Business Segment Reporting

12 Months Ended

Dec. 31, 2017

Schedule of Segment Reporting Information, by Segment [Table Text Block]

BUSINESS SEGMENT REPORTING

Farmer Mac's operations consist of four operating segments – Farm & Ranch, USDA Guarantees, Rural Utilities, and Institutional Credit. The Institutional Credit segment comprises Farmer Mac's purchases and guarantees of AgVantage securities related to general obligations of lenders that are secured by pools of eligible loans.

Farmer Mac uses these four segments to manage business risk, and each segment is based on distinct products and distinct business activities. In addition to these four operating segments, a corporate segment is presented. That segment represents activity in Farmer Mac's investment portfolio and other corporate activities. Each operating segment's financial results include directly attributable revenues and expenses. Corporate charges for administrative expenses that are not directly attributable to an operating segment are allocated to each segment based on headcount.

Farmer Mac uses core earnings to measure corporate economic performance and develop financial plans because, in management's view, core earnings is a useful alternative measure in understanding Farmer Mac's economic performance, transaction economics, and business trends. Core earnings principally differs from net income attributable to common stockholders by excluding the effects of fair value fluctuations, which are not expected to have a cumulative net impact on financial condition or results of operations reported in accordance with generally accepted accounting principles ("GAAP") if the related financial instruments are held to maturity, as is generally expected. Core earnings also differs from net income attributable to common stockholders by excluding specified infrequent or unusual transactions that Farmer Mac believes are not indicative of future operating results and that may not reflect the trends and economic financial performance of Farmer Mac's core business. This corporate economic performance measure may not be comparable to similarly labeled measures disclosed by other companies.

The financial information presented below reflects the accounts of Farmer Mac and its subsidiaries on a consolidated basis. Accordingly, the core earnings for Farmer Mac's reportable operating segments will differ from the stand-alone financial statements of Farmer Mac's subsidiaries. These differences will be due to various factors, including the exclusion of unrealized gains and losses related to fair value changes of trading assets and financial derivatives, as well as the allocation of certain expenses such as dividends and interest expense related to the issuance of capital and the issuance of indebtedness managed at the corporate level. The allocation of general and administrative expenses that are not directly attributable to an operating segment may also result in differences.

The following tables present core earnings for Farmer Mac's operating segments and a reconciliation to consolidated net income for the years ended December 31, 2017, 2016 and 2015:

Table 14.1



Core Earnings by Business Segment
For the Year Ended December 31, 2017
	Farm & Ranch			USDA Guarantees			Rural Utilities			Institutional Credit			Corporate			Reconciling Adjustments				Consolidated Net Income
	(in thousands)
Net interest income	$	54,290		$	21,106		$	11,598		$	59,842		$	10,811		$	—			$	157,647
Less: reconciling adjustments^(1)(2)(3)(4)	(8,922		)	(2,287		)	(539		)	(3,505		)	(1,091		)	16,344				—
Net effective spread	45,368			18,819			11,059			56,337			9,720			16,344				—
Guarantee and commitment fees⁽²⁾	17,175			456			1,914			805			—			(6,236		)		14,114
Other income/(expense)⁽³⁾⁽⁵⁾	2,449			43			20			—			171			715				3,398
Non-interest income/(loss)	19,624			499			1,934			805			171			(5,521		)		17,512

Provision for loan losses	(1,708		)	—			—			—			—			—				(1,708		)

Provision for reserve for losses	(50		)	—			—			—			—			—				(50		)
Other non-interest expense	(16,554		)	(4,384		)	(2,430		)	(6,439		)	(12,908		)	—				(42,715		)
Non-interest expense⁽⁶⁾	(16,604		)	(4,384		)	(2,430		)	(6,439		)	(12,908		)	—				(42,765		)
Core earnings before income taxes	46,680			14,934			10,563			50,703			(3,017		)	10,823			⁽⁷⁾	130,686
Income tax (expense)/benefit	(16,338		)	(5,227		)	(3,696		)	(17,746		)	1,792			(5,154		)	⁽⁸⁾	(46,369		)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest	30,342			9,707			6,867			32,957			(1,225		)	5,669			⁽⁷⁾	84,317
Preferred stock dividends	—			—			—			—			(13,182		)	—				(13,182		)
Non-controlling interest	—			—			—			—			165			—				165
Segment core earnings/(losses)	$	30,342		$	9,707		$	6,867		$	32,957		$	(14,242	)	$	5,669		⁽⁷⁾	$	71,300

