Wells Fargo 2009 Annual Report Download - page 127

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Transfers that
VIEs that we VIEs we account
do not that we for as secured
(in millions) QSPEs consolidate (1) consolidate borrowings Total
December 31, 2008
Cash $ — — 117 287 404
Trading account assets 1,261 5,241 71 141 6,714
Securities (2) 18,078 15,117 922 6,094 40,211
Mortgages held for sale 56 — — — 56
Loans (3) — 16,882 217 4,126 21,225
Mortgage servicing rights (4) 14,966 — — — 14,966
Other assets 345 5,022 2,416 55 7,838
Total assets 34,706 42,262 3,743 10,703 91,414
Short-term borrowings — — 307 1,440 1,747
Accrued expenses and other liabilities (4) 514 1,976 330 26 2,846
Long-term debt — — 1,773 7,125 8,898
Noncontrolling interests — — 121 — 121
Total liabilities and noncontrolling interests 514 1,976 2,531 8,591 13,612
Net assets $ 34,192 40,286 1,212 2,112 77,802
December 31, 2009
Cash $ — — 273 328 601
Trading account assets 1,309 4,788 77 35 6,209
Securities (2) 21,015 14,171 1,794 7,126 44,106
Loans (3) — 15,698 561 2,007 18,266
Mortgage servicing rights 16,233 — — — 16,233
Other assets 41 5,563 2,595 68 8,267
Total assets 38,598 40,220 5,300 9,564 93,682
Short-term borrowings — — 351 1,996 2,347
Accrued expenses and other liabilities 1,113 2,239 708 4,864 8,924
Long-term debt — — 1,448 1,938 3,386
Noncontrolling interests — — 68 — 68
Total liabilities and noncontrolling interests 1,113 2,239 2,575 8,798 14,725
Net assets $37,485 37,981 2,725 766 78,957
(1) Reverse repurchase agreements of $20 million are included in other assets at December 31, 2009. These instruments were included in loans at December 31, 2008,
in the amount of $349 million. The balance for securities at December 31, 2008, has been revised to reflect the removal of funds for which we had no contractual
support arrangements.
(2) Excludes certain debt securities related to loans serviced for the Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC)
and Government National Mortgage Association (GNMA).
(3) Excludes related allowance for loan losses.
(4) Balances related to QSPEs involving mortgage servicing rights and accrued expenses and other liabilities have been revised to reflect additionally identified QSPEs.
The classifications of assets and liabilities in our balance sheet associated with our transactions with QSPEs and VIEs follow:
Transactions with QSPEs
We use QSPEs to securitize consumer and CRE loans and
other types of financial assets, including student loans,
auto loans and municipal bonds. We typically retain the ser-
vicing rights from these sales and may continue to hold other
beneficial interests in QSPEs. We may also provide liquidity
to investors in the beneficial interests and credit enhance-
ments in the form of standby letters of credit. Through these
securitizations we may be exposed to liability under limited
amounts of recourse as well as standard representations and
warranties we make to purchasers and issuers. The amount
recorded for this liability is included in other commitments
and guarantees in the following table.
The following disclosures regarding our continuing
involvement with QSPEs and unconsolidated VIEs exclude
entities where our only involvement is in the form of:
(1) investments in trading securities, (2) investments in
securities or loans underwritten by third parties, (3) derivative
counterparty for certain derivatives such as interest rate
swaps or cross currency swaps that have customary terms,
and (4) administrative or trustee services. We determined
these forms of involvement are not significant due to the
temporary nature and size as well as our lack of involvement
in the design or operations of unconsolidated VIEs or
QSPEs. Also not included are investments accounted for
in accordance with the AICPA Investment Company Audit
Guide, investments accounted for under the cost method
and investments accounted for under the equity method.