Fannie Mae 2007 Annual Report Download - page 133

OFHEO Supervision
Pursuant to its role as our safety and soundness regulator, OFHEO monitors our liquidity management
practices and examines our liquidity position on a continuous basis. In September 2005, we entered into an
agreement with OFHEO pursuant to which we agreed to certain commitments pertaining to management of
our liquidity, including:
• compliance with principles of sound liquidity management consistent with industry practices;
• maintenance of a portfolio of highly liquid assets;
• maintenance of a functional contingency plan providing for at least three months’ liquidity without
relying upon the issuance of unsecured debt; and
• periodic testing of our contingency plan.
Each of these commitments is addressed in our liquidity risk policy. We further agreed to provide periodic
public disclosure regarding our compliance with the plan for maintaining three months’ liquidity and meeting
the commitment for periodic testing. We believe we were in compliance with our commitment to maintain and
test our liquidity contingency plan as of December 31, 2007.
Contractual Obligations
Table 37 summarizes our expectation as to the effect on our liquidity and cash flows in future periods of our
minimum debt payments and other material noncancelable contractual obligations as of December 31, 2007.
Table 37: Contractual Obligations
Total
Less than
1 Year
1to⬍3
Years
3to5
Years
More than
5 Years
(Dollars in millions)
Payments Due by Period as of December 31, 2007
Long-term debt obligations
(1)
. . . . . . . . . . . . . . . . . . . . . . $555,553 $105,424 $144,711 $105,558 $199,860
Contractual interest on long-term debt obligations
(2)
. . . . . . 173,315 26,649 41,296 28,912 76,458
Operating lease obligations
(3)
...................... 246 39 76 67 64
Purchase obligations:
Mortgage commitments
(4)
. . . . . . . . . . . . . . . . . . . . . . 32,445 32,301 144 — —
Other purchase obligations
(5)
.................... 682 15 667 — —
Other long-term liabilities reflected in the consolidated
balance sheet
(6)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,889 3,683 771 255 180
Total contractual obligations . . . . . . . . . . . . . . . . . . . . . . $767,130 $168,111 $187,665 $134,792 $276,562
(1)
Represents the carrying amount of our long-term debt assuming payments are made in full at maturity. Amounts
exclude approximately $6.6 billion in long-term debt from consolidations. Amounts include other cost basis
adjustments of approximately $11.6 billion.
(2)
Excludes contractual interest on long-term debt from consolidations.
(3)
Includes certain premises and equipment leases.
(4)
Includes on- and off-balance sheet commitments to purchase loans and mortgage-related securities.
(5)
Includes only unconditional purchase obligations that are subject to a cancellation penalty for certain telecom services,
software and computer services, and other agreements. Excludes arrangements that may be cancelled without penalty.
Amounts also include off-balance sheet commitments for debt financing activities.
(6)
Excludes risk management derivative transactions that may require cash settlement in future periods and our
obligations to stand ready to perform under our guaranties relating to Fannie Mae MBS and other financial guaranties,
because the amount and timing of payments under these arrangements are generally contingent upon the occurrence of
future events. For a description of the amount of our on- and off-balance sheet Fannie Mae MBS and other financial
guaranties as of December 31, 2007, see “Off-Balance Sheet Arrangements and Variable Interest Entities.” Includes
future cash payments due under our contractual obligations to fund LIHTC and other partnerships that are
unconditional and legally binding and cash received as collateral from derivative counterparties, which are included in
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