Citigroup deal dumps Phibro trading division

NEW YORK --- Citigroup Inc. is removing one of the irritants in its relationship with the government, its Phibro commodities trading division that is paying one trader an estimated $100 million this year.

The deal announced Friday carries a tradeoff for Citigroup: While the $250 million sale to Occidental Petroleum Corp. means a bit less government scrutiny, it also means the bank is losing hundreds of millions of dollars in annual income that could help repay $49 billion in bailout money.

Phibro, which makes most of its money through oil and natural gas trades, earned an average $371 million annually during the past five years. Citigroup sold it for about $250 million, which means Occidental could recoup its investment in less than a year.

A Citigroup official with knowledge of the deal said the bank wanted to dispose of Phibro by the end of the year.

NEW YORK --- USA Today expects to report the largest decline in circulation in its 27-year history, threatening its No. 1 position among U.S. dailies with the growth of online news and the slump in travel.

While most large dailies are struggling to hold on to print subscribers and newsstand sales, USA Today is being hurt by a drop in traffic at airports and hotels, the newspaper's mainstay. It also increased the price to $1 from 75 cents in December.

In a memo to staff Friday, publisher David Hunke said the average circulation at the Gannett Co.-owned newspaper was 1.88 million from April through September. That marks a loss of 398,000 copies, or 17 percent, from the same period the year before at the newspaper, which is printed on weekdays only.