Fannie Mae 2011 Annual Report Download - page 334

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
We operate our business solely in the United States and its territories, and accordingly, we generate no revenue
from and have no assets in geographic locations other than the United States and its territories.
15. Equity (Deficit)
Common Stock
Shares of common stock outstanding, net of shares held as treasury stock, totaled 1.2 billion and 1.1 billion as of
December 31, 2011 and 2010, respectively.
During the conservatorship, the rights and powers of shareholders are suspended. Accordingly, our common
shareholders have no ability to elect directors or to vote on other matters during the conservatorship unless FHFA
elects to delegate this authority to them. The senior preferred stock purchase agreement with Treasury prohibits
the payment of dividends on common stock without the prior written consent of Treasury. The conservator also
has eliminated common stock dividends. In addition, we issued a warrant to Treasury that provides Treasury with
the right to purchase for a nominal price shares of our common stock equal to 79.9% of the total number of
shares of common stock outstanding on a fully diluted basis on the date of exercise, which would substantially
dilute the ownership in Fannie Mae of our common stockholders at the time of exercise. Refer to “Senior
Preferred Stock and Common Stock Warrant” section of this note.
F-95