John Andrews - John C. Gerspach - Chief Financial Officer Vikram S. Pandit - Chief Executive Officer and Director

Stephen D. Walker - RBC Capital Markets, LLC, Research Division Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division Jason M. Goldberg - Barclays Capital, Research Division Christoph M. Kotowski - Oppenheimer & Co. Inc., Research Division John E. McDonald - Sanford C. Bernstein & Co., LLC., Research Division James F. Mitchell - Buckingham Research Group, Inc. Glenn Schorr - Nomura Securities Co. Ltd., Research Division Moshe Orenbuch - Crédit Suisse AG, Research Division Matthew D. O'Connor - Deutsche Bank AG, Research Division Matthew H. Burnell - Wells Fargo Securities, LLC, Research Division Brennan Hawken - UBS Investment Bank, Research Division Betsy Graseck - Morgan Stanley, Research Division Todd L. Hagerman - Sterne Agee & Leach Inc., Research Division Guy Moszkowski - BofA Merrill Lynch, Research Division

Hello, and welcome to Citi's Fourth Quarter 2011 Earnings Review with Chief Executive Officer, Vikram Pandit; and Chief Financial Officer, John Gerspach. Today's call will be hosted by John Andrews, Head of Citi Investor Relations. [Operator Instructions] Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Mr. Andrews, you may begin.

