of 26% and 17%, respectively, across the
region, and Japan continues to post strong performance. The
provision for credit losses increased by $25 million, or 39%, from
the 1998 quarter,
<PAGE>
the result of economic conditions and increased asset volumes, and
was flat with the 1999 first quarter.
* Europe, Middle East and Africa (EMEA) reported a 39% rise in core
income in the quarter to $78 million, led by strong performance in
all areas, particularly investment products and cards. Revenues rose
8% in the quarter, with strong contributions from Germany and
Greece. Expense levels were unchanged from the prior year quarter.
* Latin America core income increased 19% from the comparable 1998
quarter to $44 million, as the impact of acquisitions offset
increased write-offs in certain countries. Revenues rose 36% in the
quarter, as a result of the positive impact of recent acquisitions
and a rebound in earnings from the 33%-owned Brazilian affiliate
Credicard. Expenses rose 22%, although efficiency programs resulted
in a 3% decline in expenses, excluding the impact of acquisitions.
The impact of foreign currency translation decreased growth in
revenue and expenses by 10% and 7%, respectively. The region
experienced weaker credit trends, primarily in Argentina and Chile,
as the provision for credit losses rose from $61 million in the year
ago quarter to $135 million.
* The Global Private Bank, which serves high net worth individuals
around the world, recorded core income of $73 million, 14% higher
than in the second quarter of 1998. The increase in earnings was
driven by revenue growth, particularly in the U.S. and Japan.
e-Citi
Losses from e-Citi grew 19% to $44 million, as the Company continued to
invest in Internet-based initiatives. Consistent with its mission to
develop Internet financial services and electronic commerce applications,
the Company will launch multiple Web-based products this year, including
an electronic wallet, an electronic payment service that will facilitate
secure financial transactions on-line.
Other
Other consumer business items, which include unallocated marketing and
staff expenses, increased by $19 million to a net loss of $27 million for
the quarter.
GLOBAL CORPORATE AND INVESTMENT BANK
2nd Quarter Core Income: $1.26 Billion, Up 26% from $1.00 Billion in 1998 Period
Results for the Global Corporate and Investment Bank reflect particularly
strong performance at Salomon Smith Barney, driven by strong investment
banking results and robust securities markets, as well as solid
performance from Emerging Markets and Commercial Lines. The Global
Corporate and Investment Bank won more than 50 awards in Euromoney's
annual poll of international financial institutions. Among the highlights,
the Global Bank ranked number one in Euromoney's foreign exchange poll for
the twenty-first consecutive year.
During the quarter, Salomon Smith Barney reinforced its position as the
number one underwriter of jumbo bond deals and a leading underwriter of
bonds in all currencies through its significant participation in eleven
global bond transactions of more than $1 billion. In addition, the firm
continued to make progress over last year in the league tables. The
combined efforts of Citibank's global corporate bank and Salomon Smith
Barney resulted in the completion of 67 collaborative transactions in the
quarter.
* The momentum of Salomon Smith Barney's strong first quarter
performance continued into the second quarter, with quality earnings
emanating from growth in commission income from the Private Client
group, strong investment banking fees and principal transactions.
Core business income was $610 million, a 75% increase from the 1998
quarter, on net revenues of $3.27 billion versus $2.52 billion in
the prior year period.
<PAGE>
Revenues from principal transactions, while down from this year's
record first quarter, were well ahead of last year for the quarter
and year to date, reflecting increased customer order flow.
Principal transaction revenues from equities, fixed income and
municipals were up in the quarter by 99%, 50% and 43%, respectively,
versus the 1998 period. In addition, Phibro and Global Arbitrage
were moderately profitable, after recording modest losses in the
comparable 1998 quarter.
Annualized gross production per Financial Consultant was $477,000 in
the quarter, with overall commission revenues up 16% to a record
$903 million. Client assets under control increased 18% over last
year to $852 billion. Strong investment banking revenues of $762
million compared to $633 million in the 1998 quarter and $655
million in the first quarter of 1999. Merger and acquisition fees
were a particularly strong contributor to these results, as were
equity and high grade debt underwriting. Asset management and
administration fees, exclusive of those reported in the Asset
Management business segment, also increased substantially by 16%
over last year, reflecting continued increases in assets under
fee-based management.
Total non-interest operating expenses increased by $327 million in
the quarter, largely reflecting increases in compensation and other
production-related expenses that vary with revenue. Compensation and
benefits as a percentage of net revenues was 52.2%, down from 59.5%
in the comparable 1998 period. Including the Asset Management
business segment, the compensation and benefits ratio was 49.6%,
which is comparable to that of other broker/dealers.
* Emerging Markets core income of $295 million in the 1999 second
quarter was $53 million or 22% higher than that reported for the
1998 period, as broad-based revenue growth and expense discipline
offset higher credit costs. Revenues increased 12% to $1.09 billion,
reflecting strong growth in Latin America primarily attributable to
trading and transaction banking activities. Revenues in Asia Pacific
and CEEMEA (Central and Eastern Europe, Middle East and Africa) were
essentially unchanged from the second quarter of 1998, as lower
trading-related revenue offset a higher level of securities
transactions. Business with multinational companies managed jointly
with the Global Relationship Bank grew 16% from the prior year
period and now accounts for approximately 27% of revenues in
Emerging Markets. Expenses were well-controlled as spending to
expand the emerging market franchise was essentially funded from
savings from the 1997 and 1998 restructuring actions and other
expense savings initiatives. Expenses also benefited from the effect
of foreign currency translation. Credit write-offs of $110 million
increased $31 million from the second quarter of last year, largely
because of the Middle East and Latin America, but declined $5
million from the 1999 first quarter.
* Global Relationship Banking reported core income of $158 million,
down 34% from the 1998 quarter, which included $104 million in an
after-tax gain from the disposition of real estate investments and a
related real estate recovery. Excluding these items, core income
rose 17%. Because of 1998 real estate-related items, revenues
declined 12% to $1.01 billion from the prior year, although the
business experienced strong growth in corporate finance and moderate
growth in transaction services. Omitting the second quarter 1998
items, revenues were flat. Expenses improved for the fourth
consecutive quarter and were 8% lower than in the second quarter of
last year, primarily because of business integration actions and a
decline in expenses for Y2K and EMU. The business reported
negligible net write-offs in the quarter, versus net recoveries of
$51 million (primarily real estate) in the 1998 second quarter.
* Travelers Property Casualty's Commercial Lines core income increased
16% to $201 million, reflecting favorable prior-year loss
development, continued expense reductions and lower weather-related
losses. These factors also accounted for the improvement in the
combined ratio to 105.6% from 109.8% in the 1998 quarter. Net
written premiums were down 2% from the prior year period, reflecting
the company's continued disciplined approach to underwriting and
risk management. Renewal price increases were achieved in all major
lines.
<PAGE>
ASSET MANAGEMENT
2nd Quarter Core Income: $84 Million, Up 22% from $69 Million in 1998 Period
SSB Citi Asset Management's 16% revenue growth offset continued investment
in business infrastructure. Expenses increased 11%, reflecting global
business growth and ongoing efforts to build the group's investment and
quantitative research capabilities. These efforts are more than half
completed. The segment's pretax profit margin for the quarter increased to
38.9% from 36.6% in the 1998 period.
Assets under management rose 19% to $347 billion, as growth continued
across all product categories. Institutional managed accounts grew 17% to
$97 billion, driven by cross-selling efforts with the Global Corporate and
Investment Bank and sub-advisory business in Europe, while money funds,
including institutional liquidity funds, and long-term mutual fund assets
rose 25% and 12%, respectively. The group raised $300 million in Japan
during the quarter through sales of its new CitiFunds mutual funds and
sales of Salomon Brothers mutual funds through non-proprietary channels.
Mutual fund sales through the Citibank Europe Consumer Bank were over $850
million in the quarter, $700 million of which were from new initiatives
including Citi Euroland funds.
SSB Citi Asset Management continued to gain market share in proprietary
channels. The amount of proprietary mutual funds sold through Primerica
totaled $453 million in the quarter, and they accounted for 62% of
Primerica's U.S. mutual fund sales versus 56% in the 1998 quarter. Sales
of the group's funds through Salomon Smith Barney's retail channel grew to
33% of the firm's total mutual fund sales, up from 27% in the 1998
quarter. Penetration of the private client separately managed account
category increased as well, with sales up more than 150% from the 1998
quarter.
CORPORATE/OTHER
2nd Quarter Core Loss: $144 Million, Up 10% from $131 Million in 1998 Period
The higher loss in Corporate/Other, which includes treasury expense,
corporate staff and other expenses, reflects an increase in corporate
technology and other costs, partially offset by lower corporate staff
expense, largely resulting from a 15% reduction in headcount.
INVESTMENT ACTIVITIES
2nd Quarter Core Income: $163 Million, Down 48% from $316 Million in 1998 Period
Investment Activities core income for the quarter of $163 million was down
$153 million, or 48% from the 1998 quarter. The decrease resulted
primarily from lower revenues from sales of Brazilian Brady Bonds (down
$174 million) and of other proprietary investments, partially offset by a
43% increase in U.S. venture capital revenue to $156 million.
* * *
Forward-Looking Statements
Certain of the statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. The Company'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," "target," "may increase," "may fluctuate,"
"may result in," "are projected," and similar expressions. These forward-looking
statements involve risks and uncertainties including, but not limited to, the
following: general economic conditions, including the performance of financial
markets and interest rates; the earnings impact of recent acquisitions; the
ability to realize future profitability as a result of changes in insurance
underwriting standards; and the timely implementation of restructuring programs
and the ability of the Company generally to achieve anticipated levels of
operational efficiencies and expense savings related to recent transactions or
otherwise. Readers also are directed to other risks and uncertainties discussed
in documents filed by the Company with the Securities and Exchange Commission.
<PAGE>
Citigroup Second Quarter 1999 Results, page 10
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
Citigroup Segment Income -------------------- % -------------------- %
(In Millions of Dollars) 1999 1998 Change 1999 1998 Change
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Consumer
Citibanking North America .................. $ 106 $ 37 186 $ 180 $ 62 190
Mortgage Banking ........................... 53 50 6 113 100 13
Cards ...................................... 267 136 96 535 289 85
Commercial Credit .......................... 87 60 45 168 119 41
-------------------- --------------------
Banking/Lending ............................... 513 283 81 996 570 75
-------------------- --------------------
Travelers Life & Annuity ................... 173 127 36 320 246 30
Primerica Financial Services ............... 113 103 10 223 198 13
Personal Lines (A) ......................... 79 81 (2) 162 163 (1)
-------------------- --------------------
Insurance ..................................... 365 311 17 705 607 16
-------------------- --------------------
-------------------- --------------------
Total North America ............................... 878 594 48 1,701 1,177 45
-------------------- --------------------
Europe, Middle East, & Africa ................. 78 56 39 152 107 42
Asia Pacific .................................. 108 86 26 210 169 24
Latin America ................................. 44 37 19 92 80 15
Global Private Bank ........................... 73 64 14 130 122 7
-------------------- --------------------
Total International ............................... 303 243 25 584 478 22
-------------------- --------------------
e-Citi ............................................ (44) (37) (19) (80) (67) (19)
Other ............................................. (27) (8) (238) (44) (7) (529)
-------------------- --------------------
Total Global Consumer ............................. 1,110 792 40 2,161 1,581 37
-------------------- --------------------
Global Corporate and Investment Bank
Salomon Smith Barney .............................. 610 348 75 1,258 791 59
Emerging Markets .................................. 295 242 22 615 502 23
Global Relationship Banking ....................... 158 239 (34) 360 399 (10)
Commercial Lines (A) .............................. 201 174 16 390 345 13
-------------------- --------------------
Total Global Corporate and Investment Bank ........ 1,264 1,003 26 2,623 2,037 29
-------------------- --------------------
-------------------- --------------------
SSB Citi Asset Management Group ................... 84 69 22 164 138 19
-------------------- --------------------
Corporate/Other ................................... (144) (131) (10) (309) (264) (17)
-------------------- --------------------
Business Income ................................... 2,314 1,733 34 4,639 3,492 33
-------------------- --------------------
-------------------- --------------------
Investment Activities ............................. 163 316 (48) 253 718 (65)
-------------------- --------------------
-------------------- --------------------
Core Income ....................................... 2,477 2,049 21 4,892 4,210 16
-------------------- --------------------
Restructuring-Related Items -- After Tax (B) .... (29) 191 115 45 191 76
Cumulative Effect of Accounting Changes (C) ....... -- -- -- (127) -- NM
-------------------- --------------------
Net Income ........................................ $2,448 $2,240 9 $4,810 $4,401 9
=============================================================================================================================
</TABLE>
(A) In the aggregate, these represent Citigroup's share of Travelers Property
Casualty Corp. results.
(B) For 1999, includes restructuring-related items of $29 million in the
second quarter and $80 million in the six months and a credit for the
reversal of the 1997 charge of $125 million in the six months. For 1998,
includes a credit for the reversal of the 1997 charge of $191 million in
both the second quarter and six months.
(C) Refers to adoption of Statement of Position "SOP" 97-3, "Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments" of
($135) million; adoption of SOP 98-7, "Deposit Accounting: Accounting for
Insurance and Reinsurance Contracts That Do Not Transfer Insurance Risk"
of $23 million; and the adoption of SOP 98-5. "Reporting on the Costs of
Start-Up Activities" of ($15) million.
NM Not meaningful.
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<PAGE>
CITIGROUP - QUARTERLY FINANCIAL DATA SUPPLEMENT
Citigroup, the world's most global financial services company, provides some 100
million consumers, corporations, governments and institutions in 100 countries
with a broad range of financial products and services.
<TABLE>
<CAPTION>
2Q 1999 vs.
