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Segment Reporting
6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
We have two reportable business segments: Single-Family and Multifamily. Results of our two business segments are intended to reflect each segment as if it were a stand-alone business. The sum of the results for our two business segments equals our condensed consolidated results of operations.
The following table displays our segment results.
 
For the Three Months Ended June 30,
 
2018
 
2017
 
Single-Family
 
Multifamily
 
Total
 
Single-Family
 
Multifamily
 
Total
 
(Dollars in millions)
Net interest income(1)
$
4,723

 
$
654

 
$
5,377

 
$
4,366

 
$
636

 
$
5,002

Fee and other income(2)
69

 
170

 
239

 
111

 
242

 
353

Net revenues
4,792

 
824

 
5,616

 
4,477

 
878

 
5,355

Investment gains, net(3)
252

 
25

 
277

 
321

 
64

 
385

Fair value gains (losses), net(4)
278

 
(49
)
 
229

 
(685
)
 
(6
)
 
(691
)
Administrative expenses
(649
)
 
(106
)
 
(755
)
 
(600
)
 
(86
)
 
(686
)
Credit-related income (expense)(5)
 
 
 
 
 
 
 
 
 
 
 
Benefit for credit losses
1,295

 
1

 
1,296

 
1,255

 
12

 
1,267

Foreclosed property expense
(136
)
 
(3
)
 
(139
)
 
(32
)
 
(2
)
 
(34
)
Total credit-related income (expense)
1,159

 
(2
)
 
1,157

 
1,223

 
10

 
1,233

TCCA fees(6)
(565
)
 

 
(565
)
 
(518
)
 

 
(518
)
Other expenses, net
(270
)
 
(96
)
 
(366
)
 
(155
)
 
(136
)
 
(291
)
Income before federal income taxes
4,997

 
596

 
5,593

 
4,063

 
724

 
4,787

Provision for federal income taxes
(1,044
)
 
(92
)
 
(1,136
)
 
(1,401
)
 
(186
)
 
(1,587
)
Net income
$
3,953

 
$
504

 
$
4,457

 
$
2,662

 
$
538

 
$
3,200


 
For the Six Months Ended June 30,
 
2018
 
2017
 
Single-Family
 
Multifamily
 
Total
 
Single-Family
 
Multifamily
 
Total
 
(Dollars in millions)
Net interest income(1)
$
9,284

 
$
1,325

 
$
10,609

 
$
9,122

 
$
1,226

 
$
10,348

Fee and other income(2)
227

 
332

 
559

 
187

 
415

 
602

Net revenues
9,511

 
1,657

 
11,168

 
9,309

 
1,641

 
10,950

Investment gains, net(3)
494

 
33

 
527

 
271

 
105

 
376

Fair value gains (losses), net(4)
1,312

 
(38
)
 
1,274

 
(697
)
 
(34
)
 
(731
)
Administrative expenses
(1,292
)
 
(213
)
 
(1,505
)
 
(1,201
)
 
(169
)
 
(1,370
)
Credit-related income (expense)(5)
 
 
 
 
 
 
 
 
 
 
 
Benefit for credit losses
1,491

 
22

 
1,513

 
1,655

 
8

 
1,663

Foreclosed property expense
(298
)
 
(3
)
 
(301
)
 
(248
)
 
(3
)
 
(251
)
Total credit-related income
1,193

 
19

 
1,212

 
1,407

 
5

 
1,412

TCCA fees(6)
(1,122
)
 

 
(1,122
)
 
(1,021
)
 

 
(1,021
)
Other expenses, net
(402
)
 
(167
)
 
(569
)
 
(411
)
 
(262
)
 
(673
)
Income before federal income taxes
9,694

 
1,291

 
10,985

 
7,657

 
1,286

 
8,943

Provision for federal income taxes
(2,060
)
 
(207
)
 
(2,267
)
 
(2,653
)
 
(317
)
 
(2,970
)
Net income
$
7,634

 
$
1,084

 
$
8,718

 
$
5,004

 
$
969

 
$
5,973


__________
(1) 
Net interest income primarily consists of guaranty fees received as compensation for assuming and managing the credit risk on loans underlying Fannie Mae MBS held by third parties for the respective business segment, and the difference between the interest income earned on the respective business segment’s mortgage assets in our retained mortgage portfolio and the interest expense associated with the debt funding those assets. Revenues from single-family guaranty fees include revenues generated by the 10 basis point increase in guaranty fees pursuant to TCCA.
(2) 
Single-Family fee and other income primarily consists of compensation for engaging in structured transactions and providing other lender services, and income resulting from settlement agreements resolving certain claims relating to private-label securities we purchased or that we have guaranteed. Multifamily fee and other income consists of fees associated with multifamily business activities, including yield maintenance income.
(3) 
Investment gains and losses primarily consists of gains and losses on the sale of mortgage assets for the respective business segment.
(4) 
Single-Family fair value gains and losses primarily consist of fair value gains and losses on risk management and mortgage commitment derivatives, trading securities and other financial instruments associated with our single-family total book of business. Multifamily fair value gains and losses primarily consist of fair value gains and losses on MBS commitment derivatives, trading securities and other financial instruments associated with our multifamily total book of business.
(5) 
Credit-related income or expense is based on the guaranty book of business of the respective business segment and consists of the applicable segment’s benefit or provision for credit losses and foreclosed property expense on loans underlying the segment’s guaranty book of business.
(6) 
Consists of the portion of our single-family guaranty fees that is remitted to Treasury pursuant to the TCCA.