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Segment Reporting
 6 Months Ended
Jun. 30, 2012
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
Our three reportable segments are: Single-Family, Multifamily, and Capital Markets.  We use these three segments to generate revenue and manage business risk, and each segment is based on the type of business activities it performs. During the three months ended June 30, 2012, a new chief executive officer was hired. Our new chief executive officer continues to be the chief operating decision maker who makes decisions about resources to be allocated to each segment and assesses segment performance. We are working on reorganizing our company by function rather than by business in order to improve our operational efficiencies and effectiveness. In future periods, we may change some of our management reporting and how we report our business segment results.
Under our segment reporting, the sum of the results for our three business segments does not equal our condensed consolidated statements of operations and comprehensive income (loss), as we separate the activity related to our consolidated trusts from the results generated by our three segments. 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. We also include an eliminations/adjustments category to reconcile our business segment results and the activity related to our consolidated trusts to net income (loss) in our condensed consolidated statements of operations and comprehensive income (loss).
The following tables display our segment results for the three and six months ended June 30, 2012 and 2011.
  
For the Three Months Ended June 30, 2012
  
Business Segments
 
Other Activity/Reconciling Items
  
 
  
  
Single-Family
 
Multifamily
 
Capital Markets
 
Consolidated Trusts(1)
  
Eliminations/ Adjustments (2)
  
Total Results
  
  
(Dollars in millions)
  
Net interest (loss) income
$
(215
)
 
 
$
(6
)
 
 
$
3,443

 
 
$
1,731

 
  
 
$
475

(3)

$
5,428

  
Benefit for credit losses
2,956

 
 
85

 
 
—

 
 
—

 
  
 
—

  
 
3,041

  
Net interest income after benefit for credit losses
2,741

 
 
79

 
 
3,443

 
 
1,731

 
  
 
475

  
 
8,469

  
Guaranty fee income (expense)
1,970

 
 
252

 
 
(326
)
 
 
(1,206
)
(5) 

 
(632
)
(5) 

58

(5) 
Investment gains, net
2

 
 
6

 
 
1,458

 
 
87

 
  
 
(1,422
)
(6) 

131

  
Net other-than-temporary impairments
—

 
 
—

 
 
(597
)
 
 
(2
)
 
  
 
—

   
 
(599
)
  
Fair value losses, net
(3
)
 
 
—

 
 
(2,461
)
 
 
(60
)
 
  
 
75

(7) 

(2,449
)
  
Debt extinguishment (losses) gains, net
—

 
 
—

 
 
(102
)
 
 
9

 
  
 
—

   
 
(93
)
  
Gains from partnership investments
—

 
 
18

 
 
—

 
 
—

 
  
 
5

   
 
23

(8) 
Fee and other income (expense)
207

 
 
49

 
 
186

 
 
(100
)
 
  
 
(5
)
   
 
337

  
Administrative expenses
(382
)
 
 
(60
)
 
 
(125
)
 
 
—

 
  
 
—

   
 
(567
)
  
Foreclosed property income
59

 
 
11

 
 
—

 
 
—

 
  
 
—

   
 
70

  
Other (expenses) income
(240
)
 
 
3

 
 
(3
)
 
 
—

 
  
 
(21
)
   
 
(261
)
  
Net income
4,354

 
 
358

 
 
1,473

 
 
459

 
  
 
(1,525
)
   
 
5,119

  
Less: Net income attributable to noncontrolling interest
—

 
 
—

 
 
—

 
 
—

 
  
 
(5
)
(9) 
 
(5
)
  
Net income attributable to Fannie Mae
$
4,354

 
 
$
358

 
 
$
1,473

 
 
$
459

 
  
 
$
(1,530
)
 
  
$
5,114

  


  
For the Six Months Ended June 30, 2012
  
Business Segments
 
Other Activity/Reconciling Items
  
 
  
  
Single-Family
 
Multifamily
 
Capital Markets
 
Consolidated Trusts(1)
  
Eliminations/ Adjustments (2)
  
Total Results
  
  
(Dollars in millions)
  
Net interest (loss) income
$
(594
)
 
 
$
(13
)
 
 
$
6,984

 
 
$
3,300

 
  
 
$
948

(3) 
 
$
10,625

  
Benefit for credit losses
903

 
 
138

 
 
—

 
 
—

 
  
 
—

   
 
1,041

  
Net interest income after benefit for credit losses
309

 
 
125

 
 
6,984

 
 
3,300

 
  
 
948

   
 
11,666

   
Guaranty fee income (expense)
3,881

 
 
495

 
 
(658
)
 
 
(2,365
)
(5) 
 
 
(1,233
)
(5) 
 
120

(5) 
Investment gains, net
3

 
 
12

 
 
2,465

 
 
114

 
 
 
(2,347
)
(6) 
 
