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Segment Reporting
6 Months Ended
Jun. 30, 2016
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. We apply accounting methods for segment reporting purposes that differ from our condensed consolidated results. 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. Therefore, we reconcile the sum of the results for our three business segments to our condensed consolidated results of operations.
 
For the Three Months Ended June 30, 2016
 
Business Segments
 
 
 
 
 
 
 
 
Single-Family
 
Multifamily
 
Capital Markets
 
 
Reconciling Items(1)
 
Total Results
 
 
(Dollars in millions)
Net interest income (loss)
$
176

 
 
$
(15
)
 
 
$
1,080

 
 
$
4,045

(2) 
 
$
5,286

 
Benefit for credit losses
1,596

 
 
5

 
 

 
 

 
 
1,601

 
Net interest income (loss) after benefit for credit losses
1,772

 
 
(10
)
 
 
1,080

 
 
4,045

 
 
6,887

 
Guaranty fee income (expense)(3)
3,260

 
 
400

 
 
(192
)
 
 
(3,438
)
(4) 
 
30

(4) 
Investment gains (losses), net

 
 
11

 
 
2,088

 
 
(1,701
)
(5) 
 
398

 
Fair value gains (losses), net

 
 

 
 
(1,730
)
 
 
63

(6) 
 
(1,667
)
 
Gains (losses) from partnership investments(7)
(18
)
 
 
20

 
 

 
 

 
 
2

 
Fee and other income (expense)
100

 
 
48

 
 
31

 
 
(35
)
 
 
144

 
Administrative expenses
(496
)
 
 
(86
)
 
 
(96
)
 
 

 
 
(678
)
 
Foreclosed property expense
(61
)
 
 
(2
)
 
 

 
 

 
 
(63
)
 
TCCA fees(3)
(453
)
 
 

 
 

 
 

 
 
(453
)
 
Other income (expenses), net
(361
)
 
 
(2
)
 
 
(30
)
 
 
137

 
 
(256
)
 
Income (loss) before federal income taxes
3,743

 
 
379

 
 
1,151

 
 
(929
)
 
 
4,344

 
Provision for federal income taxes
(1,093
)
 
 
(40
)
 
 
(265
)
 
 

 
 
(1,398
)
 
Net income (loss) attributable to Fannie Mae
$
2,650

 
 
$
339

 
 
$
886

 
 
$
(929
)
 
 
$
2,946

 
 
For the Six Months Ended June 30, 2016
 
Business Segments
 
 
 
 
 
 
 
 
Single-Family
 
Multifamily
 
Capital Markets
 
 
Reconciling Items(1)
 
Total Results
 
 
(Dollars in millions)
Net interest income (loss)
$
319

 
 
$
(40
)
 
 
$
2,172

 
 
$
7,604

(2) 
 
$
10,055

 
Benefit for credit losses
2,759

 
 
26

 
 

 
 

 
 
2,785

 
Net interest income (loss) after benefit for credit losses
3,078

 
 
(14
)
 
 
2,172

 
 
7,604

 
 
12,840

 
Guaranty fee income (expense)(3)
6,482

 
 
785

 
 
(387
)
 
 
(6,825
)
(4) 
 
55

(4) 
Investment gains (losses), net
(1
)
 
 
14

 
 
3,503

 
 
(3,049
)
(5) 
 
467

 
Fair value gains (losses), net

 
 

 
 
(4,533
)
 
 
53

(6) 
 
(4,480
)
 
Gains (losses) from partnership investments(7)
(37
)
 
 
40

 
 

 
 

 
 
3

 
Fee and other income (expense)
201

 
 
107

 
 
52

 
 
(38
)
 
 
322

 
Administrative expenses
(1,004
)
 
 
(170
)
 
 
(192
)
 
 

 
 
(1,366
)
 
Foreclosed property expense
(396
)
 
 
(1
)
 
 

 
 

 
 
(397
)
 
TCCA fees(3)
(893
)
 
 

 
 

 
 

 
 
(893
)
 
Other income (expenses), net
(664
)
 
 
(11
)
 
 
(59
)
 
 
213

 
 
(521
)
 
Income (loss) before federal income taxes
6,766

 
 
750

 
 
556

 
 
(2,042
)
 
 
6,030

 
Provision for federal income taxes
(1,736
)
 
 
(78
)
 
 
(134
)
 
 

 
 
(1,948
)
 
Net income (loss) attributable to Fannie Mae
$
5,030

 
 
$
672

 
 
$
422

 
 
$
(2,042
)
 
 
$
4,082

 
 
For the Three Months Ended June 30, 2015
 
Business Segments
 
 
 
 
 
 
 
 
Single-Family
 
Multifamily
 
Capital Markets
 
 
Reconciling Items(1)
 
Total Results
 
 
(Dollars in millions)
Net interest income (loss)
$
18

 
 
$
(26
)
 
 
$
1,513

 
 
$
4,172

(2) 
 
