(Operator Instructions) Welcome to Citi’s first quarter 2009 earnings review, featuring Citi Chief Financial Officer, Ned Kelly. Today’s call will be hosted by Scott Freidenrich, head of Citi Investor Relations.

Welcome to our first quarter 2009 earnings review. On our call this morning is Citi’s Chief Financial Officer; Ned Kelly, will take you through the presentation which is available for download on our website, Citigroup.com. Afterwards we will be happy to take any questions. Please limit follow up questions to one. Before we get started I would like to remind you that today’s presentation may contain forward-looking statements. Citi’s financial results may differ materially from these statements so please refer to our SEC filings for a description of the factors that could cause our actual results to differ from expectations. With that said, let me turn it over to Ned.

I wanted to start if I could by thinking Gary Crittenden for the tremendous contributions he’s made to Citi during his time as CFO and I’m sure will continue to make in his new role. His work on reengineering, centralizing treasury functions and streamlining the finance organization are but a few examples of the contribution he’s made to say nothing of navigating the firm through very difficult times. He’s been gracious enough to agree to help me through the transition and perhaps most importantly he’s left behind a finance team which is terrific and has been enormously patient with me and also extraordinarily helpful. Turning to the quarter, this is the strongest quarter we’ve had in well over a year on many measures. Perhaps more vividly reflected in positive net income. Overall revenues were strong, driven by the performance of institutional clients group which offset declines in other areas. Expenses and headcount continue to trend downward. Together the higher revenues and lower expenses generated a strong operating margin. Assets also continued their decline and we continue to reduce exposure to the riskiest assets. Net revenue marks declined substantially during the quarter. With all that said, we still face challenges and general market conditions remain uncertain and credit conditions in consumer continue to deteriorate. Please turn to slide one to begin the earnings discussion. Slide one shows our consolidated results for the quarter. We reported revenues of $24.8 billion, that’s nearly double year over year and $19.2 billion higher sequentially. Our reported expenses were down 23% year over year. When adjusted for the effect of certain charges in items that we disclosed in the pres release expenses were down 19% year over year and 4% sequentially. Credit costs were up by $4.4 billion over last year primarily due to higher net…

(Operator Instructions) Your first question comes from Guy Moszkowski – Bank of America Securities - Merrill Lynch Guy Moszkowski – Bank of America Securities - Merrill Lynch: I know you went through the discussion of 30-day delinquencies and how that helped you decide what your loss provisions would be but all we see is the 90-day numbers. How do you reconcile the fact that the reserve build portion of the consumer loss provision declined by about half from the fourth quarter when your 90 day delinquencies in the US rose by about 90 basis points and globally by something like 80.

You might imagine I’ve spent a fair amount of time during the past couple weeks talking about that and we’ve talked about it a fair amount internally. The things that I focus on are three fold in that discussion. One is as you know we have a $24 billion rough numbers allowance in the Consumer side. Second piece of it we’ve maintained more or less the consistent months of coverage ratio with respect to those consumer loans as you know it’s been between 12 and 13. Then if you look at the sequential quarter increase which I think is rough numbers $500 million on the consumer side from $5.2 to $5.7 the reserve build is I think rough numbers $2.4 billion if I’m not mistaken something in that neighborhood which is as you know more then four times that sequential increase. If you look back at the fourth quarter and this is related to some of the comments I made, I think towards the later part of last year we were expecting actually a higher credit loss in the first and second quarter this year which may have informed the reserve build in the fourth quarter. We’ve actually now looked at it and as I mentioned with respect to the first quarter it had come in about $1 billion less then where we thought we would be. When you take all those factors together we implemented the reserve build that we did. As I mentioned, we have not ruled out the possibility and in fact expect that may go back up next quarter. My own view is given the months of coverage and given the level of the allowance overall I think we believe that we are still very well positioned. Guy Moszkowski – Bank of America Securities - Merrill Lynch: On commercial real estate finance could you speak to what your mark to market on commercial real estate finance and credit reserving was during the quarter in securities and banking and anywhere else in the firm where there might be exposure? Also tell us how much commercial real estate exposure did you move into accrual accounting in the fourth quarter?

In the fourth quarter there would have been very little in the fourth quarter. Guy Moszkowski – Bank of America Securities - Merrill Lynch: The question the more broadly is how much CRE finance did you move into held to maturity or into accrual accounting last year?