Rachel, thank you. Good morning, and thank you everyone for joining us this morning. On our call today, Vikram Pandit, our CFO -- CEO, I'm sorry, will speak first; and John Gerspach, our CFO, will take you through the earnings presentation, which is available for download on our website, citigroup.com. Afterwards, we will be happy to take your questions. Before we get started, I would like to remind you that today's presentation may contain forward-looking statements, which are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results and capital and other financial condition may differ materially from these statements due to a variety of factors, including the precautionary statements referenced in our discussion today and those included in our SEC filings, including, without limitation, the Risk Factors section of our 2010 Form 10-K. With that out of the way, let me turn it over to Vikram. Vikram S. Pandit: John, thank you, and good morning, everybody. Thank you for joining us today. As you know, earlier today, we reported earnings of $1.2 billion in net income for the fourth quarter of 2011. This increased our net income for the year to $11.3 billion, up 6% from 2010. The fourth quarter was dominated by the macro environment, and our earnings clearly suffered as a result. Market activity was down significantly and our clients reduced their risk. Any of our businesses geared to the capital markets, such as sales and trading, Securities and Fund Services and GTS and even investment sales and consumer banking were impacted. Investor activity was particularly weak in December as reflected in the volumes we experienced. In light of the macro environment, we have been quite cautious. The situation in Europe is being driven by politics as much as anything else. And given its inherent unpredictability, we have prudently derisked and hedged our exposures, actions which have further impacted our revenues. However, our consumer and nonmarkets-related businesses continue to perform well as we executed our strategy. Throughout Citicorp, we grew our loans by 14% from 2010, including a 24% increase in corporate loans. And GTS continued to show positive momentum with the full year revenue of 5% from 2010. Revenue from International Consumer Banking grew by 6%, x FX for the year as we opened 3 million new accounts while increasing average loans and deposits on a constant dollar basis by $15 billion and $9 billion, respectively. During the quarter, we achieved positive operating leverage in Latin America and again in Asia during the quarter. In the U.S., customer accounts, deposits, loans and revenue each grew from the previous quarter. We continue to make progress in winding down Citi Holdings. We reduced Holdings' assets by $90 billion during the year. And after considering the impact of the transfer of Retail Partner Cards into Citicorp, Holdings comprised only 12% of Citigroup's balance sheet. And as I indicated in December, we took a $400 million severance charge in the fourth quarter due to the reduction of approximately 5,000 positions. There were also other macro and episodic charges that John will go over in his presentation, including FX, a Japan DTA write-down and increased legal and related expenses. We also didn't have the CVA/DVA benefit, which had substantially increased our revenue in the third quarter. As we know, the situation in Europe is having a global impact. We believe it will impact U.S. GDB -- GDP by somewhere within 0.5% to 1.5%, and the emerging markets are being affected as well. The European banks have $40 trillion in total assets and they are deleveraging as a result. And from what we understand, these banks hold 65% of an emerging market debt and finance 80% of global trade finance. So the global banking system will need to step up and fill the void that comes from the deleveraging. As usual, the future isn't easy to predict, but we believe we are prepared. Despite the improved tone of the market so far this month and the positive signs coming from Europe, we will continue to maintain a cautious posture until the political aspects of the current situation are clear. In 2011, our expenses were impacted by several factors. Most significantly, a weakened dollar added $800 million in FX, while legal and related expenses were $1.3 billion higher than in 2010. These drove an increase in total expenses of just under 7%. But as you will see, our core operating expenses rose by 2.1%. This includes $3.9 billion in investments, $1.9 billion of which were funded through our ongoing expense reduction initiatives. The $3.9 billion in investments included approximately $1 billion to meet regulatory requirements. We also upgraded talent in both our institutional and consumer businesses. Other investments from modernizing our branches to increased marketing are necessary to attract and serve our clients better. A few years ago, the company had substantially reduced its spending on consumer marketing. And in 2011, we increased that spending to competitive levels. These are longer-cycle investments, but they are starting to pay off through increases in our new account acquisitions in the U.S. and the attaining of positive operating leverage in key EM consumer markets. That being said, I believe these increases in expense levels are behind us. We have a robust reengineering program and our goal is to self-fund new investments going forward. As a result of this and other actions, we currently expect to reduce our expenses by $2.5 billion to $3 billion in 2012 compared to the reported full year 2011 level, of course, excluding changes in FX or unanticipated legal costs or significant one-timers. We also continue to right-size our business for the opportunities we see, particularly in Securities and Banking. So we're prepared whether the current environment proves to be a result of cyclical or secular trends. John will now go over the slides, and I'll come back later with him and would be happy to take your questions. John C. Gerspach: Thank you, Vikram, and good morning, everyone. Starting on Slide 2, on a full year basis, Citigroup reported revenues of $78.4 billion in 2011. Operating expenses were $50.7 billion and credit costs were $12.8 billion, down over 50% from the prior year. Pretax income for 2011 was nearly $15 billion and net income was $11.3 billion or $3.69 per share. We earned $14.4 billion of net income in Citicorp, with earnings in Asia and Latin America contributing roughly half of the total. And we significantly narrowed the net loss in Citi Holdings to $2.4 billion from $4.3 billion in the prior year. Before I go into more detail, I'd like to spend a minute on significant items affecting the fourth quarter and comparable periods as shown on Slide 3. In addition to the difficult macro environment and our corresponding actions which Vikram described earlier, Citigroup's results reflect a number of firm-specific items, several of which we previewed for you in early December. First, revenue comparisons are significantly skewed by credit spread-related items. Citigroup's CVA and DVA were a negative $40 million in the fourth quarter of 2011 compared to a positive $1.9 billion last quarter and a negative $1.1 billion in the fourth quarter of last year. Also, in our lending business in Securities and Banking, we recorded hedge losses of nearly $300 million this quarter, driven by spread tightening in our lending portfolio compared to hedge gains of nearly $650 million last quarter. Second, we recorded significantly higher legal and related expenses, as well as repositioning charges in the fourth quarter of 2011. Legal and related expenses were over $550 million in the fourth quarter, including an increase in reserves related to interchange litigation. Severance charges were over $400 million in the fourth quarter, more than double the amount of repositioning expenses in prior periods. Finally, this quarter, we recorded a $300 million charge to write-down the value of deferred tax assets in Japan as the result of a tax rate change. In addition to these items, our reported results were affected by foreign exchange translation. As the U.S. dollar generally strengthened in the fourth quarter against local currencies in which we generate revenues and incur expenses and credit costs. While FX translation had no material impact on our overall earnings for the quarter, it did affect individual line items and reported business drivers, which I will discuss more as we go through the presentation. On Slide 4, we show fourth quarter results. Citigroup reported fourth quarter net income of $1.2 billion or $0.38 per diluted share. Revenues of $17.2 billion were down 7% versus the prior year on a reported basis as growth in International Consumer Banking and Transaction Services was more than offset by lower revenues in Citi Holdings, Securities and Banking and North America Consumer Banking. Expenses of $12.9 billion were up 4% year-over-year. Nearly 2/3 of the increase was attributable to the combination of higher legal and related costs, as well as severance, partially offset by a positive impact from foreign exchange translation. Excluding these items, expenses were up 1.5% over last year, principally due to higher investment spending, partially offset by productivity savings and other expense reductions. Cost of credit continued to improve year-over-year, down 41% to $2.9 billion. Year-over-year, Citigroup end of period loans were flat on a reported basis and up 1%, excluding the impact of FX, as continued loan growth in Citicorp outpaced the wind-down of Citi Holdings. Turning now to Citicorp and Citi Holdings on Slide 5. Citicorp reported revenues of $14 billion and net income of $2.1 billion in the fourth quarter. Versus last year, Citicorp loans grew 14% on a reported basis, including 7% growth in consumer and 24% growth in corporate loans. We grew loans in every business in Citicorp in the fourth quarter both year-over-year and sequentially. Citi Holdings reported revenues of $2.8 billion and a net loss of $806 million. Citi Holdings ended the year with $269 billion of assets, down $20 billion during the quarter and $90 billion year-over-year. Adjusting for the first quarter transfer of Retail Partner Cards into Citicorp, Citi Holdings would have ended the year with $225 billion of assets or 12% of total Citigroup assets. On Slide 6, we show a 9-quarter trend for Citicorp's results. Excluding CVA/DVA, Citicorp's revenues of $14.1 billion in the fourth quarter were down 8% from the prior year and down 11% from the prior quarter, driven by lower revenues in Securities and Banking. As I discussed earlier, Securities and Banking results reflect nearly $300 million of hedge losses in our lending business in the fourth quarter compared to hedge gains of nearly $650 million last quarter. Excluding these hedge gains and losses, Citicorp revenues x CVA/DVA were down 5% sequentially. Operating expenses of $10.2 billion were up 8% versus the prior year. Nearly half of the increase was attributable to the combination of higher legal and related costs, as well as severance, partially offset by a positive impact from foreign exchange translation. Excluding these items, expenses were up 4% over last year, primarily driven by higher investment spending, mostly in consumer banking and operations and technology, partially offset by productivity savings and other expense reductions. Citicorp's net credit losses were $1.9 billion, down 29% from the prior year, driven by Citi-branded cards in North America. We released $699 million in net loan loss reserves, down from $741 million last year as higher net releases in Citi-branded cards were more than offset by lower releases in the corporate portfolio and a small net build in International Consumer Banking. Excluding CVA/DVA, earnings before taxes of $2.7 billion were down 31% versus last year, driven by lower revenues as higher operating costs were largely offset by the lower cost of credit. Slide 7 shows the results for North America Consumer Banking. Revenues of $3.5 billion were down 2% versus last year, driven by card revenues, reflecting the continued impact of the look-back provisions of CARD Act and a decline in average card loans, partially offset by an increase in mortgage revenues. Expenses of $2.1 billion were up 31% year-over-year and 13% sequentially, driven in part by an increase in legal reserves related to interchange litigation. Excluding this reserve increase, expenses were up modestly versus last quarter as we continue to make investments in our North America consumer franchise. Credit costs declined 74% from last year to $372 million. Net credit losses were down 41% to $1 billion, driven by Citi-branded cards, and the net reserve release was $681 million this quarter compared to $348 million in the prior year. Earnings before tax, excluding the impact of loan loss reserves, grew by 82% year-over-year to $386 million in the fourth quarter. Overall, we continue to see signs of progress in our North America consumer business. Sequentially, for the third consecutive quarter, we grew our total revenues, card accounts and end of period card loans. Purchase sales grew 2% year-over-year and card accounts were up 4%. Average deposits were up 2% year-over-year and retail loans were up over 25%. Turning to our International Consumer Banking businesses on Slide 8. First, as Vikram mentioned, both Asia and Latin America achieved positive operating leverage in the fourth quarter. In total, International Consumer Banking revenues grew 2% versus last year, while expenses remained flat. The dollar generally appreciated in the fourth quarter, resulting in a negative impact on reported revenues. On a constant dollar basis, revenues grew 6% year-over-year and 2% from the third quarter, with sequential growth in both Asia and Latin America. Overall, revenue growth continued to reflect improvement in most underlying drivers, offset by spread compression. Accounts grew 4% year-over-year. And on a constant dollar basis, we grew average deposits, average loans and purchase sales in every region in the fourth quarter, both sequentially and year-over-year. Investment sales were lower, however, reflecting weaker investor sentiment in the face of a continued challenging macroeconomic environment in the fourth quarter. Expenses of $2.9 billion in the fourth quarter were roughly flat versus last year, including a benefit from FX translation, partially offset by higher severance charges. Excluding these items, expenses were up roughly 3% over last year as we are now beginning to lap our higher levels of investment spending in Asia and Latin America in the second half of 2010. Credit costs were $787 million in the fourth quarter as compared to $593 million last year. While net credit losses declined 10% to $683 million, we recorded a small net reserve build of $72 million in the fourth quarter, principally due to portfolio growth versus a net release in the prior year. We continued to grow our international consumer loans in a disciplined manner, as we discussed in more detail on last quarter's call. We believe the underlying credit quality of the portfolio has remained stable to improving. Earnings before tax, excluding the impact of loan loss reserves, grew 19% year-over-year to $1.1 billion. And on Slide 9, we show growth trends for International Consumer Banking in more detail. On a constant dollar basis, average loans grew 13% over the prior year. Average deposits were up 6% and purchase sales grew 11% in the fourth quarter. As reported, on a trailing 12-month basis, we have grown both net credit margin and pretax earnings, excluding the impact of loan loss reserves, each quarter for over 2 years. Slide 10 shows our Securities and Banking business. As I mentioned earlier, revenue comparisons for Securities and Banking in the fourth quarter are difficult, given the swings in CVA and DVA and the $939 million sequential change in hedge results in our lending business. Excluding only CVA/DVA, revenues of $3.3 billion were down by nearly 1/3 on both a year-over-year and a sequential basis. If we also exclude the sequential impact of lending hedges, revenues were down by 15% from the third quarter, with particular weakness in the last 3 weeks of December. In Investment Banking, revenues of $638 million were down 13% sequentially, driven by lower activity levels across all products. x CVA/DVA, Equity Market revenues of $32 million were down 20% sequentially, driven by a decline in market volumes globally, which resulted in lower cash equity revenues. This was partially offset by narrowing losses in proprietary trading where the wind-down is now complete. We also continue to experience weak trading results in our equity derivatives business. Fixed Income Market revenues, x CVA/DVA were down 24% sequentially to $1.7 billion. We continue to experience pressure in credit and securitized products in the fourth quarter. In rates and currencies, G10 products also declined from a strong third quarter, although this was partially offset by growth in emerging markets products. Lending revenues was $164 million, down from $1 billion last quarter, driven by the sequential change in hedge results I discussed earlier. Private Bank revenues, excluding CVA/DVA, were down 5% sequentially to $517 million, mainly driven by lower capital markets activity. Total operating expenses of $3.7 billion were up 2% from last year and 4% sequentially, driven mainly by severance charges. Absent severance, expenses would have been down 4% versus last year, driven by lower incentive compensation and a positive impact from FX. And sequentially, expenses would have been roughly flat. Credit costs were $69 million in the fourth quarter versus a benefit of $60 million last year. Moving to Transaction Services on Slide 11. Revenues of $2.6 billion were up 2% from the fourth quarter of last year as strong growth in Treasury and Trade Solutions more than offset a decline in Securities and Fund Services. Treasury and Trade Solutions was up 7%, primarily due to higher trade revenues and increased deposits, partially offset by the continued -- by the impact of the continued low rate environment and FX. Securities and Fund Services was down 10% year-over-year, driven by lower settlement volumes, spread compression and the impact of FX. While lower Securities and Fund Services revenues reflected the overall capital markets environment, most underlying drivers for Transaction Services continued to show momentum. Average trade loans were up over 50% from last year. Average deposits were up 4%. And on a constant dollar basis, assets under custody were also up year-over-year, with good inflows in our custody assets. Expenses of $1.5 billion were up 14% versus last year, mainly due to investment spending, as well as severance and higher legal and related costs. Sequentially, the 4% expense increase was primarily due to severance and higher legal and related costs as our level of investment spending is beginning to flatten quarter-over-quarter. On Slide 12, we show a 9-quarter trend for Citi Holdings. The loss in Citi Holdings was $806 million in the fourth quarter, flat with the prior quarter and down from a loss of over $1 billion last year. Revenues were down 30% year-over-year to $2.8 billion due primarily to lower assets. Operating expenses of $2.2 billion were down 8% versus last year. Total credit costs were down 43% to $1.6 billion. Looking at Citi Holdings in more detail on Slide 13. Revenues in Brokerage and Asset Management were $43 million this quarter, down from last year due to a lower contribution from the Morgan Stanley Smith Barney joint venture. In Local Consumer Lending, revenues were down 13% versus last year to $3 billion, driven by declining loan balances. In the Special Asset Pool, revenues were negative $234 million in the fourth quarter. Net interest revenue was negative $94 million as interest-earning assets continue to represent a smaller portion of the Special Asset Pool, while we continue to incur funding costs on the total portfolio. Noninterest revenue was negative $140 million, driven by realized net losses and other marks during the quarter as compared to net gains in the prior year. Operating expenses were down 8% year-over-year to $2.2 billion, mainly due to declining assets, partially offset by higher legal and related costs. Sequentially, expenses were up 4% due to higher legal and related costs, driven by the mortgage business, as well as an increase in interchange litigation reserves. Credit costs were down 43% year-over-year to $1.6 billion, as credit trends continued to improve in both the consumer and corporate portfolios. Total net credit losses were down 47% to $2.2 billion, and we released $767 million of net loan loss reserves in Citi Holdings. Slide 14 shows Citi Holdings' assets. We ended the quarter with $269 billion in Citi Holdings or 14% of total Citigroup assets. The $20 billion reduction in the fourth quarter was comprised of nearly $12 billion of asset sales and business dispositions, approximately $7 billion of net runoff and pay downs and nearly $2 billion of net cost of credit and net asset marks. Slide 15 shows the results for the Corporate/Other segment. Revenues of $384 million were up significantly from last year, mainly driven by hedging activities partially offset by lower investment yields and lower gains on sales of AFS securities. Expenses were down by $82 million versus last year, mainly due to lower legal and related expenses. Assets of $286 billion included approximately $95 billion of cash and cash equivalents and $130 billion of liquid available-for-sale securities. Turning to total Citigroup expenses on Slide 16. For full year 2011, expenses totaled $50.7 billion, up nearly 7% from $47.4 billion in 2010. In both 2010 and 2011, expenses included episodic legal and related costs, as well as repositioning charges. In order to better compare the core operating expense growth year-over-year, we have isolated these items, as well as the impact of foreign exchange. In 2010, expenses of $47.4 billion included approximately $700 million of episodic legal and related costs and roughly $500 million of repositioning charges, and the year-over-year impact of foreign exchange was roughly $800 million. Adjusting for these items, core operating costs on a constant dollar basis were roughly $47 billion in 2010. In 2011, investment spending was roughly $3.9 billion higher for the full year, and we funded nearly half of these investments with efficiency savings of $1.9 billion. All other variances in core operating costs, including higher volume-related expenses in Citicorp, were more than offset by lower costs in Citi Holdings. Therefore, on a constant dollar basis, core operating expenses of $48 billion in 2011 were approximately $1 billion or just over 2% higher versus the prior year. In 2011, episodic legal and related costs were roughly $2 billion and repositioning charges were around $700 million, bringing total expenses up to $50.7 billion. While some level of episodic expenses will likely continue in 2012, we remain highly focused on managing our core operating expense trends. Slide 17 shows total Citigroup net credit losses and loan loss reserves. NCLs continued to improve in the fourth quarter, down 9% sequentially to $4.1 billion, and the net LLR release was $1.5 billion, up slightly from the third quarter. We ended the quarter with $30.1 billion of total loan loss reserves and our LLR ratio was 4.7%. Consumer NCLs declined 7% sequentially to $4 billion, and we released $1.2 billion in net loan loss reserves. Corporate credit was a benefit of $158 million in the fourth quarter compared to a cost of $86 million last quarter on lower net credit losses and a higher reserve release. Total nonaccrual loans represented 1.7% of total loans at year end, down from nearly 3% at the end of 2010. Slide 18 shows our international consumer credit trends, which generally remained stable to improving in Citicorp in the fourth quarter as loans continued to grow. In Asia, the NCL rate remained stable in the 1% range in the fourth quarter, and 90-plus day delinquencies were lower than last quarter. In Latin America, the sequential NCL rate increase reflects the impact of adjustments, primarily in cards to conform loss recognition procedures in Central America. Excluding these adjustments, the NCL rate would have been stable in the fourth quarter and delinquency rates continued to improve. In Local Consumer Lending in Citi Holdings, the sequential decline in loans and the uptick in delinquencies in the fourth quarter mainly reflect the announced sale of our retail banking business in Belgium as these loans were moved into other assets held for sale. On Slide 19, we show our North America card portfolios. In Citi-branded cards, the NCL rate continued to improve in the fourth quarter, down 63 basis points sequentially to 5.3%, and 90-plus day delinquencies were down to 1.3%. In Retail Partner Cards, the NCL rate improved to 7.3% this quarter, and 90-plus day delinquencies remained stable. On Slide 20, we show the North America mortgage portfolio in Citi Holdings, split between residential first mortgages and home equity loans. NCLs improved in both portfolios in the fourth quarter, although as we have previously discussed, the pace continued to moderate. In residential first mortgages, we ended the quarter with nearly $68 billion of loans, down 16% from 1 year ago. Net credit losses were down 6% sequentially to $412 million. As we discussed last quarter, overall delinquency trends are beginning to show the impact of re-defaults of previously modified mortgages. While, at the same time, the pace of asset sales and modifications has slowed. Sales of delinquent mortgages, for example, declined to nearly $300 million in the fourth quarter from roughly $500 million in the prior quarter. These converging trends drove an increase in 90-plus day delinquencies in the fourth quarter, up $260 million to $4.1 billion. Early-stage delinquencies in this portfolio, however, actually improved quarter-over-quarter. Importantly, re-default rates for HAMP and other modifications continued to track favorably versus expectations through the fourth quarter, with expectations for re-defaults and a resulting increase in net credit losses already factored into our net loan loss reserve balance. In home equity loans, we ended the quarter with $40 billion of loans, down 12% from a year ago. Net credit losses were down 2% sequentially to $533 million in the fourth quarter. 90-plus day delinquencies were flat versus the prior quarter at $1 billion, while early-stage delinquencies improved. Overall, the pace of improvement in our home equity NCLs and delinquencies has slowed, and we are watching these trends closely. We continue to allocate roughly $10 billion of our total loan loss reserves to North America real estate lending in Citi Holdings or 31 months of coincident NCL coverage. Now let me close with some comments about 2012. Clearly, the operating environment continues to be extraordinarily challenging in a number of businesses, none more so than Securities and Banking. While we have seen some pickup in activity in the first weeks of January, the macro uncertainty that has dominated the securities market still remains unresolved. And that largely reflects the ongoing overhang of the Eurozone crisis. As Vikram noted, we reduced our risk in the fourth quarter and we saw both institutional and retail clients do likewise, which contributed to meaningfully lower levels of activity across markets and regions. While we firmly believe that Europe has the financial wherewithal to solve the sovereign crisis, any resolution will be a political process, which continues to be uncertain and unpredictable. So until the markets believe that an achievable, comprehensive resolution to the European sovereign debt crisis has been structured, the macro uncertainty that has dominated investor activity will likely remain an issue. Now the challenges in Europe are not all bad news for us. The significant deleveraging of the European banks is creating meaningful competitive opportunities in a number of businesses, particularly in Transaction Services, as European banks are pulling back from serving many clients in key businesses they historically dominate, like trade finance. And we are pursuing those opportunities, but doing so in a cautious manner as we continue to support our clients while maintaining a tight risk profile. Given the ongoing headwinds in Securities and Banking, we remain very focused on expenses and, as Vikram mentioned, also on ensuring our capacity is aligned with the opportunities that we see. For 2012, we currently expect Citigroup's full year operating expenses, excluding the impact of foreign exchange and any significant episodic items, will be between $2.5 billion and $3 billion lower than the reported 2011 expenses of $50.7 billion. Turning to our other businesses. In Transaction Services, we expect revenues to continue to grow at a moderate pace despite the low interest rate environment, and we are reaffirming our expectation that Transaction Services will achieve positive operating leverage by the second or third quarter of this year. In North America Consumer Banking, we expect consumer credit to continue improving but at a slowing pace in 2012. We are seeing positive trends in this business as we have completed much of the portfolio derisking undertaken following the crisis. We are beginning to see the benefit of our investment spending as card accounts, purchase sales and loans have all stabilized and are now beginning to grow. We believe this will drive positive operating leverage by the end of 2012. In International Consumer Banking, we had positive operating leverage overall this quarter as both Latin America and Asia generated positive operating leverage, building on the momentum started by Asia in the third quarter. While we are seeing some slowing in certain drivers, like investment sales in Asia, reflecting again the cautious sentiment of even retail investors, broadly speaking, we continue to see growth in loans, deposits, purchase sales and accounts in virtually every region. In Citi Holdings, the transfer of Retail Partner Cards business will result in approximately $45 billion of assets, including $41 billion of loans moving to Citicorp. As a result of this transfer, earnings in Citi Holdings will be lower going forward as the cards business was the single source of meaningful profitability in Local Consumer Lending segment in Citi Holdings. Nonetheless, we are reaffirming our prior guidance that existing reserves plus expected pre-provision net revenue in the Local Consumer Lending business remain sufficient to cover expected lifetime losses in the remaining LCL portfolio. We continue to believe mortgage-related issues are the single largest source of risk facing the U.S. banking industry. While we expect our overall delinquencies to rise slightly in coming quarters as some previously modified mortgages start re-defaulting, to date, those re-default rates remain below our expectations. Despite the expected delinquency increase, we saw some positive signs in early bucket mortgage delinquencies this quarter that we will continue to watch carefully. In the meantime, litigation and regulatory risk in the mortgage business will remain high and we continue to focus on further reducing our portfolio. So, in summary, the uncertain macro environment will continue to be a meaningful headwind for our Securities and Banking business, but our consumer businesses and Transaction Services should continue to exhibit growth, and we will continue to wind-down Citi Holdings in an economically rational manner. With that, Vikram and I would be more than happy to take your questions.

