01—Abstract
Summary
Summary of the 10-K/A filed June 28, 2002. Cited figures are marked; the original filing is the authoritative source.
This filing is Citigroup's Form 10-K/A-1, a limited amendment to the company's 2001 annual report (originally filed June 28, 2002).
Per the explanatory note, the amendment does not restate Citigroup's financial results or Item 14 text; it was filed solely to add two employee benefit plan financial statements as exhibits under Rule 15d-21: the Citigroup 401(k) Plan (formerly the Travelers Group 401(k) Savings Plan) and the Citibuilder 401(k) Plan for Puerto Rico. The document therefore contains no consolidated balance sheet, income statement, segment results, or capital data for Citigroup itself, and it should not be used to assess the company's earnings, capital position, or risk profile. The substantive content is the plan-level data.
The Citigroup 401(k) Plan held net assets of about $11.57 billiona at December 31, 2001, up from $7.25 billion a year earlier, driven largely by $4.85 billion in asset transfers from merged plans. Investment performance was negative in 2001, with net depreciation of about $622 million, and roughly $5.4 billion (about 47% of plan assets) was held in Citigroup common stock. The Citibuilder Puerto Rico plan was new in 2001 and had net assets of about $2.2 million, almost all in employer contributions receivable.
Both auditors' reports (KPMG LLP, June 27, 2002) were unqualified. For investors, the most relevant items are the disclosures about the plan's concentration in Citigroup stock, the 2002 changes to employer contributions (which replaced the Special Company Contribution, the 5%b stock discount, and the Citibuilder contribution with a new matching formula), and the planned spin-off of Travelers Property Casualty Corp. stock, which will shift the price of Citigroup shares and require participants' TPC holdings to move into a separate plan.
02—Key points
Key Highlights
- Form 10-K/A-1 filed solely to add Exhibits 99.02 and 99.03; Item 14 text is otherwise unchanged from the original 10-K, and no Citigroup consolidated financials are included.
- Citigroup 401(k) Plan net assets rose to $11.57 billion at 12/31/2001 from $7.25 billion, with $4.85 billion of the increase from transfers in from merged plans.
- The plan posted a net investment loss of about $411 million in 2001, including $622 million of net depreciation, versus $736 million of investment income in 2000.
- About $5.43 billion (roughly 47%) of Citigroup 401(k) Plan assets were invested in Citigroup common stock at year-end 2001, a significant single-issuer concentration.
- The Special Company Contribution, 5% stock discount, and Citibuilder contribution were eliminated effective January 1, 2002, and replaced by a new company match capped at the lesser of $1,500 or 3% of pay.
- Planned distribution of about 67% of Travelers Property Casualty stock to Citigroup shareholders later in 2002 will reduce Citigroup's share price and move plan participants' TPC holdings into a separate plan.
- The Citibuilder 401(k) Plan for Puerto Rico commenced January 1, 2001 with net assets of only about $2.2 million, almost entirely unpaid 2001 employer contributions.
03—Questions
Frequently Asked Questions
Does this filing contain Citigroup's annual financial results?
No. This 10-K/A-1 amends only Item 14 to add two employee benefit plan financial statements as exhibits. Citigroup's consolidated financial statements are in the original 10-K filed earlier, which this amendment does not restate.
Why were these 401(k) plan financial statements filed?
Rule 15d-21 under the Securities Exchange Act requires companies to file financial statements for employee stock or savings plans that hold company securities. Because the Citigroup 401(k) Plan and the Citibuilder Puerto Rico plan hold Citigroup stock, their audited statements were added to the 10-K as exhibits.
How exposed were plan participants to Citigroup stock at year-end 2001?
Heavily. Citigroup common stock represented about $5.43 billion of the Citigroup 401(k) Plan's $11.40 billion of investments, roughly 47%, and about $249,000 of the Citibuilder Puerto Rico plan's roughly $1 million. This concentration means participants' retirement savings were closely tied to the company's share price.
What changed for employer contributions in 2002?
Effective January 1, 2002, the Special Company Contribution, the 5% discount on stock fund purchases, and the Citibuilder Company Contribution were replaced by a new Company Match. For employees earning $100,000 or less, the match is $3, $2, or $1 per dollar contributed, depending on pay band, up to the lesser of $1,500 or 3% of total compensation. Employees earning above $100,000 receive no match.
How will the Travelers Property Casualty distribution affect plan participants?
On the distribution date, a Travelers Property Casualty Common Stock Fund will be created within the 401(k) plan to hold TPC shares distributed on Citigroup stock, and Citigroup's share price will be reduced to reflect the spin-off. Participants can transfer out of the TPC fund but cannot add to it, and TPC employees' balances will move to a separate TPC plan.
04—Continue