Security Analysis Presentation:Security Analysis Presentation:

Investment Funds ManagementInvestment Funds Management

September 20, 2004September 20, 2004

Current Stock Facts (C)Current Stock Facts (C)

Price: $45.36Price: $45.36 52 week range: $42.10-$49.9952 week range: $42.10-$49.99 Market Cap: 234,980.2(mil)Market Cap: 234,980.2(mil) Beta: 1.28Beta: 1.28 EPS: 3.26EPS: 3.26 DPS: 1.60DPS: 1.60 P/E: 11.2P/E: 11.2

Citigroup’s Company ProfileCitigroup’s Company Profile

Diversified holding companyDiversified holding company Global financial services provider

15 brands under Citigroup umbrella15 brands under Citigroup umbrella 3 major business segments and 2 stand-alone 3 major business segments and 2 stand-alone

segmentssegments 287,000 employees; 4,500 locations 287,000 employees; 4,500 locations Global distribution to six continents and over Global distribution to six continents and over

100 countries100 countries

Management Management

Charles Prince- CEO and Director, Charles Prince- CEO and Director, October 2003October 2003

Sanford Weill- Remains chairman of Sanford Weill- Remains chairman of board until 2006board until 2006

May still have too much control

2004 major revamping of corporate 2004 major revamping of corporate governancegovernance

Result: 70% of board classified as independent

Trend Analysis vs. S&P 500Trend Analysis vs. S&P 500

EPS Estimates (analysts)EPS Estimates (analysts)

Current Quarter Next Quarter Current Year Next YearCurrent Estimate 0.98 1.02 4.04 4.427 days ago 0.98 1.03 4.04 4.4330 days ago 0.98 1.03 4.05 4.4360 days ago 1.03 1.07 4.15 4.5790 days ago 1.04 1.08 4.2 4.62

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Industry ComparisonsIndustry Comparisons

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DIRECT COMPETITOR COMPARISONC BAC DB JPM Industry

Market Cap: 233.27B 171.16B 43.05B 120.81B 16.40BEmployees: 287,000 175,742 65,417 160,968 23.70KRevenue (ttm): 80.82B 53.36B 27.74B 48.39B 5.71BOper Margins (ttm): 52.18% 57.44% 33.03% 38.18% 48.69%Net Income (ttm): 20.94B 16.59B 3.59B 6.31B 1.02BEPS (ttm): 4.041 4.045 6.946 1.761 1.96P/E (ttm): 11.17 10.53 13.36 19.53 15.87PEG (5 yr expected): 1.02 1.1 0.88 1.17 1.34P/S (ttm): 2.89 3.21 1.53 2.48 3.23

Industry Comparisons (continued)Industry Comparisons (continued)

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Growth Est C Industry S&P 500Current Qtr. -3.90% 6.80% 17.60%Next Qtr. 0.00% 9.40% 15.50%This Year 0.00% 6.30% 14.40%Next Year 9.40% 9.20% 11.40%

Fundamental ValuationFundamental Valuation

Required rate of return = 12.46%Required rate of return = 12.46% Assumes Rf = 4.3% and Equity risk premium of 6.38%

Forecasted growth rate = 8.0376%Forecasted growth rate = 8.0376% Future dividend w/ constant growth = 2.07Future dividend w/ constant growth = 2.07

Value of Stock = $39.06Value of Stock = $39.06

Summary of Citigroup as an InvestmentSummary of Citigroup as an Investment

Pros: Pros: Large, well diversified financial services conglomerate With global expansion as its goal has growth opportunity Relatively inexpensive trading at 11X earnings Increased corporate governance mechanisms

Cons: Cons: Slowed growth recently expected to continue until year end Decreased earnings estimates by analysts in past 90 days Valuation model prices at $39 Underperformance of the S&P 500 over the last year

RecommendationRecommendation

HOLDHOLD

Uncertain future in the short-runUncertain future in the short-run

Long-term growth opportunities existLong-term growth opportunities exist