Fannie Mae-No Politics (FNMA)

[kthomp19]

It's right there under the heading "LIABILITIES AND EQUITY (DEFICIT)" and then under "LIABILITIES", then under "Fannie Mae stockholders’ equity (deficit)". Same for junior preferred.

Senior preferred stock is listed after "Total liabilities" on every FnF 10-Q and 10-K I have ever read. Thus it isn't a liability at all. Look at the bottom of page F-3 (page 210 of the pdf) here:

Fannie Mae 2017 10-K

If it really was a liability it would have to be included in "total liabilities".

This part of the SPSPA:

(i) for the avoidance of doubt, in measuring the Deficiency Amount liabilities shall exclude
any obligation in respect of any capital stock of Seller, including the Senior Preferred
Stock contemplated herein

wasn't intended to say that "normally senior prefs are liabilities but for the purposes of this calculation they aren't included". It is to clarify that the senior prefs are not liabilities at all, the same way that no other classes of equity are liabilities either.

Exactly! It appears on both sides of the balance sheet as the same amount, thus having zero effect on net worth.

The draw cured the deficiency because assets increased and liabilities didn't. Since the deficiency went from 3,686M to zero then net worth had to increase by that amount.

Think about it this way: if someone dropped $100,000 in your lap then your net worth would increase by $100,000. You would add that amount to both assets (cash) and equity (retained earnings) and your balance sheet would still be balanced.

It is quite possible to increase net worth while leaving the balance sheet balanced. In fact, if it were not possible then no company could ever make money!