It’s Time to Get Off Our Fannie

It’s Time to Get Off Our Fannie
Ira Sohn Conference
May 5, 2014
Disclaimer

The analyses and conclusions of Pershi

ng Square Capital Management, L.P. ("

Pershing Square") contained in this 

presentation are based on publicly available information. 

Pershing Square recognizes 

that there may be nonpublic 

information in the possession of the companies discussed in 

this presentation that could lead these companies and others 

to disagree with Pershing Square’s an

alyses, conclusions and opinions. This 

presentation and the information contained 

herein is not investment advice or a reco

mmendation or solicitation to buy or se

ll any securities. A

ll investments involve 

risk, including the loss of principal.

The analyses provided may include certain 

forward-looking statements, estimates and 

projections prepared with respect to, 

among other things, the historical and anti

cipated operating performance of the comp

anies discussed in this presentation, 

access to capital markets, mar

ket conditions and the values of assets and liab

ilities. Such stat

ements, estimates, and 

projections reflect various assumptions by

 Pershing Square concerning anticipated 

results that are inherently subject to 

significant economic, competitive, and other uncertainties and co

ntingencies and have been included solely for illustrative 

purposes. No representations, 

express or implied, ar

e made as to the accuracy or completeness of such statements, 

estimates or projections or with respect

 to any other materials herein and Pers

hing Square disclaims any liability with 

respect thereto. Actual resu

lts may vary materially from 

the estimates and projected r

esults contained herein. The 

information contained in this presentation 

may not contain all of the in

formation required in order 

to evaluate Fannie Mae or 

Freddie Mac and the proposal described in

 the presentation. The opinions, anal

yses, conclusions an

d proposals presented 

herein represent the views of Pershing Sq

uare and not those of any third party.

Funds managed by Pershing Square and it

s affiliates are invested in securities of Federal National Mortgage Association 

(“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“

Freddie Mac”). Pershing Square

 manages funds that are in 

the business of trading – buying and selling – securities and fina

ncial instruments. It is 

possible that there will be 

developments in the future that cause 

Pershing Square to change its position 

regarding Fannie Mae and Freddie Mac. 

Pershing Square may buy, sell, cover or otherwise change the 

form of its investment in Fannie

 Mae and Freddie Mac for any 

or no reason. Pershing Square hereby di

sclaims any duty to provide any updates or changes to the analyses contained here 

including, without limitation, the manner or type of any Pershing Square investment.

1Fannie Mae & Freddie Mac (GSE

-------------
Fannie Mae & Freddie Mac (GSEs)
2
f
Provide a guarantee on the credit
 risk of ~$5 trillion of U.S.
mortgages

~50% share of outstanding mortgages

~60% share of annual originations
f
Combined equity market cap
of ~$36bn including Treasury
warrants
f
Combined 2013 pre-tax earnings of ~$39bn

~$72bn of deferred tax assets
f
Operating in conservatorship since September 2008
f
Currently required to pay 100%
 of earnings to U.S. Treasury
f
U.S. Treasury owns warrants on
 79.9% of the common stock