I’d have to check. As you know, on slide seven basically in the S&B risk categories we’ve got CRE there. As you know, at 3/31/09 the risk exposure was $36 billion versus the year earlier. Then obviously in TERRA value accounting we’re down to $5.7 billion. I don’t have the specific break out in terms of what it is that we moved actually somebody fortunately has just handed it to me. The trading account from fourth quarter to first quarter actually went down $100 million. Held to maturity actually went down interestingly enough $26.9 to $25.8 billion. The equity method essentially was just a minor change of $100 million. On the other piece of it my recollection of is that the marks or the reserves that we took against the commercial portfolio downtown this quarter were relatively minor. As you know, a bunch of our commercial real estate is actually embedded in consumer. In fact, on page 26 of the appendix you can see that we’ve got the write downs on CRE which confirms my recollection of about $186 million.

Your next question comes from Betsy Graseck – Morgan Stanley Betsy Graseck – Morgan Stanley: Did I hear you right the consumer NCL should be about $1 billion higher next quarter versus this quarter due to the early stage delinquencies that peaked in November ’08?

Going back to it, I think, obviously I was not here but I am told that in the fourth quarter of ’08 I believe we suggested that we expected net credit losses in the consumer side to be $2 billion higher in each of the first and second quarter then they had been in the third quarter. At this stage, as you know, we were actually $1 billion short of that in the first quarter. What we are doing is essentially reverting to the discussion that we had at the end of last year, getting back to a number that’s $2 billion higher then it was in the third quarter. The rate of delinquency since November, as you know, has in fact gone down. It peaked in November and as it works its way through the buckets we expect obviously if you will the elephant will make its way through the piece on it that stage but it hasn’t, as I said, rates of delinquency have declined since then but we’re anticipating that November peak to play its way through the second quarter. Betsy Graseck – Morgan Stanley: A broader question on card in general, obviously major card player unemployment jobless claims continue to stress portfolios here. We have not only the UDEP that expected to into place July 2010 but the possibility that it gets put into place sooner given actions that Congress is taking. Can you help us understand how you’re managing your portfolio domestically as well as internationally with regard to outstandings and how you balance the profitability question versus the size question?

We’re managing very carefully as you might imagine. With due regard obviously to the environment that you’ve described and the fact that we have experienced substantial losses in that portfolio. I think it’s fair to say that the bias has shifted if you will from growth to risk management and that’s reflected in a variety of things in terms of our mid risk mitigation efforts. Looking at lines very carefully where we’ve taken some actions recently to try to reduce those lines and we are clearly trying to work through to reduce the losses to the extent that we can. Frankly there’s little to choose between the US and internationally in the cards business, the trends are broadly similar. You see that in terms of consumers drawing back and declines in sales which ultimately lead as you know to decline in balances. The net credit losses by and large are pretty similar. I think we have a chart in the appendix that reflects that. US business as you know has got the securitized cards in it which is reflected as you know in the delinquency ratios in the retail partner side which are higher then they are in the branded cards. It’s a tough environment. I think we don’t expect that there’s going to be any market pickup in the near term and that growth opportunities by way of acquisitions or balance transfers or whatever it might be should be limited by prudence. So we’re trying to risk manage our way through the cycle, mitigate the losses and make sure that we’re well positioned to participate in a recovery but as I said, my suspicion is that there is a shift in bias it is from one of historical growth now to trying to manage the portfolio as prudently as we can. Betsy Graseck – Morgan Stanley: On page 13 where you indicate the TCE improvement coming from the various actions you’re taking including the preferred exchanges that you’re anticipating. You’ve got TCE of $51.2 billion in the charge but in the footnote its $52.4, I’m just trying to understand why there’s a difference in those two numbers and you suggesting a different price?

We’d be the first to concede that is probably there is apparently some discount built into that number but the fact is that it is. Betsy Graseck – Morgan Stanley: When you say discount built into that number you’re talking about an exchange ratio?

There’s a discount to face value apparently. I’m not sure that I fully understand that. The number is around $52 billion but we can circle back to you on that. Betsy Graseck – Morgan Stanley: You indicated that at this stage you really don’t anticipate any changes in the exchange ratio?