(in millions, except per share amounts) 1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
------- ------- ------- ------- ------- ------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Core Income $ 2,161 $ 2,049 $ 729 $ 1,403 $ 2,415 $ 2,477 21%
Restructuring / Merger Items -- 191 -- (726) 74 (29)
Cumulative Effect of Accounting Changes -- -- -- -- (127) --
------- ------- ------- ------- ------- -------
Net Income $ 2,161 $ 2,240 $ 729 $ 677 $ 2,362 $ 2,448 9%
======= ======= ======= ======= ======= =======
Basic Earnings Per Share:
Core Income $ 0.62 $ 0.59 $ 0.20 $ 0.41 $ 0.71 $ 0.73 24%
======= ======= ======= ======= ======= =======
Net Income $ 0.62 $ 0.65 $ 0.20 $ 0.19 $ 0.70 $ 0.72 11%
======= ======= ======= ======= ======= =======
Weighted average common shares
applicable to Basic EPS 3,365.0 3,366.0 3,372.5 3,350.1 3,340.2 3,332.7
======= ======= ======= ======= ======= =======
Preferred Dividends - Basic $ 63 $ 58 $ 50 $ 45 $ 40 $ 38
======= ======= ======= ======= ======= =======
Diluted Earnings Per Share:
Core Income $ 0.60 $ 0.57 $ 0.20 $ 0.40 $ 0.69 $ 0.71 25%
======= ======= ======= ======= ======= =======
Net Income $ 0.60 $ 0.63 $ 0.20 $ 0.19 $ 0.68 $ 0.70 11%
======= ======= ======= ======= ======= =======
Adjusted weighted average common shares
applicable to Diluted EPS 3,492.9 3,496.4 3,481.1 3,435.5 3,440.0 3,450.3
======= ======= ======= ======= ======= =======
Preferred Dividends - Diluted $ 57 $ 52 $ 44 $ 39 $ 37 $ 35
======= ======= ======= ======= ======= =======
Common Shares Outstanding, at period end 3,421.2 3,420.8 3,413.3 3,387.0 3,380.3 3,379.6
======= ======= ======= ======= ======= =======
Tier 1 Capital Ratio 8.38% 8.46% 8.69% 8.68% 8.86% 9.20%*
======= ======= ======= ======= ======= =======
Total Capital Ratio 10.97% 11.00% 11.28% 11.43% 11.56% 12.00%*
======= ======= ======= ======= ======= =======
Leverage Ratio 5.67% 5.65% 5.73% 6.03% 6.24% 6.40%*
======= ======= ======= ======= ======= =======
Total Assets, at period end (in billions) $ 738.8 $ 750.8 $ 701.3 $ 668.6 $ 690.6 $ 690.0*
======= ======= ======= ======= ======= =======
Stockholders' Equity, at period
end (in billions) $ 42.8 $ 43.9 $ 43.1 $ 42.7 $ 44.0 $ 44.9*
======= ======= ======= ======= ======= =======
Stockholders' Equity and Trust Securities,
at period end (in billions) $ 46.4 $ 47.7 $ 46.9 $ 47.0 $ 48.9 $ 49.8*
======= ======= ======= ======= ======= =======
Book Value Per Share, at period end $ 11.63 $ 12.04 $ 11.95 $ 11.91 $ 12.38 $ 12.66*
======= ======= ======= ======= ======= =======
Return on Common Equity (Net Income) 22.0% 21.8% 6.6% 6.2% 23.0% 22.8%*
======= ======= ======= ======= ======= =======
Return on Common Equity (Core Income) 21.4% 19.4% 6.5% 13.0% 23.6% 23.1%*
======= ======= ======= ======= ======= =======
Return on Common Equity (Core Income),
excluding FAS 115 22.4% 20.2% 6.7% 13.4% 24.3% 24.1%*
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
(in millions, except per share amounts) 2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
------- ------- ---------------------
<S> <C> <C> <C>
Core Income $ 4,210 $ 4,892 16%
Restructuring / Merger Items 191 45
Cumulative Effect of Accounting Changes -- (127)
------- -------
Net Income $ 4,401 $ 4,810 9%
======= =======
Basic Earnings Per Share:
Core Income $ 1.22 $ 1.44 18%
======= =======
Net Income $ 1.27 $ 1.42 12%
======= =======
Weighted average common shares
applicable to Basic EPS 3,365.4 3,336.4
======= =======
Preferred Dividends - Basic $ 121 $ 78
======= =======
Diluted Earnings Per Share:
Core Income $ 1.17 $ 1.40 20%
======= =======
Net Income $ 1.23 $ 1.38 12%
======= =======
Adjusted weighted average common shares
applicable to Diluted EPS 3,491.6 3,445.2
======= =======
Preferred Dividends - Diluted $ 109 $ 72
======= =======
Common Shares Outstanding, at period end 3,420.8 3,379.6
======= =======
Tier 1 Capital Ratio 8.46% 9.20%*
======= =======
Total Capital Ratio 11.00% 12.00%*
======= =======
Leverage Ratio 5.65% 6.40%*
======= =======
Total Assets, at period end (in billions) $ 750.8 $ 690.0*
======= =======
Stockholders' Equity, at period
end (in billions) $ 43.9 $ 44.9*
======= =======
Stockholders' Equity and Trust Securities,
at period end (in billions) $ 47.7 $ 49.8*
======= =======
Book Value Per Share, at period end $ 12.04 $ 12.66*
======= =======
Return on Common Equity (Net Income) 21.9% 22.9%*
======= =======
Return on Common Equity (Core Income) 20.9% 23.3%*
======= =======
Return on Common Equity (Core Income),
excluding FAS 115 21.9% 24.2%*
</TABLE>
* Preliminary
Page 1
<PAGE>
CITIGROUP -- SEGMENT NET REVENUES
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
-------- -------- -------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Global Consumer:
Banking / Lending
Citibanking North America $ 491 $ 535 $ 501 $ 502 $ 521 $ 532 (1%)
Mortgage Banking 154 152 160 153 169 183 20%
Cards 1,415 1,825 1,930 2,045 1,988 2,000 10%
Consumer Finance Services 309 326 342 361 376 410 26%
-------- -------- -------- -------- -------- --------
Total Banking / Lending 2,369 2,838 2,933 3,061 3,054 3,125 10%
Insurance
Travelers Life and Annuity 698 765 716 833 771 867 13%
Primerica Financial Services 400 420 413 421 432 443 5%
Personal Lines 868 899 924 975 983 1,005 12%
-------- -------- -------- -------- -------- --------
Total Insurance 1,966 2,084 2,053 2,229 2,186 2,315 11%
International
Europe, Middle East and Africa 471 496 513 541 534 537 8%
Asia Pacific 423 457 460 512 519 544 19%
Latin America 354 370 431 445 466 503 36%
Global Private Bank 264 285 285 294 273 299 5%
-------- -------- -------- -------- -------- --------
Total International 1,512 1,608 1,689 1,792 1,792 1,883 17%
e-Citi 30 34 38 47 54 55 62%
Other 27 21 23 27 31 24 14%
-------- -------- -------- -------- -------- --------
Total Global Consumer 5,904 6,585 6,736 7,156 7,117 7,402 12%
-------- -------- -------- -------- -------- --------
Global Corporate and Investment Bank:
Salomon Smith Barney 2,918 2,523 685 2,207 3,341 3,269 30%
Emerging Markets 957 972 721 974 1,138 1,087 12%
Global Relationship Banking 989 1,151 828 947 1,087 1,008 (12%)
Commercial Lines 1,619 1,584 1,604 1,674 1,534 1,558 (2%)
-------- -------- -------- -------- -------- --------
Total Global Corporate and Investment Bank 6,483 6,230 3,838 5,802 7,100 6,922 11%
-------- -------- -------- -------- -------- --------
SSB Citi Asset Management Group 305 309 318 324 354 357 16%
-------- -------- -------- -------- -------- --------
Corporate / Other (53) (69) (64) (5) (66) (1) 99%
-------- -------- -------- -------- -------- --------
- ---------------------------------------------------------------------------------------------------------------
Total Business Revenues 12,639 13,055 10,828 13,277 14,505 14,680 12%
- ---------------------------------------------------------------------------------------------------------------
Investment Activities 619 491 169 45 153 270 (45%)
- ---------------------------------------------------------------------------------------------------------------
Total Adjusted Net Revenues $ 13,258 $ 13,546 $ 10,997 $ 13,322 $ 14,658 $ 14,950 10%
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
-------- -------- ---------------------
<S> <C> <C> <C>
Global Consumer:
Banking / Lending
Citibanking North America $ 1,026 $ 1,053 3%
Mortgage Banking 306 352 15%
Cards 3,240 3,988 23%
Consumer Finance Services 635 786 24%
-------- --------
Total Banking / Lending 5,207 6,179 19%
Insurance
Travelers Life and Annuity 1,463 1,638 12%
Primerica Financial Services 820 875 7%
Personal Lines 1,767 1,988 13%
-------- --------
Total Insurance 4,050 4,501 11%
International
Europe, Middle East and Africa 967 1,071 11%
Asia Pacific 880 1,063 21%
Latin America 724 969 34%
Global Private Bank 549 572 4%
-------- --------
Total International 3,120 3,675 18%
e-Citi 64 109 70%
Other 48 55 15%
-------- --------
Total Global Consumer 12,489 14,519 16%
-------- --------
Global Corporate and Investment Bank:
Salomon Smith Barney 5,441 6,610 21%
Emerging Markets 1,929 2,225 15%
Global Relationship Banking 2,140 2,095 (2%)
Commercial Lines 3,203 3,092 (3%)
-------- --------
Total Global Corporate and Investment Bank 12,713 14,022 10%
-------- --------
SSB Citi Asset Management Group 614 711 16%
-------- --------
Corporate / Other (122) (67) 45%
-------- --------
- ----------------------------------------------- -------------------
Total Business Revenues 25,694 29,185 14%
- ----------------------------------------------- -------------------
Investment Activities 1,110 423 (62%)
- ----------------------------------------------- -------------------
Total Adjusted Net Revenues $ 26,804 $ 29,608 10%
- ----------------------------------------------- -------------------
</TABLE>
Page 2
<PAGE>
CITIGROUP -- SEGMENT CORE INCOME
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
------- ------- ------- ------- ------- ------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Global Consumer:
Banking / Lending
Citibanking North America $ 25 $ 37 $ 28 $ 19 $ 74 $ 106 186%
Mortgage Banking 50 50 57 55 60 53 6%
Cards 153 136 218 290 268 267 96%
Consumer Finance Services 59 60 72 73 81 87 45%
------- ------- ------- ------- ------- -------
Total Banking / Lending 287 283 375 437 483 513 81%
Insurance
Travelers Life and Annuity 119 127 123 124 147 173 36%
Primerica Financial Services 95 103 99 103 110 113 10%
Personal Lines 82 81 68 88 83 79 (2%)
------- ------- ------- ------- ------- -------
Total Insurance 296 311 290 315 340 365 17%
International
Europe, Middle East and Africa 51 56 69 61 74 78 39%
Asia Pacific 83 86 101 117 102 108 26%
Latin America 43 37 42 38 48 44 19%
Global Private Bank 58 64 65 61 57 73 14%
------- ------- ------- ------- ------- -------
Total International 235 243 277 277 281 303 25%
e-Citi (30) (37) (33) (43) (36) (44) (19%)
Other 1 (8) (28) (45) (17) (27) (238%)
------- ------- ------- ------- ------- -------
Total Global Consumer 789 792 881 941 1,051 1,110 40%
------- ------- ------- ------- ------- -------
Global Corporate and Investment Bank:
Salomon Smith Barney 443 348 (396) 13 648 610 75%
Emerging Markets 260 242 7 236 320 295 22%
Global Relationship Banking 160 239 (7) 103 202 158 (34%)
Commercial Lines 171 174 177 201 189 201 16%
------- ------- ------- ------- ------- -------
Total Global Corporate and Investment Bank 1,034 1,003 (219) 553 1,359 1,264 26%
------- ------- ------- ------- ------- -------
SSB Citi Asset Management Group 69 69 68 51 80 84 22%
------- ------- ------- ------- ------- -------
Corporate / Other (133) (131) (101) (157) (165) (144) (10%)
------- ------- ------- ------- ------- -------
- ---------------------------------------------------------------------------------------------------------
Total Business Income 1,759 1,733 629 1,388 2,325 2,314 34%
- ---------------------------------------------------------------------------------------------------------
Investment Activities 402 316 100 15 90 163 (48%)
- ---------------------------------------------------------------------------------------------------------
Total Core Income $ 2,161 $ 2,049 $ 729 $ 1,403 $ 2,415 $ 2,477 21%
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
------- ------- ---------------------
<S> <C> <C> <C>
Global Consumer:
Banking / Lending
Citibanking North America $ 62 $ 180 190%
Mortgage Banking 100 113 13%
Cards 289 535 85%
Consumer Finance Services 119 168 41%
------- -------
Total Banking / Lending 570 996 75%
Insurance
Travelers Life and Annuity 246 320 30%
Primerica Financial Services 198 223 13%
Personal Lines 163 162 (1%)
------- -------
Total Insurance 607 705 16%
International
Europe, Middle East and Africa 107 152 42%
Asia Pacific 169 210 24%
Latin America 80 92 15%
Global Private Bank 122 130 7%
------- -------
Total International 478 584 22%
e-Citi (67) (80) (19%)
Other (7) (44) (529%)
------- -------
Total Global Consumer 1,581 2,161 37%
------- -------
Global Corporate and Investment Bank:
Salomon Smith Barney 791 1,258 59%
Emerging Markets 502 615 23%
Global Relationship Banking 399 360 (10%)
Commercial Lines 345 390 13%
------- -------
Total Global Corporate and Investment Bank 2,037 2,623 29%
------- -------
SSB Citi Asset Management Group 138 164 19%
------- -------
Corporate / Other (264) (309) (17%)
------- -------
- ------------------------------------------------ -----------------
Total Business Income 3,492 4,639 33%
- ------------------------------------------------ -----------------
Investment Activities 718 253 (65%)
- ------------------------------------------------ -----------------
Total Core Income $ 4,210 $ 4,892 16%
- ------------------------------------------------ -----------------
</TABLE>
Page 3
<PAGE>
GLOBAL CONSUMER - Banking/Lending
CITIBANKING NORTH AMERICA
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
------ ------ ------ ------ ------ ------ -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 491 $ 535 $ 501 $ 502 $ 521 $ 532 (1%)
Adjusted Operating Expenses 413 438 418 435 364 329 (25%)
Provision for Loan Losses 31 30 28 29 27 18 (40%)
------ ------ ------ ------ ------ ------
Core Income Before Taxes 47 67 55 38 130 185 176%
Income Taxes 22 30 27 19 56 79 163%
------ ------ ------ ------ ------ ------
Core Income $ 25 $ 37 $ 28 $ 19 $ 74 $ 106 186%
====== ====== ====== ====== ====== ======
Average Assets (in billions of dollars) $ 10 $ 10 $ 10 $ 10 $ 10 $ 10 --
====== ====== ====== ====== ====== ======
Return on Assets 1.01% 1.48% 1.11% 0.75% 3.00% 4.25%
====== ====== ====== ====== ====== ======
Average Loans (in billions of dollars) $ 8.4 $ 8.3 $ 8.3 $ 8.2 $ 8.1 $ 8.1 (2%)
Average Customer Deposits
(in billions of dollars) $ 38.9 $ 39.4 $ 39.7 $ 40.4 $ 41.6 $ 42.2 7%
Accounts (In millions) 5.9 6.0 6.1 6.2 6.3 6.4 7%
Net Credit Loss Ratio 1.51% 1.49% 1.38% 1.55% 1.35% 1.31%
Loans 90+Days Past Due
In millions of dollars $ 129 $ 119 $ 117 $ 87 $ 107 $ 96 (19%)
% 1.51% 1.39% 1.28% 1.04% 1.33% 1.20%
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
------ ------ ---------------------
<S> <C> <C> <C>
Total Revenues, Net of Interest Expense $1,026 $1,053 3%
Adjusted Operating Expenses 851 693 (19%)
Provision for Loan Losses 61 45 (26%)
------ ------
Core Income Before Taxes 114 315 176%
Income Taxes 52 135 160%
------ ------
Core Income $ 62 $ 180 190%
====== ======
Average Assets (in billions of dollars) $ 10 $ 10 --
====== ======
Return on Assets 1.25% 3.63%
====== ======
</TABLE>
Page 4
<PAGE>
GLOBAL CONSUMER - Banking/Lending
MORTGAGE BANKING
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
----- ----- ----- ----- ----- ----- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 154 $ 152 $ 160 $ 153 $ 169 $ 183 20%
Adjusted Operating Expenses 59 61 62 60 59 82 34%
Provision for Loan Losses 13 9 3 (5) 3 5 (44%)
----- ----- ----- ----- ----- -----
Core Income Before Taxes and Minority Interest 82 82 95 98 107 96 17%
Income Taxes 32 32 38 38 42 38 19%
Minority Interest, Net of Tax -- -- -- 5 5 5 NM
----- ----- ----- ----- ----- -----
Core Income $ 50 $ 50 $ 57 $ 55 $ 60 $ 53 6%
===== ===== ===== ===== ===== =====
Average Assets (in billions of dollars) $ 25 $ 25 $ 25 $ 26 $ 28 $ 29 16%
===== ===== ===== ===== ===== =====
Return on Assets 0.81% 0.80% 0.90% 0.84% 0.87% 0.73%
===== ===== ===== ===== ===== =====
Accounts (in millions) (1) 2.5 2.5 2.7 2.8 2.8 3.0 20%
Average Loans (in billions of dollars) (1) (2) $23.5 $23.7 $24.0 $24.6 $26.6 $27.3 15%
Mortgage Originations (in billions of dollars) $ 2.9 $ 4.0 $ 4.2 $ 5.0 $ 3.8 $ 4.8 20%
Net Credit Loss Ratio 0.42% 0.31% 0.29% 0.27% 0.20% 0.17%
Loans 90+ Days Past Due (1) $ 688 $ 634 $ 623 $ 625 $ 610 $ 575 (9%)
In millions of dollars 2.91% 2.67% 2.69% 2.44% 2.29% 2.09%
%
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
----- ----- ---------------------
<S> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 306 $ 352 15%
Adjusted Operating Expenses 120 141 18%
Provision for Loan Losses 22 8 (64%)
----- -----
Core Income Before Taxes and Minority Interest 164 203 24%
Income Taxes 64 80 25%
Minority Interest, Net of Tax -- 10 NM
----- -----
Core Income $ 100 $ 113 13%
===== =====
Average Assets (in billions of dollars) $ 25 $ 28 12%
===== =====
Return on Assets 0.81% 0.81%
===== =====
</TABLE>
(1) Includes Student Loans.