[Operator Instructions] Your first question comes from Glenn Schorr with Nomura. Glenn Schorr - Nomura Securities Co. Ltd., Research Division: You gave a lot of comments around expenses, so I appreciate that. When you were talking about the year-on-year potential pullback of $2.5 billion to $3 billion, can you give a thought on just, a, geography -- and I don't mean that international, I mean more by business. Meaning, it looks like you're still growing all the consumer businesses and what you want to come out in international franchise. Is there -- it leaves me thinking the IB might be one of the source of funds, so just curious there. John C. Gerspach: Yes, I'm not going to go into individual business guidance at this point in time, Glenn, all right? Glenn Schorr - Nomura Securities Co. Ltd., Research Division: Okay. Let's attack it maybe a little differently. In the S&B, you talked about focus on aligning capacity with the -- and the size of the opportunities. This has been obviously a tough market and there are cyclical pressures as you mentioned. But how do you get your arms around the rule changes happening and then the revenue environment falling? How do you weigh that cyclical versus secular? And what's the timing on making those decisions because it has a big impact on how you size the infrastructure? Vikram S. Pandit: I think that's right, Glenn. And certainly, by all means try to parse out secular versus cyclical is not easy. And I think we've tried to do that this quarter, 2 different sets of actions. The cyclical aspect, obviously, we've addressed for compensation. And on the secular side, some of the restructuring reserves that we've taken and the positions we eliminated try to get at that secular aspect of the markets. Now if you kind of think about the environment, there are still some significant overhangs and that's notwithstanding the fact that the market activities this year so far have been significantly better than fourth quarter. They're still running below the first quarter of last year, but there are questions out there. Questions such as, how is the Greek situation going to be resolved and it's March 20 and that's before the fiscal compact gets signed. These are all the kind of situations that are still out there, which suggests that it's very hard to parse out exactly what part of the activity we're seeing is because of the cyclical situation versus how much of secular. Now there's no magic answer to that except, I can tell you, we are keenly watching that and we'll make whatever changes we need to make. Glenn Schorr - Nomura Securities Co. Ltd., Research Division: So I guess, I'm sure you all get the same thing I get from investors and probably your board, too, of trying to understand what you have at your fingertips in the capital markets business that's fixed versus incentive comp, and I don't know if you can talk towards that. But I still want to get towards the timing because I don't have the crystal ball either, but the investor base wants to know an action plan. Can -- in 2012, do you think we'll see either an improvement in activity or something more material on the structure of the business? Vikram S. Pandit: I think -- I hope that 2012 is the year where we get the European overhang out of here. And that would be a significant shift that would then allow one to gauge what's happening on a much more normalized basis. And with that in mind, we're certainly thinking about 2012 as the year where you won't make a lot of those decisions. Having said that, again, I want to go back to saying that the actions we've taken so far are our best view as to what reflects the secular actions we need to take. As I said again, we'll keep monitoring it and if that changes, we'll take those decisions. Glenn Schorr - Nomura Securities Co. Ltd., Research Division: Okay. And then just final quickie, on international consumer, I know it gets messed up a little bit with FX and what's constant dollar, but you mentioned a little bit of slowing in Asia investment sales. Is everything else on the international consumer engine still growing and headed in the right direction in your mind? A simple answer. John C. Gerspach: Absolutely.