That’s right. Either in the exchange ratio or frankly in the stock price.

Your next question comes from Mike Mayo - CLSA

This is the first conference call since you’ve been CFO. Style changes now that you’re CFO and also curious this is the first earnings call that Vikram Pandit has not been on. Is this a stylistic change can we read into that anything?

With respect the later Mike, I’m advised this isn’t the first conference where he hasn’t been present. Having said that, no, I don’t think you should read anything into that at all. On the second point, I will let you be the judge of whether there are any style changes. I can tell you that I haven’t immense regard for Gary. He’s become a very good friend in addition to being a very highly value colleague. I’m very sensitive to the fact that I had big shoes to fill. I’m doing my best. I will appreciate your patience as we go through this process and I’m working as hard as I can to bring myself up to speed.

I’m looking at just a big picture measure reserves to non-performing assets which that ratio is down a lot in the last year. When you had mercantile you were a lot more conservative with reserves to NPAs and so to the extent that you’re cautious on the outlook for credit quality you said you might be increasing the level the reserve build next quarter. What’s a reasonable level to shoot for in terms of reserves to NPAs?

Two things, one is that obviously one of the things that I’ve gone through as you point out and the transition from my former life to the current one was as you know an intermediate stop. I understand the reserving policies which as you know are different in the context of a firm of this nature with the consumer exposures that it has and obviously with the large investment gain corporate exposures it has. There are a couple differences from what I’m accustomed to, the team’s been great in terms of taking me through those. As I said earlier, when you look at the absolute allowance level relative to consumer I think its fair to say that $24 billion my view is and its obviously one shared by the team and the firm, is actually in pretty good shape. Secondly we focus on those coverage ratios as you know, in terms of months of coverage and they remain fairly constant. One of the points that I made earlier in terms of what it was that we were thinking about during the fourth quarter of last year you could argue that we were conservative in our reserving against the consumer portfolio at that stage given our expectations. As I said, it came in a little lighter then we thought but we’re not getting overly optimistic and suspect it may track back up in the second quarter. In addition, when you look at the corporate loan portfolio I think our reserve there is about 4.4% if I recall, which strikes me as pretty solid. The fact is that that’s going to be given the nature of the portfolio lumpy and episodic, less predictable. Having said that I think we feel in pretty good shape on that front. The thing that we’re bracing ourselves for is I think everybody is, is what is in fact going to happen to the economy and what’s going to happen to the consumer. We’re tracking that very closely. We’ll do what it is that we think makes sense in the reserving front as those losses flow through but I think we have maintained a consistent methodology consistently applied and that is how we will continue to pursue it.

How much more should we expect the reserve build to be next quarter relative to this quarter? Do you have any sense yet?

No, because obviously that’s going to be highly contingent on whether we’re right. We’ve been wrong obviously as we were in the fourth quarter in terms of predicting what the first and second would look like. I’m sure that I run the hazard of being wrong with respect to the second quarter that was just our effort to give you some sense of where we thought it would be but ultimately the reserve level would be determined by results during the course of the quarter.

In your role you’ll take a new independent fresh look at that I guess?

With able assistance.

Your next question comes from Meredith Whitney – Meredith Whitney Advisory Group Meredith Whitney – Meredith Whitney Advisory Group: The trends in the mortgage portfolio, how much of those were influenced by the foreclosure furlough during the quarter?

Very little. As a matter of fact if you look at the 90 days plus past due bucket there is an immaterial percentage of that bucket that is reflected by forbearance. Meredith Whitney – Meredith Whitney Advisory Group: What happened in securities and banking in Europe during the quarter to have such outsize results?

My suspicion is and somebody will quickly correct me if I’m wrong. I think the marks by and large are basically booked in New York. The European results reflect the fact that the marks are booked in New York so the relative out performance of Europe on one level given that in terms of that $4.2 billion of traditionally disclosed marks is what drives that. Meredith Whitney – Meredith Whitney Advisory Group: Could you dumb that down for me please?

If you think about it we have $4.2 billion of what we described as traditionally disclosed marks. As you know, those are by and large in securities and banking. Those marks would predominantly be booked in New York rather then in Europe. Meredith Whitney – Meredith Whitney Advisory Group: Right, but on a relative basis Europe was stronger and that’s what I’m asking about not Europe relative to US, Europe relative to Europe.