(2) Includes loans held for sale.
NM Not meaningful
Page 5
<PAGE>
GLOBAL CONSUMER - Banking/Lending
CARDS (1)
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
------ ------ ------ ------ ------ ------ -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Adjusted Revenues, Net of Interest Expense $1,415 $1,825 $1,930 $2,045 $1,988 $2,000 10%
Adjusted Operating Expenses 451 721 737 776 748 746 3%
Adjusted Provision for Loan Losses (2) 717 885 846 805 816 831 (6%)
------ ------ ------ ------ ------ ------
Core Income Before Taxes 247 219 347 464 424 423 93%
Income Taxes 94 83 129 174 156 156 88%
------ ------ ------ ------ ------ ------
Core Income $ 153 $ 136 $ 218 $ 290 $ 268 $ 267 96%
====== ====== ====== ====== ====== ======
Average Assets (in billions of dollars) $ 23 $ 30 $ 28 $ 31 $ 30 $ 28 (7%)
====== ====== ====== ====== ====== ======
Return on Assets 2.70% 1.82% 3.09% 3.71% 3.62% 3.82%
====== ====== ====== ====== ====== ======
U.S. BANKCARDS DATA (3):
(in billions of dollars)
End of Period Managed Receivables $ 46.8 $ 62.0 $ 63.8 $ 69.6 $ 69.4 $ 70.3 13%
Total Accounts (in millions) 25.6 39.4 39.7 40.5 41.4 41.1 4%
Total Sales $ 25.3 $ 35.4 $ 37.7 $ 42.2 $ 36.8 $ 40.8 15%
End of Period Loans:
On Balance Sheet $ 16.5 $ 17.3 $ 19.8 $ 21.9 $ 19.4 $ 20.0 16%
Securitized 27.8 41.5 40.6 44.3 46.7 47.4 14%
Held for Sale 2.0 2.5 2.6 2.9 2.9 2.8 12%
------ ------ ------ ------ ------ ------
Total $ 46.3 $ 61.3 $ 63.0 $ 69.1 $ 69.0 $ 70.2 15%
====== ====== ====== ====== ====== ======
Average Loans:
On Balance Sheet $ 17.3 $ 21.0 $ 19.3 $ 20.9 $ 20.2 $ 20.0 (5%)
Securitized 27.6 37.0 40.2 41.5 44.3 46.7 26%
Held for Sale 2.0 2.5 2.5 2.7 2.9 2.8 12%
------ ------ ------ ------ ------ ------
Total $ 46.9 $ 60.5 $ 62.0 $ 65.1 $ 67.4 $ 69.5 15%
====== ====== ====== ====== ====== ======
Write-offs (in millions of dollars):
On Balance Sheet $ 214 $ 271 $ 229 $ 222 $ 196 $ 233 (14%)
Securitized 431 544 542 536 556 541 (1%)
Held for Sale 31 37 34 32 32 29 (22%)
------ ------ ------ ------ ------ ------
Total $ 676 $ 852 $ 805 $ 790 $ 784 $ 803 (6%)
====== ====== ====== ====== ====== ======
Coincident Net Credit Loss Rate 5.85% 5.65% 5.15% 4.82% 4.72% 4.63%
12 Month Lagged Net Credit Loss Rate (4) 5.98% 5.92% 5.43% 5.30% 5.34% 5.12%
Loans 90+ Days Past Due
In millions of dollars $ 855 $ 956 $ 939 $1,001 $1,007 $ 954 --
% 1.85% 1.56% 1.49% 1.45% 1.46% 1.36%
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
------ ------ ---------------------
<S> <C> <C> <C>
Adjusted Revenues, Net of Interest Expense $3,240 $3,988 23%
Adjusted Operating Expenses 1,172 1,494 27%
Adjusted Provision for Loan Losses (2) 1,602 1,647 3%
------ ------
Core Income Before Taxes 466 847 82%
Income Taxes 177 312 76%
------ ------
Core Income $ 289 $ 535 85%
====== ======
Average Assets (in billions of dollars) $ 26 $ 29 12%
====== ======
Return on Assets 2.24% 3.72%
====== ======
</TABLE>
(1) Includes U.S. Bankcards, Diners Club and Travelers Bank. The acquisition
of the Universal Card (UCS) was completed in the 1998 second quarter.
(2) On a managed basis.
(3) Includes U.S. Bankcards and Travelers Bank.
(4) Excluding acquisitions.
Page 6
<PAGE>
GLOBAL CONSUMER - Banking/Lending
CONSUMER FINANCE SERVICES
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
REVENUES, NET OF INTEREST EXPENSE * $ 309 $ 326 $ 342 $ 361 $ 376 $ 410
CORE INCOME $ 59 $ 60 $ 72 $ 73 $ 81 $ 87
Net receivables:
Real estate-secured loans (1) $ 5,324.7 $ 5,673.4 $ 6,084.8 $ 6,659.5 $ 7,179.5 $ 7,699.2
Personal loans (2) 3,868.9 4,007.4 4,134.3 4,275.2 4,647.2 4,886.2
Sales finance and other 866.3 893.7 936.4 990.8 1,033.8 1,032.1
--------- --------- --------- --------- --------- ---------
Consumer finance receivables,
net of unearned finance charges 10,059.9 10,574.5 11,155.5 11,925.5 12,860.5 13,617.5
Accrued interest receivable 75.8 79.1 87.3 99.2 99.3 106.5
Allowance for credit losses (294.6) (317.3) (334.4) (369.7) (388.7) (436.4)
--------- --------- --------- --------- --------- ---------
Consumer finance receivables, net $ 9,841.1 $10,336.3 $10,908.4 $11,655.0 $12,571.1 $13,287.6
========= ========= ========= ========= ========= =========
Number of offices 1,023 1,005 993 980 1,143 1,177
Average yield 14.91% 14.94% 14.93% 14.74% 14.38% 14.48%
Average net interest margin 8.35% 8.43% 8.48% 8.57% 8.45% 8.59%
Charge-off rate 2.93% 2.78% 2.61% 2.67% 2.38% 2.14%
Loans 60+ days past due as % of receivables 1.82% 1.74% 1.85% 1.90% 1.78% 1.67%
Reserves as % of net receivables 2.93% 3.00% 3.00% 3.10% 3.02% 3.20%
(1) Includes fully secured $.M.A.R.T. receivables,
as follows: $ 2,052.8 $ 2,272.8 $ 2,432.1 $ 2,604.6 $ 2,817.6 $ 3,117.4
(2) Includes $.A.F.E. and partially secured $.M.A.R.T
receivables, as follows: $ 359.8 $ 351.3 $ 345.0 $ 345.6 $ 337.9 $ 334.2
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- --------- --------- ---------------------
<S> <C> <C> <C> <C>
REVENUES, NET OF INTEREST EXPENSE * 26% $ 635 $ 786 24%
CORE INCOME 45% $ 119 $ 168 41%
Net receivables:
Real estate-secured loans (1) 36% $ 5,673.4 $ 7,699.2 36%
Personal loans (2) 22% 4,007.4 4,886.2 22%
Sales finance and other 15% 893.7 1,032.1 15%
--------- ---------
Consumer finance receivables,
net of unearned finance charges 29% 10,574.5 13,617.5 29%
Accrued interest receivable 35% 79.1 106.5 35%
Allowance for credit losses 38% (317.3) (436.4) 38%
--------- ---------
Consumer finance receivables, net 29% $10,336.3 $13,287.6 29%
========= =========
Number of offices 17% 1,005 1,177 17%
Average yield 14.93% 14.43%
Average net interest margin 8.39% 8.52%
Charge-off rate 2.83% 2.24%
Loans 60+ days past due as % of receivables 1.74% 1.67%
Reserves as % of net receivables 3.00% 3.20%
(1) Includes fully secured $.M.A.R.T. receivables,
as follows: 37% $ 2,272.8 $ 3,117.4 37%
(2) Includes $.A.F.E. and partially secured $.M.A.R.T
receivables, as follows: (5%) $ 351.3 $ 334.2 (5%)
</TABLE>
* Excludes realized gains.
Page 7
<PAGE>
GLOBAL CONSUMER - Insurance
TRAVELERS LIFE AND ANNUITY - Page 1
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
REVENUES, NET OF INTEREST EXPENSE * $ 698 $ 765 $ 716 $ 833 $ 771 $ 867
CORE INCOME $ 119 $ 127 $ 123 $ 124 $ 147 $ 173
Pre-tax contribution by source:
Deferred and payout annuities $ 87.3 $ 89.2 $ 82.1 $ 87.9 $ 111.7 $ 139.1
Group annuities 31.5 28.3 36.4 24.1 36.6 43.7
Life and long term care insurance 37.9 39.3 34.6 42.6 39.8 50.5
Other (includes run-off and return on excess capital) 24.1 37.6 37.6 33.1 33.0 28.8
--------- --------- --------- --------- --------- ---------
Total $ 180.8 $ 194.4 $ 190.7 $ 187.7 $ 221.1 $ 262.1
========= ========= ========= ========= ========= =========
Deferred annuities:
Number of annuities in force (000):
Fixed 415.3 408.4 402.6 399.8 392.4 384.2
Variable 430.7 463.8 496.2 529.6 560.8 600.7
--------- --------- --------- --------- --------- ---------
Total 846.0 872.2 898.8 929.4 953.2 984.9
========= ========= ========= ========= ========= =========
Number of annuities issued (000):
Fixed 5.5 4.8 3.7 4.0 3.9 2.9
Variable 42.3 42.6 41.4 43.0 47.2 54.5
--------- --------- --------- --------- --------- ---------
Total 47.8 47.4 45.1 47.0 51.1 57.4
========= ========= ========= ========= ========= =========
Net written premiums & deposits:
Fixed $ 264.7 $ 215.6 $ 217.4 $ 210.4 $ 194.2 $ 249.7
Variable 646.9 679.8 757.5 808.0 975.7 1,048.3
--------- --------- --------- --------- --------- ---------
Total $ 911.6 $ 895.4 $ 974.9 $ 1,018.4 $ 1,169.9 $ 1,298.0
========= ========= ========= ========= ========= =========
Policyholder account balances & benefit reserves: (1)
Fixed $ 7,890.1 $ 7,863.4 $ 7,877.1 $ 7,915.1 $ 7,839.3 $ 7,874.2
Variable 10,401.2 11,148.5 10,601.1 12,951.4 14,172.9 15,770.8
--------- --------- --------- --------- --------- ---------
Total $18,291.3 $19,011.9 $18,478.2 $20,866.5 $22,012.2 $23,645.0
========= ========= ========= ========= ========= =========
Payout annuities:
Net written premiums & deposits $ 81.0 $ 106.8 $ 76.1 $ 165.1 $ 88.0 $ 114.8
Policyholder account balances & benefit reserves $ 4,558.1 $ 4,602.2 $ 4,626.9 $ 4,743.6 $ 4,774.7 $ 4,841.3
GIC and other annuities:
Net written premiums & deposits (2) $ 778.9 $ 921.6 $ 1,005.4 $ 983.7 $ 1,792.1 $ 1,510.3
Policyholder account balances & benefit reserves: (1)
Guaranteed investment contracts $ 2,633.2 $ 3,018.1 $ 3,748.2 $ 4,170.7 $ 4,912.2 $ 5,840.1
Other group annuities 5,040.1 5,052.9 4,962.6 4,929.6 4,854.2 5,142.8
--------- --------- --------- --------- --------- ---------
Total $ 7,673.3 $ 8,071.0 $ 8,710.8 $ 9,100.3 $ 9,766.4 $10,982.9
========= ========= ========= ========= ========= =========
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- --------- --------- ---------------------
<S> <C> <C> <C> <C>
REVENUES, NET OF INTEREST EXPENSE * 13% $ 1,463 $ 1,638 12%
CORE INCOME 36% $ 246 $ 320 30%
Pre-tax contribution by source:
Deferred and payout annuities 56% $ 176.5 $ 250.8 42%
Group annuities 54% 59.8 80.3 34%
Life and long term care insurance 28% 77.2 90.3 17%
Other (includes run-off and return on excess capital) (23%) 61.7 61.8 --
--------- ---------
Total 35% $ 375.2 $ 483.2 29%
========= =========
Deferred annuities:
Number of annuities in force (000):
Fixed (6%) 408.4 384.2 (6%)
Variable 30% 463.8 600.7 30%
--------- ---------
Total 13% 872.2 984.9 13%
========= =========
Number of annuities issued (000):
Fixed (40%) 10.3 6.8 (34%)
Variable 28% 84.9 101.7 20%
--------- ---------
Total 21% 95.2 108.5 14%
========= =========
Net written premiums & deposits:
Fixed 16% $ 480.3 $ 443.9 (8%)
Variable 54% 1,326.7 2,024.0 53%
--------- ---------
Total 45% $ 1,807.0 $ 2,467.9 37%
========= =========
Policyholder account balances & benefit reserves: (1)
Fixed -- $ 7,863.4 $ 7,874.2 --
Variable 41% 11,148.5 15,770.8 41%
--------- ---------
Total 24% $19,011.9 $23,645.0 24%
========= =========
Payout annuities:
Net written premiums & deposits 7% $ 187.8 $ 202.8 8%
Policyholder account balances & benefit reserves 5% $ 4,602.2 $ 4,841.3 5%
GIC and other annuities:
Net written premiums & deposits (2) 64% $ 1,700.5 $ 3,302.4 94%
Policyholder account balances & benefit reserves: (1)
Guaranteed investment contracts 94% $ 3,018.1 $ 5,840.1 94%
Other group annuities 2% 5,052.9 5,142.8 2%
--------- ---------
Total 36% $ 8,071.0 $10,982.9 36%
========= =========
</TABLE>
(1) Includes general account, separate accounts and managed funds.
