Federated Completes Second Transaction with CitiGroup

Cincinnati, Ohio, Federated Department Stores, Inc. completed a second transaction related to its previously announced sale of Federated and May Department Stores Co.’s credit card receivables to Citigroup. The transaction, covering receivables that Federated has repurchased from General Electric Capital Corp. entities, yielded a pre-tax gain of approximately $179 million ($112 million after tax). These proceeds will be used to repay the short-term debt associated with Federated’s acquisition of May Co., which was completed on Aug. 30, 2005. Under the terms of an agreement, Citigroup will purchase all Federated and May Co. credit receivables in several separate transactions at a premium of approximately 11.5%. The transactions are expected to produce after-tax proceeds of approximately $4.6 billion.