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Segment Reporting
9 Months Ended
Sep. 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 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 September 30, 2016
 
Business Segments
 
 
 
 
 
 
 
 
Single-Family
 
Multifamily
 
Capital Markets
 
 
Reconciling Items(1)
 
Total Results
 
 
(Dollars in millions)
Net interest income (loss)
$
166

 
 
$
(22
)
 
 
$
1,049

 
 
$
4,242

(2) 
 
$
5,435

 
Benefit for credit losses
645

 
 
28

 
 

 
 

 
 
673

 
Net interest income after benefit for credit losses
811

 
 
6

 
 
1,049

 
 
4,242

 
 
6,108

 
Guaranty fee income (expense)(3)
3,305

 
 
431

 
 
(189
)
 
 
(3,524
)
(4) 
 
23

(4) 
Investment gains (losses), net

 
 
23

 
 
2,232

 
 
(1,788
)
(5) 
 
467

 
Fair value gains (losses), net

 
 

 
 
(530
)
 
 
39

(6) 
 
(491
)
 
Gains (losses) from partnership investments(7)
(17
)
 
 
5

 
 

 
 

 
 
(12
)
 
Fee and other income (expense)
89

 
 
49

 
 
69

 
 
(55
)
 
 
152

 
Administrative expenses
(479
)
 
 
(84
)
 
 
(98
)
 
 

 
 
(661
)
 
Foreclosed property (expense) income
(114
)
 
 
4

 
 

 
 

 
 
(110
)
 
TCCA fees(3)
(465
)
 
 

 
 

 
 

 
 
(465
)
 
Other income (expenses), net
(382
)
 
 
(10
)
 
 
(44
)
 
 
148

 
 
(288
)
 
Income (loss) before federal income taxes
2,748

 
 
424

 
 
2,489

 
 
(938
)
 
 
4,723

 
Provision for federal income taxes
(808
)
 
 
(49
)
 
 
(670
)
 
 

 
 
(1,527
)
 
Net income (loss) attributable to Fannie Mae
$
1,940

 
 
$
375

 
 
$
1,819

 
 
$
(938
)
 
 
$
3,196

 
 
For the Nine Months Ended September 30, 2016
 
Business Segments
 
 
 
 
 
 
 
 
Single-Family
 
Multifamily
 
Capital Markets
 
 
Reconciling Items(1)
 
Total Results
 
 
(Dollars in millions)
Net interest income (loss)
$
485

 
 
$
(62
)
 
 
$
3,221

 
 
$
11,846

(2) 
 
$
15,490

 
Benefit for credit losses
3,404

 
 
54

 
 

 
 

 
 
3,458

 
Net interest income (loss) after benefit for credit losses
3,889

 
 
(8
)
 
 
3,221

 
 
11,846

 
 
18,948

 
Guaranty fee income (expense)(3)
9,787

 
 
1,216

 
 
(576
)
 
 
(10,349
)
(4) 
 
78

(4) 
Investment gains (losses), net
(1
)
 
 
37

 
 
5,735

 
 
(4,837
)
(5) 
 
934

 
Fair value gains (losses), net

 
 

 
 
(5,063
)
 
 
92

(6) 
 
(4,971
)
 
Gains (losses) from partnership investments(7)
(54
)
 
 
45

 
 

 
 

 
 
(9
)
 
Fee and other income (expense)
290

 
 
156

 
 
121

 
 
(93
)
 
 
474

 
Administrative expenses
(1,483
)
 
 
(254
)
 
 
(290
)
 
 

 
 
(2,027
)
 
Foreclosed property (expense) income
(510
)
 
 
3

 
 

 
 

 
 
(507
)
 
TCCA fees(3)
(1,358
)
 
 

 
 

 
 

 
 
(1,358
)
 
Other income (expenses), net
(1,046
)
 
 
(21
)
 
 
(103
)
 
 
361

 
 