(2) Excludes deposits of $13.0, $197.0, $14.0 and $33.3 in the 1998 first,
second, third and fourth quarters, respectively, and $23.2 and $416.0 in the
1999 first and second quarters, related to Travelers plans previously
managed externally.
* Excludes realized gains.
Page 8
<PAGE>
GLOBAL CONSUMER - Insurance
TRAVELERS LIFE AND ANNUITY - Page 2
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Individual life insurance:
Life insurance in force (in billions, face amt.):
Term $ 30.6 $ 30.9 $ 31.4 $ 32.1 $ 32.8 $ 33.4
Permanent (universal and whole life) 21.8 22.3 22.8 23.3 23.8 24.3
-------- -------- -------- -------- -------- --------
Total $ 52.4 $ 53.2 $ 54.2 $ 55.4 $ 56.6 $ 57.7
======== ======== ======== ======== ======== ========
Number of life policies in force (000) 525.2 522.9 520.0 518.1 515.8 513.8
Life insurance issued (in billions, face amt.) $ 2.0 $ 2.1 $ 2.2 $ 2.6 $ 2.5 $ 2.4
Number of life policies issued (000) 7.1 7.9 6.8 7.4 7.4 8.0
Net written premiums and deposits:
Direct periodic premiums and deposits $ 76.2 $ 78.2 $ 77.9 $ 89.2 $ 84.5 $ 86.7
Single premium deposits 23.8 20.5 17.1 23.7 16.2 20.8
Reinsurance (14.8) (16.0) (16.5) (18.7) (16.8) (17.8)
-------- -------- -------- -------- -------- --------
Total $ 85.2 $ 82.7 $ 78.5 $ 94.2 $ 83.9 $ 89.7
======== ======== ======== ======== ======== ========
Policyholder account balances & benefit reserves $2,327.1 $2,360.0 $2,366.9 $2,436.1 $2,468.3 $2,511.0
Individual long term care insurance:
Number of policies in force (000) 107.7 113.6 118.5 122.2 125.9 129.2
Net earned premiums $ 45.6 $ 48.7 $ 51.8 $ 53.7 $ 55.2 $ 56.5
Net written premiums $ 44.5 $ 53.7 $ 53.3 $ 61.5 $ 52.5 $ 59.8
All businesses:
Net investment income $ 483.0 $ 498.5 $ 476.2 $ 510.0 $ 526.2 $ 579.4
Interest credited to contractholders $ 215.0 $ 210.3 $ 220.4 $ 230.8 $ 225.7 $ 237.9
Statutory data:
Travelers Insurance Company
Statutory capital and surplus $4,142.6 $4,370.3 $4,230.5 $4,953.9 $4,955.9 $4,976.9
Surplus to liabilities ratio 19.4% 20.0% 18.2% 20.4% 19.8% 19.5%
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- -------- -------- ---------------------
<S> <C> <C> <C> <C>
Individual life insurance:
Life insurance in force (in billions, face amt.):
Term 8% $ 30.9 $ 33.4 8%
Permanent (universal and whole life) 9% 22.3 24.3 9%
-------- --------
Total 8% $ 53.2 $ 57.7 8%
======== ========
Number of life policies in force (000) (2%) 522.9 513.8 (2%)
Life insurance issued (in billions, face amt.) 14% $ 4.1 $ 4.9 20%
Number of life policies issued (000) 1% 15.0 15.4 3%
Net written premiums and deposits:
Direct periodic premiums and deposits 11% $ 154.4 $ 171.2 11%
Single premium deposits 1% 44.3 37.0 (16%)
Reinsurance 11% (30.8) (34.6) 12%
-------- --------
Total 8% $ 167.9 $ 173.6 3%
======== ========
Policyholder account balances & benefit reserves 6% $2,360.0 $2,511.0 6%
Individual long term care insurance:
Number of policies in force (000) 14% 113.6 129.2 14%
Net earned premiums 16% $ 94.3 $ 111.7 18%
Net written premiums 11% $ 98.2 $ 112.3 14%
All businesses:
Net investment income 16% $ 981.5 $1,105.6 13%
Interest credited to contractholders 13% $ 425.3 $ 463.6 9%
Statutory data:
Travelers Insurance Company
Statutory capital and surplus 14% $4,370.3 $4,976.9 14%
Surplus to liabilities ratio 20.0% 19.5%
</TABLE>
Page 9
<PAGE>
GLOBAL CONSUMER - Insurance
PRIMERICA FINANCIAL SERVICES
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
-------- -------- -------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES, NET OF INTEREST EXPENSE * $ 400 $ 420 $ 413 $ 421 $ 432 $ 443 5%
CORE INCOME (1)
Life insurance $ 75 $ 80 $ 77 $ 75 $ 86 $ 89 11%
Other financial products 20 23 22 28 24 24 4%
-------- -------- -------- -------- -------- --------
Total core business income $ 95 $ 103 $ 99 $ 103 $ 110 $ 113 10%
======== ======== ======== ======== ======== ========
Face value (in billions) of:
Life insurance issued $ 13.0 $ 15.8 $ 14.2 $ 14.4 $ 13.6 $ 15.5 (2%)
Life insurance in force $ 372.5 $ 377.5 $ 380.6 $ 383.7 $ 386.3 $ 391.7 4%
Number of life policies issued (000) 51.1 61.2 55.6 55.7 51.6 58.0 (5%)
Number of life policies in force (000) 2,141.6 2,151.1 2,153.1 2,151.8 2,147.1 2,150.9 --
Annualized issued premiums $ 40.8 $ 48.7 $ 45.0 $ 44.8 $ 42.4 $ 48.4 (1%)
Direct premiums $ 306.2 $ 312.3 $ 311.6 $ 313.7 $ 315.2 $ 321.0 3%
Earned premiums:
PFS Individual term life $ 244.7 $ 248.8 $ 246.1 $ 247.3 $ 251.6 $ 252.7 2%
Other 15.5 17.1 15.1 22.6 15.5 15.9 (7%)
-------- -------- -------- -------- -------- --------
Total $ 260.2 $ 265.9 $ 261.2 $ 269.9 $ 267.1 $ 268.6 1%
======== ======== ======== ======== ======== ========
Mutual fund sales at NAV:
Salomon Smith Barney Asset Management funds $ 335.6 $ 400.7 $ 383.9 $ 341.4 $ 407.7 $ 453.1 13%
Other funds 228.8 308.6 249.8 197.3 233.5 277.3 (10%)
-------- -------- -------- -------- -------- --------
Total U.S. mutual fund sales 564.4 709.3 633.7 538.7 641.2 730.4 3%
Mutual fund sales - Canada 204.3 123.9 91.3 76.5 143.2 76.2 (38%)
-------- -------- -------- -------- -------- --------
Total mutual fund sales $ 768.7 $ 833.2 $ 725.0 $ 615.2 $ 784.4 $ 806.6 (3%)
======== ======== ======== ======== ======== ========
Cash advanced on $.M.A.R.T. and $.A.F.E. loans (2) $ 316.6 $ 410.6 $ 347.4 $ 386.5 $ 419.2 $ 492.7 20%
Variable annuity net written premiums and deposits $ 126.3 $ 175.2 $ 171.9 $ 178.6 $ 223.4 $ 278.6 59%
SECURE net written premiums (3) $ 38.0 $ 55.8 $ 60.8 $ 58.7 $ 57.2 $ 62.6 12%
Agents licensed for:
Life insurance 76,835 77,274 79,081 80,725 79,738 79,251 3%
Mutual funds 28,475 28,864 29,176 26,517 27,129 27,053 (6%)
$.M.A.R.T. / $.A.F.E. loans 96,188 96,422 117,704 129,310 129,556 118,762 23%
Variable annuities 12,924 13,169 13,269 13,434 13,816 14,497 10%
Home & auto insurance 10,051 11,123 12,683 14,083 15,102 14,734 32%
Financial Needs Analyses submitted 140,617 130,549 132,771 131,080 142,451 122,958 (6%)
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
-------- -------- ---------------------
<S> <C> <C> <C>
REVENUES, NET OF INTEREST EXPENSE * $ 820 $ 875 7%
CORE INCOME (1)
Life insurance $ 155 $ 175 13%
Other financial products 43 48 12%
-------- --------
Total core business income $ 198 $ 223 13%
======== ========
Face value (in billions) of:
Life insurance issued $ 28.8 $ 29.1 1%
Life insurance in force $ 377.5 $ 391.7 4%
Number of life policies issued (000) 112.3 109.6 (2%)
Number of life policies in force (000) 2,151.1 2,150.9 --
Annualized issued premiums $ 89.5 $ 90.8 1%
Direct premiums $ 618.5 $ 636.2 3%
Earned premiums:
PFS Individual term life $ 493.5 $ 504.3 2%
Other 32.6 31.4 (4%)
-------- --------
Total $ 526.1 $ 535.7 2%
======== ========
Mutual fund sales at NAV:
Salomon Smith Barney Asset Management funds $ 736.3 $ 860.8 17%
Other funds 537.4 510.8 (5%)
-------- --------
Total U.S. mutual fund sales 1,273.7 1,371.6 8%
Mutual fund sales - Canada 328.2 219.4 (33%)
-------- --------
Total mutual fund sales $1,601.9 $1,591.0 (1%)
======== ========
Cash advanced on $.M.A.R.T. and $.A.F.E. loans (2) $ 727.2 $ 911.9 25%
Variable annuity net written premiums and deposits $ 301.5 $ 502.0 67%
SECURE net written premiums (3) $ 93.8 $ 119.8 28%
Agents licensed for:
Life insurance 77,274 79,251 3%
Mutual funds 28,864 27,053 (6%)
$.M.A.R.T. / $.A.F.E. loans 96,422 118,762 23%
Variable annuities 13,169 14,497 10%
Home & auto insurance 11,123 14,734 32%
Financial Needs Analyses submitted 130,549 122,958 (6%)
</TABLE>
(1) The 1998 fourth quarter reflects a one time $4.5 million reclass of income
from life insurance to other financial products as a result of bank holding
company requirements.
(2) The $.M.A.R.T. and $.A.F.E. loan products are marketed by PFS; the
receivables are reflected in the assets of Consumer Finance Services.
(3) The SECURE property casualty insurance products are marketed by PFS; the
premiums are reflected in the operating earnings of Travelers Property
Casualty Corp.
* Excludes realized gains.
Page 10
<PAGE>
GLOBAL CONSUMER - Insurance
TRAVELERS PROPERTY CASUALTY - PERSONAL LINES
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
REVENUES, NET OF INTEREST EXPENSE * $ 868 $ 899 $ 924 $ 975 $ 983 $ 1,005
CORE INCOME $ 82 $ 81 $ 68 $ 88 $ 83 $ 79
Net written premiums by product line: (1)
Auto $ 555.7 $ 578.3 $ 590.8 $ 603.0 $ 619.6 $ 597.0
Homeowners and other 250.3 295.6 317.9 298.5 363.8 353.9
-------- -------- -------- -------- -------- --------
Total net written premiums $ 806.0 $ 873.9 $ 908.7 $ 901.5 $ 983.4 $ 950.9
======== ======== ======== ======== ======== ========
Net written premiums by distribution channel: (1)
Independent agents $ 682.5 $ 718.0 $ 731.8 $ 720.3 $ 791.6 $ 750.6
Affinity group marketing 53.4 61.0 72.9 76.9 83.0 84.5
SECURE 38.0 55.8 60.8 58.7 57.2 62.6
Joint marketing arrangements 32.1 39.1 43.2 45.6 51.6 53.2
-------- -------- -------- -------- -------- --------
Total net written premiums $ 806.0 $ 873.9 $ 908.7 $ 901.5 $ 983.4 $ 950.9
======== ======== ======== ======== ======== ========
Statutory ratio development:
Earned premiums $ 770.8 $ 802.5 $ 835.7 $ 862.4 $ 892.1 $ 905.1
Losses and loss adjustment expenses 502.7 523.5 580.9 574.1 594.3 627.1
Other underwriting expenses 226.0 242.1 243.5 238.8 269.8 242.5
-------- -------- -------- -------- -------- --------
Total deductions 728.7 765.6 824.4 812.9 864.1 869.6
-------- -------- -------- -------- -------- --------
Statutory underwriting gain $ 42.1 $ 36.9 $ 11.3 $ 49.5 $ 28.0 $ 35.5
======== ======== ======== ======== ======== ========
Statutory combined ratio: (1)
Loss and loss adjustment expense ratio 65.2% 65.2% 69.5% 66.6% 66.6% 69.3%
Other underwriting expense ratio 28.0% 27.7% 26.8% 26.5% 27.4% 25.5%
-------- -------- -------- -------- -------- --------
Combined ratio 93.2% 92.9% 96.3% 93.1% 94.0% 94.8%
======== ======== ======== ======== ======== ========
Net investment income (pre-tax) $ 95.4 $ 94.8 $ 88.6 $ 109.6 $ 90.4 $ 98.8
Effective tax rate on net investment income 29.4% 28.5% 27.4% 28.7% 27.2% 27.7%
Catastrophe losses, net of reinsurance (after-tax) $ 8.6 $ 13.1 $ 21.8 $ -- $ 8.1 $ 23.2
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- -------- -------- ---------------------
<S> <C> <C> <C> <C>
REVENUES, NET OF INTEREST EXPENSE * 12% $ 1,767 $ 1,988 13%
CORE INCOME (2%) $ 163 $ 162 (1%)
Net written premiums by product line: (1)
Auto 3% $1,134.0 $1,216.6 7%
Homeowners and other 20% 545.9 717.7 31%
-------- --------
Total net written premiums 9% $1,679.9 $1,934.3 15%
======== ========
Net written premiums by distribution channel: (1)
Independent agents 5% $1,400.5 $1,542.2 10%
Affinity group marketing 39% 114.4 167.5 46%
SECURE 12% 93.8 119.8 28%
Joint marketing arrangements 36% 71.2 104.8 47%
-------- --------
Total net written premiums 9% $1,679.9 $1,934.3 15%
======== ========
Statutory ratio development:
Earned premiums 13% $1,573.3 $1,797.2 14%
Losses and loss adjustment expenses 20% 1,026.2 1,221.4 19%
Other underwriting expenses -- 468.1 512.3 9%
-------- --------
Total deductions 14% 1,494.3 1,733.7 16%
-------- --------
Statutory underwriting gain (4%) $ 79.0 $ 63.5 (20%)
======== ========
Statutory combined ratio: (1)
Loss and loss adjustment expense ratio 65.2% 68.0%
Other underwriting expense ratio 27.9% 26.5%
-------- --------
Combined ratio 93.1% 94.5%
======== ========
Net investment income (pre-tax) 4% $ 190.2 $ 189.2 (1%)
Effective tax rate on net investment income 28.9% 27.5%
Catastrophe losses, net of reinsurance (after-tax) 77% $ 21.7 $ 31.3 44%
</TABLE>
(1) The 1999 first quarter and six months net written premiums include an
adjustment associated with a reinsurance transaction, which increased
homeowners premiums written by independent agents by $71.7 million.
Excluding this transaction, the loss and loss adjustment expense ratio,
other underwriting expense ratio, and combined ratio for the 1999 first
quarter were 66.6%, 26.6% and 93.2%, respectively and for the 1999 six
months were 68.0%, 26.1% and 94.1%, respectively.
