Fannie Mae 2013 Annual Report Download - page 340

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
F-116
For the 2012 Quarter Ended
March 31 June 30 September 30 December 31
(Dollars and shares in millions, except per share amounts)
Interest income:
Trading securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 449 $ 73 $ 234 $ 233
Available-for-sale securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727 1,035 789 748
Mortgage loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,570 32,023 30,593 29,520
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 40 53 65
Total interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,784 33,171 31,669 30,566
Interest expense:
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 32 38 40
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,545 27,711 26,314 24,967
Total interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,587 27,743 26,352 25,007
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,197 5,428 5,317 5,559
(Provision) benefit for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,000) 3,041 (2,079) 1,890
Net interest income after (provision) benefit for credit losses . . . . . . . . . . . . . . . . . . . . 3,197 8,469 3,238 7,449
Investment gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 131 134 106
Net other-than-temporary impairments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (64) (599) (38) (12)
Fair value gains (losses), net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 (2,449) (1,020) 209
Debt extinguishment losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34) (93) (54) (63)
Fee and other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 395 378 339
Non-interest income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 676 (2,615) (600) 579
Administrative expenses:
Salaries and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306 292 294 303
Professional services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 179 195 224
Occupancy expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 48 48 49
Other administrative expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 48 51 72
Total administrative expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564 567 588 648
Foreclosed property expense (income). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339 (70) (48) (475)
TCCA fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 26 78 134
Other expenses, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 212 207 151
Total expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,155 735 825 458
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,718 5,119 1,813 7,570
Less: Net loss (income) attributable to noncontrolling interest. . . . . . . . . . . . . . . . . 1 (5) 8 —
Net income attributable to Fannie Mae. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,719 5,114 1,821 7,570
Dividends distributed or available for distribution to senior preferred stockholder. . . . (2,817) (2,929) (2,929) (7,152)
Net (loss) income attributable to common stockholders (Note 11) . . . . . . . . . . . . . . . . $ (98) $ 2,185 $ (1,108) $ 418
(Loss) earnings per share:
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.02) $ 0.38 $ (0.19) $ 0.07
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.02) 0.37 (0.19) 0.07
Weighted-average common shares outstanding:
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,761 5,762 5,762 5,762
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,761 5,893 5,762 5,893
21. Subsequent Events
On January 23, 2014, we resolved our outstanding bankruptcy claims against Lehman Brothers Holdings, Inc. (“Lehman
Brothers”), which included securities law claims related to Lehman Brothers private-label securities and notes and mortgage
loan repurchase obligations, for an allowed amount of $2.15 billion. We expect to receive only a portion of this amount under
the terms of the Lehman Plan of Reorganization. To date, claims similar to ours have received approximately 19% of the
allowed amount, although we anticipate additional distributions in the future.
On February 7, 2014, we, along with FHFA and Freddie Mac, entered into a settlement agreement with Morgan Stanley and
certain related entities over legal claims relating to mortgage-backed securities that we and Freddie Mac purchased from
them. Pursuant to this agreement, Morgan Stanley paid us $625 million in February 2014.