(809
)
 
Income (loss) before federal income taxes
9,514

 
 
1,174

 
 
3,045

 
 
(2,980
)
 
 
10,753

 
Provision for federal income taxes
(2,544
)
 
 
(127
)
 
 
(804
)
 
 

 
 
(3,475
)
 
Net income (loss) attributable to Fannie Mae
$
6,970

 
 
$
1,047

 
 
$
2,241

 
 
$
(2,980
)
 
 
$
7,278

 
 
For the Three Months Ended September 30, 2015
 
Business Segments
 
 
 
 
 
 
 
 
Single-Family
 
Multifamily
 
Capital Markets
 
 
Reconciling Items(1)
 
Total Results
 
 
(Dollars in millions)
Net interest income (loss)
$
66

 
 
$
(16
)
 
 
$
1,401

 
 
$
4,137

(2) 
 
$
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

 
 
4,137

 
 
7,138

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

 
 
367

 
 
(210
)
 
 
(3,271
)
(4) 
 
31

(4) 
Investment gains (losses), net
(1
)
 
 
5

 
 
1,608

 
 
(1,313
)
(5) 
 
299

 
Fair value gains (losses), net
(4
)
 
 

 
 
(2,697
)
 
 
112

(6) 
 
(2,589
)
 
Gains (losses) from partnership investments(7)
(12
)
 
 
7

 
 

 
 

 
 
(5
)
 
Fee and other income (expense)
98

 
 
58

 
 
83

 
 
(11
)
 
 
228

 
Administrative expenses
(649
)
 
 
(109
)
 
 
(194
)
 
 

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

 
 

 
 

 
 
(497
)
 
TCCA fees(3)
(413
)
 
 

 
 

 
 

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

 
 
(1
)
 
 
(34
)
 
 
(210
)
 
Income (loss) before federal income taxes
3,079

 
 
341

 
 
(10
)
 
 
(380
)
 
 
3,030

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

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

 
 
$
324

 
 
$
(23
)
 
 
$
(380
)
 
 
$
1,960

 
 
For the Nine Months Ended September 30, 2015
 
Business Segments
 
 
 
 
 
 
 
 
Single-Family
 
Multifamily
 
Capital Markets
 
 
Reconciling Items(1)
Total Results
 
 
(Dollars in millions)
Net interest income (loss)
$
93

 
 
$
(73
)
 
 
$
4,516

 
 
$
11,796

(2) 
 
$
16,332

 
Benefit for credit losses
967

 
 
83

 
 

 
 

 
 
1,050

 
Net interest income after benefit for credit losses
1,060

 
 
10

 
 
4,516

 
 
11,796

 
 
17,382

 
Guaranty fee income (expense)(3)
9,277

 
 
1,064

 
 
(658
)
 
 
(9,584
)
(4) 
 
99

(4) 
Investment gains (losses), net
(2
)
 
 
29

 
 
4,679

 
 
(3,551
)
(5) 
 
1,155

 
Fair value gains (losses), net
(8
)
 
 

 
 
(2,112
)
 
 
218

(6) 
 
(1,902
)
 
Gains (losses) from partnership investments(7)
(27
)
 
 
262

 
 

 
 

 
 
235

 
Fee and other income (expense)
571

 
 
193

 
 
288

 
 
(28
)
 
 
1,024

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

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

 
 

 
 

 
 
(1,152
)
 
TCCA fees(3)
(1,192
)
 
 

 
 

 
 

 
 
(1,192
)
 
Other income (expenses), net
(669
)
 
 
(8
)
 
 
(12
)
 
 
42

 
 
(647
)
 
Income (loss) before federal income taxes
6,236

 
 
1,301

 
 
6,208

 
 
(1,107
)
 
 
12,638

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

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

 
 
$
1,173

 
 
$
4,226

 
 
$
(1,107
)
 
 
$
8,488

 
__________
(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.