* Excludes realized gains.
Page 11
<PAGE>
GLOBAL CONSUMER - International
EUROPE, MIDDLE EAST AND AFRICA
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
------ ------ ------ ------ ------ ------ -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 471 $ 496 $ 513 $ 541 $ 534 $ 537 8%
Adjusted Operating Expenses 318 337 328 358 338 337 --
Provision for Loan Losses 70 67 72 83 78 75 12%
------ ------ ------ ------ ------ ------
Core Income Before Taxes 83 92 113 100 118 125 36%
Income Taxes 32 36 44 39 44 47 31%
------ ------ ------ ------ ------ ------
Core Income $ 51 $ 56 $ 69 $ 61 $ 74 $ 78 39%
====== ====== ====== ====== ====== ======
Average Assets (in billions of dollars) $ 21 $ 21 $ 21 $ 22 $ 21 $ 21 --
====== ====== ====== ====== ====== ======
Return on Assets 0.98% 1.07% 1.30% 1.10% 1.43% 1.49%
====== ====== ====== ====== ====== ======
Average Loans (in billions of dollars) $ 15.0 $ 15.4 $ 16.0 $ 16.9 $ 16.3 $ 16.0 4%
Average Customer Deposits (in billions of dollars) $ 16.5 $ 16.5 $ 16.6 $ 17.3 $ 16.8 $ 16.5 --
Accounts (in millions) 9.0 9.2 9.3 9.5 9.6 9.8 7%
Net Credit Loss Ratio 1.78% 1.71% 1.64% 1.71% 1.81% 1.71%
Loans 90+ Days Past Due
In millions of dollars $ 873 $ 887 $ 938 $ 937 $ 878 $ 882 (1%)
% 5.88% 5.80% 5.57% 5.49% 5.45% 5.50%
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
------ ------ ---------------------
<S> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 967 $1,071 11%
Adjusted Operating Expenses 655 675 3%
Provision for Loan Losses 137 153 12%
------ ------
Core Income Before Taxes 175 243 39%
Income Taxes 68 91 34%
------ ------
Core Income $ 107 $ 152 42%
====== ======
Average Assets (in billions of dollars) $ 21 $ 21 --
====== ======
Return on Assets 1.03% 1.46%
====== ======
</TABLE>
GLOBAL CONSUMER - International
ASIA PACIFIC
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
------ ------ ------ ------ ------ ------ -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 423 $ 457 $ 460 $ 512 $ 519 $ 544 19%
Adjusted Operating Expenses 237 253 232 248 267 282 11%
Provision for Loan Losses 50 64 63 74 88 89 39%
------ ------ ------ ------ ------ ------
Core Income Before Taxes 136 140 165 190 164 173 24%
Income Taxes 53 54 64 73 62 65 20%
------ ------ ------ ------ ------ ------
Core Income $ 83 $ 86 $ 101 $ 117 $ 102 $ 108 26%
====== ====== ====== ====== ====== ======
Average Assets (in billions of dollars) $ 27 $ 28 $ 28 $ 29 $ 29 $ 29 4%
====== ====== ====== ====== ====== ======
Return on Assets 1.25% 1.23% 1.43% 1.60% 1.43% 1.49%
====== ====== ====== ====== ====== ======
Average Loans (in billions of dollars) $ 19.5 $ 19.7 $ 20.1 $ 21.6 $ 22.1 $ 22.9 16%
Average Customer Deposits (in billions of dollars) $ 33.2 $ 34.9 $ 36.8 $ 39.6 $ 40.2 $ 41.0 17%
Accounts (in millions) 6.4 6.6 7.1 7.4 8.0 8.3 26%
Net Credit Loss Ratio 0.92% 1.17% 1.12% 1.24% 1.43% 1.33%
Loans 90+ Days Past Due
In millions of dollars $ 316 $ 324 $ 384 $ 498 $ 513 $ 509 57%
% 1.57% 1.64% 1.87% 2.28% 2.31% 2.17%
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
------ ------ ---------------------
<S> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 880 $1,063 21%
Adjusted Operating Expenses 490 549 12%
Provision for Loan Losses 114 177 55%
------ ------
Core Income Before Taxes 276 337 22%
Income Taxes 107 127 19%
------ ------
Core Income $ 169 $ 210 24%
====== ======
Average Assets (in billions of dollars) $ 27 $ 29 7%
====== ======
Return on Assets 1.26% 1.46%
====== ======
</TABLE>
Page 12
<PAGE>
GLOBAL CONSUMER - International
LATIN AMERICA
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
----- ----- ----- ----- ----- ----- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 354 $ 370 $ 431 $ 445 $ 466 $ 503 36%
Adjusted Operating Expenses 233 248 287 301 292 302 22%
Provision for Loan Losses 49 61 74 81 101 135 121%
----- ----- ----- ----- ----- -----
Core Income Before Taxes 72 61 70 63 73 66 8%
Income Taxes 29 24 28 25 25 22 (8%)
----- ----- ----- ----- ----- -----
Core Income $ 43 $ 37 $ 42 $ 38 $ 48 $ 44 19%
===== ===== ===== ===== ===== =====
Average Assets (in billions of dollars) $ 9 $ 10 $ 13 $ 14 $ 14 $ 15 50%
===== ===== ===== ===== ===== =====
Return on Assets 1.94% 1.48% 1.28% 1.08% 1.39% 1.18%
===== ===== ===== ===== ===== =====
Average Loans (in billions of dollars) $ 7.5 $ 7.9 $ 8.0 $ 7.9 $ 7.8 $ 8.1 3%
Average Customer Deposits (in billions of dollars) $ 8.9 $ 9.3 $10.7 $11.8 $12.7 $13.5 45%
Accounts (in millions) 5.1 5.5 6.6 6.7 6.8 7.2 31%
Net Credit Loss Ratio 2.45% 2.88% 3.48% 3.39% 4.74% 6.17%
Loans 90+ Days Past Due
In millions of dollars $ 183 $ 209 $ 243 $ 288 $ 292 $ 346 66%
% 2.38% 2.61% 3.05% 3.60% 3.75% 4.32%
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 Decrease)
----- ----- ---------------------
<S> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 724 $ 969 34%
Adjusted Operating Expenses 481 594 23%
Provision for Loan Losses 110 236 115%
----- -----
Core Income Before Taxes 133 139 5%
Income Taxes 53 47 (11%)
----- -----
Core Income $ 80 $ 92 15%
===== =====
Average Assets (in billions of dollars) $ 10 $ 14 40%
===== =====
Return on Assets 1.61% 1.33%
===== =====
</TABLE>
GLOBAL CONSUMER - International
GLOBAL PRIVATE BANK
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
----- ----- ----- ----- ----- ----- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 264 $ 285 $ 285 $ 294 $ 273 $ 299 5%
Adjusted Operating Expenses 176 179 179 184 174 181 1%
Provision for Loan Losses (7) -- 1 11 8 2 NM
----- ----- ----- ----- ----- -----
Core Income Before Taxes 95 106 105 99 91 116 9%
Income Taxes 37 42 40 38 34 43 2%
----- ----- ----- ----- ----- -----
Core Income $ 58 $ 64 $ 65 $ 61 $ 57 $ 73 14%
===== ===== ===== ===== ===== =====
Average Assets (in billions of dollars) $ 16 $ 16 $ 17 $ 18 $ 18 $ 19 19%
===== ===== ===== ===== ===== =====
Return on Assets 1.47% 1.60% 1.52% 1.34% 1.28% 1.54%
===== ===== ===== ===== ===== =====
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
----- ----- ---------------------
<S> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 549 $ 572 4%
Adjusted Operating Expenses 355 355 --
Provision for Loan Losses (7) 10 243%
----- -----
Core Income Before Taxes 201 207 3%
Income Taxes 79 77 (3%)
----- -----
Core Income $ 122 $ 130 7%
===== =====
Average Assets (in billions of dollars) $ 16 $ 19 19%
===== =====
Return on Assets 1.54% 1.38%
===== =====
</TABLE>
NM - Not meaningful
Page 13
<PAGE>
GLOBAL CONSUMER
e-CITI (1)
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
----- ----- ----- ----- ----- ----- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 30 $ 34 $ 38 $ 47 $ 54 $ 55 62%
Adjusted Operating Expenses 78 94 91 118 113 128 36%
Provision for Loan Losses 1 1 -- 1 1 1 --
----- ----- ----- ----- ----- -----
Business Loss Before Tax Benefits (49) (61) (53) (72) (60) (74) 21%
Income Tax Benefits (19) (24) (20) (29) (24) (30) 25%
----- ----- ----- ----- ----- -----
Business Loss $ (30) $ (37) $ (33) $ (43) $ (36) $ (44) 19%
===== ===== ===== ===== ===== =====
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
----- ----- ---------------------
<S> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 64 $ 109 70%
Adjusted Operating Expenses 172 241 40%
Provision for Loan Losses 2 2 --
----- -----
Business Loss Before Tax Benefits (110) (134) 22%
Income Tax Benefits (43) (54) 26%
----- -----
Business Loss $ (67) $ (80) 19%
===== =====
</TABLE>
(1) Includes development of electronic banking initiatives
GLOBAL CONSUMER
OTHER (1)
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease)
----- ----- ----- ----- ----- ----- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 27 $ 21 $ 23 $ 27 $ 31 $ 24 14%
Adjusted Operating Expenses 31 41 72 95 61 67 63%
----- ----- ----- ----- ----- -----
Business Loss Before Tax Benefits (4) (20) (49) (68) (30) (43) 115%
Income Tax Benefits (5) (12) (21) (23) (13) (16) 33%
----- ----- ----- ----- ----- -----
Business Loss $ 1 $ (8) $ (28) $ (45) $ (17) $ (27) 238%
===== ===== ===== ===== ===== =====
<CAPTION>
YTD YTD YTD 2Q 1999 vs.
2Q 2Q YTD 2Q 1998 Increase/
1998 1999 (Decrease)
----- ----- ---------------------
<S> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 48 $ 55 15%
Adjusted Operating Expenses 72 128 78%
----- -----
Business Loss Before Tax Benefits (24) (73) 204%
Income Tax Benefits (17) (29) 71%
----- -----
Business Loss $ (7) $ (44) 529%
===== =====
</TABLE>
(1) Includes unallocated marketing and staff expenses.
Page 14
<PAGE>
GLOBAL CORPORATE AND INVESTMENT BANK
SALOMON SMITH BARNEY - Page 1
(In millions of dollars)
(Excluding Asset Management division)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Commissions $ 793 $ 781 $ 794 $ 835 $ 900 $ 903
Asset management and administration fees 300 344 350 331 377 400
Investment banking 616 633 514 518 655 762
Principal transactions 779 315 (1,332) 123 974 698
Other income 28 44 28 79 65 49
------- ------- ------- ------- ------- -------
Total non-interest revenues 2,516 2,117 354 1,886 2,971 2,812
------- ------- ------- ------- ------- -------
Interest and dividends 3,316 3,466 3,336 2,775 2,611 2,864
Interest expense 2,914 3,060 3,005 2,454 2,241 2,407
------- ------- ------- ------- ------- -------
Net interest and dividends 402 406 331 321 370 457
------- ------- ------- ------- ------- -------
Total revenues, net of interest expense 2,918 2,523 685 2,207 3,341 3,269
------- ------- ------- ------- ------- -------
Non-interest expenses:
Compensation and benefits 1,682 1,501 876 1,619 1,794 1,707
Communications 115 113 116 123 117 111
Occupancy and equipment 101 102 101 110 106 104
Floor brokerage and other production 112 108 111 122 107 137
Other operating and administrative expenses 197 157 122 214 214 249
------- ------- ------- ------- ------- -------
Total non-interest expenses 2,207 1,981 1,326 2,188 2,338 2,308
------- ------- ------- ------- ------- -------
Core Income before income taxes 711 542 (641) 19 1,003 961
Provision for income taxes 268 194 (245) 6 355 351
------- ------- ------- ------- ------- -------
Core Income $ 443 $ 348 $ (396) $ 13 $ 648 $ 610
======= ======= ======= ======= ======= =======
Total equity (in billions of dollars) (1) $ 8.9 $ 9.3 $ 8.7 $ 8.9 $ 9.6 $ 9.6*
Return on equity (1) 23.1% 18.2% (14.5%) 3.4% 31.4% 29.1%
Pre-tax profit margin 24.4% 21.5% (93.6%) 0.9% 30.0% 29.4%
Non-compensation expenses as a percent of
net revenues 18.0% 19.0% 65.7% 25.8% 16.3% 18.4%
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
Revenues: (Decrease) 1998 1999 (Decrease)
----------------- ------- ------- ---------------------
<S> <C> <C> <C> <C>
Commissions 16% $ 1,574 $ 1,803 15%
Asset management and administration fees 16% 644 777 21%
Investment banking 20% 1,249 1,417 13%
Principal transactions 122% 1,094 1,672 53%
Other income 11% 72 114 58%
------- -------
Total non-interest revenues 33% 4,633 5,783 25%
------- -------
Interest and dividends (17%) 6,782 5,475 (19%)
Interest expense (21%) 5,974 4,648 (22%)
------- -------
Net interest and dividends 13% 808 827 2%
------- -------
Total revenues, net of interest expense 30% 5,441 6,610 21%
------- -------
Non-interest expenses:
Compensation and benefits 14% 3,183 3,501 10%
Communications (2%) 228 228 --
Occupancy and equipment 2% 203 210 3%
Floor brokerage and other production 27% 220 244 11%
Other operating and administrative expenses 59% 354 463 31%
------- -------
Total non-interest expenses 17% 4,188 4,646 11%
------- -------
Core Income before income taxes 77% 1,253 1,964 57%
Provision for income taxes 81% 462 706 53%
------- -------
Core Income 75% $ 791 $ 1,258 59%
======= =======
Total equity (in billions of dollars) (1) 3% $ 9.3 $ 9.6* 3%
Return on equity (1) 20.6% 30.2%
Pre-tax profit margin 23.0% 29.7%
Non-compensation expenses as a percent of
net revenues 18.5% 17.3%
</TABLE>
(1) Total equity and return on equity (core income) for Salomon Smith Barney
in total (includes Salomon Smith Barney Asset Management).
* Preliminary.
