Fannie Mae 2010 Annual Report Download - page 117

increased level of troubled debt restructurings, particularly through workouts initiated as part of our
foreclosure prevention efforts, increased the number of loans that were individually impaired, contributing to
the increase in the provision for credit losses.
We also experienced a significant increase in fair value losses on credit-impaired loans acquired from MBS
trusts for the purpose of modifying them during 2009, reflecting the increase in the number of delinquent
loans acquired from MBS trusts, and the decrease in the estimated fair value of these loans compared with
2008.
Credit-related expenses in the Single-Family business represent the substantial majority of the company’s total
credit-related expenses. We provide additional information on total credit-related expenses in “Consolidated
Results of Operations — Credit-Related Expenses.”
Federal Income Taxes
The net tax benefit recognized in 2009 was attributable to our ability to carry back current year tax losses to
previous tax years. We recorded a valuation allowance for the majority of the tax benefits associated with the
pre-tax losses recognized in 2009 that we were unable to carry back to previous tax years as there has been no
change in the conclusion we reached in 2008 that it was more likely than not that we would not generate
sufficient taxable income in the foreseeable future to realize all of the tax benefits generated from these losses.
We recorded a non-cash charge in 2008 to establish a partial deferred tax asset valuation allowance against our
net deferred tax assets.
Multifamily Business Results
Table 21 summarizes the financial results of our Multifamily business for 2010 under the current segment
reporting presentation and for 2009 and 2008 under the prior segment reporting presentation. The primary
sources of revenue for our Multifamily business are guaranty fee income and fee and other income. Expenses
primarily include credit-related expenses, net operating losses associated with our partnership investments, and
administrative expenses.
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