First quarter ’08 I am told Europe did have the marks, this year they do not. Meredith Whitney – Meredith Whitney Advisory Group: On the sequential basis the difference they didn’t have the marks last quarter?

They did not have the marks last quarter. Meredith Whitney – Meredith Whitney Advisory Group: They had the marks last quarter they don’t have the marks this quarter?

First quarter ’08 Europe had the marks. Not since then. So I was right. Meredith Whitney – Meredith Whitney Advisory Group: I’m looking at it on a sequential basis.

Sequential basis, apples to apples no marks. Meredith Whitney – Meredith Whitney Advisory Group: It’s materially stronger and I’m just wondering what’s in there if its not marks what is it?

It’s pretty broad based, in other words, if you look at the revenue distribution across securities and banking fixed income was strong, equities were strong, investment banking was relatively strong obviously down from historical levels. Rates and currencies as you know was particularly strong within the fixed income business, I suspect that in part reflects that. As I said, fixed income is the largest part of the revenues. I don’t want to understate the performance of equities or investment banking but I think it’s attributable to fixed income performance. Meredith Whitney – Meredith Whitney Advisory Group: On Citi Holdings can you review your run off versus dispositions strategy within that portfolio and then maybe talk about some of the things that are going on not named specific but some of it that conversations that you’re having if deal volumes picking up, interest in those assets are picking up please.

When we announced it in January and fortunately I was involved in that. When we announced it in January essentially we placed the assets in Citi Holdings into three broad buckets. As you know, one was Brokerage and Asset management, the second was essentially the consumer business which as you know as I mentioned earlier includes the retail partners card portfolio and the third was what we described as special assets. When we announced that we said that basically we’ll have three strategies in connection with those assets. One and the overall arching one was the optimized value with respect to them. The second was to manage those assets that we could not optimize in the near term as effectively as we could across the cycle in order to mitigate risk and maximize returns. Third is in the special asset portfolio those are obviously assets and wind downs. I think it’s safe to say that none of that has changed. As you know, as part of that we went into the Morgan Stanley/Smith Barney joint venture which I think we’ve said is typical or a prototype for the types of deals we’d like to do in terms of up front cash payment, capital generation, retention of the upside for the future when the markets might improve. That’s not going to be easy to replicate but we’re thinking about that concept in connection with a number of businesses on the holding side. We’re going to continue to pursue that, I think its also fair to say that if opportunities emerge that allow us to return capital to the firm as a whole on a basis where it makes sense and where we believe that can be redeployed better then the way its deployed today we will in fact pursue those. I’m sure it wouldn’t come as any surprise to you that we continue to actively consider what our alternatives might be in the context of achieving that optimization of value that we laid out in January. Meredith Whitney – Meredith Whitney Advisory Group: What bucket would the private label card business be?

It’s in the Consumer portfolio. Meredith Whitney – Meredith Whitney Advisory Group: In terms of optimized special assets or managed.

That is basically in managed.

Your next question comes from John McDonald – Sanford Bernstein John McDonald – Sanford Bernstein: You had a pretty big chunk of assets in the fall that you moved out of trading and into held for sale and/or held to maturity. Can you comment on how the cash flows on those assets are tracking relative to the levels they’re marked at and over time would you expect to accrete net interest income from those assets?

As I think I mentioned earlier, one of the adjustments that we made to revenues was the $541 million worth of accretion associated with the assets that we had transferred from to mark to markets held to maturity. I think I mentioned obviously recognizing that life is uncertain we expect that accretion to continue because we believe when we move those assets they were market attractive prices and that values should accrete over time. As I said, it was a $541 million benefit in the first quarter. We would expect to enjoy that benefit going forward, and as a result, as you know, we’ve included it in those forward adjustments that we make to news up front. John McDonald – Sanford Bernstein: How big is the base of assets because you’re minus that that $541 million came off of this quarter?

$29 billion, rough numbers I think its in one of the charts in one of the slides in the presentation but my recollection is its $72 and $29 billion. John McDonald – Sanford Bernstein: Can you give any more color on the drivers for the consolidated net interest margin and the improvement this quarter and what might be sustainable from that?

