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SEC Filings

10-Q
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE filed this Form 10-Q on 05/06/2011
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Table of Contents

FANNIE MAE
(In conservatorship)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(UNAUDITED)
 
10.   Segment Reporting
 
Our three reportable segments are: Single-Family, Multifamily, and Capital Markets. We use these three segments to generate revenue and manage business risk, and each segment is based on the type of business activities it performs. We are working on reorganizing our company by function rather than by business in order to improve our operational efficiencies and effectiveness. When we begin operating under a functional structure, we may change some of our management reporting and how we report our business segment results.
 
Under our segment reporting, the sum of the results for our three business segments does not equal our condensed consolidated statements of operations and comprehensive loss, as we separate the activity related to our consolidated trusts from the results generated by our three segments. Our 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. We also include an eliminations/adjustments category to reconcile our business segment results and the activity related to our consolidated trusts to our condensed consolidated statements of operations.
 
The following tables display our segment results for the three months ended March 31, 2011 and 2010.
 
                                                 
    For the Three Months Ended March 31, 2011  
    Business Segments     Other Activity/Reconciling Items  
    Single-
          Capital
    Consolidated
    Eliminations/
    Total
 
    Family     Multifamily     Markets     Trusts(1)     Adjustments(2)     Results  
    (Dollars in millions)  
 
Net interest income (expense)
  $ (898 )   $ (9 )   $ 3,710     $ 1,574     $ 583 (3)   $ 4,960  
Benefit (provision) for loan losses
    (10,612 )     25                         (10,587 )
                                                 
Net interest income (expense) after provision for loan losses
    (11,510 )     16       3,710       1,574       583       (5,627 )
Guaranty fee income (expense)
    1,871       209       (399 )     (1,110 )(4)     (521 )(4)     50 (4)
Investment gains (losses), net
    1       4       870       (26 )     (774 )(5)     75  
Net other-than-temporary impairments
                (44 )                 (44 )
Fair value gains (losses), net
                218       (33 )     104 (6)     289  
Debt extinguishment gains (losses), net
                (24 )     37             13  
Losses from partnership investments
          (12 )                       (12 )(7)
Fee and other income (expense)
    147       58       75       (92 )     (1 )     187  
Administrative expenses
    (416 )     (68 )     (121 )                 (605 )
Benefit (provision) for guaranty losses
    (6 )     39                         33  
Foreclosed property expense
    (488 )                             (488 )
Other income (expenses)
    (318 )     6       (9 )           (19 )     (340 )
                                                 
Income (loss) before federal income taxes
    (10,719 )     252       4,276       350       (628 )     (6,469 )
Benefit (provision) for federal income taxes
    (2 )     (5 )     5                   (2 )
                                                 
Net income (loss) attributable to Fannie Mae
  $ (10,721 )   $ 247     $ 4,281     $ 350     $ (628 )   $ (6,471 )
                                                 
 


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