Fannie Mae 2014 Annual Report Download - page 267

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
F-52
For the Year Ended December 31, 2012
Business Segments Other Activity/Reconciling Items
Single-
Family Multifamily Capital Markets Consolidated Trusts(1) Eliminations/ Adjustments(2) Total Results
(Dollars in millions)
Net interest (loss) income . . . . . . . . . . . $ (790) $ (13) $ 13,241 $ 7,156 $ 1,907 (3) $ 21,501
Benefit for credit losses . . . . . . . . . . . . . 672 180 — — — 852
Net interest (loss) income after
provision for credit losses . . . . . . . . . (118) 167 13,241 7,156 1,907 22,353
Guaranty fee income (expense)(4) . . . . . 8,151 1,040 (1,291)(4,737)(5) (2,951)(5) 212 (5)
Investment gains (losses), net . . . . . . . . 8 37 5,506 (3)(5,774)(6) (226)
Fair value losses, net . . . . . . . . . . . . . . . (8) — (3,041)(313) 385 (7) (2,977)
Debt extinguishment (losses) gains, net.— — (277) 33 — (244)
Gains from partnership investments(8) . . — 123 — — (4) 119
Fee and other income (expense) . . . . . . 759 207 717 (395)(13) 1,275
Administrative expenses . . . . . . . . . . . . (1,590) (269) (508) — — (2,367)
Foreclosed property income. . . . . . . . . . 247 7 — — — 254
TCCA fees(4). . . . . . . . . . . . . . . . . . . . . . (238) — — — — (238)
Other expenses. . . . . . . . . . . . . . . . . . . . (841) (5) (22) — (73)(941)
Income before federal income taxes . . . 6,370 1,307 14,325 1,741 (6,523) 17,220
(Provision) benefit for federal income
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . (80) 204 (124) — — —
Net income . . . . . . . . . . . . . . . . . . . . 6,290 1,511 14,201 1,741 (6,523) 17,220
Less: Net loss attributable to
noncontrolling interest . . . . . . . . . — — — — 4 (10) 4
Net income attributable to Fannie
Mae . . . . . . . . . . . . . . . . . . . . . . . . $ 6,290 $ 1,511 $14,201 $1,741 $ (6,519) $ 17,224
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(1) Represents activity related to the assets and liabilities of consolidated trusts in our consolidated balance sheets.
(2) Represents the elimination of intercompany transactions occurring between the three business segments and our consolidated trusts, as
well as other adjustments to reconcile to our consolidated results.
(3) Represents the amortization expense of cost basis adjustments on securities in the Capital Markets group’s retained mortgage portfolio
that on a GAAP basis are eliminated.
(4) Includes the impact of a 10 basis point guaranty fee increase implemented pursuant to the TCCA, the incremental revenue from which
must be remitted to Treasury. The resulting revenue is included in guaranty fee income and the expense is recognized as “TCCA fees.”
(5) Represents the guaranty fees paid from consolidated trusts to the Single-Family and Multifamily segments. The adjustment to guaranty
fee income in the Eliminations/Adjustments column represents the elimination of the amortization of deferred cash fees related to
consolidated trusts that were re-established for segment reporting. Total guaranty fee income related to unconsolidated Fannie Mae
MBS trusts and other credit enhancement arrangements is included in fee and other income in our consolidated statements of operations
and comprehensive income.
(6) Primarily represents the removal of realized gains and losses on sales of Fannie Mae MBS classified as available-for-sale securities that
are issued by consolidated trusts and in the Capital Markets group’s retained mortgage portfolio. The adjustment also includes the
removal of securitization gains (losses) recognized in the Capital Markets segment relating to portfolio securitization transactions that
do not qualify for sale accounting under GAAP.
(7) Represents the removal of fair value adjustments on consolidated Fannie Mae MBS classified as trading that are in the Capital Markets
group’s retained mortgage portfolio.
(8) Gains from partnership investments are included in other expenses in our consolidated statements of operations and comprehensive
income.
(9) Primarily represents the release of the valuation allowance for our deferred tax assets that generally are directly attributable to each
segment based on the nature of the item.
(10) Represents the adjustment from equity method accounting to consolidation accounting for partnership investments that are consolidated
in our consolidated balance sheets.