Fannie Mae 2005 Annual Report Download - page 302

interim and final reports of its special examination. According to the OFHEO Consent Order, we agreed to the
following restrictions relating to our capital activity in addition to the restrictions set forth in the Charter Act:
• We must continue our commitment to maintain a 30% capital surplus over our statutory minimum capital
requirement until such time as the Director of OFHEO determines that the requirement should be
modified or allowed to expire, considering factors such as the resolution of accounting and internal
control issues.
• While the capital restoration plan is in effect, we must seek the approval of the Director of OFHEO
before engaging in any transaction that could have the effect of reducing our capital surplus below an
amount equal to 30% more than our statutory minimum capital requirement.
• We must submit a written report to OFHEO detailing the rationale and process for any proposed capital
distribution before making the distribution.
• We are not permitted to increase our net mortgage portfolio assets above the amount shown in the
minimum capital report to OFHEO as of December 31, 2005 ($727.75 billion), except under limited
circumstances at the discretion of OFHEO. Net mortgage portfolio assets are defined as the unpaid
principal balance of our mortgage loans and mortgage-related securities net of market valuation
adjustments, allowance for loan losses, impairments and unamortized premiums and discounts. We will be
subject to this limitation on portfolio growth until the Director of OFHEO has determined that expiration
of the limitation is appropriate in light of information regarding: capital; market liquidity issues; housing
goals; risk management improvements; outside auditor’s opinion that the consolidated financial statements
present fairly in all material respects our financial condition; receipt of an unqualified opinion from an
outside audit firm that our internal controls are effective pursuant to section 404 of the Sarbanes-Oxley
Act of 2002; or other relevant information.
We are in compliance with the OFHEO Consent Order as of the date of this filing.
16. Preferred Stock
The following table displays preferred stock outstanding as of December 31, 2005 and 2004.
Title
Issue
Date Shares Amount Shares Amount
Stated
Value
per Share
Annual
Dividend Rate
as of
December 31,
2005
Redeemable on
or After
2005 2004
Issued and Outstanding as of December 31,
Series D ....... September 30, 1998 3,000,000 $ 150,000,000 3,000,000 $ 150,000,000 $ 50 5.250% September 30, 1999
Series E ....... April 15, 1999 3,000,000 150,000,000 3,000,000 150,000,000 50 5.100 April 15, 2004
Series F........ March 20, 2000 13,800,000 690,000,000 13,800,000 690,000,000 50 1.370
(1)
March 31, 2002
(3)
Series G ....... August 8, 2000 5,750,000 287,500,000 5,750,000 287,500,000 50 2.350
(2)
September 30, 2002
(3)
Series H ....... April 6, 2001 8,000,000 400,000,000 8,000,000 400,000,000 50 5.810 April 6, 2006
Series I ........ October 28, 2002 6,000,000 300,000,000 6,000,000 300,000,000 50 5.375 October 28, 2007
Series J ........ November 26, 2002 14,000,000 700,000,000 14,000,000 700,000,000 50 4.716
(4)
November 26, 2004
Series K ....... March 18, 2003 8,000,000 400,000,000 8,000,000 400,000,000 50 5.396
(5)
March 18, 2005
Series L ....... April 29, 2003 6,900,000 345,000,000 6,900,000 345,000,000 50 5.125 April 29, 2008
Series M ....... June 10, 2003 9,200,000 460,000,000 9,200,000 460,000,000 50 4.750 June 10, 2008
Series N ....... September 25, 2003 4,500,000 225,000,000 4,500,000 225,000,000 50 5.500 September 25, 2008
Series O ....... December 30, 2004 50,000,000 2,500,000,000 50,000,000 2,500,000,000 50 7.000
(6)
December 31, 2007
Convertible
Series 2004-1 . . December 30, 2004 25,000 2,500,000,000 25,000 2,500,000,000 100,000 5.375 January 5, 2008
Total ......... 132,175,000 $9,107,500,000 132,175,000 $9,107,500,000
(1)
Rate effective March 31, 2004. Variable dividend rate resets every two years at the two-year Constant Maturity
U.S. Treasury Rate (“CMT”) minus 0.16% with a cap of 11% per year. As of March 31, 2006, the annual dividend rate
reset to 4.56%.
F-73
FANNIE MAE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)