Citigroup in Halliburton-Linked ELKS® Offering

August 25, 2005

Cleary Gottlieb represented Citigroup Global Markets Inc., as underwriter, in Citigroup Funding’s $92.5 million offering of Equity Linked Securities (ELKS ®) due August 28, 2006, and also acted as special tax counsel to the issuer. The offering is linked to the common stock of Halliburton Company.

Halliburton provides a variety of services, products, maintenance, engineering and construction to energy, industrial and governmental customers.

ELKS® are debt securities that give investors a much higher semi-annual coupon payment than would a standard Citigroup Funding bond of comparable maturity. At maturity, investors are repaid their full principal amount so long as the price of the underlying stock is greater than a fixed percentage (77.5% in this case) of its price on the issue date. If the price of the underlying stock declines by 22.5% or more as of three trading days prior to maturity, investors receive shares of the underlying stock. The payments due under the ELKS are fully and unconditionally guaranteed by Citigroup Inc.

ELKS® also provide a tax benefit to investors because 58% of the semi-annual coupon payments are treated as the payment of an option premium, rather than interest. As a result, (1) investors are not required to include the option premium portion of the first semi-annual coupon payment in income until maturity or other taxable disposition of the ELKS®, and (2) if investors receive stock at maturity, the investors are not required to include the option premium portion of either semi-annual coupon payment in income, but may use it instead to reduce basis in the stock.