Fannie Mae 2014 Annual Report Download - page 274

FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
F-59
agreement. In addition, Treasury may terminate its funding commitment and declare the senior preferred stock purchase
agreement null and void if a court vacates, modifies, amends, conditions, enjoins, stays or otherwise affects the appointment
of the conservator or otherwise curtails the conservator’s powers. Treasury may not terminate its funding commitment solely
by reason of our being in conservatorship, receivership or other insolvency proceeding, or due to our financial condition or
any adverse change in our financial condition.
Waivers and Amendments
The senior preferred stock purchase agreement provides that most provisions of the agreement may be waived or amended by
mutual written agreement of the parties. No waiver or amendment of the agreement, however, may decrease Treasury’s
aggregate funding commitment or add conditions to Treasury’s funding commitment if the waiver or amendment would
adversely affect in any material respect the holders of our debt securities or guaranteed Fannie Mae MBS.
Third-party Enforcement Rights
If we default on payments with respect to our debt securities or guaranteed Fannie Mae MBS and Treasury fails to perform its
obligations under its funding commitment, and if we and/or the conservator are not diligently pursuing remedies in respect of
that failure, the holders of these debt securities or Fannie Mae MBS may file a claim for relief in the United States Court of
Federal Claims. The relief, if granted, would require Treasury to fund to us the lesser of (1) the amount necessary to cure the
payment defaults on our debt and Fannie Mae MBS and (2) the lesser of (a) the deficiency amount and (b) the maximum
amount available under the agreement less the aggregate amount of funding previously provided under the commitment. Any
payment that Treasury makes under those circumstances would be treated for all purposes as a draw under the senior
preferred stock purchase agreement that would increase the liquidation preference of the senior preferred stock.
Accumulated Other Comprehensive Income
The following table displays our accumulated other comprehensive income as of December 31, 2014, 2013 and 2012.
As of December 31,
2014 2013 2012
(Dollars in millions)
Net unrealized gains on AFS securities for which we have not recorded OTTI, net of tax. . . . . $ 592 $ 365 $ 1,399
Net unrealized gains (losses) on AFS securities for which we have recorded OTTI, net of tax .1,529 1,262 (465)
Prior service cost and actuarial losses, net of amortization, net of tax. . . . . . . . . . . . . . . . . . . . . (358)(395)(505)
Other losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30)(29)(45)
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,733 $ 1,203 $ 384
The table below displays changes in accumulated other comprehensive income, net of tax, for the year ended December 31,
2014 and 2013.
For the Year Ended December 31,
2014 2013
Available-
for-Sale
Securities(1) Other(2) Total
Available-
for-Sale
Securities(1) Other(2) Total
(Dollars in millions)
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,627 $ (424) $1,203 $ 934 $ (550) $ 384
Other comprehensive income before
reclassifications . . . . . . . . . . . . . . . . . . . . . . . . 722 37 759 983 116 1,099
Amounts reclassified from other
comprehensive income. . . . . . . . . . . . . . . . . . . (228) (1)(229)(290) 10 (280)
Net other comprehensive income . . . . . . . . . . . 494 36 530 693 126 819
Ending balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,121 $ (388) $1,733 $ 1,627 $ (424) $ 1,203