At the end of the day part of it’s obviously going to depend on the pricing of assets. I think the principal driver not surprisingly was liability. We are liability sensitive given the fact that rates are as low as they are. It’s not surprising that net interest margin would pick up. I think it was up eight basis points if I’m not mistaken on a quarterly basis from 322 to 330. In part it is going to depend whether I’m right and this may take some time to play out that over time if everybody manages to get through this, this could be a very good period for banks in so far as credit becomes regarded as less of a commodity and more of a precious asset which may lead to some secular re-pricing. As I look back on it based on my past life I think the fact is that there was mis-pricing of risk and there was mis-pricing of credit generally to the extent that reverts more to historical norms and assuming there’s no real spike in rates it should enhance margins over time. I think the industry as a whole is hoping that that’s the case. Obviously at this stage is being supported by very low rates because there’s an offset as you well know on the other side just in terms of non-accrual assets. Having said that, once we get through it I suspect that there’s a chance that margins may in fact go back up. John McDonald – Sanford Bernstein: Could you give us some comments on international consumer credit? It’s very hard for us to analyze that. Where are your greatest concerns in terms of the international consumer credit deterioration, maybe specifically comment on EMEA and Latin America where their trajectories are moving up there?

I have in my own review over the past couple of weeks; I think it’s fair to say the countries of greatest concern are UK, Spain, Greece, Mexico and India. I have spanned the globe with those countries. If you look at the international versus the North American business, I’ve actually been through that analysis as well and not to be flip about it but there’s not much to choose between the two. I think the trends that you see among consumers with respect to credit losses are broadly very similar. I think it’s probably fair to say that there has been a slightly more of an acceleration in terms of credit deterioration internationally versus the US over the past couple of months. Having said they’re reaching basically the same nominal levels. The interesting thing is that there does not seem to be in one respect, any relief from what clearly is a global economic condition which is affecting consumers not only here but also outside the United States. As I said, there’s very little to choose between the two if you look at it in terms of loss rates and net credit loss ratios. Obviously we are thinking about reserving broadly both in connection with North America and with respect internationally. Interestingly enough even if I were extremely pressed and you said take your choice it would be a toss up. John McDonald – Sanford Bernstein: That also reflects differences in underwriting or risk layering that you may have done in international versus domestic.

There’s one confounding factor in domestic which of course is the securitization trust on the credit card side. As you know, the retail card obviously has a higher loss ratio then the branded cards. So that is one thing at least on a nominal basis drives North America higher. We are continually focused as you might well imagine on risk mitigation efforts. Generally those risk mitigation efforts are not only in the United States but around the world. John McDonald – Sanford Bernstein: Did you grow faster internationally is that a factor?

I don’t think so. I don’t think there’s really much to choose in terms of the growth rates either by and large, it’s been pretty consistent across the board.

Your next question comes from Richard Ramsden – Goldman Sachs Richard Ramsden – Goldman Sachs: I want to clarify that there’s been no change in the way in which you’re either recognizing or reporting non-performing assets on the $300 billion of assets that are in the risk sharing agreement with the government?

There is not. Richard Ramsden – Goldman Sachs: Those are just flowing through non-performing assets in the normal way.

That’s right, including losses. Richard Ramsden – Goldman Sachs: Going back to the exchanging offering for the preferred if you don’t think that the stress test is going to have an impact on the offering why are you delaying it, what’s the reason?

I’ve been careful not to saying anything about the stress test principally because we’ve been instructed rather expressively by the regulators not to say anything. Just to take your question in its premise, irrespective of what the outcome is, positive, negative, and indifferent, that’s going to be a source of great interest to the market and I guess the way I thought about this and I’d be the first to admit that I was the one who suggested it. If you were about do, putting the government to one side, a $27 billion equity offering and you are weeks, not months away from the revelation of information that is likely to be of great interest to the market, it makes perfect sense to delay that offering to allow for the digestion of that information. It’s really as simple as that.

Your next question comes from Chris Kotowski – Oppenheimer & Co. Chris Kotowski – Oppenheimer & Co.: The one thing I noticed as kind of pleasant surprise was that corporate non-accruals were up only about 12% something like that. Most of the other reporting banks that I’ve seen were up more in the 20% to 30% range. I was wondering is that just a timing difference, did you have accelerated recognition in the fourth quarter. Is there any reason to think your corporate credit would exhibit different characteristics then what we see at the industry at large? Also, I wonder if you could comment on some of the key trouble spots like the auto industry and your exposure there.