Your next question comes from the line of John McDonald with Sanford Bernstein. John E. McDonald - Sanford C. Bernstein & Co., LLC., Research Division: John, could you give us a little feel for what drove the increase in legal reserves for the interchange issue? John C. Gerspach: Well, as we take a look at what our potential exposure is under the interchange litigation, we needed to increase the level of reserve that we had. John E. McDonald - Sanford C. Bernstein & Co., LLC., Research Division: Okay. So you're just looking ahead to the case that will come into court, I guess, in September of this year? John C. Gerspach: I'm not quite sure of what the date is. I know it's later this year. John E. McDonald - Sanford C. Bernstein & Co., LLC., Research Division: Okay. And then on net interest income and the margin, this quarter, we saw the net interest margin percentage up, but your average earning assets down. A little bit of color on what happened this quarter, and then just some thoughts on the outlook for net interest income and margin, please? John C. Gerspach: Yes. From a NIM point of view, as you note, our net interest margin improved by about 7 basis points this quarter. But a lot of that was driven, probably about 5 basis points of the 7 basis point increase was really driven by the fact that we took down our trading assets. And trading assets have got some component of interest-earning assets in there. We tended to take down the lower -- those trading assets with the lowest-earning rate. So I would look at that as almost being a -- almost like a one-off benefit that we got this quarter, John. I would anticipate that with some modest growth again in our trading assets, we'll probably be back to a 2.85% NIM ratio next quarter, give or take 1 or 2 basis points. John E. McDonald - Sanford C. Bernstein & Co., LLC., Research Division: Okay. And in terms of growing net interest income, you've had some loan growth across the franchise. What will be the key to your ability to grow net interest income this year? John C. Gerspach: Well, don't forget, you still have -- you're still fighting a couple of trends. We're able to grow loans, but we still -- in Citicorp, we still have those Citi Holdings loans coming off the books. And the Citi Holdings loans tend to have, with the exception of, say, Student Lending, those student -- those Citi Holdings loans have got some higher spreads than the loans that we're building on Citicorp. So we're still going to be -- we were having a little bit of a fight as far as just swimming upstream a little bit, working our way through the reductions in Citi Holdings and offset by Citicorp. And then you've got -- we're still existing in a very low interest rate environment. So it's hard to point right now to solid growth trends in net interest margin. I think you can say at this point in time that we feel pretty good that absent that onetime benefit that you see this quarter, that NIM should roughly stabilize. John E. McDonald - Sanford C. Bernstein & Co., LLC., Research Division: Okay. And then also, a different question on DTA. Could you update us whether you consumed or built DTA this quarter on a net basis and what your expectations might be to recapture DTA in 2012? John C. Gerspach: Yes, fine, John. This quarter, we would have generated additional DTA. So in your parlance, we would have built DTA. I think the important thing for DTA is to look where we are on a full year basis. We started the year at about $52 billion of DTA. We'll end the year at about $51 billion. But more importantly, as we've discussed in the past, are the real components of the DTA. And you'll recall, last year -- and when -- and you'll see this laid out in more detail when we publish our K. When you looked at that portion of the DTA, that really reflected U.S. federal DTA. It had a sizable component in it about $4 billion compromising NOL carryforwards. And what we were able to do this year is we've been able to completely utilize that NOL carryforward. So that will leave us, in 2012 now, able to address the monetization of the carryforward, deferred the foreign tax credits. As you may recall, we can't begin to utilize the foreign tax credits until we worked our way through the carryforward NOL. And it's the foreign tax credits that tend to expire more near term. We have some of those coming off, expiring in '17 and '18. So it was important from our point of view to work our way through the NOL this year. And now we'll be able to address the utilization of those carryforwards foreign tax credits beginning in 2012. John E. McDonald - Sanford C. Bernstein & Co., LLC., Research Division: Okay. So even though the total DTA only came down by $1 billion for the year, you did get that $3.5 billion or $4 billion of NOLs that you were shooting for? John C. Gerspach: Yes. As we said, there's 2 different things to look at with DTA. One is the overall gross amount of the DTA. But more -- almost more importantly are those component pieces. And so while the gross amount only came down by that $1 billion, I think that we significantly improved the mix of the remaining DTA by removing that NOL carryforward. John E. McDonald - Sanford C. Bernstein & Co., LLC., Research Division: Okay. And last thing from me, I know you can't get into specifics, but if you or Vikram could just talk about what your goals and hopes are for capital return this year and what you hope to be able to do after the stress test and what your goals are in terms of what the stress test will show for Citigroup? Vikram S. Pandit: Yes. Again, lot of that we submitted early this year to the Fed. They've got our stress test under their scenarios. They've got our capital-creation projections this year. They also have our capital return requests built in there as well. And what I would say to you is that we continue to have the same goals that I mentioned before, which is that this will be the year that we'll start returning capital. We also have the same goals in terms of getting the capital above 8% by the end of the year. None of those things have changed, except that the filing's gone into the regulators. And now all of us are just going to have to wait and see exactly when the response comes back.

