Wells Fargo 2008 Annual Report Download - page 158

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Note 24: Operating Segments
We have three lines of business for management reporting:
Community Banking, Wholesale Banking and Wells Fargo
Financial. The results for these lines of business are based on
our management accounting process, which assigns balance
sheet and income statement items to each responsible operating
segment. This process is dynamic and, unlike financial
accounting, there is no comprehensive, authoritative guidance
for management accounting equivalent to generally accepted
accounting principles. The management accounting process
measures the performance of the operating segments based on
our management structure and is not necessarily comparable
with similar information for other financial services companies.
We define our operating segments by product type and
customer segments. If the management structure and/or
the allocation process changes, allocations, transfers and
assignments may change. Because the Wachovia acquisition
was completed on December 31, 2008, Wachovia’s results are
not included in the segment results or average balances for
2008. To reflect the realignment of our corporate trust business
from Community Banking into Wholesale Banking in 2008,
results for prior periods have been revised.
The Community Banking Group offers a complete line of
diversified financial products and services to consumers and
small businesses with annual sales generally up to $20 million
in which the owner generally is the financial decision maker.
Community Banking also offers investment management
and other services to retail customers and high net worth
individuals, securities brokerage through affiliates and
venture capital financing. These products and services
include the Wells Fargo Advantage FundsSM, a family of
mutual funds, as well as personal trust and agency assets.
Loan products include lines of credit, equity lines and loans,
equipment and transportation (recreational vehicle and
marine) loans, education loans, origination and purchase of
residential mortgage loans and servicing of mortgage loans
and credit cards. Other credit products and financial
services available to small businesses and their owners
include receivables and inventory financing, equipment
leases, real estate financing, Small Business Administration
financing, venture capital financing, cash management,
payroll services, retirement plans, Health Savings Accounts
and merchant payment processing. Consumer and business
deposit products include checking accounts, savings
deposits, market rate accounts, Individual Retirement
Accounts (IRAs), time deposits and debit cards.
Community Banking serves customers through a wide
range of channels, which include traditional banking stores,
in-store banking centers, business centers and ATMs. Also,
Phone BankSM centers and the National Business Banking
Center provide 24-hour telephone service. Online banking
services include single sign-on to online banking, bill pay
and brokerage, as well as online banking for small business.
The Wholesale Banking Group serves businesses across
the United States with annual sales generally in excess of
$10 million. Wholesale Banking provides a complete line
of commercial, corporate and real estate banking products
and services. These include traditional commercial loans
and lines of credit, letters of credit, asset-based lending,
equipment leasing, mezzanine financing, high-yield debt,
international trade facilities, foreign exchange services,
treasury management, investment management, institutional
fixed-income sales, interest rate, commodity and equity risk
management, online/electronic products such as the
Commercial Electronic Office® (CEO®) portal, insurance,
corporate trust fiduciary and agency services and investment
banking services. Wholesale Banking manages and administers
institutional investments, employee benefit trusts and
mutual funds, including the Wells Fargo Advantage Funds.
Cumulative other comprehensive income balances were:
(in millions) Translation Net Net Defined Cumulative
adjustments unrealized unrealized benefit other
gains gains on pension compre-
(losses) on derivatives plans hensive
securities and income
available hedging
for sale activities
Balance, December 31, 2005 $ 29 $ 593 $ 43 $ — $ 665
Net change — (31) 70 (402)(1) (363)
Balance, December 31, 2006 29 562 113 (402) 302
Net change 23 (164) 322 242 423
Balance, December 31, 2007 52 398 435 (160) 725
Net change (58) (6,610) 436 (1,362) (7,594)
Balance, December 31, 2008 $ (6) $(6,212) $871 $(1,522) $(6,869)
(1) Adoption of FAS 158.