As I said earlier, our loan portfolio by and large obviously there are going to be exceptions is essentially large global corporate, there are exceptions. You would expect in that context in the absence of severe economic distress for that portfolio to perform reasonably well. It’s obviously going to be driven by the economy but it should perform reasonably well. The losses that we’ve had in the past in some respects have been driven, as you know by highly leveraged transactions and in fact we’ve seen a couple of examples of that over the past couple of years. I’m not surprised in one respect that we wouldn’t show the immediate impact in terms of non-performance because the other facto is that our losses and our non-performance tend to be relatively lumpy in that business given the nature of our business. The corporate NPA did go up during the fourth quarter as you well know, and we went through that in one of the slides we obviously crystallized one of those losses in the first quarter which I’d mentioned by name. We’re continuing to watch it closely. With respect to the autos obviously we do have exposure to the auto and related industries including suppliers. We feel that we are well secured and/or adequately reserved in connection with those exposures. Assuming that there is some orderly resolution of the situation, as I said, having spent a fair amount of time with our risk people in discussions with the business guys downtown I think we feel as if we’re pretty well positioned. Chris Kotowski – Oppenheimer & Co.: Have you disclosed a gain on the Nikko sale?

To my knowledge there is no Nikko sale.

Your next question comes from Moshe Orenbuch – Credit Suisse Moshe Orenbuch – Credit Suisse: You mentioned a re-pricing benefit in cards, have you sized how much that could be in basis points on the portfolio, could you discuss a little more, maybe either that specifically or if not that specifically how we should think about the steps you took.

I can’t. As I said, I’d be the first to tell you if I didn’t know. I’m not sure that we have sized it. It may be that you could follow up with John on that question. It looks as if somebody’s just written me a note that essentially the benefit was $2 billion plus annualized. Moshe Orenbuch – Credit Suisse: $2 billion annualized in this quarter and you expect it to continue to increase or to be $2 billion at an annual rate during 2009?

It obviously it should level out. In other words there’s going to be a point at which it begins to pick up and then it normalizes and flattens out. As I said, that’s not something I’ve look at so we’ll have to get back to you. Moshe Orenbuch – Credit Suisse: The logic of continuing to pay the dividends on the preferred until the exchange offer, why is that?

We just think it’s the fair think to do until they’re swapped out it makes sense to continue to pay the dividends.

Your next question comes from Ed Najarian – ISI Group Inc. Ed Najarian – ISI Group Inc.: My question has to do with the operating expense run rate. It looked like taking this quarters operating expense run rate annualizing it you’re already a little bit below your full year run rate target at the $48 to $49 billion range annualized this quarter.

Adjusted it would be $42.2 billion I think. Ed Najarian – ISI Group Inc.: Yet this obviously seems like a quarter, especially with the trading revenue where your revenue performance might have come in a little bit higher then expected. I’m looking for you to rationalize that a bit. Should we expect expenses to potentially go up in future quarters from here?

I think what you heard me say was that we’d established a goal of $50 to $52 billion. I said we’re hoping to bring it in at the lower end of that. Frankly it had $800 million of hedge in it if you will. We’re obviously very focused on expenses. We’re going to try to get them to be as reasonable as they can, consistent with not starving the businesses or our employees. We’re certainly aiming to do better then $50 billion whether we do or not I’m not sure but that is our goal as I suggested. The one thing I do know that in one respect we can control is expenses. What we have some influence over but no ultimate control is revenues and that’s where we’re very intently focused to make sure that we can sustain the revenue momentum. To your point and this may be the ultimate import of it Vikram has said that we’re very much interested, not surprisingly, in generating the strongest operating margin we can so that we’re in a position to absorb the inevitable credit losses that will flow through. This quarter if you look at it on a reported basis our operating margin was $12.7 billion that obviously put us in a position to absorb $10.3 billion of credit losses in to report net income. The challenge for us going forward is to make sure that we have an operating margin, revenues versus expenses that is adequate to deal with what inevitably are going to be losses during the course of the year. Ed Najarian – ISI Group Inc.: Can we think about the current quarter, I would have thought maybe there would have been a little bit higher expense rate related to incentive compensation because of the strong trading revenue and some of the strong banking results? Is there any way to think about that from an incentive comp accrual standpoint?