Total assets at carrying value	$	4,274,693		$	2,195,189		$	1,088,986		$	7,627,749		$	2,605,657		$	—			$	17,792,274
Total on- and off-balance sheet program assets at principal balance	$	6,867,586		$	2,352,214		$	1,882,633		$	7,904,878		$	—		$	—			$	19,007,311


⁽¹⁾	Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.


⁽²⁾	Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.


⁽³⁾	Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "Gains on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.

⁽⁴⁾

Effective in fourth quarter 2017, Farmer Mac revised its methodology for calculating net effective spread, a component of core earnings, to also include the net effects of gains/(losses) due to terminations or net settlements on financial derivatives and hedging activities. All prior period information has been recast to reflect the revised methodology. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread."

⁽⁵⁾

Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities. In 2016 and prior periods, fair value adjustments on financial derivatives included variation margin payment amounts because those amounts were considered to be collateral of the related exposure and were accounted for as unrealized gains or losses. However, effective first quarter 2017, CME implemented a change in its rules related to the exchange of variation margin, whereby variation margin payments are considered to be a partial settlement of the respective derivatives contracts rather than as pledged collateral, and accounted for as realized gains and losses. See Note 4 for more information about this rule change. Farmer Mac believes that even though these variation margin amounts are now accounted for as realized gains or losses on financial derivatives and hedging activities as a result of the CME rule change, their economic character will remain the same as they were before the change. This is not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP because the related financial instruments are expected to be held to maturity. Therefore, beginning in 2017, this reconciling adjustment includes realized gains and losses on financial derivatives centrally cleared through CME resulting from the exchange of variation margin. As a result, core earnings subsequent to 2016 will be presented on a consistent basis with core earnings in 2016 and prior periods.


⁽⁶⁾	Includes directly attributable costs and an allocation of indirectly attributable costs based on staffing.


⁽⁷⁾	Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.


⁽⁸⁾	Includes the non-recurring, non-cash charge to income tax expense resulting from the re-measurement of the net deferred tax asset at a reduced corporate federal income tax rate due to the enactment of new tax legislation on December 22, 2017. See "Notes to Consolidated Financial Statements—Income Taxes."



Core Earnings by Business Segment
For the Year Ended December 31, 2016
	Farm & Ranch			USDA Guarantees			Rural Utilities			Institutional Credit			Corporate			Reconciling Adjustments				Consolidated Net Income
	(in thousands)
Net interest income	$	47,219		$	21,865		$	11,739		$	48,756		$	10,695		$	—			$	140,274
Less: reconciling adjustments^(1)(2)(3)(4)	(7,729		)	(3,210		)	(1,771		)	(3,184		)	(1,308		)	17,202				—
Net effective spread	39,490			18,655			9,968			45,572			9,387			17,202				—
Guarantee and commitment fees⁽²⁾	15,542			101			1,694			1,833			—			(4,302		)		14,868
Other income/(expense)⁽³⁾⁽⁵⁾	539			222			2			—			1,322			3,515				5,600
Non-interest income/(loss)	16,081			323			1,696			1,833			1,322			(787		)		20,468

Provision for loan losses	(1,065		)	—			—			—			—			—				(1,065		)

Provision for reserve for losses	63			—			—			—			—			—				63
Other non-interest expense	(16,206		)	(4,200		)	(2,856		)	(3,786		)	(13,335		)	—				(40,383		)
Non-interest expense⁽⁶⁾	(16,143		)	(4,200		)	(2,856		)	(3,786		)	(13,335		)	—				(40,320		)
Core earnings before income taxes	38,363			14,778			8,808			43,619			(2,626		)	16,415			⁽⁷⁾	119,357
Income tax (expense)/benefit	(13,428		)	(5,173		)	(3,083		)	(15,265		)	636			(5,744		)		(42,057		)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest	24,935			9,605			5,725			28,354			(1,990		)	10,671			⁽⁷⁾	77,300
Preferred stock dividends	—			—			—			—			(13,182		)	—				(13,182		)
Non-controlling interest	—			—			—			—			34			—				34
Segment core earnings/(losses)	$	24,935		$	9,605		$	5,725		$	28,354		$	(15,138	)	$	10,671		⁽⁷⁾	$	64,152