$
5,677

 
(Provision) benefit for credit losses
(1,056
)
 
 
23

 
 

 
 

 
 
(1,033
)
 
Net interest income (loss) after (provision) benefit for credit losses
(1,038
)
 
 
(3
)
 
 
1,513

 
 
4,172

 
 
4,644

 
Guaranty fee income (expense)(3)
3,092

 
 
357

 
 
(221
)
 
 
(3,191
)
(4) 
 
37

(4) 
Investment gains (losses), net
(1
)
 
 
15

 
 
1,562

 
 
(1,062
)
(5) 
 
514

 
Fair value gains, net

 
 

 
 
2,555

 
 
51

(6) 
 
2,606

 
Gains (losses) from partnership investments(7)
(10
)
 
 
43

 
 

 
 

 
 
33

 
Fee and other income (expense)
301

 
 
84

 
 
150

 
 
(16
)
 
 
519

 
Administrative expenses
(458
)
 
 
(83
)
 
 
(148
)
 
 

 
 
(689
)
 
Foreclosed property expense
(182
)
 
 

 
 

 
 

 
 
(182
)
 
TCCA fees(3)
(397
)
 
 

 
 

 
 

 
 
(397
)
 
Other income (expenses), net
(262
)
 
 
(6
)
 
 
(11
)
 
 
44

 
 
(235
)
 
Income (loss) before federal income taxes
1,045

 
 
407

 
 
5,400

 
 
(2
)
 
 
6,850

 
Provision for federal income taxes
(419
)
 
 
(41
)
 
 
(1,750
)
 
 

 
 
(2,210
)
 
Net income (loss) attributable to Fannie Mae
$
626

 
 
$
366

 
 
$
3,650

 
 
$
(2
)
 
 
$
4,640

 
 
For the Six Months Ended June 30, 2015
 
Business Segments
 
 
 
 
 
 
 
 
Single-Family
 
Multifamily
 
Capital Markets
 
 
Reconciling Items(1)
Total Results
 
 
(Dollars in millions)
Net interest income (loss)
$
27

 
 
$
(57
)
 
 
$
3,115

 
 
$
7,659

(2) 
 
$
10,744

 
(Provision) benefit for credit losses
(578
)
 
 
78

 
 

 
 

 
 
(500
)
 
Net interest income (loss) after (provision) benefit for credit losses
(551
)
 
 
21

 
 
3,115

 
 
7,659

 
 
10,244

 
Guaranty fee income (expense)(3)
6,132

 
 
697

 
 
(448
)
 
 
(6,313
)
(4) 
 
68

(4) 
Investment gains (losses), net
(1
)
 
 
24

 
 
3,071

 
 
(2,238
)
(5) 
 
856

 
Fair value gains (losses), net
(4
)
 
 

 
 
585

 
 
106

(6) 
 
687

 
Gains (losses) from partnership investments(7)
(15
)
 
 
255

 
 

 
 

 
 
240

 
Fee and other income (expense)
473

 
 
135

 
 
205

 
 
(17
)
 
 
796

 
Administrative expenses
(942
)
 
 
(171
)
 
 
(299
)
 
 

 
 
(1,412
)
 
Foreclosed property income (expense)
(667
)
 
 
12

 
 

 
 

 
 
(655
)
 
TCCA fees(3)
(779
)
 
 

 
 

 
 

 
 
(779
)
 
Other income (expenses), net
(489
)
 
 
(13
)
 
 
(11
)
 
 
76

 
 
(437
)
 
Income (loss) before federal income taxes
3,157

 
 
960

 
 
6,218

 
 
(727
)
 
 
9,608

 
Provision for federal income taxes
(1,000
)
 
 
(111
)
 
 
(1,969
)
 
 

 
 
(3,080
)
 
Net income (loss) attributable to Fannie Mae
$
2,157

 
 
$
849

 
 
$
4,249

 
 
$
(727
)
 
 
$
6,528

 
__________
(1) 
Represents activity related to the assets and liabilities of consolidated trusts in our condensed consolidated balance sheets, and the elimination of intercompany transactions occurring between the three business segments and our consolidated trusts, as well as other adjustments to reconcile to our condensed consolidated results.
(2) 
Represents net interest income of consolidated trusts and amortization expense of cost basis adjustments on securities in the Capital Markets group’s mortgage portfolio that on a GAAP basis are eliminated.
(3) 
Reflects the impact of a 10 basis point guaranty fee increase implemented in 2012 pursuant to the TCCA, the incremental revenue from which is remitted to Treasury. The resulting revenue is included in guaranty fee income and the expense is recognized as “TCCA fees.”
(4) 
Represents the guaranty fees paid from consolidated trusts to the Single-Family and Multifamily segments and 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 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 in the Capital Markets group’s mortgage portfolio.
(7) 
Gains (losses) from partnership investments are included in “Other expenses, net” in our condensed consolidated statements of operations and comprehensive income.