Fannie Mae 2010 Annual Report Download - page 357

consolidated statements of operations, we eliminate gains and losses on securities that have been
consolidated to loans.
•Fair value gains or losses, net—Fair value gains or losses, net for the Capital Markets group includes
derivative gains and losses, foreign exchange gains and losses, and the fair value gains and losses on
certain debt securities in our portfolio. To reconcile to our consolidated statements of operations, we
eliminate fair value gains or losses on Fannie Mae MBS that have been consolidated to loans.
•Other expenses, net—Debt extinguishment gains or losses recorded on the segment statements of
operations relate exclusively to our funding debt, which is reported as “Debt of Fannie Mae” on our
consolidated balance sheets. To reconcile to our consolidated statements of operations, we include debt
extinguishment gains or losses related to consolidated trusts to arrive at our total recognized debt
extinguishment gains or losses.
Segment Allocations and Results
Our segment financial results include directly attributable revenues and expenses. Additionally, we allocate to
each of our segments: (1) capital using FHFA minimum capital requirements adjusted for over- or under-
capitalization; (2) indirect administrative costs; and (3) a provision or benefit for federal income taxes. In
addition, we allocate intracompany guaranty fee income as a charge from the Single-Family and Multifamily
segments to Capital Markets for managing the credit risk on mortgage loans held by the Capital Markets
group.
With the adoption of the new accounting standards, we have prospectively revised the presentation of our
results for these segments to better reflect how we operate and oversee these businesses.
F-99
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)