Total assets at carrying value	$	3,582,098		$	2,096,503		$	1,012,014		$	6,008,574		$	2,906,831		$	—			$	15,606,020
Total on- and off-balance sheet program assets at principal balance	6,139,304			2,094,375			1,878,110			7,287,686			—			—				$	17,399,475


⁽¹⁾	Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.


⁽²⁾	Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.


⁽³⁾	Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "Gains on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.

⁽⁴⁾


⁽⁵⁾	Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.


⁽⁶⁾	Includes directly attributable costs and an allocation of indirectly attributable costs based on staffing.


⁽⁷⁾	Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.



Core Earnings by Business Segment
For the Year Ended December 31, 2015
	Farm & Ranch			USDA Guarantees					Rural Utilities					Institutional Credit					Corporate					Reconciling Adjustments				Consolidated Net Income
	(in thousands)
Net interest income	$	43,271		$	17,750				$	11,728				$	44,971				$	8,087				$	—			$	125,807
Less: reconciling adjustments^(1)(2)(3)(4)	(5,308		)	(638		)			(723		)			(1,512		)			(198		)			8,379				—
Net effective spread	37,963			17,112					11,005					43,459					7,889					8,379				—
Guarantee and commitment fees⁽²⁾	15,076			17					397					1,665					—					(3,078		)		14,077
Other income/(expense)⁽³⁾⁽⁵⁾	1,039			100					25					—					74					4,826				6,064
Non-interest income/(loss)	16,115			117					422					1,665					74					1,748				20,141

Provision for loan losses	(2,388		)	—					—					—					—					—				(2,388		)

Release of reserve for losses	2,180			—					—					—					—					—				2,180
Other non-interest expense	(16,876		)	(3,449		)			(3,364		)			(2,109		)			(11,864		)			—				(37,662		)
Non-interest expense⁽⁶⁾	(14,696		)	(3,449		)			(3,364		)			(2,109		)			(11,864		)			—				(35,482		)
Core earnings before income taxes	36,994			13,780					8,063					43,015					(3,901		)			10,127			⁽⁷⁾	108,078
Income tax (expense)/benefit	(12,956		)	(4,826		)			(2,828		)			(15,038		)			3,053					(1,644		)		(34,239		)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest	24,038			8,954					5,235					27,977					(848		)			8,483			⁽⁷⁾	73,839
Preferred stock dividends	—			—					—					—					(13,182		)			—				(13,182		)
Non-controlling interest	—			—					—					—					(5,139		)			—				(5,139		)
Loss on retirement of preferred stock	—			—					—					—					—					(8,147		)		(8,147		)
Segment core earnings/(losses)	$	24,038		$	8,954		$	—	$	5,235		$	—	$	27,977		$	—	$	(19,169	)	$	—	$	336		⁽⁷⁾	$	47,371

Total assets at carrying value	$	3,041,386		$	1,977,609				$	1,019,279				$	5,420,195				$	4,081,885				$	—			$	15,540,354
Total on- and off-balance sheet program assets at principal balance	$	5,725,299		$	1,918,277				$	1,530,990				$	6,724,254									$	—			$	15,898,820


⁽¹⁾	Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.


⁽²⁾	Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.


⁽³⁾	Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "Gains on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.

⁽⁴⁾


⁽⁵⁾	Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.


⁽⁶⁾	Includes directly attributable costs and an allocation of indirectly attributable costs based on staffing.


⁽⁷⁾	Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.

