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Segment Reporting
9 Months Ended
Sep. 30, 2015
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.
 
For the Three Months Ended September 30, 2015
 
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)
$
66

 
 
$
(16
)
 
 
$
1,401

 
 
$
3,901

 
 
$
236

(3) 
 
$
5,588

 
Benefit for credit losses
1,545

 
 
5

 
 

 
 

 
 

 
 
1,550

 
Net interest income (loss) after benefit for credit losses
1,611

 
 
(11
)
 
 
1,401

 
 
3,901

 
 
236

 
 
7,138

 
Guaranty fee income (expense)(4)
3,145

 
 
367

 
 
(210
)
 
 
(2,024
)
(5) 
 
(1,247
)
(5) 
 
31

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

 
 
1,608

 
 
(187
)
 
 
(1,126
)
(6) 
 
299

 
Fair value gains (losses), net
(4
)
 
 

 
 
(2,697
)
 
 
32

 
 
80

(7) 
 
(2,589
)
 
Debt extinguishment gains (losses), net

 
 

 
 
(25
)
 
 
14

 
 

 
 
(11
)
 
Gains (losses) from partnership investments(8)
(12
)
 
 
7

 
 

 
 

 
 

 
 
(5
)
 
Fee and other income (expense)
98

 
 
58

 
 
83

 
 
(80
)
 
 
69

 
 
228

 
Administrative expenses
(649
)
 
 
(109
)
 
 
(194
)
 
 

 
 

 
 
(952
)
 
Foreclosed property income (expense)
(516
)
 
 
19

 
 

 
 

 
 

 
 
(497
)
 
TCCA fees(4)
(413
)
 
 

 
 

 
 

 
 

 
 
(413
)
 
Other income (expenses)
(180
)
 
 
5

 
 
24

 
 
(93
)
 
 
45

 
 
(199
)
 
Income (loss) before federal income taxes
3,079

 
 
341

 
 
(10
)
 
 
1,563

 
 
(1,943
)
 
 
3,030

 
Provision for federal income taxes
(1,040
)
 
 
(17
)
 
 
(13
)
 
 

 
 

 
 
(1,070
)
 
Net income (loss) attributable to Fannie Mae
$
2,039

 
 
$
324

 
 
$
(23
)
 
 
$
1,563

 
 
$
(1,943
)
 
 
$
1,960

 


 
For the Nine Months Ended September 30, 2015
 
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)
$
93

 
 
$
(73
)
 
 
$
4,516

 
 
$
11,039

 
 
$
757

(3) 
 
$
16,332

 
Benefit for credit losses
967

 
 
83

 
 

 
 

 
 

 
 
1,050

 
Net interest income after benefit for credit losses
1,060

 
 
10

 
 
4,516

 
 
11,039

 
 
757

 
 
17,382

 
Guaranty fee income (expense)(4)
9,277

 
 
1,064

 
 
(658
)
 
 
(5,929
)
(5) 
 
(3,655
)
(5) 
 
99

(5) 
Investment gains (losses), net
(2
)
 
 
29

 
 
4,679

 
 
(664
)
 
 
(2,887
)
(6) 
 
1,155

 
Fair value gains (losses), net
(8
)
 
 

 
 
(2,112
)
 
 
37

 
 
181

(7) 
 
(1,902
)
 
Debt extinguishment gains (losses), net

 
 

 
 
(30
)
 
 
30

 
 

 
 

 
Gains (losses) from partnership investments(8)
(27
)
 
 
262

 
 

 
 

 
 

 
 
235

 
Fee and other income (expense)
571

 
 
193

 
 
288

 
 
(249
)
 
 
221

 
 
1,024

 
Administrative expenses
(1,591
)
 
 
(280
)
 
 
(493
)
 
 

 
 

 
 
(2,364
)
 
Foreclosed property income (expense)
(1,183
)
 
 
31

 
 

 
 

 
 

 
 
(1,152
)
 
TCCA fees(4)
(1,192
)
 
 

 
 

 
 

 
 

 
 
(1,192
)
 
Other income (expenses)
(669
)
 
 
(8
)
 
 
18

 
 
(93
)
 
 
105

 
 
(647
)
 
Income before federal income taxes
6,236

 
 
1,301

 
 
6,208

 
 
4,171

 
 
(5,278
)
 
 
12,638

 
Provision for federal income taxes
(2,040
)
 
 
(128
)
 
 
(1,982
)
 
 

 
 

 
 
(4,150
)
 
Net income attributable to Fannie Mae
$
4,196

 
 
$
1,173

 
 
$
4,226

 
 
$
4,171

 
 
$
(5,278
)
 
 
$
8,488

 


 
For the Three Months Ended September 30, 2014
 
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)
$
19

 
 
$
(22
)
 
 
$
1,845

 
 
$
3,088

 
 
$
254

(3) 
 
$
5,184

 
Benefit for credit losses
1,029

 
 
56

 
 

 
 

 
 

 
 
1,085

 
Net interest income after benefit for credit losses
1,048

 
 
34

 
 
