Fannie Mae 2009 Annual Report Download - page 338

eligible for the low-income housing tax credit and other equity investments that provide tax credits. In
addition, our effective tax rates for the years ended December 31, 2009 and 2008 were impacted by the
increase to and establishment of a valuation allowance for our net deferred tax assets of $25.7 billion and
$30.8 billion, respectively. A valuation allowance was not recorded for 2007.
Deferred Tax Assets and Liabilities
The following table displays our deferred tax assets, deferred tax liabilities, and valuation allowance as of
December 31, 2009 and 2008.
2009 2008
As of December 31,
(Dollars in millions)
Deferred tax assets:
(1)
Allowance for loan losses and basis in acquired property, net . . . . . . . . . . . . . . . . . . . $ 23,615 $ 10,762
Mortgage and mortgage-related assets, including acquired credit-impaired loans . . . . . . 10,547 6,365
Debt and derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,255 8,604
Partnership credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,587 2,157
Partnership and other equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,411 257
Cash fees and other upfront payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,532 1,540
Unrealized losses on AFS securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 927 3,926
Net guaranty assets and obligations and related credits . . . . . . . . . . . . . . . . . . . . . . . 1,113 858
Net operating loss and alternative minimum tax credit carryforwards. . . . . . . . . . . . . . 688 —
Employee compensation and benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 289
Other,net....................................................... 810 —
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,691 34,758
Deferred tax liabilities:
Other,net....................................................... 45 7
Total deferred tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 7
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52,737) (30,825)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 909 $ 3,926
(1)
Certain prior year amounts have been reclassified to conform to the current period presentation.
We recognize deferred tax assets and liabilities for the future tax consequences related to differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for
net operating loss and tax credit carryforwards. Our deferred tax assets, net of a valuation allowance, totaled
$909 million and $3.9 billion as of December 31, 2009 and 2008, respectively. We evaluate our deferred tax
assets for recoverability using a consistent approach which considers the relative impact of both negative and
positive evidence, including our historical profitability and projections of future taxable income. We are
required to establish a valuation allowance for deferred tax assets and record a charge in our consolidated
statements of operations or in “Fannie Mae stockholders’ deficit” if we determine, based on available evidence
at the time the determination is made, that it is more likely than not that some portion or all of the deferred
tax assets will not be realized. In evaluating the need for a valuation allowance, we estimate future taxable
income based on management-approved business plans and ongoing tax planning strategies. This process
involves significant management judgment about assumptions that are subject to change from period to period
F-80
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)