247

   
Net other-than-temporary impairments
—

 
 
—

 
 
(661
)
 
 
(2
)
 
  
 
—

   
 
(663
)
   
Fair value losses, net
(4
)
 
 
—

 
 
(2,291
)
 
 
(8
)
 
  
 
137

(7) 
 
(2,166
)
   
Debt extinguishment (losses) gains, net
—

 
 
—

 
 
(172
)
 
 
45

 
  
 
—

 
  
(127
)
   
Gains from partnership investments
—

 
 
29

 
 
—

 
 
—

 
  
 
4

 
  
33

(8) 
Fee and other income (expense)
407

 
 
96

 
 
366

 
 
(208
)
 
  
 
(11
)
 
  
650

   
Administrative expenses
(762
)
 
 
(124
)
 
 
(245
)
 
 
—

 
  
 
—

 
  
(1,131
)
   
Foreclosed property (expense) income
(273
)
 
 
4

 
 
—

 
 
—

 
  
 
—

 
  
(269
)
  
Other expenses
(475
)
 
 
—

 
 
(11
)
 
 
—

 
  
 
(37
)
 
  
(523
)
  
Net income
3,086

 
 
637

 
 
5,777

 
 
876

 
  
 
(2,539
)
 
  
7,837

  
Less: Net income attributable to noncontrolling interest
—

 
 
—

 
 
—

 
 
—

 
  
 
(4
)
(9) 
 
(4
)
  
Net income attributable to Fannie Mae
$
3,086

 
 
$
637

 
 
$
5,777

 
 
$
876

 
  
 
$
(2,543
)
 
  
$
7,833

  



 
For the Three Months Ended June 30, 2011
 
Business Segments
 
Other Activity/Reconciling Items
  
 
  
 
Single-Family
 
Multifamily
 
Capital Markets
 
Consolidated Trusts(1)
  
Eliminations/ Adjustments (2)
  
Total Results
  
 
(Dollars in millions)
  
Net interest (loss) income
$
(680
)
 
 
$
(11
)
 
 
$
3,867

 
 
$
1,314

 
  
 
$
482

(3) 
 
$
4,972

  
Provision for credit losses(4)
(6,414
)
 
 
(123
)
 
 
—

 
 
—

 
  
 
—

 
  
(6,537
)
  
Net interest (loss) income after provision for credit losses
(7,094
)
 
 
(134
)
 
 
3,867

 
 
1,314

 
  
 
482

 
  
(1,565
)
  
Guaranty fee income (expense)
1,880

 
 
216

 
 
(391
)
 
 
(1,116
)
(5) 
 
 
(539
)
(5) 
 
50

(5) 
Investment (losses) gains, net
(6
)
 
 
1

 
 
918

 
 
(143
)
 
  
 
(599
)
(6) 
 
171

   
Net other-than-temporary impairments
—

 
 
—

 
 
(55
)
 
 
(1
)
 
  
 
—

   
 
(56
)
   
Fair value losses, net
(3
)
 
 
—

 
 
(1,507
)
 
 
(72
)
 
  
 
(52
)
(7) 
 
(1,634
)
   
Debt extinguishment (losses) gains, net
—

 
 
—

 
 
(55
)
 
 
12

 
  
 
—

 
  
(43
)
   
Gains from partnership investments
—

 
 
34

 
 
—

 
 
—

 
  
 
1

 
  
35

(8) 
Fee and other income (expense)
114

 
 
57

 
 
109

 
 
(63
)
 
  
 
(2
)
 
  
215

  
Administrative expenses
(400
)
 
 
(64
)
 
 
(105
)
 
 
—

 
  
 
—

 
  
(569
)
  
Foreclosed property income (expense)
481

 
 
(3
)
 
 
—

 
 
—

 
  
 
—

 
  
478

  
Other (expenses) income
(77
)
 
 
36

 
 
(9
)
 
 
—

 
  
 
(17
)
 
  
(67
)
  
(Loss) income before federal income taxes
(5,105
)
 
 
143

 
 
2,772

 
 
(69
)
 
  
 
(726
)
 
  
(2,985
)
  
Benefit (provision) for federal income taxes
109

 
 
(56
)
 
 
40

 
 
—

 
  
 
—

 
  
93

  
Net (loss) income
(4,996
)
 
 
87

 
 
2,812

 
 
(69
)
 
 
 
(726
)
 
 
(2,892
)
  
Less: Net income attributable to noncontrolling interest
—

 
 
—

 
 
—

 
 
—

 
 
 
(1
)
(9) 
 
(1
)
  
Net (loss) income attributable to Fannie Mae
$
(4,996
)
 
 
$
87

 
 
$
2,812

 
 
$
(69
)
 
  
 
$
(727
)
 
  
$
(2,893
)
  