Page 15
<PAGE>
GLOBAL CORPORATE AND INVESTMENT BANK
SALOMON SMITH BARNEY - Page 2
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Client Assets (in billions of dollars)
Assets under fee-based management:
Financial Consultant (FC) managed accounts $ 13.3 $ 14.3 $ 13.8 $ 16.5 $ 18.6 $ 20.2
Consulting Group externally managed assets 67.1 69.3 63.9 71.9 73.1 76.8
--------- --------- --------- --------- --------- ---------
Total assets under fee-based management $ 80.4 $ 83.6 $ 77.7 $ 88.4 $ 91.7 $ 97.0
========= ========= ========= ========= ========= =========
Total client assets $ 703.0 $ 724.3 $ 697.5 $ 773.8 $ 816.0 $ 852.1
Private Client
Registered Financial Consultants 10,321 10,494 10,573 10,803 10,918 11,032
Annualized retail gross production per FC (000) $ 452 $ 441 $ 431 $ 413 $ 481 $ 477
Domestic retail offices 432 439 442 449 457 467
Investment Banking and Public Finance
Underwriting (full credit to lead mgr.):
Debt and equity
Global volume $71,923.3 $80,556.9 $50,170.3 $53,515.3 $92,142.8 $83,487.8
Global market share 9.7% 11.1% 8.9% 9.5% 10.2% 9.9%
Rank 4 2 3 2 2 2
U.S. volume $64,904.9 $71,902.1 $42,305.4 $46,235.9 $73,981.1 $68,348.7
U.S. market share 13.0% 14.1% 10.6% 11.9% 13.8% 13.7%
Rank 2 2 3 2 2 2
Municipals (1)
Volume $ 8,319.1 $10,913.8 $ 9,553.1 $ 7,180.0 $ 7,271.4 $ 5,269.4
Market share 11.8% 14.2% 14.7% 10.5% 12.5% 9.4%
Rank 1 1 1 2 1 2
Capital Markets/Research
Number of institutional salespeople (2) 877 854 869 884 796 830
Number of stocks in which markets are made 1,464 1,465 1,418 1,329 1,305 1,228
% of S&P sectors covered by research 99% 99% 99% 98% 98% 98%
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C>
Client Assets (in billions of dollars)
Assets under fee-based management:
Financial Consultant (FC) managed accounts 41% $ 14.3 $ 20.2 41%
Consulting Group externally managed assets 11% 69.3 76.8 11%
---------- ----------
Total assets under fee-based management 16% $ 83.6 $ 97.0 16%
========== ==========
Total client assets 18% $ 724.3 $ 852.1 18%
Private Client
Registered Financial Consultants 5% 10,494 11,032 5%
Annualized retail gross production per FC (000) 8% $ 446 $ 479 7%
Domestic retail offices 6% 439 467 6%
Investment Banking and Public Finance
Underwriting (full credit to lead mgr.):
Debt and equity
Global volume 4% $152,480.2 $175,630.6 15%
Global market share 10.4% 10.0%
Rank 3 2
U.S. volume (5%) $136,807.0 $142,329.8 4%
U.S. market share 13.5% 13.8%
Rank 2 2
Municipals (1)
Volume (52%) $ 19,232.9 $ 12,540.8 (35%)
Market share 13.1% 11.0%
Rank 1 1
Capital Markets/Research
Number of institutional salespeople (2) (3%) 854 830 (3%)
Number of stocks in which markets are made (16%) 1,465 1,228 (16%)
% of S&P sectors covered by research 99% 98%
</TABLE>
(1) Total long term excluding private placement.
(2) Excludes institutional salespeople at Nikko in the 1999 six months.
Page 16
<PAGE>
GLOBAL CORPORATE AND INVESTMENT BANK
EMERGING MARKETS
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 957 $ 972 $ 721 $ 974 $ 1,138 $ 1,087
Adjusted Operating Expenses 477 505 513 514 503 503
Provision for Loan Losses 62 79 198 85 115 110
------- ------- ------- ------- ------- -------
Core Income Before Taxes and Minority Interest 418 388 10 375 520 474
Income Taxes 158 146 3 139 199 177
Minority Interest, Net of Tax -- -- -- -- 1 2
------- ------- ------- ------- ------- -------
Core Income $ 260 $ 242 $ 7 $ 236 $ 320 $ 295
======= ======= ======= ======= ======= =======
Average Assets (in billions of dollars) $ 74 $ 75 $ 78 $ 81 $ 80 $ 83
======= ======= ======= ======= ======= =======
Return on Assets 1.42% 1.29% 0.04% 1.16% 1.62% 1.43%
======= ======= ======= ======= ======= =======
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- ------- ------- ---------------------
<S> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense 12% $ 1,929 $ 2,225 15%
Adjusted Operating Expenses -- 982 1,006 2%
Provision for Loan Losses 39% 141 225 60%
------- -------
Core Income Before Taxes and Minority Interest 22% 806 994 23%
Income Taxes 21% 304 376 24%
Minority Interest, Net of Tax NM -- 3 NM
------- -------
Core Income 22% $ 502 $ 615 23%
======= =======
Average Assets (in billions of dollars) 11% $ 75 $ 82 9%
======= =======
Return on Assets 1.35% 1.51%
======= =======
</TABLE>
GLOBAL CORPORATE AND INVESTMENT BANK
GLOBAL RELATIONSHIP BANKING
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 989 $ 1,151 $ 828 $ 947 $ 1,087 $ 1,008
Adjusted Operating Expenses 733 825 804 800 777 757
Provision for Loan Losses 3 (51) 34 (16) (4) --
------- ------- ------- ------- ------- -------
Core Income Before Taxes 253 377 (10) 163 314 251
Income Taxes 93 138 (3) 60 112 93
------- ------- ------- ------- ------- -------
Core Income $ 160 $ 239 $ (7) $ 103 $ 202 $ 158
======= ======= ======= ======= ======= =======
Average Assets (in billions of dollars) $ 90 $ 93 $ 94 $ 94 $ 88 $ 80
======= ======= ======= ======= ======= =======
Return on Assets 0.72% 1.03% $ -- 0.43% 0.93% 0.79%
======= ======= ======= ======= ======= =======
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- ------- ------- ---------------------
<S> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense (12%) $ 2,140 $ 2,095 (2%)
Adjusted Operating Expenses (8%) 1,558 1,534 (2%)
Provision for Loan Losses NM (48) (4) 92%
------- -------
Core Income Before Taxes (33%) 630 565 (10%)
Income Taxes (33%) 231 205 (11%)
------- -------
Core Income (34%) $ 399 $ 360 (10%)
======= =======
Average Assets (in billions of dollars) (14%) $ 92 $ 84 (9%)
======= =======
Return on Assets 0.87% 0.86%
======= =======
</TABLE>
NM Not meaningful
Page 17
<PAGE>
GLOBAL CORPORATE AND INVESTMENT BANK
TRAVELERS PROPERTY CASUALTY - COMMERCIAL LINES
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
REVENUES, NET OF INTEREST EXPENSE * $ 1,619 $ 1,584 $ 1,604 $ 1,674 $ 1,534 $ 1,558
CORE INCOME $ 171 $ 174 $ 177 $ 201 $ 189 $ 201
Net written premiums by market:
National accounts $ 186.6 $ 121.6 $ 175.3 $ 140.9 $ 149.9 $ 101.4
Commercial accounts 462.6 440.8 446.0 450.7 443.6 440.1
Select accounts 378.6 393.7 365.7 356.3 372.3 393.4
Specialty accounts 184.0 164.7 181.2 164.8 148.2 159.8
-------- -------- -------- -------- -------- --------
Total net written premiums $1,211.8 $1,120.8 $1,168.2 $1,112.7 $1,114.0 $1,094.7
======== ======== ======== ======== ======== ========
Statutory ratio development:
Earned premiums $1,126.2 $1,093.6 $1,139.2 $1,157.8 $1,072.7 $1,100.8
Losses and loss adjustment expenses 880.5 864.2 896.6 906.3 817.5 827.2
Other underwriting expenses 346.0 345.6 341.7 336.4 317.9 333.8
-------- -------- -------- -------- -------- --------
Total deductions 1,226.5 1,209.8 1,238.3 1,242.7 1,135.4 1,161.0
-------- -------- -------- -------- -------- --------
Statutory underwriting loss $ (100.3) $ (116.2) $ (99.1) $ (84.9) $ (62.7) $ (60.2)
======== ======== ======== ======== ======== ========
Statutory combined ratio: (1)
Loss and loss adjustment expense ratio 78.2% 79.0% 78.7% 78.3% 76.2% 75.1%
Other underwriting expense ratio 28.6% 30.8% 29.3% 30.2% 28.5% 30.5%
-------- -------- -------- -------- -------- --------
Combined ratio 106.8% 109.8% 108.0% 108.5% 104.7% 105.6%
======== ======== ======== ======== ======== ========
Net investment income (pre-tax) $ 412.5 $ 424.3 $ 411.8 $ 460.7 $ 412.6 $ 410.5
Effective tax rate on net investment income 28.0% 27.5% 26.9% 27.6% 26.6% 26.5%
Catastrophe losses, net of reinsurance (after-tax) $ -- $ 10.4 $ 14.9 $ -- $ -- $ 9.9
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- -------- -------- ---------------------
<S> <C> <C> <C> <C>
REVENUES, NET OF INTEREST EXPENSE * (2%) $ 3,203 $ 3,092 (3%)
CORE INCOME 16% $ 345 $ 390 13%
Net written premiums by market:
National accounts (17%) $ 308.2 $ 251.3 (18%)
Commercial accounts -- 903.4 883.7 (2%)
Select accounts -- 772.3 765.7 (1%)
Specialty accounts (3%) 348.7 308.0 (12%)
-------- --------
Total net written premiums (2%) $2,332.6 $2,208.7 (5%)
======== ========
Statutory ratio development:
Earned premiums 1% $2,219.8 $2,173.5 (2%)
Losses and loss adjustment expenses (4%) 1,744.7 1,644.7 (6%)
Other underwriting expenses (3%) 691.6 651.7 (6%)
-------- --------
Total deductions (4%) 2,436.3 2,296.4 (6%)
-------- --------
Statutory underwriting loss (48%) $ (216.5) $ (122.9) (43%)
======== ========
Statutory combined ratio: (1)
Loss and loss adjustment expense ratio 78.6% 75.7%
Other underwriting expense ratio 29.6% 29.5%
-------- --------
Combined ratio 108.2% 105.2%
======== ========
Net investment income (pre-tax) (3%) $ 836.8 $ 823.1 (2%)
Effective tax rate on net investment income 27.7% 26.5%
Catastrophe losses, net of reinsurance (after-tax) (5%) $ 10.4 $ 9.9 (5%)
</TABLE>
(1) Before policyholder dividends.
* Excludes realized gains.
Page 18
<PAGE>
SSB CITI ASSET MANAGEMENT GROUP
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Investment advisory, admin. & distribution fees $ 288 $ 304 $ 301 $ 317 $ 341 $ 339
Unit Investment Trust revenues - net 13 7 17 4 9 10
Other revenues 12 5 8 11 12 15
-------- -------- -------- -------- -------- --------
Total revenues 313 316 326 332 362 364
Interest expense 8 7 8 8 8 7
-------- -------- -------- -------- -------- --------
Total revenues, net of interest expense 305 309 318 324 354 357
-------- -------- -------- -------- -------- --------
Expenses:
Employee compensation and benefits 85 86 95 118 107 100
Mutual fund commission expense 35 32 31 28 30 28
Other expenses 72 78 80 94 86 90
-------- -------- -------- -------- -------- --------
Total expenses 192 196 206 240 223 218
-------- -------- -------- -------- -------- --------
Core income before income taxes 113 113 112 84 131 139
Provision for income taxes 44 44 44 33 51 55
-------- -------- -------- -------- -------- --------
Core income $ 69 $ 69 $ 68 $ 51 $ 80 $ 84
======== ======== ======== ======== ======== ========
Pre-tax profit margin 37.0% 36.6% 35.2% 25.9% 37.0% 38.9%
Assets Under Management
(in billions of dollars):
Money market and institutional liquidity funds $ 67.5 $ 66.2 $ 71.8 $ 77.8 $ 85.7 $ 83.0
-------- -------- -------- -------- -------- --------
Long-term mutual funds:
Equity / Balanced 42.5 43.6 38.7 43.2 44.5 46.9
Taxable Fixed Income 47.2 51.0 52.8 55.1 56.5 59.5
Tax Exempt Fixed Income 9.6 9.8 10.4 10.8 10.9 10.3
Annuities 3.7 3.4 3.1 3.7 4.1 4.5
-------- -------- -------- -------- -------- --------
Total mutual funds 103.0 107.8 105.0 112.8 116.0 121.2
-------- -------- -------- -------- -------- --------
Managed accounts
Private client 33.7 34.9 35.2 40.3 43.2 46.3
Institutional 76.5 82.6 82.0 96.1 93.3 96.9
-------- -------- -------- -------- -------- --------
Total managed accounts 110.2 117.5 117.2 136.4 136.5 143.2
-------- -------- -------- -------- -------- --------
Total assets under management $ 280.7 $ 291.5 $ 294.0 $ 327.0 $ 338.2 $ 347.4
======== ======== ======== ======== ======== ========
Unit Investment Trusts held in client accounts $ 13.1 $ 12.9 $ 12.4 $ 13.2 $ 13.2 $ 13.3
Number of Morningstar 4- and 5-star funds 23 25 24 24 22 17
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- -------- -------- ---------------------
<S> <C> <C> <C> <C>
Revenues:
Investment advisory, admin. & distribution fees 12% $ 592 $ 680 15%
Unit Investment Trust revenues - net 43% 20 19 (5%)
Other revenues 200% 17 27 59%
-------- --------
Total revenues 15% 629 726 15%
Interest expense -- 15 15 --
-------- --------
Total revenues, net of interest expense 16% 614 711 16%
-------- --------
Expenses:
Employee compensation and benefits 16% 171 207 21%
Mutual fund commission expense (13%) 67 58 (13%)
Other expenses 15% 150 176 17%
-------- --------
Total expenses 11% 388 441 14%
-------- --------
Core income before income taxes 23% 226 270 19%
Provision for income taxes 25% 88 106 20%
-------- --------
Core income 22% $ 138 $ 164 19%
======== ========
Pre-tax profit margin 36.8% 38.0%
Assets Under Management (in billions of dollars):
Money market and institutional liquidity funds 25%
Long-term mutual funds:
Equity / Balanced 8%
Taxable Fixed Income 17%
Tax Exempt Fixed Income 5%
Annuities 32%
Total mutual funds 12%
Managed accounts
Private client 33%
Institutional 17%
Total managed accounts 22%
Total assets under management 19%
Unit Investment Trusts held in client accounts 3%
Number of Morningstar 4- and 5-star funds (32%)
</TABLE>
Page 19
<PAGE>
INVESTMENT ACTIVITIES
(In millions of dollars)
<TABLE>
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
1998 1998 1998 1998 1999 1999 (Decrease) 1998 1999 (Decrease)
---- ---- ---- ---- ---- ---- ----------------- ---- ---- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Core Income:
Proprietary Investments (1) $170 $165 $ 60 $(54) $ 57 $133 (19%) $335 $190 (43%)
LDC Debt Sales 132 118 10 16 13 11 (91%) 250 24 (90%)
Portfolio Gains 87 28 25 50 18 19 (32%) 115 37 (68%)
Refinancing 13 5 5 3 2 -- NM 18 2 (89%)
---- ---- ---- ---- ---- ---- ---- ----
Total Core Income $402 $316 $100 $ 15 $ 90 $163 (48%) $718 $253 (65%)
==== ==== ==== ==== ==== ==== ==== ====
</TABLE>
(1) Includes Venture Capital Activities and certain other corporate
investments.
<TABLE>
<CAPTION>
2Q 1999 vs.
1Q 2Q 3Q 4Q 1Q 2Q 2Q 1998 Increase/
INVESTMENT PORTFOLIO (1) 1998 1998 1998 1998 1999 1999 (Decrease)
---- ---- ---- ---- ---- ---- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed-income investments:
Available for sale, at market:
Mortgage-backed securities - principally
obligations of U.S. Government agencies $ 8,726 $ 8,693 $ 9,663 $ 9,599 $ 9,595 $ 9,294 7%
U.S. Treasury securities and obligations of U.S.
