Fannie Mae 2013 Annual Report Download - page 297

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
F-73
The table below displays changes in accumulated other comprehensive income, net of tax, for the year ended December 31,
2013.
For the year ended December 31, 2013
Available-
for-Sale
Securities(1) Other(2) Total
(Dollars in millions)
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 934 $ (550) $ 384
Other comprehensive income before reclassifications . . . . . . . . . . . . . . . . . . . . . . . . . 983 116 1,099
Amounts reclassified from other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . (290) 10 (280)
Net other comprehensive income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693 126 819
Ending balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,627 $ (424) $1,203
__________
(1) The amounts reclassified from AOCI represent the gain or loss recognized in earnings due to a sale of an available-for-sale security or
the recognition of a net impairment in earnings.
(2) Primarily represents activity from our defined benefit pension plans.
The following table displays reclassifications from accumulated other comprehensive income, net of tax, including the
affected line item in our consolidated statement of operations and comprehensive income for the year ended December 31,
2013.
For the Year Ended
December 31, 2013
(Dollars in millions)
Net other than temporary impairments (net of tax of $22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42
Investment gains, net (net of tax of $179) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (332)
Salaries and employee benefits (net of tax of $5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(280)
15. Regulatory Capital Requirements
FHFA has announced that during the conservatorship our existing statutory and FHFA-directed regulatory capital
requirements will not be binding and that FHFA will not issue quarterly capital classifications. We submit capital reports to
FHFA during the conservatorship and FHFA monitors our capital levels. FHFA has stated that it does not intend to report our
critical capital, risk-based capital or subordinated debt levels during the conservatorship. Our regulatory capital classification
measures are determined based on guidance from FHFA, in which FHFA (1) directed us, for loans backing Fannie Mae MBS
held by third parties, to continue reporting our minimum capital requirements based on 0.45% of the unpaid principal balance
and critical capital based on 0.25% of the unpaid principal balance, regardless of whether these loans have been consolidated
pursuant to accounting rules, and (2) issued a regulatory interpretation stating that our minimum capital requirements are not
automatically affected by the consolidation accounting guidance. Additionally, our regulatory capital classification measures
exclude the funds provided to us by Treasury pursuant to the senior preferred stock purchase agreement, as the senior
preferred stock does not qualify as core capital due to its cumulative dividend provisions.
Pursuant to the GSE Act, if the Director of FHFA makes a written determination that our total assets are less than our total
obligations (a net worth deficit) for a period of 60 days, FHFA is mandated by law to appoint a receiver for Fannie Mae.
Treasury’s funding commitment under the senior preferred stock purchase agreement is intended to ensure that we avoid a net
worth deficit, in order to avoid this mandatory trigger of receivership. In order to avoid a net worth deficit, our conservator
may request funds on our behalf from Treasury under the senior preferred stock purchase agreement.
FHFA has directed us, during the time we are under conservatorship, to focus on managing to a positive net worth. We had a
positive net worth of $9.6 billion and $7.2 billion as of December 31, 2013 and 2012, respectively.