Your next question comes from Guy Moszkowski with Bank of America Merrill Lynch. Guy Moszkowski - BofA Merrill Lynch, Research Division: Just a follow-up on that question. The -- you've obviously targeted 8% to 9% Basel III capital ratio by the end of this year for some time. Given the uncertainty in Europe, the challenging global growth outlook that you've kind of talked about and just picking up on what you just said about above 8%, should we be assuming that your target is sort of to the low end of that 8% to 9% range right now? Vikram S. Pandit: I, again, it's hard to -- when we say 8% to 9%, it is 8% to 9%, and that's clearly true. Obviously, we and all of us are aware of the environment we're going through, and we are still targeting in between that 8% to 9%. So it depends upon a number of other actions that we've planned as well. So it's a little early to guide you to any one particular point. Guy Moszkowski - BofA Merrill Lynch, Research Division: Okay. And then just if I can go back to the discussion of expenses. I recognize that you don't, at this point, want to be pigeonholed into where you're going to target some of these expense reductions that you're talking about. But in Citi Holdings, in the Local Consumer Lending group in particular, is it fair to say that the reduction in expenses as the assets have come down has been slower than you might have expected? And is there anything that you can do as you continue to get a reduction in the portfolio there besides the transfer of assets that we should think might accelerate the reduction in the cost that you have against those pretty unproductive assets? John C. Gerspach: Yes, Guy, that's a great question. There's probably -- there's several things that you need to think about when it comes to the Holdings' expense levels, because you're right. Assets came down 25% in Holdings during the course of the year. Expenses came down something on the order of 8% or so. But you need to think in terms of one, we did have some increased episodic legal and related expenses in Citi Holdings this year. That probably added $0.5 billion to the expense base. So it's hard to say that we could drive expenses down and absorb those increased episodic legal expenses. The second thing is, as we -- after we made the decision to move the Retail Partner Cards business back into Citicorp, we certainly increased the level of investment spend that we were making in that business. So you'll see some adjustment in the Holding levels -- Holdings' expense levels as we move Retail Partner Cards out as well. And we'll do that on a -- well, on a full restatement basis, so that we'll take the history out so you'll get a cleaner history of Holdings. The third aspect of that is we have had some incremental level of expenses in our residential mortgage business this year as we have put on additional headcount to meet the terms of the consent order that all the banks signed with the regulators earlier this year. So that had somewhat of a modest impact on the expenses themselves. And then the last factor -- I'm sorry to drag you through every little factor, is as we sell businesses in Holdings, and that's everything from the Student Loan business and other things that we've conducted, normally there's a transition period. We did this with auto loans. We do it with student loans. There's a transition period where we continued to support the transferred business. Now we get paid for that support, but what we get paid comes in through the revenue line while the expenses remained in our expense line. So all of that tends to mask what you should really begin to see as the reduction in those Holdings expenses. I still feel very confident that after we moved out partner cards and if you can adjust for some of these things like these ongoing service levels activity, you'll see that expenses are coming down closely aligned with the reduction in assets.

Your next question comes from the line of Jim Mitchell with Buckingham Research. James F. Mitchell - Buckingham Research Group, Inc.: Just a quick question on the expense reductions again. Can you at least give us a sense of -- is that mostly coming from headcount reductions and other efficiency gains? Or is there some pullback on the investment spend? John C. Gerspach: Well, I think as we've said, we're not going to be increasing investment spend at the same level that we increased it in 2011. 2011, we increased investment spend year-over-year by about $3.9 billion as we've talked about. We're not targeting a $3.9 billion increase in investment spend again next year. James F. Mitchell - Buckingham Research Group, Inc.: No, but is it going up or down, I guess is the question? John C. Gerspach: Well, the investment spend will go up slightly next year. All right? We're not going to pull back from investing in the businesses. But as we've discussed in the past, we do have an ongoing reengineering program. We, again, fully expect each one of our businesses to reduce expenses on an ongoing basis by 3% to 5% annually. This year, we took $1.9 billion out of our expense base. That's roughly 4% of last year's reported expenses. And without going into -- you're trying to forecast details, you should expect that we would be able to do roughly another 4% next year, which would take $2 billion out, which leaves us then the ability to still invest in the business and deal with some level of continuing episodic expenses and still hit the overall reduction that Vikram and I talked about. James F. Mitchell - Buckingham Research Group, Inc.: Okay, that's helpful. And then one other question maybe in terms of reserve releases. You guys were a little later to that game than some of your peers. So is it fair to assume that maybe at a declining level where we should still see, assuming the environment continues at the current rate of improvement, that we'd see some more reserve releases? John C. Gerspach: Yes. Given the assumptions that you put out, that if things continue, the environment continues as it is. And don't forget, most of the reserve releases that we're doing now are really tied up in our 2 cards businesses. So it's really a U.S. type of view right now as far as reserve releases. But we continue to see NCL rates decline in that business. We continue to see delinquencies improving. So as long as the overall economy continues as it is now, and it continues to improve, yes, you should continue to see some level of reserve releases.

Your next question comes from Brennan Hawken with UBS. Brennan Hawken - UBS Investment Bank, Research Division: Just one quick question on expenses and then we can move on, I promise. Just you had said that the $2.5 billion to $3 billion decline that you expect for 2012 does not include unforeseen episodic issues. But do you bake in an elevated level of legal expense in those assumptions? Because it does seem like that's part of the environment that we're in, at least for the near term. John C. Gerspach: Yes. I would say that the -- when we're talking about a $2.5 billion to $3 billion reduction, and that works you down to a number. You should assume that in that number, there is some level of ongoing litigation-type expenses. But we wouldn't expect it to be a repeat of 2011 where we had $2 billion worth of episodic legal and related expenses. Brennan Hawken - UBS Investment Bank, Research Division: Okay, fair enough. And then digging in a little bit into the equities results, this is the second quarter where we've had some weak derivatives results weighing down that business. Could you give maybe some color on what happened there and any steps that you might be taking to prevent more of the same? John C. Gerspach: Yes, let me just start, and then I'll kind of let Vikram maybe finish about things to come. When you look at equities, I think there's 2 things that you got to think about. Overall, for the full year, in equities, our revenues declined by about $1.3 billion. About half of that decline was tied up in the principal strategies business, that prop trading unit that we mentioned last quarter and again this quarter. And that's a unit now where we have completed the wind-down. The other half, as far as the revenue shortfall year-over-year, was really in equity derivatives. And there's certainly at least an element in equity derivatives' performance that is market related. And then there's probably some element of it also that is a bit of an underperformance on our part. But you've got to think in terms of the full year, especially the second half of the year, was definitely impacted by those losses in the principal strategies group, and now we've wound that down. Vikram S. Pandit: I think the only thing I'd add to that is volatility, volatility was extremely high. And in addition to that, liquidity, even in some of the most liquid markets, like index options and index derivatives, dried up dramatically. And so when you're making markets for your clients, sometimes the market-making reflects -- market-making activity and market-making P&L reflects the underlying nature of liquidity in the markets and was not as good a quarter as we would've liked.