Table 14.1



Core Earnings by Business Segment
For the Year Ended December 31, 2017
	Farm & Ranch			USDA Guarantees			Rural Utilities			Institutional Credit			Corporate			Reconciling Adjustments				Consolidated Net Income
	(in thousands)
Net interest income	$	54,290		$	21,106		$	11,598		$	59,842		$	10,811		$	—			$	157,647
Less: reconciling adjustments^(1)(2)(3)(4)	(8,922		)	(2,287		)	(539		)	(3,505		)	(1,091		)	16,344				—
Net effective spread	45,368			18,819			11,059			56,337			9,720			16,344				—
Guarantee and commitment fees⁽²⁾	17,175			456			1,914			805			—			(6,236		)		14,114
Other income/(expense)⁽³⁾⁽⁵⁾	2,449			43			20			—			171			715				3,398
Non-interest income/(loss)	19,624			499			1,934			805			171			(5,521		)		17,512

Provision for loan losses	(1,708		)	—			—			—			—			—				(1,708		)

Provision for reserve for losses	(50		)	—			—			—			—			—				(50		)
Other non-interest expense	(16,554		)	(4,384		)	(2,430		)	(6,439		)	(12,908		)	—				(42,715		)
Non-interest expense⁽⁶⁾	(16,604		)	(4,384		)	(2,430		)	(6,439		)	(12,908		)	—				(42,765		)
Core earnings before income taxes	46,680			14,934			10,563			50,703			(3,017		)	10,823			⁽⁷⁾	130,686
Income tax (expense)/benefit	(16,338		)	(5,227		)	(3,696		)	(17,746		)	1,792			(5,154		)	⁽⁸⁾	(46,369		)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest	30,342			9,707			6,867			32,957			(1,225		)	5,669			⁽⁷⁾	84,317
Preferred stock dividends	—			—			—			—			(13,182		)	—				(13,182		)
Non-controlling interest	—			—			—			—			165			—				165
Segment core earnings/(losses)	$	30,342		$	9,707		$	6,867		$	32,957		$	(14,242	)	$	5,669		⁽⁷⁾	$	71,300

Total assets at carrying value	$	4,274,693		$	2,195,189		$	1,088,986		$	7,627,749		$	2,605,657		$	—			$	17,792,274
Total on- and off-balance sheet program assets at principal balance	$	6,867,586		$	2,352,214		$	1,882,633		$	7,904,878		$	—		$	—			$	19,007,311


⁽¹⁾	Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.


⁽²⁾	Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.


⁽³⁾	Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "Gains on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.

⁽⁴⁾

⁽⁵⁾


⁽⁶⁾	Includes directly attributable costs and an allocation of indirectly attributable costs based on staffing.


⁽⁷⁾	Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.


⁽⁸⁾	Includes the non-recurring, non-cash charge to income tax expense resulting from the re-measurement of the net deferred tax asset at a reduced corporate federal income tax rate due to the enactment of new tax legislation on December 22, 2017. See "Notes to Consolidated Financial Statements—Income Taxes."



Core Earnings by Business Segment
For the Year Ended December 31, 2016
	Farm & Ranch			USDA Guarantees			Rural Utilities			Institutional Credit			Corporate			Reconciling Adjustments				Consolidated Net Income
	(in thousands)
Net interest income	$	47,219		$	21,865		$	11,739		$	48,756		$	10,695		$	—			$	140,274
Less: reconciling adjustments^(1)(2)(3)(4)	(7,729		)	(3,210		)	(1,771		)	(3,184		)	(1,308		)	17,202				—
Net effective spread	39,490			18,655			9,968			45,572			9,387			17,202				—
Guarantee and commitment fees⁽²⁾	15,542			101			1,694			1,833			—			(4,302		)		14,868
Other income/(expense)⁽³⁾⁽⁵⁾	539			222			2			—			1,322			3,515				5,600
Non-interest income/(loss)	16,081			323			1,696			1,833			1,322			(787		)		20,468

Provision for loan losses	(1,065		)	—			—			—			—			—				(1,065		)

