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)  April 11, 2007

Citigroup Inc.
(Exact name of Registrant as specified in its charter)

Delaware

1-9924

52-1568099

(State or other jurisdiction
 of incorporation)

(Commission
File Number)

(IRS Employer
 Identification No.)

 

 

 

399 Park Avenue, New York,
New York
(Address of principal executive offices)

 

10043
(Zip Code)


(212) 559-1000

(Registrant’s telephone number,
including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 




 

CITIGROUP INC.

Current Report on Form 8-K

Item 7.01  Regulation FD Disclosure.

On April 11, 2007, Citigroup Inc. held an investor presentation titled “Structural Expense Review.”

Exhibit 99.1 is a copy of the related press release issued by Citigroup Inc., and Exhibit 99.2 is a copy of the presentation materials used in connection with the investor presentation.  The information in Exhibits 99.1 and 99.2 is being furnished pursuant to Item 7.01 of this Current Report on Form 8-K, and the information contained in Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under Section 18.  Furthermore, the information contained in Exhibits 99.1 and 99.2 shall not be deemed to be incorporated by reference into the filings of Citigroup Inc. under the Securities Act of 1933, as amended.

Item 9.01  Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit Number

 

99.1

Press release, dated April 11, 2007, issued by Citigroup Inc.

 

 

99.2

Presentation materials for the investor presentation by Citigroup Inc.

 

The investor presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act.  These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances.  Actual results may differ materially from those included in these statements due to a variety of factors.  More information about these factors is contained in Citigroup’s filings with the Securities and Exchange Commission.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

CITIGROUP INC.

 

 

 

 

 

Dated: April 11, 2007

 

By:

 

/s/ JOHN C. GERSPACH

 

 

 

 

Name: John C. Gerspach

 

 

 

 

Title: Controller and Chief Accounting Officer

 

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EXHIBIT INDEX

Exhibit Number

 

99.1

Press release, dated April 11, 2007, issued by Citigroup Inc.

99.2

Presentation materials for the investor presentation by Citigroup Inc.

 

 

 



Exhibit 99.1

For Immediate Release
Citigroup Inc. (NYSE: C)
April 11, 2007

Citi Announces Actions to Streamline Organization,
Reduce Expense Growth and Drive Future Expansion

Projected Savings of Approximately $2.1 Billion in 2007,
Growing to $4.6 Billion in 2009

First Quarter 2007 Pre-Tax Charge of $1.38 Billion

New York – Citi today announced its plan to create a more streamlined organization, reduce expense growth, and drive future expansion. The plan is a result of a structural expense review conducted over the past three months in every business, as well as the previously announced IT optimization program.

“In December, I charged Bob Druskin and our management team with a simple directive: eliminate organizational, technology, and administrative costs that do not contribute to our ability to efficiently deliver products and services to our clients,” said Charles Prince, Chairman and Chief Executive Officer. “The recommendations that emerged from the structural expense review will improve business integration, as well as our ability to move quickly and seize new growth opportunities.”

With previously announced information technology savings, the structural expense review is expected to generate total expense savings of approximately $2.1 billion in 2007, $3.7 billion in 2008, and $4.6 billion in 2009. The company will record a charge of $1.38 billion pre-tax, $871 million after-tax, in the first quarter of 2007, and additional charges totaling approximately $200 million pre-tax over the subsequent quarters of 2007.

“We undertook this review to create a consistent level of best-in-class expense discipline in every part of our company,” said Robert Druskin, Chief Operating Officer, who managed the structural expense review process. “We did not simply give the entire organization an arbitrary number to cut. Instead, we looked objectively at each of our businesses and functions based on the opportunities we saw, benchmarking them against their peers.”

He continued, “We have been very careful to maintain our revenue generating capability – in fact, this effort should enhance our capacity to grow. There will be very little impact on client-facing functions, other than additional efforts to enhance our service levels. We remain as committed as ever to our investment objectives and will continue to add resources in areas targeted for growth.




“Through this effort, we are adopting a process of continuous improvement, recognizing that strong ongoing expense discipline is an essential part of being a great company and achieving our goals. We expect this discipline to produce additional savings in the months and years ahead,” concluded Mr. Druskin.

The review process focused on structural changes that improve our operations. As a result of this review, the company will:

·                  Eliminate layers of management, bringing those interacting with clients closer to those responsible for running the businesses. In many businesses the company will increase the average number of employees that report to each manager. This will enable Citi to make decisions more quickly, reinforcing a culture of ideas and intelligent business risk taking, and enabling people to use their time more productively in service to clients. The company is also reducing corporate center.

