Fannie Mae 2014 Annual Report Download - page 265

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
F-50
• Investment gains or losses, net—Investment gains or losses, net includes the gains and losses on securitizations and
sales of available-for-sale securities from our portfolio. To reconcile to our consolidated statements of operations and
comprehensive income, we eliminate gains and losses on securities that have been consolidated to loans.
• Fair value gains or losses, net—Fair value gains or losses, net for the Capital Markets group includes derivative gains
and losses, foreign exchange gains and losses, and the fair value gains and losses on certain debt securities in our
portfolio. To reconcile to our consolidated statements of operations and comprehensive income, we eliminate fair value
gains or losses on Fannie Mae MBS that have been consolidated to loans.
• Other expenses, net—Debt extinguishment gains or losses recorded on the segment statements of operations relate
exclusively to our funding debt, which is reported as “Debt of Fannie Mae” in our consolidated balance sheets. To
reconcile to our consolidated statements of operations and comprehensive income, we include debt extinguishment
gains or losses related to consolidated trusts to arrive at our total recognized debt extinguishment gains or losses.
Segment Allocations and Results
Our business segment financial results include directly attributable revenues and expenses. Additionally, we allocate to each
of our segments: (1) capital using FHFA minimum capital requirements adjusted for over- or under-capitalization; (2) indirect
administrative costs; and (3) a provision or benefit for federal income taxes. In addition, we allocate intracompany guaranty
fee income as a charge from the Single-Family and Multifamily segments to Capital Markets for managing the credit risk on
mortgage loans held by the Capital Markets group.
The following tables display our business segment financial results for the years ended December 31, 2014, 2013 and 2012.
For the Year Ended December 31, 2014
Business Segments Other Activity/Reconciling Items
Single-
Family Multifamily Capital Markets Consolidated Trusts(1) Eliminations/ Adjustments(2) Total Results
(Dollars in millions)
Net interest income (loss) . . . . . . . . . . $ 6 $ (79) $ 7,243 $ 11,722 $ 1,076 (3) $ 19,968
Benefit for credit losses. . . . . . . . . . . . 3,850 114 — — — 3,964
Net interest income after benefit for
credit losses . . . . . . . . . . . . . . . . . . . 3,856 35 7,243 11,722 1,076 23,932
Guaranty fee income (expense)(4) . . . . 11,702 1,297 (955)(5,895)(5) (5,974)(5) 175 (5)
Investment (losses) gains, net . . . . . . . (1) 57 6,378 (192)(5,306)(6) 936
Fair value (losses) gains, net . . . . . . . . (19) — (5,476) 300 362 (7) (4,833)
Debt extinguishment gains, net . . . . . . — — 35 31 — 66
(Losses) gains from partnership
investments(8) . . . . . . . . . . . . . . . . . . (31) 299 — — 1 269
Fee and other income (expense) . . . . . 624 166 4,894 (323) 351 5,712
Administrative expenses . . . . . . . . . . . (1,830) (306) (641) — — (2,777)
Foreclosed property (expense) income (225) 83 — — — (142)
TCCA fees(4) . . . . . . . . . . . . . . . . . . . . (1,375) — — — — (1,375)
Other expenses. . . . . . . . . . . . . . . . . . . (726) (10) (77) — — (813)
Income before federal income taxes . . 11,975 1,621 11,401 5,643 (9,490) 21,150
Provision for federal income taxes . . . (3,496) (158) (3,287) — — (6,941)
Net income. . . . . . . . . . . . . . . . . . . 8,479 1,463 8,114 5,643 (9,490) 14,209
Less: Net income attributable to
noncontrolling interest . . . . . . . . — — — — (1)(10) (1)
Net income attributable to Fannie
Mae. . . . . . . . . . . . . . . . . . . . . . . $ 8,479 $ 1,463 $ 8,114 $ 5,643 $ (9,491) $ 14,208