Fannie Mae 2011 Annual Report Download - page 30

Business
Segment Primary Business Activities Primary Revenues Primary Expenses
Capital Markets •Mortgage and other
investments: Purchases
mortgage assets and makes
investments in non-mortgage
interest-earning assets
•Mortgage securitizations:
Purchases loans from a large
group of lenders, securitizes
them, and may sell the
securities to dealers and
investors
•Structured mortgage
securitizations and other
customer services: Issues
structured Fannie Mae MBS
for customers in exchange for
a transaction fee and provides
other fee-related services to
our lender customers
•Interest rate risk
management: Manages the
interest rate risk on our
portfolio by issuing a variety
of debt securities in a wide
range of maturities and by
using derivatives
•Net interest income:
Generated from the difference
between the interest income
earned on our interest-earning
assets and the interest
expense associated with the
debt funding those assets
•Fee and other income:
Compensation received for
providing structured
transactions and other lender
services
•Fair value gains and losses:
Primarily consists of fair
value gains and losses on
derivatives and trading
securities
•Investment gains and losses:
Primarily consists of gains
and losses on the sale or
securitization of mortgage
assets
•Other-than-temporary
impairment: Consists of
impairment recognized on our
investments
•Administrative expenses:
Consists of salaries and
benefits, occupancy costs,
professional services, and
other expenses associated
with our Capital Markets
business operations
We are working on reorganizing our company by function rather than by business in order to improve our
operational efficiencies and effectiveness. In future periods, we may change some of our management reporting
and how we report our business segment results.
Revenues from our Business Segments
The following table displays the percentage of our total net revenues accounted for by our business segments for
each of the last three years. Our prospective adoption in 2010 of revised accounting guidance on the
consolidation of variable interest entities (“consolidation accounting guidance”) and transfers of financial assets
had a significant impact on our financial statements. Also effective in 2010, we changed the presentation of
segment financial information that is currently evaluated by management.As a result, our 2010 and 2011
segment results are not comparable to prior years’ segment results. We have not restated prior years’ results, nor
have we presented 2010 and 2011 results under the old presentation, because we determined that it was
impracticable to do so. For more information about changes in our segment reporting and the financial results
and performance of each of our segments, please see “MD&A—Business Segment Results” and “Note 14,
Segment Reporting.”
Business Segment Revenues(1)
For the Year Ended
December 31,
2011(2) 2010(2) 2009
Single-Family Credit Guaranty ........................................... 28% 12% 39%
Multifamily(3) ......................................................... 5 5 3
Capital Markets ....................................................... 63 77 58
(1) Amounts presented represent the percentage of our total net revenues accounted for by each of our business segments.
(2) Segment results for 2011 and 2010 are not comparable with 2009 and prior years’ results. In addition, under our current
segment reporting structure, the sum of net revenues for our three business segments does not equal our consolidated total
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