Fannie Mae 2005 Annual Report Download - page 67

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
ORGANIZATION OF MD&A
We intend for our MD&A to provide information that will assist the reader in better understanding our
consolidated financial statements. Our MD&A explains the changes in certain key items in our consolidated
financial statements from year to year, the primary factors driving those changes, our risk management
processes and results, any known trends or uncertainties of which we are aware that we believe may have a
material effect on our future performance, as well as how certain accounting principles affect our consolidated
financial statements. Our MD&A also provides information about our three complementary business segments
in order to explain how the activities of each segment impact our results of operations and financial condition.
This discussion should be read in conjunction with our consolidated financial statements as of December 31,
2005 and the notes accompanying those consolidated financial statements. Readers should also review
carefully “Item 1—Business—Forward-Looking Statements” and “Item 1A—Risk Factors” for a description of
the forward-looking statements in this report and a discussion of the factors that might cause our actual results
to differ, perhaps materially, from these forward-looking statements. Please refer to “Item 1—Business—
Glossary of Terms Used in this Report” for an explanation of key terms used throughout this discussion.
Our MD&A is organized as follows:
• Executive Summary
• Critical Accounting Policies and Estimates
• Consolidated Results of Operations
• Business Segment Results
• Supplemental Non-GAAP Information—Fair Value Balance Sheet
• Risk Management
• Liquidity and Capital Management
• Off-Balance Sheet Arrangements and Variable Interest Entities
• Impact of Future Adoption of New Accounting Pronouncements
• 2005 Quarterly Review
EXECUTIVE SUMMARY
Our Mission and Business
Fannie Mae is a mission-driven company, owned by private shareholders (NYSE: FNM) and chartered by
Congress to support liquidity and stability in the secondary mortgage market. Our business includes three
integrated business segments—Single-Family Credit Guaranty, Housing and Community Development and
Capital Markets—that work together to provide services, products and solutions to our lender customers and a
broad range of housing partners. Together, our business segments contribute to our chartered mission
objectives, helping to increase the total amount of funds available to finance housing in the United States and
to make homeownership more available and affordable for low-, moderate- and middle-income Americans. We
also work with our customers and partners to increase the availability and affordability of rental housing.
We view our mission as a key point of distinction and a fundamental element of our value proposition. By
growing our earnings over time and providing investors with attractive returns, we grow capital. Growing our
capital enables us to grow our business. As our business grows, so can the benefits that we provide to our
customers and housing partners, who in turn can pass those benefits to the American homebuyer in the form
of lower mortgage costs and product innovation. Our mission and the interests of our shareholders are aligned
and complementary in our business model.
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