Fannie Mae 2005 Annual Report Download - page 298

Single-Family
Credit Guaranty HCD
Capital
Markets Total
For the Year Ended December 31, 2003
(Dollars in millions)
Net interest income (expense)
(1)
. . . . . . . . . . . . . . . . . . . . . $ 495 $ (99) $ 19,081 $19,477
Guaranty fee income (expense)
(2)
. . . . . . . . . . . . . . . . . . . . 4,222 303 (1,244) 3,281
Investment gains (losses), net . . . . . . . . . . . . . . . . . . . . . . . 76 — (1,307) (1,231)
Derivatives fair value losses, net . . . . . . . . . . . . . . . . . . . . . — — (6,289) (6,289)
Debt extinguishment losses, net . . . . . . . . . . . . . . . . . . . . . . — — (2,692) (2,692)
Losses from partnership investments . . . . . . . . . . . . . . . . . . — (637) — (637)
Fee and other income (expense) . . . . . . . . . . . . . . . . . . . . . 277 209 (146) 340
Non-interest income (loss) . . . . . . . . . . . . . . . . . . . . . . . 4,575 (125) (11,678) (7,228)
Provision for credit losses. . . . . . . . . . . . . . . . . . . . . . . . . . 331 34 — 365
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925 238 435 1,598
Income (loss) before federal income taxes, extraordinary
gains and cumulative effect of change in accounting
principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,814 (496) 6,968 10,286
Provision (benefit) for federal income taxes . . . . . . . . . . . . . 1,333 (782) 1,883 2,434
Income before extraordinary gains and cumulative effect of
change in accounting principle . . . . . . . . . . . . . . . . . . . 2,481 286 5,085 7,852
Extraordinary gain, net of tax effect. . . . . . . . . . . . . . . . . . . — — 195 195
Cumulative effect of change in accounting principle, net of
tax effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 34 34
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,481 $ 286 $ 5,314 $ 8,081
(1)
Includes cost of capital charge.
(2)
Includes intercompany guaranty fee revenue (expense) of $1.0 billion 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.
The following table displays total assets by segment as of December 31, 2005 and 2004.
2005 2004
As of December 31,
(Dollars in millions)
Single-Family Credit Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,871 $ 11,543
HCD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,829 10,166
Capital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 809,468 999,225
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $834,168 $1,020,934
We operate our business solely in the United States and, accordingly, we do not generate any revenue from or
have assets in geographic locations other than the United States.
15. Regulatory Capital Requirements
The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (the “1992 Act”) established
minimum capital, critical capital and risk-based capital requirements for Fannie Mae. Based upon these
requirements, OFHEO classifies us on a quarterly basis as either adequately capitalized, undercapitalized,
significantly undercapitalized or critically undercapitalized. We are required by federal statute to meet the
minimum, critical and risk-based capital standards to be classified as adequately capitalized.
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FANNIE MAE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)