Fannie Mae 2006 Annual Report Download - page 89

BUSINESS SEGMENT RESULTS
The table below displays net revenues, net income and total assets for each of our business segments for each
of the three years in the period ended December 31, 2006. We use various methodologies to allocate certain
balance sheet and income statement amounts between operating segments. For additional financial information
on the underlying management allocation methodologies and adjustments to prior period segment results, see
“Notes to Consolidated Financial Statements—Note 15, Segment Reporting.” Following is an analysis and
discussion of the performance of our business segments. We provide a more complete description of our
business segments in “Item 1—Business—Business Segments.”
Table 11: Business Segment Summary Financial Information
2006 2005 2004
For the Year Ended December 31,
(Dollars in millions)
Net revenues:
(1)
Single-Family Credit Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,073 $ 5,585 $ 5,007
Housing and Community Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510 607 527
Capital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,202 10,764 16,666
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,785 $16,956 $22,200
Net income:
Single-Family Credit Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,044 $ 2,623 $ 2,396
Housing and Community Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338 503 425
Capital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,677 3,221 2,146
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,059 $ 6,347 $ 4,967
2006 2005
As of December 31,
Total assets:
Single-Family Credit Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,777 $ 14,450
Housing and Community Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,100 12,075
Capital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 814,059 807,643
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $843,936 $834,168
(1)
Includes net interest income, guaranty fee income, and fee and other income.
Single-Family Business
Our Single-Family business generated net income of $2.0 billion, $2.6 billion and $2.4 billion in 2006, 2005
and 2004, respectively. The primary source of net revenues for our Single-Family business is guaranty fee
income. Other sources of revenue include technology and other fees and interest income. Expenses primarily
include administrative expenses and credit-related expenses, including the provision for credit losses.
Net income for the Single-Family business segment decreased by $579 million, or 22%, in 2006 from 2005
reflecting a $488 million increase in net revenue during the period that was more than offset by a $308 million
increase in losses on certain guaranty contracts, a $553 million increase in administrative expenses, a
$123 million increase in the provision for credit losses, and an increase of $218 million of foreclosed property
expense.
Net revenues increased in 2006 by 9% to $6.1 billion from $5.6 billion in 2005 primarily reflecting a
$288 million, or 6%, increase in guaranty fee income and a $62 million increase in float income during the
period. Guaranty fee income increased $288 million, or 6%, from $4.5 billion to $4.8 billion due to a 4%
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