This is the accessible text file for the U.S. Department of the Treasury’s Office of Financial Stability (Troubled Asset Relief 

Program) Fiscal Years 2013 and 2012 Financial Statements, which was 

released on December 11, 2013. 

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GAO: 

United States Government Accountability Office: 

441 G St. N.W. 

Washington, DC 20548: 

OFS (TARP)

U. S. Department of the Treasury

1500 Pennsylvania Ave. N. W. 

Washington, DC  20220

The Department of the Treasury: 

Agency Financial Report: 

Office of Financial Stability--Troubled Asset Relief Program: 

Fiscal Year 2013: 

Figure: 2012 Certificate of Excellence: 

[Refer to PDF for image: snapshot of certificate] 

AGA Certificate of Excellence in Accountability Reporting: 

U.S. Department of the Treasury, Office of Financial Stability: 

In recognition of your outstanding efforts in preparing the Agency 

Financial Report and Summary of Performance and Financial Information 

for the fiscal year ending September 30, 2012. 

A Certificate of Excellence in Accountability Reporting is presented 

by AGA to federal government agencies whose Agency Financial Reports 

achieve the highest standards demonstrating accountability and 

communicating results. 

[End of figure] 

Table of Contents: 

Message From The Assistant Secretary For Financial Stability: 

Executive Summary: 

PART 1: Management’s Discussion and Analysis: 

Background, OFS Organization Structure and Programs: 

OFS Operational Goals: 

Operational Goal One: Complete the Wind?down of the Investment 

Programs: 

Capital Purchase Program: 

Targeted Investment Program: 

Asset Guarantee Program: 

Community Development Capital Initiative: 

Public Private Investment Program: 

Term Asset-Backed Securities Loan Facility: 

Small Business Administration 7(a) Securities Purchase Program: 

Automotive Industry Financing Program: 

American International Group (AIG) Investment Program: 

Operational Goal Two: Continue Helping Families in Need to Avoid 

Foreclosure: 

Operational Goal Three: Minimize Cost to Taxpayer: 

Operational Goal Four: Continue to Operate with the Highest Standards 

of Transparency,Accountability, and Integrity: 

Fiscal Year 2012 and 2013 Financial Summary and Cumulative Net Income: 

Key Trends/Factors Affecting TARP Future Activities and Ultimate Cost: 

Systems, Controls, and Legal Compliance: 

Limitations of the Financial Statements: 

Part 2: Financial Report: 

Message from the Chief Financial Officer (CFO): 

Government Accountability Office Auditor’s Report: 

Appendix I: Management’s Report on Internal Control Over Financial 

Reporting: 

Appendix II: OFS Response to Auditor’s Report: 

Financial Statements: 

Notes to the Financial Statements: 

Required Supplementary Information: 

Other Information – Schedule of Spending: 

Part 3: Appendices: 

Appendix A: TARP Glossary: 

Appendix B: Abbreviations and Acronyms: 

Websites: 

Message From The Assistant Secretary For Financial Stability: 

[Photograph of Timothy G. Massad] 

December 5, 2013: 

I am pleased to present the Office of Financial Stability's (OFS)

Agency Financial Report for the Fiscal Year 2013. This report 

describes our financial and performance results for the fifth year

of the Troubled Asset Relief Program (TARP). Within this report you 

will find the comparative fiscal years 2013 and 2012 financial 

statements for TARP, the Government Accountability Office's (GAO) 

audit opinion on these financial statements, a separate opinion from 

the GAO on OFS's internal control over financial reporting, and the 

results of the GAO's tests of OFS's compliance with selected 

provisions of laws, regulations, contracts, and grant agreements 

applicable to OFS. 

The Emergency Economic Stabilization Act (EESA) of 2008 established 

OFS within the Office of Domestic Finance at the Department of the 

Treasury to implement TARP. With the nation in the midst of the worst 

financial crisis since the Great Depression, TARP was created to 

"restore the liquidity and stability of the financial system." It was an

extraordinary response to an extraordinary crisis. 

