Fannie Mae 2005 Annual Report Download - page 179

Single-Family
Credit Guaranty HCD
Capital
Markets Total
For the Quarter Ended September 30, 2005
(Dollars in millions)
Net interest income (expense)
(1)
. . . . . . . . . . . . . . . . . . . . . . . $ 261 $ (53) $2,456 $2,664
Guaranty fee income (expense)
(2)
. . . . . . . . . . . . . . . . . . . . . . 1,038 88 (294) 832
Investment gains (losses), net . . . . . . . . . . . . . . . . . . . . . . . . . 57 — (226) (169)
Derivatives fair value losses, net. . . . . . . . . . . . . . . . . . . . . . . — — (539) (539)
Debt extinguishment gains, net. . . . . . . . . . . . . . . . . . . . . . . . — — 86 86
Losses from partnership investments . . . . . . . . . . . . . . . . . . . . — (211) — (211)
Fee and other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 180 58 298
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . (258) (114) (195) (567)
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . (172) — — (172)
Other expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43) (23) (2) (68)
Income (loss) before federal income taxes and extraordinary
losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943 (133) 1,344 2,154
Provision (benefit) for federal income taxes . . . . . . . . . . . . . . . 317 (261) 350 406
Income before extraordinary losses . . . . . . . . . . . . . . . . . . . . . 626 128 994 1,748
Extraordinary losses, net of tax effect . . . . . . . . . . . . . . . . . . . — — (3) (3)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 626 $ 128 $ 991 $1,745
(1)
Includes cost of capital charge.
(2)
Includes intercompany guaranty fee income (expense) of $241 million allocated to Single-Family Credit Guaranty and
HCD from Capital Markets for absorbing the credit risk on mortgage loans and Fannie Mae MBS held in our
portfolio.
Single-Family
Credit Guaranty HCD
Capital
Markets Total
For the Quarter Ended December 31, 2005
(Dollars in millions)
Net interest income (expense)
(1)
. . . . . . . . . . . . . . . . . . . . . . . $ 256 $ (57) $1,958 $2,157
Guaranty fee income (expense)
(2)
. . . . . . . . . . . . . . . . . . . . . . 1,081 79 (291) 869
Investment gains (losses), net . . . . . . . . . . . . . . . . . . . . . . . . . 41 — (348) (307)
Derivatives fair value losses, net. . . . . . . . . . . . . . . . . . . . . . . — — (267) (267)
Debt extinguishment losses, net . . . . . . . . . . . . . . . . . . . . . . . — — (30) (30)
Losses from partnership investments . . . . . . . . . . . . . . . . . . . . — (228) — (228)
Fee and other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 217 147 416
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . (311) (139) (228) (678)
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . (87) — — (87)
Other expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (58) (33) (2) (93)
Income (loss) before federal income taxes and extraordinary
losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974 (161) 939 1,752
Provision (benefit) for federal income taxes . . . . . . . . . . . . . . . 326 (260) 255 321
Income before extraordinary losses . . . . . . . . . . . . . . . . . . . . . 648 99 684 1,431
Extraordinary losses, net of tax effect . . . . . . . . . . . . . . . . . . . — — (7) (7)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 648 $ 99 $ 677 $1,424
(1)
Includes cost of capital charge.
(2)
Includes intercompany guaranty fee income (expense) of $243 million allocated to Single-Family Credit Guaranty and
HCD from Capital Markets for absorbing the credit risk on mortgage loans and Fannie Mae MBS held in our
portfolio.
During the year ended December 31, 2005, our earnings fluctuated from a net income of $1.8 billion for the
quarter ended March 31, 2005, to a net income of $1.3 billion for the quarter ended June 30, 2005, to a net
income of $1.7 billion for the quarter ended September 30, 2005 and to a net income of $1.4 billion for the
quarter ended December 31, 2005. As discussed in “Consolidated Results of Operations” above, we expect
174