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Segment Reporting
 6 Months Ended
Jun. 30, 2013
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. 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, as we separate the activity related to our consolidated trusts from the results generated by our three segments. Our business 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 financial results and the activity related to our consolidated trusts to net income in our condensed consolidated statements of operations and comprehensive income.
As of March 31, 2013, we released the valuation allowance for our deferred tax assets, except for amounts that will be released against income before federal income taxes for the remainder of the year and the portion of the valuation allowance that pertains to our capital loss carryforwards. This resulted in a significant benefit for income taxes during the six months ended June 30, 2013. See “Note 10, Income Taxes” for additional information regarding the factors that led to our conclusion to release the valuation allowance against our deferred tax assets. The benefit for income taxes allocated to each business segment for the six months ended June 30, 2013 primarily represents the release of the valuation allowance against deferred tax assets that primarily are directly attributable to that segment based on the nature of the item. For Single-Family, we attributed the benefit of the valuation allowance release against deferred tax assets primarily related to the allowance for loan losses and guaranty fee income. For Multifamily, we attributed the benefit of the valuation allowance release against deferred tax assets primarily related to partnership and other equity investment losses and credits. For the Capital Markets group, we attributed the benefit of the valuation allowance release against deferred tax assets primarily related to debt and derivative instruments and mortgage and mortgage-related assets.
The following tables display our business segment financial results for the three and six months ended June 30, 2013 and 2012.
 
For the Three Months Ended June 30, 2013
 
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
$
(50
)
 
 
$
(17
)
 
 
 
$
2,680

 
 
 
$
2,621

 
 
 
$
433

(3) 
 
$
5,667

 
Benefit for credit losses
5,353

 
 
30

 
 
 
—

 
 
 
—

 
 
 
—

 
 
5,383

 
Net interest income after benefit for credit losses
5,303

 
 
13

 
 
 
2,680

 
 
 
2,621

 
 
 
433

 
 
11,050

 
Guaranty fee income (expense)
2,544

 
 
300

 
 
 
(283
)
 
 
 
(1,283
)
(4) 

 
(1,227
)
(4) 

51

(4) 
Investment gains (losses), net
1

 
 
4

 
 
 
898

 
 
 
(89
)
 
 
 
(524
)
(5) 

290

 
Net other-than-temporary impairments
—

 
 
—

 
 
 
(6
)
 
 
 
—

 
 
 
—

 
 
(6
)
 
Fair value (losses) gains, net
(1
)
 
 
—

 
 
 
841

 
 
 
(214
)
 
 
 
203

(6) 

829

 
Debt extinguishment gains, net
—

 
 
—

 
 
 
3

 
 
 
24

 
 
 
—

 
 
27

 
Gains from partnership investments
—

 
 
104

 
 
 
—

 
 
 
—

 
 
 
11

 
 
115

(7) 
Fee and other income (expense)
179

 
 
38

 
 
 
255

 
 
 
(86
)
 
 
 
48

 
 
434

 
Administrative expenses
(419
)
 
 
(67
)
 
 
 
(140
)
 
 
 
—

 
 
 
—

 
 
(626
)
 
Foreclosed property income
328

 
 
4

 
 
 
—

 
 
 
—

 
 
 
—

 
 
332

 
Other expenses
(387
)
 
 
—

 
 
 
(8
)
 
 
 
—

 
 
 
(21
)
 
 
(416
)
 
Income before federal income taxes
7,548

 
 
396

 
 
 
4,240

 
 
 
973

 
 
 
(1,077
)
 
 
12,080

 
Provision for federal income taxes
(1,050
)
 
 
(10
)
 
 
 
(925
)
 
 
 
—

 
 
 
—

 
 
(1,985
)
 
Net income
6,498

 
 
386

 
 
 
3,315

 
 
 
973

 
 
 
(1,077
)
 
 
10,095

 
Less: Net income attributable to noncontrolling interest
—

 
 
—

 
 
 
—

 
 
 
—

 
 
 
(11
)
(8) 
 
(11
)
 
Net income attributable to Fannie Mae
$
6,498

 
 
$
386

 
 
 
$
3,315

 
 
 
$
973

 
 
 
$
(1,088
)
 
 
$
10,084

 
 
For the Six Months Ended June 30, 2013
 
 
Business Segments
 
Other Activity/Reconciling Items
 
 
 
 
Single-Family
 
Multifamily
 
Capital Markets
 
Consolidated Trusts(1)
 
Eliminations/ Adjustments(2)
 
Total Results
 
 
(Dollars in millions)
 
Net interest income (loss)
$
470

 
 
$
(28
)
 
 
$
5,422

 
 
$
5,218

 
 
 
$
889

(3) 
 
$
11,971

 
Benefit for credit losses
6,134

 
 
206

 
 
—

 
 
—

 
 
 
—

 
 
6,340

 
Net interest income after benefit for credit losses
6,604

 
 
