Fannie Mae 2013 Annual Report Download - page 331

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
F-107
As of December 31, 2012
Carrying
Value
Quoted
Price in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobserva
ble Inputs
(Level 3) Netting Adjustment Estimated Fair Value
(Dollars in millions)
Financial assets:
Cash and cash equivalents and restricted
cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 89,036 $ 75,786 $ 13,250 $ — $ — $ 89,036
Federal funds sold and securities purchased
under agreements to resell or similar
arrangements. . . . . . . . . . . . . . . . . . . . . . . 32,500 — 32,500 — — 32,500
Trading securities . . . . . . . . . . . . . . . . . . . . . 40,695 17,950 20,459 2,286 — 40,695
Available-for-sale securities. . . . . . . . . . . . . 63,181 — 38,147 25,034 — 63,181
Mortgage loans held for sale. . . . . . . . . . . . . 464 — 267 208 — 475
Mortgage loans held for investment, net of
allowance for loan losses:
Of Fannie Mae . . . . . . . . . . . . . . . . . . . . 305,025 — 39,018 232,170 — 271,188
Of consolidated trusts . . . . . . . . . . . . . . . 2,643,917 — 2,528,004 234,424 — 2,762,428
Mortgage loans held for investment . . . . . . . 2,948,942 — 2,567,022 466,594 — 3,033,616
Advances to lenders . . . . . . . . . . . . . . . . . . . 7,592 — 6,936 572 — 7,508
Derivative assets at fair value. . . . . . . . . . . . 435 — 16,051 175 (15,791) 435
Guaranty assets and buy-ups . . . . . . . . . . . . 327 — — 692 — 692
Total financial assets. . . . . . . . . . . . . . . . . . . $3,183,172 $ 93,736 $2,694,632 $ 495,561 $ (15,791) $ 3,268,138
Financial liabilities:
Short-term debt:
Of Fannie Mae . . . . . . . . . . . . . . . . . . . . $ 105,233 $ — $ 105,253 $ — $ — $ 105,253
Of consolidated trusts . . . . . . . . . . . . . . . 3,483 — — 3,483 — 3,483
Long-term debt:
Of Fannie Mae . . . . . . . . . . . . . . . . . . . . 510,631 — 534,516 1,056 — 535,572
Of consolidated trusts . . . . . . . . . . . . . . . 2,570,170 — 2,685,008 16,171 — 2,701,179
Derivative liabilities at fair value . . . . . . . . . 705 — 22,590 161 (22,046) 705
Guaranty obligations. . . . . . . . . . . . . . . . . . . 599 — — 3,113 — 3,113
Total financial liabilities. . . . . . . . . . . . . . . . $3,190,821 $ — $3,347,367 $ 23,984 $ (22,046) $ 3,349,305
Financial Instruments for which fair value approximates carrying value—We hold certain financial instruments that are not
carried at fair value but for which the carrying value approximates fair value due to the short-term nature and negligible
credit risk inherent in them. These financial instruments include cash and cash equivalents, the majority of advances to
lenders and federal funds and securities sold/purchased under agreements to repurchase/resell.
Federal funds and securities sold/purchased under agreements to repurchase/resell—The carrying value for the majority of
these specific instruments approximates the fair value due to the short-term nature and the negligible inherent credit risk, as
they involve the exchange of liquid collateral. Were we to calculate the fair value of these instruments we would use
observable inputs resulting in Level 2 classification.
Mortgage Loans Held for Sale—Loans are reported at the lower of cost or fair value in our consolidated balance sheets. The
valuation methodology and inputs used in estimating the fair value of HFS loans are the same as for our HFI loans and are
described under “Fair Value Measurement—Mortgage Loans Held for Investment” and these loans are classified as Level 2