You can think about it as one quarter. Not to be flip about it but at the end of the day as you know, we don’t pay based on the quarter, we pay based on the year. Clearly we have room to go up on the incentive comp front. Having said that, it was one quarter.

Your next question comes from Andy Baker – Jefferies Andy Baker – Jefferies: Is there any reason to think that the outcome of the stress test, the results of the stress test would impact your thinking on whether or not you want to do the preferred exchange? If you turn out to be in a very, very strong capital position and didn’t feel you need to be incremental common equity.

As you know, as I said earlier, I’ve gotten express direction from the regulators not to comment on the stress test. Unfortunately, I hope you forgive me; I will leave it at that.

Your next question comes from [Sam Saba] – JP Morgan [Sam Saba] – JP Morgan: Regarding the press, you have the three buckets, the government, the private, and the public. If you did consider the idea of raising the stock price so its say 450 you’ve cut the dilution on your equity by about 6% and it would affect the probability of getting your TC up to $81 billion. Considering that I don’t really understand why you wouldn’t do that.

We have certainly considered that dynamic. As you know, we have agreements with the privates and we have an agreement with the government at 3.25%. The fact is that leaves the $15 billion of public. Having considered pros and cons as you suggest I stand by the earlier statement which is at this stage we can’t envision changing either the stock price or the conversion ratio, understanding your point. [Sam Saba] – JP Morgan: What’s the downside for doing that, for not increasing the stock price?

As I said, we have an agreement with the privates, we have an agreement with the government and we’ve thought about precisely what you’re thinking about and we’ve concluded that we can envision circumstances in which we wouldn’t leave the stock price and the exchange ratio where they are. You’re not going to draw me out any farther so we might as well just.

Your next question comes from Vivek Juneja – JP Morgan Vivek Juneja – JP Morgan: Your balance needs to shrink, how should be think about that, is there room to do that further, are there plans to do that?

If I look at it, this is just rough numbers; GAAP assets I think shrank $120 billion on a link quarter basis if I’m not mistaken. Risk assets, as you know, were up marginally but that was because of the consolidation of the credit card trust. When I think about the balance sheet and I think Vikram’s been clear about this we’ve been focused since he arrived on trying to reduce legacy assets. We’re still very much focused on that. As you can see from that chart on page six or seven or whatever it is, we still have $101 billion of key risk assets, $29 billion of which are now in mark to market. Having said that, over time we would clearly like to exit some of those assets given the losses that they’ve generated in the past and are interested in reducing the risk profile. The second piece is we put a bunch of assets into holdings as you know, which as I went through before, we’ve described is the objective being either to optimize, manage or wind down. There are substantial parts of the assets in holdings that we have described as special assets that we’d be interested in winding down. If you ask me to just project out over the future and not netting any growth which obviously we would inevitably hope to have I think its still fair to say that there are hundreds of billions of assets that we would think about exiting over time. Vivek Juneja – JP Morgan: Looking at the backstop assets are you going to continue to build reserves for those until you get to your $29 billion amount that you have to bear or you talked in previous quarters about the fact that when you announced this backstop agreement that nothing was going to change. Is that still the plan so that’s part of your reserve build that’s going in there or is anything changing on that?

There is nothing changing. As I think I said earlier the losses they are flowing through as well so obviously the reserves to the extent that there are losses associated with that would flow through. To the extent we had losses in the first quarter essentially they showed up in the numbers that you see. They are not any more insulated then as a construct in terms of government insurance program they are still part of our balance sheet, we are still treating them accordingly. Vivek Juneja – JP Morgan: In terms of net charge offs can you give a little more color in terms of on your home equity portfolios what you’re seeing as you think about first mortgage versus second mortgage you’ve given us some breakout in the appendices. As you look out any sense of where you expect them to peak at this point given that unemployment has risen so sharply in the last six months and particularly in the last three months where do think it is headed to?

