What happens to contacts' groups once you enable iCloud?

In the Contacts program (i.e. Address Book), I enabled iCloud. I now have 2 listings along the left side: "iCloud" and "On My Mac." All my contacts look good, and did move over to iCloud and I don't have duplicates. (I believe I moved everything over to iCloud by dragging and dropping all my contacts from the "On My Mac" section to the new "iCloud" label.) But, the groups that I've created over the years in Address Book didn't move over to iCloud. For instance, I have a group called "Live in New York" with 15 contacts in it. Some of those contacts are in other groups, too, such as "Family," and "College."
I can't imagine I need to re-create all my groups manually now that I'm using iCloud instead of "On My Mac" to manage my contact cards, do I?
Thanks for the help.

Csound1, I tried that, with no luck. It just got me back to where I was before. Here's a screenshot of the Address Book program now. The 3 items that start with "-Geo: ... " are the first of the groups that I created for my Address Book contacts.

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