1,845

 
 
3,088

 
 
254

 
 
6,269

 
Guaranty fee income (expense)(4)
2,945

 
 
332

 
 
(235
)
 
 
(1,488
)
(5) 
 
(1,502
)
(5) 
 
52

(5) 
Investment gains, net

 
 
8

 
 
1,510

 
 
21

 
 
(1,368
)
(6) 
 
171

 
Fair value gains (losses), net
(4
)
 
 

 
 
(335
)
 
 
13

 
 
119

(7) 
 
(207
)
 
Debt extinguishment gains (losses), net

 
 

 
 
(3
)
 
 
14

 
 

 
 
11

 
Gains from partnership investments(8)

 
 
52

 
 

 
 

 
 

 
 
52

 
Fee and other income (expense)
146

 
 
32

 
 
579

 
 
(71
)
 
 
88

 
 
774

 
Administrative expenses
(468
)
 
 
(77
)
 
 
(161
)
 
 

 
 

 
 
(706
)
 
Foreclosed property income (expense)
(281
)
 
 
32

 
 

 
 

 
 

 
 
(249
)
 
TCCA fees(4)
(351
)
 
 

 
 

 
 

 
 

 
 
(351
)
 
Other income (expenses)
(136
)
 
 
8

 
 
(5
)
 
 

 
 
9

 
 
(124
)
 
Income before federal income taxes
2,899

 
 
421

 
 
3,195

 
 
1,577

 
 
(2,400
)
 
 
5,692

 
Provision for federal income taxes
(837
)
 
 
(37
)
 
 
(913
)
 
 

 
 

 
 
(1,787
)
 
Net income attributable to Fannie Mae
$
2,062

 
 
$
384

 
 
$
2,282

 
 
$
1,577

 
 
$
(2,400
)
 
 
$
3,905

 

 
For the Nine Months Ended September 30, 2014
 
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)
$
(24
)
 
 
$
(65
)
 
 
$
5,592

 
 
$
8,525

 
 
$
798

(3) 
 
$
14,826

 
Benefit for credit losses
3,377

 
 
121

 
 

 
 

 
 

 
 
3,498

 
Net interest income after benefit for credit losses
3,353

 
 
56

 
 
5,592

 
 
8,525

 
 
798

 
 
18,324

 
Guaranty fee income (expense)(4)
8,708

 
 
960

 
 
(722
)
 
 
(4,367
)
(5) 
 
(4,441
)
(5) 
 
138

(5) 
Investment gains (losses), net
(1
)
 
 
50

 
 
4,420

 
 
(141
)
 
 
(3,579
)
(6) 
 
749

 
Fair value gains (losses), net
(11
)
 
 

 
 
(2,770
)
 
 
232

 
 
218

(7) 
 
(2,331
)
 
Debt extinguishment gains, net

 
 

 
 
31

 
 
18

 
 

 
 
49

 
Gains from partnership investments(8)

 
 
131

 
 

 
 

 
 
1

 
 
132

 
Fee and other income (expense)
471

 
 
87

 
 
4,848

 
 
(242
)
 
 
262

 
 
5,426

 
Administrative expenses
(1,376
)
 
 
(225
)
 
 
(474
)
 
 

 
 

 
 
(2,075
)
 
Foreclosed property income
154

 
 
73

 
 

 
 

 
 

 
 
227

 
TCCA fees(4)
(1,008
)
 
 

 
 

 
 

 
 

 
 
(1,008
)
 
Other expenses
(528
)
 
 
(5
)
 
 
(70
)
 
 

 
 
(8
)
 
 
(611
)
 
Income before federal income taxes
9,762

 
 
1,127

 
 
10,855

 
 
4,025

 
 
(6,749
)
 
 
19,020

 
Provision for federal income taxes
(2,897
)
 
 
(37
)
 
 
(3,189
)
 
 

 
 

 
 
(6,123
)
 
Net income
6,865

 
 
1,090

 
 
7,666

 
 
4,025

 
 
(6,749
)
 
 
12,897

 
Less: Net income attributable to noncontrolling interest

 
 

 
 

 
 

 
 
(1
)
 
 
(1
)
 
Net income attributable to Fannie Mae
$
6,865

 
 
$
1,090

 
 
$
7,666

 
 
$
4,025

 
 
$
(6,750
)
 
 
$
12,896

 
__________
(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 in the Capital Markets group’s retained mortgage portfolio that on a GAAP basis are eliminated.
(4) 
Reflects the impact of a 10 basis point guaranty fee increase implemented pursuant to the TCCA, the incremental revenue from which must be remitted to Treasury. The resulting revenue is included in guaranty fee income and the expense is recognized as “TCCA fees.”
(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 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.
(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 in the Capital Markets group’s retained 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.
(7) 
Represents the removal of fair value adjustments on consolidated Fannie Mae MBS classified as trading that are in the Capital Markets group’s retained mortgage portfolio.
(8) 
Gains (losses) from partnership investments are included in other expenses in our condensed consolidated statements of operations and comprehensive income.