I think we see them headed up there’s no question about that. Having said that, in that respect, your guess is probably as good as mind in terms of predicting what’s likely to happen. I think its probably fair to say that we think the housing price decline hopefully is going to bottom out here at some point which presumably is probably the biggest factor driving the seconds just in terms of the home values and so forth. I don’t know that we see much to choose frankly between the two, in other words there has obviously been defaults in non-performers with respect to primaries and seconds. I think its just part of the generalized environment in terms of unemployment and falling home prices. I wish I could predict where they’re going to end up. We certainly hope they’re going to moderate. Having said that we’re not confused about the fact that they may very well deteriorate over the coming quarters. As I said, we’re hoping that by the end of the year we might be in a position to see some daylight and begin to reduce reserve builds that were otherwise going to incur during the course of the first part of the year. That’s the wildcard, I think it’s the wildcard that everybody faces and that’s why we’re as intent as we are in trying to generate that operating margin that I described earlier. Vivek Juneja – JP Morgan: On the second mortgages the net charge offs on the over 90 bucket you’ve given us the DCD, any sense of where the net charge offs were on those?

I don’t know but we could probably get back to you on that. I don’t know off the top of my head.

Your next question comes from [Kent Escalara] – RBC Capital Management [Kent Escalara] – RBC Capital Management: With regard to the preferred exchange you stated that you are delaying to allow the preferred holders to digest the stress test results. Is it fair to say that this factor alone is 100% responsible for your decision to delay?

I’m sorry I missed the last part of your question. [Kent Escalara] – RBC Capital Management: You mentioned that you were delaying to allow pref holders to digest the stress test. Is it fair to say this factor alone is 100% responsible for your decision to delay?

I think I described what was 100% responsible for my decision to delay which was that irrespective of the outcome of the stress test which I’ve been careful not to comment on. That’s going to be information that’s relevant not just to preferred holders but presumably to the market as a whole. As a result we thought the sensible thing to do was to wait to launch the offer until we had the results of the test. Its no more complicated then that. [Kent Escalara] – RBC Capital Management: There were no other factors then involved in deciding to delay?

No, and the reason I say that with some confidence is that I’m the one that came up with the idea. [Kent Escalara] – RBC Capital Management: You mentioned that the company discussed whether to change the strength but decided not to or considered, floated the idea.

There were no active discussions of it. The fact is that not surprisingly that’s one of the factors that you would look at given what’s happened to the stock price. We had preexisting agreements obviously we have thought about it, we have included it, as I said we can envision circumstances under which we would change it. [Kent Escalara] – RBC Capital Management: Do you think it’s conceivable that the preferred offer would be cancelled at any point?

I think there’s a 5% change the sun doesn’t come up. The short answer is no.

Your last question comes from Michael Schwartz – Redwood Partners Michael Schwartz – Redwood Partners: I have a question about the Geitner plan and whether you guys are going to partake in the PPIP?

Two things, one is as I think Vikram has said we applaud the government’s efforts in the Treasury Department, in particular to support banking system in the economy. I’ve actually been through the plan in some detail. I can’t say that I’ve done it within the past week or so but certainly when it came out I went through it. As you know, there are an awful lot of details that are to emerge with respect to the PPIP which is the market has been very much focused on. We’re going to follow it closely as it evolves. One of the critical issues is going to be whether it makes economic sense given how that program is structured, given the amount of leverage provided, given the market tenor at that stage as whether it makes sense for us economically to participate. That’s how we plan to analyze it in terms of thinking whether it makes sense to do it or not. One thing that I would point out which you’re acutely aware of is that we do have this $300 billion ring sense which we paid the government $7 billion for in terms of protecting the tail on those assets. It’s perfectly conceivable that that might affect our analysis at least with respect that $300 billion whether we were to participate or not. I think the basic message, not surprisingly is we’re watching it closely. We think it’s an interesting idea conceptually. There are a lot of detail that will be forthcoming that we’ll have to analyze in the context of what makes sense economically for us at the time. Michael Schwartz – Redwood Partners: About the timing of the exchange offer for the preferreds, how many days after the stress test is out there will you think it’s enough before you launch the deal.

My own judgment at this state, lord knows I have been wrong in the past is that it should not be many. Having said that there will be some logical issues around crossing “t’s” and dotting “I’s” not only with the commission but with respect to the disclosure if any that is necessary. We would expect it to be forthcoming shortly after.

There are no further questions.

Thank you very much I appreciate it. I appreciate your patience and look forward to working with you.

This concludes Citi’s First Quarter 2009 Earnings Review. You may now disconnect.