 
For the Six Months Ended June 30, 2011
 
Business Segments
 
Other Activity/Reconciling Items
  
 
  
 
Single-Family
 
Multifamily
 
Capital Markets
 
Consolidated Trusts(1)
  
Eliminations/ Adjustments (2)
  
Total Results
  
 
(Dollars in millions)
 
Net interest (loss) income
$
(1,578
)
 
 
$
(20
)
 
 
$
7,577

 
 
$
2,888

 
  
 
$
1,065

(3) 
 
$
9,932

  
Provision for credit losses(4)
(17,032
)
 
 
(59
)
 
 
—

 
 
—

 
  
 
—

   
 
(17,091
)
  
Net interest (loss) income after provision for credit losses
(18,610
)
 
 
(79
)
 
 
7,577

 
 
2,888

 
  
 
1,065

   
 
(7,159
)
  
Guaranty fee income (expense)
3,751

 
 
425

 
 
(790
)
 
 
(2,226
)
(5) 
 
 
(1,060
)
(5) 
 
100

(5) 
Investment (losses) gains, net
(5
)
 
 
5

 
 
1,788

 
 
(169
)
 
  
 
(1,373
)
(6) 
 
246

   
Net other-than-temporary impairments
—

 
 
—

 
 
(99
)
 
 
(1
)
 
  
 
—

   
 
(100
)
   
Fair value losses, net
(3
)
 
 
—

 
 
(1,289
)
 
 
(105
)
 
  
 
52

(7) 
 
(1,345
)
   
Debt extinguishment (losses) gains, net
—

 
 
—

 
 
(79
)
 
 
49

 
  
 
—

   
 
(30
)
   
Gains from partnership investments
—

 
 
22

 
 
—

 
 
—

 
  
 
1

   
 
23

(8) 
Fee and other income (expense)
261

 
 
115

 
 
184

 
 
(155
)
 
  
 
(3
)
   
 
402

  
Administrative expenses
(816
)
 
 
(132
)
 
 
(226
)
 
 
—

 
  
 
—

   
 
(1,174
)
  
Foreclosed property expense
(7
)
 
 
(3
)
 
 
—

 
 
—

 
  
 
—

   
 
(10
)
  
Other (expenses) income
(395
)
 
 
42

 
 
(18
)
 
 
—

 
  
 
(36
)
   
 
(407
)
  
(Loss) income before federal income taxes
(15,824
)
 
 
395

 
 
7,048

 
 
281

 
  
 
(1,354
)
   
 
(9,454
)
  
Benefit (provision) for federal income taxes
107

 
 
(61
)
 
 
45

 
 
—

 
  
 
—

   
 
91

  
Net (loss) income
(15,717
)
 
 
334

 
 
7,093

 
 
281

 
 
 
(1,354
)
 
 
(9,363
)
 
Less: Net income attributable to noncontrolling interest
—

 
 
—

 
 
—

 
 
—

 
 
 
(1
)
(9) 
 
(1
)
 
Net (loss) income attributable to Fannie Mae
$
(15,717
)
 
 
$
334

 
 
$
7,093

 
 
$
281

 
  
 
$
(1,355
)
 
  
$
(9,364
)
  
__________
(1) 
Represents activity related to the assets and liabilities of consolidated trusts in our condensed consolidated balance sheets.
(2) 
Represents the elimination of intercompany transactions occurring between the three business segments and our consolidated trusts, as well as other adjustments to reconcile to our consolidated results.
(3) 
Represents the amortization expense of cost basis adjustments on securities that we own in our portfolio that on a GAAP basis are eliminated.
(4) 
Prior period amounts have been reclassified to conform to the current period presentation.
(5) 
Represents the guaranty fees paid from consolidated trusts to the Single-Family and Multifamily segments. The adjustment to guaranty fee income in the Eliminations/Adjustments column represents the elimination of the amortization of deferred cash fees related to consolidated trusts that were re-established for segment reporting. Total guaranty fee income is included in fee and other income in our condensed consolidated statements of operations and comprehensive income (loss).
(6) 
Primarily represents the removal of realized gains and losses on sales of Fannie Mae MBS classified as available-for-sale securities that are issued by consolidated trusts and retained in the Capital Markets portfolio. The adjustment also includes the removal of securitization gains (losses) recognized in the Capital Markets segment relating to portfolio securitization transactions that do not qualify for sale accounting under GAAP.
(7) 
Represents the removal of fair value adjustments on consolidated Fannie Mae MBS classified as trading that are retained in the Capital Markets portfolio.
(8) 
Gains from partnership investments are included in other expenses in our condensed consolidated statements of operations and comprehensive income (loss).
(9) 
Represents the adjustment from equity method accounting to consolidation accounting for partnership investments that are consolidated in our condensed consolidated balance sheets.