Contingent Liability. Citi takes $5 bln charge for WorldCom, other issues. Citigroup sets up a reserve for litigation by recognizing a loss or expense on the income statement and creating a liability for future payments on the Balance Sheet.

The balance of the $4.95 billion after-tax charge will be added to Citigroup's reserves for future settlements, and brings that kitty to $6.7 billion. Prince says most of that reserve is earmarked for Enron litigation.