Your next question comes from Matt O'Connor with Deutsche Bank. Matthew D. O'Connor - Deutsche Bank AG, Research Division: A couple of maybe secondary questions here. But as we think about just the business activity in Securities and Banking and then your position, you did have some comments that you proactively derisked. And obviously, these hedges that you have on has some cost to it. Is there a way to quantify kind of the proactive cost of hedging and derisking? I realize some of it is opportunistic costs, but there is probably some direct costs as well? Vikram S. Pandit: That's difficult. I mean, obviously, John Gerspach has given you one line on the CDS hedges, and that's one which was relatively difficult. But we got to the numbers to tell you exactly where they are. I think the broader issue is what you have stated. We've derisked a lot of these businesses. And when you have less risk to work, you make less money. And so the opportunity cost is an important piece, including derivatives and other books when you carry a lot of data, and you have a lot of hedges in place that can reduce the amount of revenues you generate. It's very hard to tell you that this is what it cost us because obviously, you can't run 2 businesses side-by-side, one with this and one without. And so that's a difficult exercise. We've chosen just to tell you that we actually ran our books in a very cautious way. And frankly, we thought that was exactly the right thing to do given the uncertainty that Europe represented. Matthew D. O'Connor - Deutsche Bank AG, Research Division: Okay. And then just separately, as we think about capital and the build to get to the 8% to 9% under Basel III, there's obviously the joint venture with Morgan Stanley and the brokerage business. Could you just remind us of when their call date is this year and the process at which they basically to figure out the price and what the impact would be to the capital? I think it might free up 20, 30 basis points or so, just remind us about some of those moving pieces. John C. Gerspach: Yes, Matt. You pretty much have got it. The call date is -- it's either May 31 or June 1. I can't remember the exact date, but I believe it's May 31. And what will happen is about a month before that time, Morgan Stanley will hopefully notify us of their intent to exercise their call to buy 14% of the joint venture. So that's 14% out of the 49% that we currently own. And if we don't immediately reach agreement on a price, then we each agree on a third-party arbitrator who will come in and set a price. Matthew D. O'Connor - Deutsche Bank AG, Research Division: Okay. Am I right that when the deal was struck, there was a deal value of 10? And I think you or at least the media was reporting that the bid-ask spread was like $1 billion or so, plus or minus? John C. Gerspach: I don't know what the media reports.

Your next question comes from Chris Kotowski with Oppenheimer. Christoph M. Kotowski - Oppenheimer & Co. Inc., Research Division: Most of my questions actually have been asked, but if you've been derisking the trading books, should we see any of that in terms of risk-weighted assets coming down? John C. Gerspach: Chris, I think you'll see a couple of things. One, you can see, certainly in the -- just the level of assets that we've got on our balance sheet right now, balance sheet assets are down. When we publish our K, you'll see that our average VAR is down quarter-on-quarter. More importantly, and something that you won't see though, is the way that we really manage the businesses is by applying a continuous stress test on our businesses. And overall, I say that the stress losses in the second half of this year on our various trading books were reduced significantly compared to the levels that would have existed at the end of the second quarter. You're more likely to see this on a Basel II or Basel III risk-weighting assets. And so that's something that, as we get more into the later part of the year, we can probably talk about.

Your next question comes from the line of Moshe Orenbuch with Credit Suisse. Moshe Orenbuch - Crédit Suisse AG, Research Division: I guess, given that you talked about these expense reductions kind of not like contingent on the environment, I mean, this is what your plan would be kind of in normal course for 2012. And presumably, there are contingency plans above and beyond that, right? I mean, that's -- but I guess the question is, I mean, some of this must be being phased in. And what's the -- what is it going to be in terms of the run rate by the end of 2012? Will it be lower than where we're starting the year? John C. Gerspach: Moshe, I'm not going to forecast the run rate by the end of 2012. But again, when you're talking about things being phased in, and I don't mean to continuing to beat a dead horse, but we have an ongoing cost reduction program built into each one of our businesses. And so we are continuously taking cost out of the business. Last year, we did take $1.9 billion of expense out of our businesses. Now we chose to invest $3.9 billion, an incremental $3.9 billion in the businesses, so that overwhelmed the cost reductions. But as we pare down on increasing that level of investment, the cost reductions that we've got can cover the level of investment and actually drop some cost savings to the bottom line. Moshe Orenbuch - Crédit Suisse AG, Research Division: Got it. Maybe just to kind of flesh that out, because I think in response to an earlier question, John, you had said that you would be increasing those investments. When you meant increasing, you meant increasing above 0 from like a 0-based budgeting-type of thing? John C. Gerspach: Yes. If you take today as saying, okay, the level of investment spending that I've baked into the business is now my -- my now 0-based. We will be increasing that level of spend. We're going to open up more branches. Moshe Orenbuch - Crédit Suisse AG, Research Division: And presumably, given the fact that you've talked about kind of reaching a positive expense leverage in more -- in the entire company as opposed to just portions of the company, that $1.9 billion number should be a larger number, as well as the $3.9 billion being smaller? John C. Gerspach: Yes. Yes.

Your next question comes from Jason Goldberg with Barclays Capital. Jason M. Goldberg - Barclays Capital, Research Division: Just, I guess, a bit of clarification. I guess it looked like trading fell off, as you mentioned, a lot in the last 3 weeks of the year, given your comments earlier in the quarter. But was that -- I guess you mentioned principal strategies. Was that just more derisking you did in the last 3 weeks? Was that tied to the year-end kind of mark process? Or just maybe a bit more color in terms of what actually drove that? John C. Gerspach: Well, principal strategies was a business that we were winding down throughout the second part of the year. So that in and of itself wasn't a last 3 weeks of December rush on it. So that -- you can kind of take that off the table. December was just a month that we saw as being remarkably weak. I'd characterize this December as being something beyond what we would normally expect to see in seasonality. It just -- people just sat on the sidelines, and we just didn't see a lot going on during the month of December. Jason M. Goldberg - Barclays Capital, Research Division: Got it. And then in your comments, you mentioned that mortgage re-default rates were coming in better than you had expected. I guess, any kind of hypothesis in terms of what's driving that? John C. Gerspach: Well, when you get into the HAMP process, assuming you've done it correctly, you basically have reunderwritten the loan and it's actually quite an extensive process. And our re-default rates now on our HAMP modifications are running at something less than 15%. So that's clearly below certainly the expectations that us or the industry would have normally had going into the process. And then some of that carries over into just the normal modifications that we do. And I'd say that we're in an enhanced modification mode. And so even on our non-HAMP modifications, the re-default rates are running less than 25%. Jason M. Goldberg - Barclays Capital, Research Division: Interesting. And then I guess, just lastly, obviously, you're moving Retail Partner Cards back into Citicorp. OneMain Financial, I guess, been a lot of discussion around that, just your thoughts around the ultimate outcome for that unit? John C. Gerspach: Well, OneMain Financial, again, that's a unit that we'd like to find a buyer for. And I think that, that's where that's going to stay. It's a business that's a good business. You take a look at the -- some of the information we give you in the appendix slides, it's generating positive pretax income now for several quarters in a row, but it's just not a business that we see fitting with the strategy of Citicorp. So it's hard to see how we would just suddenly decide to make a transfer of that into Citicorp. That's just one that we're going to have to find the right buyer at the right time and deal with it that way.