Government corporations and agencies 3,912 4,281 4,977 4,144 3,728 3,324 (22%)
Corporates (including redeemable preferreds) 27,428 27,176 26,796 26,437 27,346 27,504 1%
Obligations of states and political subdivisions 9,124 10,107 10,854 10,977 11,023 10,672 6%
Debt securities issued by foreign governments 1,339 1,166 997 1,603 1,822 1,842 58%
Held to maturity, at amortized cost 38 36 33 30 28 26 (28%)
------- ------- ------- ------- ------- -------
Total fixed income 50,567 51,459 53,320 52,790 53,542 52,662 2%
Equity securities, at market 1,541 1,503 1,368 1,423 1,685 1,819 21%
Short-term and other 6,709 6,179 7,477 5,757 6,651 5,301 (14%)
------- ------- ------- ------- ------- -------
Total investments held by Insurance companies (2) 58,817 59,141 62,165 59,970 61,878 59,782 1%
Proprietary Investments 4,347 4,637 4,606 4,732 4,633 4,835 4%
LDC Debt 5,099 3,941 3,148 3,194 3,290 3,271 (17%)
Refinancing 121 118 125 92 90 89 (25%)
------- ------- ------- ------- ------- -------
Total invested assets $68,384 $67,837 $70,044 $67,988 $69,891 $67,977 --
======= ======= ======= ======= ======= =======
After tax unrealized gains on invested assets $ 1,782 $ 1,582 $ 1,552 $ 1,358 $ 1,041 $ 197 (88%)
======= ======= ======= ======= ======= =======
</TABLE>
(1) Excluding certain investments held by operating banking segments.
(2) Interest and dividend income from investments held by insurance companies
is included in the operating segments and not included in Core Income
above.
NM -- Not meaningful
Page 20
<PAGE>
CITIGROUP CONSOLIDATED STATEMENT OF INCOME
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Loan interest, including fees $ 5,344 $ 5,625 $ 5,884 $ 5,690 $ 5,888 $ 5,614
Other interest and dividends 5,787 6,010 5,926 5,973 5,414 5,449
Insurance premiums 2,340 2,395 2,423 2,692 2,526 2,616
Commissions and fees 2,875 2,985 2,907 2,822 2,780 3,052
Principal transactions 1,365 878 (1,016) 553 1,770 1,272
Asset management and administration fees (1) 498 553 563 678 955 1,003
Realized gains (losses) from sales of investments 378 332 (16) 146 53 188
Other income 850 1,183 923 885 1,135 1,242
-------- -------- -------- -------- -------- --------
Total revenues 19,437 19,961 17,594 19,439 20,521 20,436
Interest expense 6,641 6,996 7,173 6,685 6,451 6,056
-------- -------- -------- -------- -------- --------
Total revenues, net of interest expense 12,796 12,965 10,421 12,754 14,070 14,380
-------- -------- -------- -------- -------- --------
Provisions for Benefits, Claims, and Credit Losses
Policyholder benefits and claims 1,994 2,047 2,099 2,225 2,048 2,151
Provision for credit losses 595 656 826 674 729 790
-------- -------- -------- -------- -------- --------
Total provisions for benefits, claims, and credit losses 2,589 2,703 2,925 2,899 2,777 2,941
-------- -------- -------- -------- -------- --------
Operating Expenses
Non-insurance compensation and benefits 3,491 3,429 2,819 3,597 3,755 3,615
Insurance underwriting, acquisition and operating 812 811 756 895 825 802
Restructuring / Merger Items -- (324) -- 1,119 (130) 47
Other operating 2,436 2,764 2,764 3,182 2,871 3,060
-------- -------- -------- -------- -------- --------
Total operating expenses 6,739 6,680 6,339 8,793 7,321 7,524
-------- -------- -------- -------- -------- --------
Income before Income Taxes, Minority Interest and
Cumulative Effect of Accounting Changes 3,468 3,582 1,157 1,062 3,972 3,915
Provision for income taxes 1,249 1,290 375 320 1,423 1,402
Minority interest, net of income taxes 58 52 53 65 60 65
-------- -------- -------- -------- -------- --------
Income before Cumulative Effect of Accounting
Changes 2,161 2,240 729 677 2,489 2,448
Cumulative effect of accounting changes -- -- -- -- (127) --
-------- -------- -------- -------- -------- --------
Net Income $ 2,161 $ 2,240 $ 729 $ 677 $ 2,362 $ 2,448
======== ======== ======== ======== ======== ========
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- -------- -------- ---------------------
<S> <C> <C> <C> <C>
Revenues
Loan interest, including fees -- $ 10,969 $ 11,502 5%
Other interest and dividends (9%) 11,797 10,863 (8%)
Insurance premiums 9% 4,735 5,142 9%
Commissions and fees 2% 5,860 5,832 --
Principal transactions 45% 2,243 3,042 36%
Asset management and administration fees (1) 81% 1,051 1,958 86%
Realized gains (losses) from sales of investments (43%) 710 241 (66%)
Other income 5% 2,033 2,377 17%
-------- --------
Total revenues 2% 39,398 40,957 4%
Interest expense (13%) 13,637 12,507 (8%)
-------- --------
Total revenues, net of interest expense 11% 25,761 28,450 10%
-------- --------
Provisions for Benefits, Claims, and Credit Losses
Policyholder benefits and claims 5% 4,041 4,199 4%
Provision for credit losses 20% 1,251 1,519 21%
-------- --------
Total provisions for benefits, claims, and credit losses 9% 5,292 5,718 8%
-------- --------
Operating Expenses
Non-insurance compensation and benefits 5% 6,920 7,370 7%
Insurance underwriting, acquisition and operating (1%) 1,623 1,627 --
Restructuring / Merger Items 115% (324) (83) 74%
Other operating 11% 5,200 5,931 14%
-------- --------
Total operating expenses 13% 13,419 14,845 11%
-------- --------
Income before Income Taxes, Minority Interest and
Cumulative Effect of Accounting Changes 9% 7,050 7,887 12%
Provision for income taxes 9% 2,539 2,825 11%
Minority interest, net of income taxes 25% 110 125 14%
-------- --------
Income before Cumulative Effect of Accounting
Changes 9% 4,401 4,937 12%
Cumulative effect of accounting changes -- -- (127) NM
-------- --------
Net Income 9% $ 4,401 $ 4,810 9%
======== ========
</TABLE>
(1) The 1999 first and second quarters include asset management and
administrative fees for Citicorp subsidiaries, previously reflected in
Commissions and fees.
NM -- Not meaningful
Page 21
<PAGE>
CITIGROUP EARNINGS ANALYSIS - MANAGED BASIS
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense $ 12,796 $ 12,965 $ 10,421 $ 12,754 $ 14,070 $ 14,380
Effect of Credit Card Securitization Activity 462 581 576 568 588 570
-------- -------- -------- -------- -------- --------
Adjusted Revenues, Net of Interest Expense 13,258 13,546 10,997 13,322 14,658 14,950
Total Operating Expenses 6,739 6,680 6,339 8,793 7,321 7,524
Restructuring / Merger Items (1) -- 324 -- (1,119) 130 (47)
-------- -------- -------- -------- -------- --------
Adjusted Operating Expenses 6,739 7,004 6,339 7,674 7,451 7,477
Provisions for Benefits, Claims and Credit Losses 2,589 2,703 2,925 2,899 2,777 2,941
Effect of Credit Card Securitization Activity 462 581 576 568 588 570
-------- -------- -------- -------- -------- --------
Adjusted Provisions for Benefits, Claims and Credit Losses 3,051 3,284 3,501 3,467 3,365 3,511
Core Income Before Income Taxes, Minority Interest
and Cumulative Effect of Accounting Changes 3,468 3,258 1,157 2,181 3,842 3,962
Taxes on Core Income 1,249 1,157 375 713 1,367 1,420
Minority Interest, Net of Income Taxes 58 52 53 65 60 65
-------- -------- -------- -------- -------- --------
Core Income 2,161 2,049 729 1,403 2,415 2,477
Restructuring / Merger Items After-tax (1) -- 191 -- (726) 74 (29)
Cumulative Effect of Accounting Changes (2) -- -- -- -- (127) --
-------- -------- -------- -------- -------- --------
Net Income $ 2,161 $ 2,240 $ 729 $ 677 $ 2,362 $ 2,448
======== ======== ======== ======== ======== ========
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- -------- -------- ---------------------
<S> <C> <C> <C> <C>
Total Revenues, Net of Interest Expense 11% $ 25,761 $ 28,450 10%
Effect of Credit Card Securitization Activity (2%) 1,043 1,158 11%
-------- --------
Adjusted Revenues, Net of Interest Expense 10% 26,804 29,608 10%
Total Operating Expenses 13% 13,419 14,845 11%
Restructuring / Merger Items (1) 115% 324 83 74%
-------- --------
Adjusted Operating Expenses 7% 13,743 14,928 9%
Provisions for Benefits, Claims and Credit Losses 9% 5,292 5,718 8%
Effect of Credit Card Securitization Activity (2%) 1,043 1,158 11%
-------- --------
Adjusted Provisions for Benefits, Claims and Credit Losses 7% 6,335 6,876 9%
Core Income Before Income Taxes, Minority Interest
and Cumulative Effect of Accounting Changes 22% 6,726 7,804 16%
Taxes on Core Income 23% 2,406 2,787 16%
Minority Interest, Net of Income Taxes 25% 110 125 14%
-------- --------
Core Income 21% 4,210 4,892 16%
Restructuring / Merger Items After-tax (1) 115% 191 45 76%
Cumulative Effect of Accounting Changes (2) NM -- (127) NM
-------- --------
Net Income 9% $ 4,401 $ 4,810 9%
======== ========
</TABLE>
(1) Includes restructuring charge of $1,122 million pre-tax ($703 million
after-tax) and merger-related expenses of $65 million in the 1998 fourth
quarter; credits for reversals of the 1997 charge of $211 million pre-tax
($125 million after-tax) in the 1999 first quarter, $68 million pre-tax
($42 million after-tax) in the 1998 fourth quarter, and $324 million
pre-tax ($191 million after-tax) in the 1998 second quarter . The 1999
first and second quarters include $81 million pre-tax ($51 million
after-tax) and $47 million pre-tax ($29 million after-tax), respectively,
of restructuring related items.
(2) First quarter 1999 accounting changes refer to adoption of Statement of
Position ("SOP") 97-3, "Accounting by Insurance and Other Enterprises for
Insurance-Related Assessments" (SOP 97-3) of ($135) million; adoption of
SOP 98-7, "Deposits Accounting: Accounting for Insurance and Reinsurance
Contracts That Do Not Transfer Insurance Risk" of $23 million; and the
adoption of SOP 98-5, "Reporting on the Costs of Start-Up Activities" of
($15) million.
NM -- Not meaningful
Page 22
<PAGE>
CONSUMER LOAN DELINQUENCY AMOUNTS, NET CREDIT LOSSES AND RATIOS
(In millions of dollars, except loan amounts in billions)
<TABLE>
<CAPTION>
EOP Average
Loans 90 Days Or More Past Due (1) Loans Net Credit Losses (1)
------- ------------------------------- ------- -------------------------------
2Q 1999 2Q 1999 1Q 1999 2Q 1998 2Q 1999 2Q 1999 1Q 1999 2Q 1998
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Citibanking North America $ 8 $ 96 $ 107 $ 119 $ 8 $ 26 $ 28 $ 31
Ratio 1.20% 1.33% 1.39% 1.31% 1.35% 1.49%
Mortgage Banking 28 575 610 634 27 11 13 18
Ratio 2.09% 2.29% 2.67% 0.17% 0.20% 0.31%
U.S. Bankcards (2) 70 954 1,007 956 69 803 784 852
Ratio 1.36% 1.46% 1.56% 4.63% 4.72% 5.65%
Other Cards 3 46 46 40 2 21 18 17
Ratio 1.80% 1.86% 1.61% 3.33% 3.25% 2.77%
Consumer Finance Services 14 172 183 145 13 70 71 71
Ratio 1.26% 1.42% 1.37% 2.14% 2.38% 2.78%
Europe, Middle East and Africa 16 882 878 887 16 68 73 65
Ratio 5.50% 5.45% 5.80% 1.71% 1.81% 1.71%
Asia Pacific 23 509 513 324 23 76 78 58
Ratio 2.17% 2.31% 1.64% 1.33% 1.43% 1.17%
Latin America 8 346 292 209 8 124 91 57
Ratio 4.32% 3.75% 2.61% 6.17% 4.74% 2.88%
Global Private Bank 18 162 191 197 18 2 8 --
Ratio 0.88% 1.10% 1.23% 0.05% 0.18% NM
Other 1 2 2 2 1 1 1 1
------- ------- ------- ------- ------- ------- ------- -------
Total Managed 189 3,744 3,829 3,513 185 1,202 1,165 1,170
Ratio 1.98% 2.09% 2.12% -- 2.58% 2.61% 2.86%
Securitization Activities:
Securitized Credit Card Receivables (47) (652) (688) (605) (47) (541) (556) (544)
Loans Held for Sale (7) (35) (39) (40) (6) (29) (32) (37)
------- ------- ------- ------- ------- ------- ------- -------
(54) (687) (727) (645) (53) (570) (588) (581)
Total Loans $ 135 $ 3,057 $ 3,102 $ 2,868 $ 132 $ 632 $ 577 $ 589
======= ======= ======= ======= ======= ======= ======= =======
Ratio 2.27% 2.37% 2.39% 1.89% 1.78% 1.93%
</TABLE>
(1) The ratios of 90 days or more past due and net credit losses are
calculated based on end-of-period and average loans, respectively, both
net of unearned income.
(2) Includes U.S. Bankcards and Travelers Bank.
NM Not meaningful
Page 23
<PAGE>
CITIGROUP SUPPLEMENTAL DATA
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
CASH BASIS AND RENEGOTIATED LOANS
Commercial Cash-Basis Loans
Collateral Dependent (at lower of cost or collateral value) (1) $ 242 $ 193 $ 170 $ 394 $ 358 $ 214
Other 1,102 1,100 1,110 1,201 1,277 1,341
------ ------ ------ ------ ------ ------
Total Cash-Basis Loans $1,344 $1,293 $1,280 $1,595 $1,635 $1,555
====== ====== ====== ====== ====== ======
Commercial Cash-Basis Loans
Emerging Markets $ 953 $ 981 $ 982 $1,062 $1,095 $1,197
Global Relationship Banking 378 300 286 268 308 279
Insurance Subsidiaries -- -- -- 252 218 66
Investment Activities 13 12 12 13 14 13
------ ------ ------ ------ ------ ------
Total Cash-Basis Loans $1,344 $1,293 $1,280 $1,595 $1,635 $1,555
====== ====== ====== ====== ====== ======
Commercial Renegotiated Loans $ 61 $ 45 $ 48 $ 45 $ 47 $ 50
====== ====== ====== ====== ====== ======
Consumer Loans on which Accrual of Interest
has been Suspended $2,013 $2,031 $2,107 $2,283 $2,252 $2,259
====== ====== ====== ====== ====== ======
OTHER REAL ESTATE OWNED (2)
Consumer $ 258 $ 199 $ 260 $ 254 $ 217 $ 213
------ ------ ------ ------ ------ ------
Emerging Markets 21 24 26 27 26 28
Global Relationship Banking 329 324 319 235 212 178
Insurance Subsidiaries 189 191 211 234 225 428
------ ------ ------ ------ ------ ------
Total Commercial 539 539 556 496 463 634
------ ------ ------ ------ ------ ------
Total $ 797 $ 738 $ 816 $ 750 $ 680 $ 847
====== ====== ====== ====== ====== ======
ASSETS PENDING DISPOSITION (3) $ 103 $ 104 $ 103 $ 100 $ 95 $ 89
====== ====== ====== ====== ====== ======
ALLOWANCE FOR CREDIT LOSSES
Global Consumer (4) $2,830 $3,200 $3,275 $3,310 $3,355 $3,436
Global Corporate and Investment Bank 3,329 3,329 3,329 3,307 3,307 3,307
------ ------ ------ ------ ------ ------
Total Allowance for Credit Losses $6,159 $6,529 $6,604 $6,617 $6,662 $6,743
====== ====== ====== ====== ====== ======
Allowance As a Percent of Total Loans:
Global Consumer 2.41% 2.67% 2.62% 2.50% 2.56% 2.55%
Global Corporate and Investment Bank 3.89% 3.80% 3.68% 3.69% 3.46% 3.38%
Total 3.03% 3.15% 3.06% 2.98% 2.94% 2.90%
</TABLE>
(1) A cash-basis loan is defined as collateral dependent when repayment is
expected to be provided solely by the underlying collateral and there are
no other available and reliable sources of repayment, in which case the
loans are written down to the lower of cost or collateral value.