·                  Consolidate certain back-office, middle-office and corporate functions at the business, regional and headquarters levels to eliminate duplication of effort and to focus instead on building truly efficient, world-class back-office and support functions. More than 9,500 jobs will be moved to lower-cost locations, both domestically and internationally, with about two-thirds through attrition.

·                  Increase the use of shared services across sectors to obtain greater efficiencies by leveraging scale and better sharing expertise across business groups. This effort includes the creation of utilities in areas such as legal, human resources, risk management, and  financial operations, as well as the sharing of regional and country middle office functions in international markets.

·                  Expand centralized procurement. At the end of 2006, the company had centralized 65% of its overall purchases. That amount is expected to increase to 80% by the end of 2007 and close to 100% by the end of 2009.

·                  Continue to rationalize operational spending on technology. Simplification and standardization of Citi’s information technology platform will be critical to increase efficiency and drive lower costs as well as decrease time to market. Examples of this are: consolidation of data centers; improved capacity utilization of technical assets and optimizing global voice and data networks; standardizing how the company develops, deploys and runs applications; and maximizing value by limiting the number of software vendors to operate at scale.

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As a result of the structural changes identified in the review, Citi will eliminate approximately 17,000 positions.   Citi’s total headcount will continue to grow in 2007, but the rate of growth, excluding acquisitions, new branches and other investments, will slow significantly.

“Ultimately these changes will streamline Citi and make us leaner, more efficient, and better able to take advantage of high revenue opportunities,” Prince said.

###

Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi’s major brand names include Citibank, CitiFinancial, Primerica, Citi Smith Barney and Banamex. Additional information may be found at www.citigroup.com or www.citi.com.

Certain statements in this document are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in Citigroup’s filings with the Securities and Exchange Commission.

Contacts

Media:

Christina Pretto

(212) 559-9560

 

Michael Hanretta

(212) 559-9466

 

Shannon Bell

(212) 793-6206

 

 

 

Equity Investors:

Arthur Tildesley

(212) 559-2718

 

 

 

Fixed Income Investors:

Maurice Raichelson

(212) 559-5091

 

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Exhibit 99.2

 

GRAPHIC

Structural Expense Review Improving How We Operate Robert Druskin Chief Operating Officer April 11, 2007

 


GRAPHIC

Key Priorities in 2007 Generate Growth in U.S. Consumer Re-weight Towards Int’l Consumer, Markets & Banking, GWM Sharp Focus on Expense Management Credit Management Structurally reduce expense growth Improve workforce management Expand shared services Optimize IT assets Drive other reductions Change how we operate Eliminate redundancies Shrink the size of corporate centers Increase speed of decision-making Reduce bureaucracy Sustain and enhance organic investment initiatives Eliminate unproductive expenses and move resources to growth initiatives Maintain revenue producing capacity Objectives of Structural Expense Review

 


GRAPHIC

Structural Expense Review Summary of Results * Excludes from the 2006 Expense base of $52.0B the impact from 123(R), Incentive Compensation and Smith Barney commissions. Note: 1Q 2007 repositioning charge of $1.38 billion pre-tax, $871 million after tax. 1Q 2007 repositioning charge of $1.4 billion pre-tax, recorded in Corporate / Other Additional charges of ~$100MM in 2Q’07 and ~$50MM in each subsequent quarter of 2007 Implementation costs of ~$100 million in 2007 Costs Combined projected expense savings: 2007: $2.1 billion 2008: $3.7 billion 2009: $4.6 billion 2006 targeted expense base of $40.6 billion* Net headcount reduction of ~17,000 positions Saves Roadmap created to capture additional savings

 


GRAPHIC

Expanding Shared Services Structural Expense Levers Improving Workforce Management Optimizing IT Assets Platform and system consolidation Server rationalization Improved capacity utilization Organization redesign De-layering Improving span of control Reducing duplicative capabilities Shrinking the size of corporate centers Impact: Approximately 17,000 net headcount reduction 9,500 positions moving to lower cost locations Other Actions Facilities consolidation Focused line item reviews Legal, human resources, financial operations, risk management Centralized procurement

 


GRAPHIC

Summary of Projected Expense Savings Global Consumer $650 $1,225 $1,225 Markets & Banking 400 500 500 Wealth Management 175 150 150 Corporate Operations & Technology 375 550 550 Other 100 150 150 Sub-Total $1,700 $2,575 $2,575 Previously Announced Information Technology Optimization 400 1,100 2,000 Total $2,100 $3,675 $4,575 ($ millions, pre-tax) 2007 2008 2009 Note: Numbers rounded to the nearest $25 million.

 


GRAPHIC

Looking Ahead Implement planned actions Reallocate resources to growth initiatives Pursue additional expense opportunities Change the way we operate

 


GRAPHIC

Certain statements in this document are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in Citigroup’s filings with the Securities and Exchange Commission.