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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (214626)	1/15/2003 10:01:26 AM
From: oldirtybastard	Read Replies (1) \| Respond to of 436258

not only that, but it means after the break they can once again have favorable capex comps in 2004, the 2nd half of the 2nd half of 2004 of course -g-

To: Lucretius who wrote (214626)	1/15/2003 10:06:16 AM
From: oldirtybastard	Read Replies (1) \| Respond to of 436258

see this on fannie? The big drop in profits can be traced partly to an accounting rule governing the valuation of "purchase options," a type of derivative contract Fannie Mae uses to protect itself from sharp changes in the value of its massive mortgage portfolio. The rule change requires Fannie Mae to treat the options as an expense on its income statement and count it against net income. In light of the rule change, Fannie Mae booked a purchase option expense of $1.88 billion in the fourth quarter because of decline in the value of those derivatives. A year ago, it recorded a $578 million gain in the value of those derivatives. Like other players in the derivatives market, Fannie Mae values derivative contracts on a "mark-to-market" basis, which means it records the value on a daily basis and reports them on its balance sheet at the current market value. Excluding the expense for the change in value of its derivatives, Fannie Mae on an operating basis, reported a 16.3% gain in operating income of $1.67 billion, or $1.66 a share. Many Wall Street analysts who follow the company prefer to focus on the operating number for the firm. That's partly due to Fannie Mae management's contention that it's a better metric for analyzing the company's results, on grounds that it usually holds the options to maturity. interesting logic in the last paragraph