(2) Represents repossessed real estate, carried at lower of cost or collateral
value.
(3) Represents consumer residential mortgage loans that have a high
probability of foreclosure, carried at lower of cost or collateral value.
(4) The 1998 second quarter reflects the addition of $320 million of credit
loss reserves related to the acquisition of the Universal Card portfolio.
Page 24
<PAGE>
CITIGROUP MANAGED ASSETS AND INSURANCE INVESTMENTS
(In billions of dollars)
<TABLE>
<CAPTION>
YTD YTD
1Q 2Q 3Q 4Q 1Q 2Q 2Q 2Q
1998 1998 1998 1998 1999 1999 1998 1999
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SSB Citi Asset Management Group $280.7 $291.5 $294.0 $327.0 $338.2 $347.4 $291.5 $347.4
SSB - Financial Consultant managed accounts 13.3 14.3 13.8 16.5 18.6 20.2 14.3 20.2
Travelers Life and Annuity 25.2 24.3 25.7 26.0 26.6 27.3 24.3 27.3
------ ------ ------ ------ ------ ------ ------ ------
Total assets managed for third parties 319.2 330.1 333.5 369.5 383.4 394.9 330.1 394.9
Consulting Group externally managed assets 67.1 69.3 63.9 71.9 73.1 76.8 69.3 76.8
Other investments held by Insurance companies 37.1 38.2 40.1 37.6 39.0 39.3 38.2 39.3
------ ------ ------ ------ ------ ------ ------ ------
Total managed assets and insurance investments $423.4 $437.6 $437.5 $479.0 $495.5 $511.0 $437.6 $511.0
====== ====== ====== ====== ====== ====== ====== ======
<CAPTION>
CITICORP SUPPLEMENTAL DATA
(In millions of dollars)
YTD YTD
1Q 2Q 3Q 4Q 1Q 2Q 2Q 2Q
1998 1998 1998 1998 1999 1999 1998 1999
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET INTEREST REVENUE STATISTICS
(taxable equivalent basis)
Net Interest Revenue $2,856 $3,009 $3,117 $3,284 $3,274 $3,308 $5,865 $6,582
Effect of Credit Card Securitization Activity 640 908 951 1,039 1,080 1,016 1,548 2,096
------ ------ ------ ------ ------ ------ ------ ------
Total Adjusted $3,496 $3,917 $4,068 $4,323 $4,354 $4,324 $7,413 $8,678
====== ====== ====== ====== ====== ====== ====== ======
Average Interest Earning Assets (in billions of dollars) $265.2 $276.0 $278.7 $287.5 $289.5 $292.4 $270.6 $291.0
Effect of Credit Card Securitization Activity 27.4 36.8 39.9 41.2 44.0 46.4 32.1 45.2
------ ------ ------ ------ ------ ------ ------ ------
Total Adjusted $292.6 $312.8 $318.6 $328.7 $333.5 $338.8 $302.7 $336.2
====== ====== ====== ====== ====== ====== ====== ======
Net Interest Margin (%) 4.37% 4.37% 4.44% 4.53% 4.59% 4.54% 4.37% 4.56%
Effect of Credit Card Securitization Activity 0.48% 0.65% 0.62% 0.69% 0.70% 0.58% 0.57% 0.65%
====== ====== ====== ====== ====== ====== ====== ======
Total Adjusted 4.85% 5.02% 5.06% 5.22% 5.29% 5.12% 4.94% 5.21%
====== ====== ====== ====== ====== ====== ====== ======
TRADING-RELATED REVENUES
By Business Sector:
Global Corporate:
Emerging Markets $ 271 $ 259 $ 234 $ 174 $ 301 $ 221 $ 530 $ 522
Global Relationship Banking 383 357 63 310 448 285 740 733
------ ------ ------ ------ ------ ------ ------ ------
Total Global Corporate 654 616 297 484 749 506 1,270 1,255
Global Consumer and Other 74 114 95 101 123 94 188 217
------ ------ ------ ------ ------ ------ ------ ------
Total $ 728 $ 730 $ 392 $ 585 $ 872 $ 600 $1,458 $1,472
====== ====== ====== ====== ====== ====== ====== ======
By Trading Activity:
Foreign Exchange $ 412 $ 425 $ 403 $ 373 $ 424 $ 308 $ 837 $ 732
Derivative 196 182 102 223 290 183 378 473
Fixed Income 70 31 (30) (11) 32 21 101 53
Other 50 92 (83) -- 126 88 142 214
------ ------ ------ ------ ------ ------ ------ ------
Total $ 728 $ 730 $ 392 $ 585 $ 872 $ 600 $1,458 $1,472
====== ====== ====== ====== ====== ====== ====== ======
By Income Statement Line:
Foreign Exchange $ 349 $ 465 $ 474 $ 340 $ 488 $ 368 $ 814 $ 856
Trading Account 236 98 (159) 90 304 138 334 442
Other 143 167 77 155 80 94 310 174
====== ====== ====== ====== ====== ====== ====== ======
Total $ 728 $ 730 $ 392 $ 585 $ 872 $ 600 $1,458 $1,472
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
Page 25
<PAGE>
TRAVELERS PROPERTY CASUALTY CORP. SUPPLEMENTAL DATA
(In millions of dollars)
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q 2Q
1998 1998 1998 1998 1999 1999
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
GAAP Consolidated Statement of Operations
Revenues:
Premiums $ 1,898.2 $ 1,902.8 $ 1,974.9 $ 2,020.2 $ 1,964.8 $ 2,005.9
Net investment income 508.3 519.3 501.4 571.0 503.2 509.5
Fee income 82.0 76.9 74.2 72.7 66.5 67.9
Realized investment gains 66.4 9.6 32.7 34.8 15.6 31.6
Other revenues 39.3 23.6 17.2 25.6 22.5 19.9
--------- --------- --------- --------- --------- ---------
Total revenues 2,594.2 2,532.2 2,600.4 2,724.3 2,572.6 2,634.8
--------- --------- --------- --------- --------- ---------
Claims and expenses:
Claims and claim adjustment expenses* 1,427.9 1,430.8 1,517.7 1,529.4 1,449.1 1,492.3
Policyholder dividends 13.0 13.2 13.3 1.9 10.4 8.1
Amortization of deferred acquisition costs 285.9 303.7 304.7 302.2 314.6 310.9
Interest expense 41.0 40.4 39.9 39.9 39.9 39.9
General and administrative expenses 340.5 318.0 300.1 350.3 307.9 303.3
--------- --------- --------- --------- --------- ---------
Total claims and expenses 2,108.3 2,106.1 2,175.7 2,223.7 2,121.9 2,154.5
--------- --------- --------- --------- --------- ---------
Income before federal income taxes and cumulative
effect of changes in accounting principles 485.9 426.1 424.7 500.6 450.7 480.3
Federal income taxes 138.8 113.6 109.4 132.7 117.1 126.0
--------- --------- --------- --------- --------- ---------
Income before cumulative effect of changes in
accounting principles 347.1 312.5 315.3 367.9 333.6 354.3
Cumulative effect of change in accounting for insurance-
related assessments, net of tax -- -- -- -- (160.5) --
Cumulative effect of change in accounting for insurance and
reinsurance contracts that do not transfer insurance
risk, net of tax -- -- -- -- 27.4 --
--------- --------- --------- --------- --------- ---------
Net income** $ 347.1 $ 312.5 $ 315.3 $ 367.9 $ 200.5 $ 354.3
========= ========= ========= ========= ========= =========
* Includes pre-tax:
Catastrophe losses, net of reinsurance $ 13.2 $ 36.2 $ 56.5 $ -- $ 12.5 $ 51.0
Asbestos and environmental losses $ 31.0 $ 30.0 $ 28.0 $ 27.0 $ 29.0 $ 29.0
** Includes, net of taxes:
Net investment income $ 364.8 $ 375.5 $ 366.1 $ 412.2 $ 368.9 $ 373.4
Realized investment gains $ 43.2 $ 6.2 $ 21.3 $ 22.5 $ 10.1 $ 20.5
Statutory underwriting
Net written premiums (1) $ 2,017.8 $ 1,994.7 $ 2,076.9 $ 2,014.2 $ 2,097.4 $ 2,045.6
Net earned premiums $ 1,897.0 $ 1,896.1 $ 1,974.9 $ 2,020.2 $ 1,964.8 $ 2,005.9
Losses and loss adjustment expenses 1,383.2 1,387.7 1,477.5 1,480.4 1,411.8 1,454.3
Other underwriting expenses 572.0 587.7 585.2 575.2 587.7 576.3
--------- --------- --------- --------- --------- ---------
Statutory underwriting loss (58.2) (79.3) (87.8) (35.4) (34.7) (24.7)
Policyholder dividends 13.0 13.2 13.3 1.9 10.4 8.1
--------- --------- --------- --------- --------- ---------
Statutory underwriting loss after policyholder
dividends $ (71.2) $ (92.5) $ (101.1) $ (37.3) $ (45.1) $ (32.8)
========= ========= ========= ========= ========= =========
Reserves for losses and loss adjustment expenses $21,323.2 $21,141.8 $20,958.4 $20,726.7 $20,660.1 $20,445.6
Decrease in reserves (2) $ (73.0) $ (181.4) $ (183.4) $ (231.7) $ (66.6) $ (214.5)
Statutory surplus $ 6,409.1 $ 6,640.4 $ 6,754.3 $ 7,079.1 $ 7,260.0 $ 7,493.1
Net written premiums/surplus (3) 1.21:1 1.18:1 1.18:1 1.14:1 1.13:1 1.10:1
Statutory combined ratio: (1) (4)
Loss and loss adjustment expense ratio 72.9% 73.2% 74.8% 73.3% 71.9% 72.5%
Other underwriting expense ratio 28.3% 29.5% 28.2% 28.6% 28.0% 28.2%
--------- --------- --------- --------- --------- ---------
Combined ratio 101.2% 102.7% 103.0% 101.9% 99.9% 100.7%
========= ========= ========= ========= ========= =========
<CAPTION>
2Q 1999 vs. YTD YTD YTD 2Q 1999 vs.
2Q 1998 Increase/ 2Q 2Q YTD 2Q 1998 Increase/
(Decrease) 1998 1999 (Decrease)
----------------- --------- --------- ---------------------
<S> <C> <C> <C> <C>
GAAP Consolidated Statement of Operations
Revenues:
Premiums 5% $ 3,801.0 $ 3,970.7 4%
Net investment income (2%) 1,027.6 1,012.7 (1%)
Fee income (12%) 158.9 134.4 (15%)
Realized investment gains 229% 76.0 47.2 (38%)
Other revenues (16%) 62.9 42.4 (33%)
--------- ---------
Total revenues 4% 5,126.4 5,207.4 2%
--------- ---------
Claims and expenses:
Claims and claim adjustment expenses* 4% 2,858.7 2,941.4 3%
Policyholder dividends (39%) 26.2 18.5 (29%)
Amortization of deferred acquisition costs 2% 589.6 625.5 6%
Interest expense (1%) 81.4 79.8 (2%)
General and administrative expenses (5%) 658.5 611.2 (7%)
--------- ---------
Total claims and expenses 2% 4,214.4 4,276.4 1%
--------- ---------
Income before federal income taxes and cumulative
effect of changes in accounting principles 13% 912.0 931.0 2%
Federal income taxes 11% 252.4 243.1 (4%)
--------- ---------
Income before cumulative effect of changes in
accounting principles 13% 659.6 687.9 4%
Cumulative effect of change in accounting for insurance-
related assessments, net of tax NM -- (160.5) NM
Cumulative effect of change in accounting for insurance and
reinsurance contracts that do not transfer insurance
risk, net of tax NM -- 27.4 NM
--------- ---------
Net income** 13% $ 659.6 $ 554.8 (16%)
========= =========
* Includes pre-tax:
Catastrophe losses, net of reinsurance 41% $ 49.4 $ 63.5 29%
Asbestos and environmental losses (3%) $ 61.0 $ 58.0 (5%)
** Includes, net of taxes:
Net investment income (1%) $ 740.3 $ 742.3 --
Realized investment gains 231% $ 49.4 $ 30.6 (38%)
Statutory underwriting
Net written premiums (1) 3% $ 4,012.5 $ 4,143.0 3%
Net earned premiums 6% $ 3,793.1 $ 3,970.7 5%
Losses and loss adjustment expenses 5% 2,770.9 2,866.1 3%
Other underwriting expenses (2%) 1,159.7 1,164.0 --
--------- ---------
Statutory underwriting loss (69%) (137.5) (59.4) (57%)
Policyholder dividends (39%) 26.2 18.5 (29%)
--------- ---------
Statutory underwriting loss after policyholder
dividends (65%) $ (163.7) $ (77.9) (52%)
========= =========
Reserves for losses and loss adjustment expenses (3%) $21,141.8 $20,445.6 (3%)
Decrease in reserves (2) 18% $ (254.4) $ (281.1) 10%
Statutory surplus 13% $ 6,640.4 $ 7,493.1 13%
Net written premiums/surplus (3) 1.18:1 1.10:1
Statutory combined ratio: (1) (4)
Loss and loss adjustment expense ratio 73.1% 72.2%
Other underwriting expense ratio 28.9% 28.1%
--------- ---------
Combined ratio 102.0% 100.3%
========= =========
</TABLE>
(1) The 1999 first quarter and six month net written premiums include an
increase of $71.7 million due to an adjustment associated with a
reinsurance transaction. Excluding this transaction, the statutory loss
and loss adjustment expense ratio, other underwriting expense ratio and
combined ratio for the 1999 first quarter were 71.9%, 27.7% and 99.6%,
respectively, and for the 1999 six months were 72.2%, 27.9% and 100.1%,
respectively.
(2) Payments on environmental and cumulative injury claims incurred in prior
years are reflected as a decrease in reserves. Such payments do not have
any impact on reported earnings.
(3) Based on 12 month rolling net written premiums.
(4) Before policyholder dividends.
NM -- Not meaningful
Page 26
<PAGE>
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 hereunto duly authorized.
Dated: July 20, 1999 Citigroup Inc.
By: /s/ Roger W. Trupin
----------------------------
Roger W. Trupin
Controller