Your next question comes from Matt Burnell with Wells Fargo. Matthew H. Burnell - Wells Fargo Securities, LLC, Research Division: Just a couple of questions. John, you mentioned one of the -- what appears to be one of the major benefits of some of the deleveraging of the European banks. I'm curious outside of Transaction Services, more in the lending businesses, are you seeing obvious signs there where you're gaining market share as a result of some of the pullback of the European banks? And does that -- do you expect that to help your loan growth this year? Vikram S. Pandit: I think the most obvious place where you see it is in Trade Finance, and that's a pretty big number in terms of increase. And I think we can continue to see good momentum there, particularly given our global network. Corporate lending is a little bit more sporadic in the sense that not every corporation needs the liquidity. Lots of corporations, even in Europe, have a lot of cash. We think that some benefit may also accrue in terms of capacity or rationalization and things like derivatives markets and those kind of places where pricing structures may change on that. And so I think the bigger impact, as I said, the European banking system has a gross number of about $40 trillion of assets. As you can guess, that's substantially larger than the U.S. It depends on how you measure it and all of that, but it is a multiple. That number is coming down. And as that number is coming down, it's going to impact a lot of different aspects and not only in terms of product lines, but also geographically. I think the emerging market businesses are ones where we are quite present. And as I said earlier, the numbers that we understand, a 65% of emerging market debt is held by the European banking system. Well, that creates certain types of opportunities there as well. So it has to play out. It's going to play out in a very steady way because we've got to underwrite everything as carefully as we underwrite anything else. But the trends are certainly in the favor of those banks that have the capacity to step in. Matthew H. Burnell - Wells Fargo Securities, LLC, Research Division: And if I can, just a couple of quick questions on the consumer side of things. Domestically, are you still sticking to your goal of achieving positive operating leverage in North America basically this year? And has that accelerated at all given some of the positive trends you saw this quarter? John C. Gerspach: I'm not going to accelerate the guidance on that at this point in time, but we do -- we are reaffirming that. We expect North America Regional Consumer Banking to generate positive operating leverage by the end of this year. But I'm not going to advance that timeline just yet. Matthew H. Burnell - Wells Fargo Securities, LLC, Research Division: Fair enough. And on EMEA consumer banking, the credit trends there look quite good in the fourth quarter, certainly relative to the last couple of quarters. I guess that surprises me a little bit given some of the concerns raised in the media about the slowdown in several of the economies in Western and Central Europe. I guess I'm just curious how you're thinking about the potential for credit trend weakening in the consumer businesses in EMEA, given all the challenges in the Eurozone? John C. Gerspach: Yes. We actually -- as you've noted, we really haven't seen that impact on our consumer business. Now remember, even in EMEA, it's the same strategy as we have everywhere around the world where we're focused on a specific customer segment. So -- but we're -- again, EMEA is a rather smaller part of our consumer franchise, but we don't see issues right now with our book of business in EMEA.

Your next question comes from Betsy Graseck with Morgan Stanley. Betsy Graseck - Morgan Stanley, Research Division: A quick question on the lending business and the S&B. You highlighted the variances from the hedge gains and losses. Just wanted to understand what some of those big drivers are. John C. Gerspach: I'm sorry, what are the big drivers in the hedge gains and losses? Betsy Graseck - Morgan Stanley, Research Division: Yes, what's driving the variance there? John C. Gerspach: Counterparty spreads. Betsy Graseck - Morgan Stanley, Research Division: So then a follow-up is just given the downgrades that happened. I mean, I know it's at a country level last week. Does that impact what kind of gains or losses you'd be expecting this coming quarter? John C. Gerspach: No, no. I mean, I don't want to say that a lot of our book is certainly -- there's not a lot of our book that's concentrated in Western Europe, which is where I think you've seen those downgrades that you're talking about. And then there's always that question as to whether or not the country rating drives down the corporate or the financial institution of rating. So most of our CDS hedges are against either individual -- these are specific hedges against the risk in our loan portfolio. And so they're either single-name risks or something where we've been able to construct a hedge against an industry group. But it's really not tied back into what you may be thinking about, Betsy, as far as the European sovereign CDS. That's not what we're talking about. Betsy Graseck - Morgan Stanley, Research Division: And is there anything else that the recent downgrades at the country level would impact your look forward? John C. Gerspach: Would impact my what? Betsy Graseck - Morgan Stanley, Research Division: Your look forward? John C. Gerspach: Look forward? No, no. Not from where we're positioned right now.

Your next question comes from Gerard Cassidy with RBC Capital Markets. Stephen D. Walker - RBC Capital Markets, LLC, Research Division: This is actually Steve dialing in for Gerard. Starting Holdings, how much of the expenses -- what percentage would you say is legal in nature? John C. Gerspach: I don't have that. I've got the growth year-on-year. But when you take a look at the episodic expenses in Holdings for this year, I'd have to guess at it, Gerard (sic) [Steve]. And so -- I'm sorry, I just don't have that in front of me. Stephen D. Walker - RBC Capital Markets, LLC, Research Division: Okay, that's fine. And also, just your loan loss reserves. Recognize that they're set by classified loans. Do you see that in a normalized credit environment that you'll get it below 2% from where it is right now? I think it's at 4%? John C. Gerspach: Yes, it's a little over that, actually. It's 4.7%. Don't forget, that's a mix of both a corporate business and consumer business. I think you're going to naturally have slightly higher reserves in your consumer business, so I don't think we would get down to having an LLR ratio of 2% for the whole business. I don't want to sit here and forecast one for you, but 2% would sound pretty aggressive to me. Stephen D. Walker - RBC Capital Markets, LLC, Research Division: Okay, got it. And just last question, and I apologize if this has already been mentioned. What are you expecting for your tax rate in 2012 effective? John C. Gerspach: Well, we don't talk about forecasting individual year tax rates. I'd say that as we continue to get back to a more normal operating environment, our tax rate should be something in the high 20s. In the, say, 28% range.

Your next question comes from Todd Hagerman with Sterne Agee. Todd L. Hagerman - Sterne Agee & Leach Inc., Research Division: Just quickly in terms of the Volcker proposal, we know the comment period ends next month in February. And assuming -- well, we don't know the rules, assuming the final rules come out later this spring for January implementation next year, how should we kind of think about the repositioning or kind of the timeline in terms of implementing that rule, so to speak? Is that kind of a second half 2012 kind of event? I mean, how should we kind of think about the residual impact of that proposal? Vikram S. Pandit: That's a logistically difficult question obviously, because there are tremendous amount of details that yet we need to know about, and we don't know what they are. A lot of that has to do with the certifications and other things up and down the chain in terms of proprietary trading and how you approach making market. So let me answer it this way, I think the broad-based approach to Volcker, which is about prop trading, private equity, other things that we've already started making and those changes are occurring, as John said earlier, a lot of them are behind us, some more things to be done. But a lot of them are behind us. In terms of sort of the mechanics of putting in place a system we've started, obviously, as best as we can, but I can't tell you exactly when everything is going to come online yet because I don't know all the details. Todd L. Hagerman - Sterne Agee & Leach Inc., Research Division: Yes, I guess I'm more specifically talking about the fixed income component as opposed to the equities component, which is obviously more clear cut. Vikram S. Pandit: Again, I can't tell you off the top of my head exactly when it all comes together. Todd L. Hagerman - Sterne Agee & Leach Inc., Research Division: Okay. And then maybe just kind of a follow-up to the earlier discussion in terms -- Vikram, you mentioned Asia and your positive outlook there. Could you just -- and John perhaps, too, just give us a little bit more flavor, color in terms of just the restructuring and the repositioning that you've been doing in both EMEA and Asia. As you mentioned before kind of the secular component? But I'm just curious just kind of what -- the profitability was just less than expected this quarter in particular. I'm just wondering, again, how we should think about that business, how you're repositioning it and going forward? Vikram S. Pandit: I mean, let me talk about it this way. The biggest broad-based repositioning is towards less resources in some of the more developed markets and more resources in the emerging markets. That's a very big, broad piece. I think that works through all our businesses, Consumer, Securities and Banking, et cetera. But that's one big piece. The second big piece of restructuring is still towards those businesses that are more services-oriented, local consumer banking, those kind of -- restructuring towards the kind of activities that allow us to serve our clients by providing them services and loans. That's the second type of restructuring. Third type of restructuring is in reaction to our view as to what volumes are going to be in the different product areas. I think it is clear to us that some of the credit markets, securitization markets, some of the other derivative markets are going to have different kind of volumes than what we've been used to. We've been restructuring towards that. We've been restructuring towards volumes that may be lower as a result of Basel III charges in certain areas as well. So that's the third big round of restructuring. And I guess, on the volumes, the last part, I would say, is our general view is that with more companies, that will over time go public and more credit markets in the emerging markets that we're skewing our resources a little bit more in that area. So that's the big picture kind of perspective which -- John, you want to add to that? John C. Gerspach: Well, I just -- when you take a look at Asia, don't forget that in this quarter, we actually had -- that Japan DTA write-down impacted the Asia geography. So when you're taking a look at Asia's results in Citicorp, about $120 billion -- $120 million of the write-off, I think it's $122 million of the write-off, impacted that. So that's a direct impact on the bottom line. The other thing is, Asia, the consumer business we talked a little bit about having an impact on lower investment sales this quarter. So that certainly impacts both the quarter-on-quarter, as well as the year-on-year comparisons. And when you take a look at what went on in Securities and Banking, they actually had a blowout quarter in the third quarter. So you're comparing fourth quarter to a blowout third quarter, which makes any sort of comparison difficult. They are down, revenues from where they were last year, and that's got a little bit to do with the equities derivatives market where we had a bit more of that impact hit us regionally in Asia than anything else. So I think there's just a couple -- it's a couple of singular events that hit in the quarter like the DTA write-down. And then some of it is a bit of a comparability issue where they had such a strong third quarter that it's a little difficult to compare fourth to third. Todd L. Hagerman - Sterne Agee & Leach Inc., Research Division: That's helpful, John. And so I'm just assuming again just all else being equal that, again, that the positive operating leverage kind of where we were year-over-year that, that would be the expectation for 2012 as well? John C. Gerspach: Yes. Certainly, our Asia consumer banking business, which is the one that we were giving that guidance on, we expect that positive operating leverage. Now that they've had it 2 consecutive quarters, we expect that to continue.