Provision for reserve for losses	63			—			—			—			—			—				63
Other non-interest expense	(16,206		)	(4,200		)	(2,856		)	(3,786		)	(13,335		)	—				(40,383		)
Non-interest expense⁽⁶⁾	(16,143		)	(4,200		)	(2,856		)	(3,786		)	(13,335		)	—				(40,320		)
Core earnings before income taxes	38,363			14,778			8,808			43,619			(2,626		)	16,415			⁽⁷⁾	119,357
Income tax (expense)/benefit	(13,428		)	(5,173		)	(3,083		)	(15,265		)	636			(5,744		)		(42,057		)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest	24,935			9,605			5,725			28,354			(1,990		)	10,671			⁽⁷⁾	77,300
Preferred stock dividends	—			—			—			—			(13,182		)	—				(13,182		)
Non-controlling interest	—			—			—			—			34			—				34
Segment core earnings/(losses)	$	24,935		$	9,605		$	5,725		$	28,354		$	(15,138	)	$	10,671		⁽⁷⁾	$	64,152

Total assets at carrying value	$	3,582,098		$	2,096,503		$	1,012,014		$	6,008,574		$	2,906,831		$	—			$	15,606,020
Total on- and off-balance sheet program assets at principal balance	6,139,304			2,094,375			1,878,110			7,287,686			—			—				$	17,399,475


⁽¹⁾	Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.


⁽²⁾	Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.


⁽³⁾	Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "Gains on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.

⁽⁴⁾


⁽⁵⁾	Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.


⁽⁶⁾	Includes directly attributable costs and an allocation of indirectly attributable costs based on staffing.


⁽⁷⁾	Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.



Core Earnings by Business Segment
For the Year Ended December 31, 2015
	Farm & Ranch			USDA Guarantees					Rural Utilities					Institutional Credit					Corporate					Reconciling Adjustments				Consolidated Net Income
	(in thousands)
Net interest income	$	43,271		$	17,750				$	11,728				$	44,971				$	8,087				$	—			$	125,807
Less: reconciling adjustments^(1)(2)(3)(4)	(5,308		)	(638		)			(723		)			(1,512		)			(198		)			8,379				—
Net effective spread	37,963			17,112					11,005					43,459					7,889					8,379				—
Guarantee and commitment fees⁽²⁾	15,076			17					397					1,665					—					(3,078		)		14,077
Other income/(expense)⁽³⁾⁽⁵⁾	1,039			100					25					—					74					4,826				6,064
Non-interest income/(loss)	16,115			117					422					1,665					74					1,748				20,141

Provision for loan losses	(2,388		)	—					—					—					—					—				(2,388		)

Release of reserve for losses	2,180			—					—					—					—					—				2,180
Other non-interest expense	(16,876		)	(3,449		)			(3,364		)			(2,109		)			(11,864		)			—				(37,662		)
Non-interest expense⁽⁶⁾	(14,696		)	(3,449		)			(3,364		)			(2,109		)			(11,864		)			—				(35,482		)
Core earnings before income taxes	36,994			13,780					8,063					43,015					(3,901		)			10,127			⁽⁷⁾	108,078
Income tax (expense)/benefit	(12,956		)	(4,826		)			(2,828		)			(15,038		)			3,053					(1,644		)		(34,239		)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest	24,038			8,954					5,235					27,977					(848		)			8,483			⁽⁷⁾	73,839
Preferred stock dividends	—			—					—					—					(13,182		)			—				(13,182		)
Non-controlling interest	—			—					—					—					(5,139		)			—				(5,139		)
Loss on retirement of preferred stock	—			—					—					—					—					(8,147		)		(8,147		)
Segment core earnings/(losses)	$	24,038		$	8,954		$	—	$	5,235		$	—	$	27,977		$	—	$	(19,169	)	$	—	$	336		⁽⁷⁾	$	47,371

Total assets at carrying value	$	3,041,386		$	1,977,609				$	1,019,279				$	5,420,195				$	4,081,885				$	—			$	15,540,354
Total on- and off-balance sheet program assets at principal balance	$	5,725,299		$	1,918,277				$	1,530,990				$	6,724,254									$	—			$	15,898,820


⁽¹⁾	Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.


⁽²⁾	Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.


⁽³⁾	Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "Gains on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.

⁽⁴⁾


⁽⁵⁾	Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.


⁽⁶⁾	Includes directly attributable costs and an allocation of indirectly attributable costs based on staffing.


⁽⁷⁾	Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.