178

 
 
5,422

 
 
5,218

 
 
 
889

 
 
18,311

 
Guaranty fee income (expense)
4,919

 
 
591

 
 
(582
)
 
 
(2,487
)
(4) 
 
 
(2,336
)
(4) 
 
105

(4) 
Investment gains (losses), net
3

 
 
11

 
 
2,247

 
 
(156
)
 
 
 
(1,697
)
(5) 
 
408

 
Net other-than-temporary impairments
—

 
 
—

 
 
(15
)
 
 
—

 
 
 
—

 
 
(15
)
 
Fair value (losses) gains, net
(3
)
 
 
—

 
 
1,716

 
 
(418
)
 
 
 
368

(6) 
 
1,663

 
Debt extinguishment (losses) gains, net
—

 
 
—

 
 
(37
)
 
 
41

 
 
 
—

 
 
4

 
Gains from partnership investments
—

 
 
163

 
 
—

 
 
—

 
 
 
11

 
 
174

(7) 
Fee and other income (expense)
351

 
 
89

 
 
604

 
 
(170
)
 
 
 
74

 
 
948

 
Administrative expenses
(845
)
 
 
(137
)
 
 
(285
)
 
 
—

 
 
 
—

 
 
(1,267
)
 
Foreclosed property income
581

 
 
11

 
 
—

 
 
—

 
 
 
—

 
 
592

 
Other (expenses) income
(741
)
 
 
1

 
 
50

 
 
—

 
 
 
(39
)
 
 
(729
)
 
Income before federal income taxes
10,869

 
 
907

 
 
9,120

 
 
2,028

 
 
 
(2,730
)
 
 
20,194

 
Benefit for federal income taxes(9)
30,528

 
 
7,978

 
 
10,080

 
 
—

 
 
 
—

 
 
48,586

 
Net income
41,397

 
 
8,885

 
 
19,200

 
 
2,028

 
 
 
(2,730
)
 
 
68,780

 
Less: Net income attributable to noncontrolling interest
—

 
 
—

 
 
—

 
 
—

 
 
 
(11
)
(8) 
 
(11
)
 
Net income attributable to Fannie Mae
$
41,397

 
 
$
8,885

 
 
$
19,200

 
 
$
2,028

 
 
 
$
(2,741
)
 
 
$
68,769

 

 
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
)
(4) 
 
 
(632
)
(4) 
 
58

(4) 
Investment gains, net
2

 
 
6

 
 
1,458

 
 
87

 
 
 
(1,422
)
(5) 
 
131

 
Net other-than-temporary impairments
—

 
 
—

 
 
(597
)
 
 
(2
)
 
 
 
—

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

 
 
(2,461
)
 
 
(60
)
 
 
 
75

(6) 
 
(2,449
)
 
Debt extinguishment (losses) gains, net
—

 
 
—

 
 
(102
)
 
 
9

 
 
 
—

 
 
(93
)
 
Gains from partnership investments
—

 
 
18

 
 
—

 
 
—

 
 
 
5

 
 
23

(7) 
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
)
(8) 
 
(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
)
(4) 
 
 
(1,233
)
(4) 
 
120

(4) 
Investment gains, net
3

 
 
12

 
 
2,465

 
 
114

 
 
 
(2,347
)
(5) 
 
247

 
Net other-than-temporary impairments
—

 
 
—

 
 
(661
)
 
 
(2
)
 
 
 
—

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

 
 
(2,291
)
 
 
(8
)
 
 
 
137

(6) 
 
(2,166
)
 
Debt extinguishment (losses) gains, net
—

 
 
—

 
 
(172
)
 
 
45

 
 
 
—

 
 
(127
)
 
Gains from partnership investments
—

 
 
29

 
 
—

 
 
—

 
 
 
4

 
 
33

(7) 
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
)
(8) 
 
(4
)
 
Net income attributable to Fannie Mae
$
3,086

 
 
$
637

 
 
$
5,777

 
 
$
876

 
 
 
$
(2,543
)
 
 
$
7,833

 
__________
(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 are retained in the Capital Markets group’s mortgage portfolio that on a GAAP basis are eliminated.
(4) 
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 related to unconsolidated Fannie Mae MBS trusts and other credit enhancement arrangements is included in fee and other income in our condensed consolidated statements of operations and comprehensive income.
(5) 
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 group’s mortgage 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.
(6) 
Represents the removal of fair value adjustments on consolidated Fannie Mae MBS classified as trading that are retained in the Capital Markets group’s mortgage portfolio.
(7) 
Gains from partnership investments are included in other expenses in our condensed consolidated statements of operations and comprehensive income.
(8) 
Represents the adjustment from equity method accounting to consolidation accounting for partnership investments that are consolidated in our condensed consolidated balance sheets.
(9) 
Primarily represents the release of the valuation allowance for our deferred tax assets that primarily are directly attributable to each segment based on the nature of the item.