Your next question comes from Mike Mayo with CLSA. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: My question relates to the balance between investing for growth then shrinking for profitability. And the reason I ask that is just looking at the operating leverage. Quarter-over-quarter, year-over-year, 3 years, 5 years or 10 years, it looks like you've had negative operating leverage. So the real specific questions would be, number one, are you cutting enough? With revenues down $8 billion last year, you're looking to cut $2.5 billion to $3 billion. It seems like maybe you could cut more. The second question is, are you investing too much? If you look at the gap between revenues and expense, the growth last year, I get $11 billion taking your numbers. It might be $9 billion or $10 billion, but you're still going to invest, I guess, $4 billion or more taking last year's level. And the third question is perhaps, can you reduce the number of countries where you do business? Vikram S. Pandit: Let me start. John, you answer as well. Let's be clear. I think in any business like ours, you got a little bit of both going on. For example, we are investing against the emerging market consumer businesses because we expect them to grow. And at the same time, we've also demonstrated operating leverage which just is exactly to your point, which is having made the investments to start with. From here on, we expect them to self-fund a lot of the growth that's going to come from there. That's an example. We then go to our next business, which is the U.S. consumer business. We talked about investing in that. A lot of what we had to do is normalize some of the marketing spend in cards and as well, for that matter, in the consumer business, normalize marketing spend around the world. We've done that and we expect to see operating leverage coming out of that business as well. That's investment, but investment in a way that we think generates the operating leverage. Then you go to GTS. We've talked about that as well. There, we expect operating leverage sometime this year, middle of -- middle-ish of this year, something of that sort. And then you really get to the Securities and Banking business, which we've talked about before. That is a business which has been impacted by a combination of regulation, market uncertainty, volumes, a variety of different things. And that's a business where we are doing a little bit of both again. And by that, I mean that in certain of our local market foreign exchange businesses, local market consumer businesses -- not consumer, of trading businesses, there are some tweaking required in terms of investment. But by and large, there are large amount of businesses where we have reduced the amount of resources and hence the restructuring charge. So that's sort of the full picture of what's going on. I think John also stated that $3.9 billion may have been the investment number last year, but that's not the number next year. It's not going to be 0, but it's not going to be $3.9 billion And again, geared towards this kind of operating leverage momentum that we've started creating and plan to create going forward. Now that's to us the pattern of our investment and disinvestment, and it's consistent with where we think growth and earnings are going to come from going forward. John, you want to add to that? John C. Gerspach: The only thing I'd say, Mike, when you take a look at the revenues and you take a look at the overall Citigroup revenues, don't forget that one of the single biggest driver of the revenue reduction year-over-year is the revenue reduction in Citi Holdings. Citi Holdings revenues are down 33% year-over-year, as you would expect, because we're driving the assets down. So maybe a better way to look at it would be just on the Citigroup -- Citicorp plus Corp/Other. And again, there, certainly, we had revenues down year-over-year. It's 12%. And then you get into the individual business characteristics that Vikram mentioned, and that's really where we're focused. But I think we've got clean line of sight to positive operating leverage in the International Consumer Banking businesses, in North America Consumer Banking business, in GTS and the discussion keeps on coming back to what can we do to Securities and Banking, and that's a business that we are very focused on. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: I guess, if you strip this a few ways, you can still come up with negative operating leverage even at Citicorp revenue is down over $3 billion. John C. Gerspach: It is. It's down this year. You don't have to strip it out, it's down. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: I guess the general question is, Vikram... John C. Gerspach: The question is where we're going forward? Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: Well, Vikram, are you satisfied with the operating leverage the way it is today? I guess that's the core question. Vikram S. Pandit: We would like to see better markets and therefore, we'd like to see more revenues in Securities and Banking. That, to us, has been the biggest delta on a year-over-year, quarter-over-quarter basis. No, I'm not happy with those revenues in those businesses. A lot of that's related to the market. Some of it is related in terms of our continuing to execute in the right way. But what John said is important. The plan is -- has been to use 2011 as a year where we've made some of the catch-up investments, re-normalize some of the investments, put money to work where over the -- from 2008 through 2010, we had operated businesses very tightly, and to use 2012 as a year where we would start showing you operating leverage business by business by business. Some of that's already started, and some of that we expect to see this year. But that's the goal. Michael Mayo - Credit Agricole Securities (USA) Inc., Research Division: Last follow-up, I'll try one more time. Just are you satisfied with the expenses that are under your control, that you're doing really everything that you can? Vikram S. Pandit: The answer to that is, yes. And not only that, I think John talked about $1.9 billion of reengineering. We have a robust reengineering plan in place. Don't forget that John also talked about a couple of billion of one timers in legal. No, I'm not happy with those, and those are not the kind of expenses we want to see recur as well. But the company and the businesses are on top of driving operating leverage and operating efficiency, and we are focused on keeping our expense base as low as possible, just as we are in this environment focused on keeping our risk under control and keeping a lot of liquidity on our balance sheet because we do continue to see a lot of issues out there, particularly in Europe, that we are all going to have to be prepared for.

Your next question comes from Betsy Graseck with Morgan Stanley. Betsy Graseck - Morgan Stanley, Research Division: Just one quick follow-up. How much of the investment spend in 2011 was in the S&B business, the Securities and Banking business? John C. Gerspach: The incremental investment spending in Securities and Banking was about $1 billion, Betsy. Betsy Graseck - Morgan Stanley, Research Division: Okay. And is that going to persist into 2012, you think, as part of the investment spending? John C. Gerspach: I don't see an incremental $1 billion needed to be spent in that business. That was money that we needed to spend in order to bring on some of the additional banking teams that we did. It also had some systems level investments in there. Betsy Graseck - Morgan Stanley, Research Division: I mean, does that $1 billion continue in 2012 or does it go away? John C. Gerspach: Well, that $1 billion is in our expense base, and it's a part of what we need to address.

There are no additional questions at this time. I will now turn the call back over to John Andrews.

Great. Thank you, everyone, for taking the time this morning, this afternoon to listen to the call. Obviously, if you have any follow-ups, contact Investor Relations. And this call will be available for replay on our website for those who need to relisten to it. Otherwise, thanks, and have a good afternoon.

Thank you, ladies and gentlemen, for participating in the Citigroup Earnings Conference Call Fourth Quarter 2011. You may now disconnect.