Today, it is generally agreed that as a result of the forceful and 

coordinated response by the government through TARP and many other 

emergency programs, we helped avert what could have been a devastating 

collapse of our financial system. Although we are still repairing the 

damage from the crisis and many families still face challenges on a 

daily basis, the financial system is much more stable and our economy 

is growing, albeit not as fast as we would like. Credit is more 

available than would otherwise be case for families, businesses, and 

local governments, banks are better capitalized, and we are 

implementing reforms to address the underlying causes of the crisis. 

In addition, OFS has made significant progress towards winding down 

TARP investments. As of September 30, 2013, OFS had collected 96.2 

percent of the $421.6 billion in program funds that were disbursed 

under TARP, as well as an additional $17.5 billion from Treasury's 

equity in AIG. Here is where we stand concerning the four categories 

of TARP investment programs: 

* Banking Programs: OFS has collected a total of $273.4 billion 

(including $6.4 billion collected in fiscal year 2013) for all TARP 

bank support programs through repayments, sales, dividends, interest, 

and other income compared to $245.5 billion invested. As of September 

30, 2013, $3.6 billion in banking program investments remained 

outstanding, primarily in community banks, and OFS is continuing to 

wind-down these investments through repurchases by banks, asset sales, 

and restructurings. 

* Credit Market Programs. OFS substantially completed the wind-down of 

all of the TARP credit market programs, including investments made 

under the Public-Private Investment Program (PPIP), Term Asset-Backed 

Securities Loan Facility (TALF) program, and SBA 7(a) Securities 

Purchase Program. As of the end of fiscal year 2013, OFS collected 

$23.5 billion as compared to $19.1 billion of disbursements under 

these programs. 

* Auto Industry Financing Program. As of September, 302013, OFS has 

collected $53.3 billion through sales, repayments, dividends, 

interest, and other income, compared to the $79.7 billion in funds 

that were disbursed under the Automotive Industry Financing Program 

(AIFP). Chrysler exited the program in July 2011 and the wind-down of 

General Motors (GM) is anticipated to be completed by December 31, 

2013. In November 2013, OFS received additional repayment of $5.9 

billion from Ally Financial Inc. (Ally) under an agreement announced 

in August. As a result, OFS has recovered over 70% of the investment 

in Ally Financial Inc. (Ally) through repayments, dividends, and 

proceeds in excess of costs. OFS is actively seeking to wind-down the 

remaining investment in Ally. 

* American International Group. In fiscal year 2013, OFS exited all 

remaining holdings in American International Group, Inc. (AIG). During 

the financial crisis, the peak amount of assistance provided by OFS 

and the Federal Reserve to prevent the collapse of AIG totaled $182.3 

billion, a part of which was later canceled. As a result of the 

combined efforts of AIG, Treasury, and the Federal Reserve, $22.7 

billion in excess of the total of funds disbursed to AIG has been 

recovered through sales and other income. Of the $67.8 billion total 

disbursed to AIG by OFS, TARP's cumulative net proceeds from 

repayments, sales, dividends, interest, and other income related to 

AIG assets totaled $55.3 billion. As Treasury's non-TARP AIG shared 

generated proceeds in excess of cost of $17.5 billion, total net 

proceeds in excess of cost were $5.0 billion for Treasury as a whole. 

While OFS carefully winds down the investment programs under TARP, we 

are continuing to implement the TARP Housing Programs to help millions 

of struggling homeowners avoid foreclosure, primarily through mortgage 

modifications and other forms of assistance. These programs (including 

government sponsored enterprise (GSE and non-GSE) have also set new 

mortgage modification and consumer protection standards which have 

helped to transform the mortgage servicing industry and thereby help 

millions more families. On May 30, 2013, the Obama Administration 

extended the application deadline for the Making Home Affordable 

Program through December 2015 in order to provide struggling 

homeowners additional time to access sustainable mortgage relief. 

The financial and performance data contained in this report are 

reliable and complete. For the fifth consecutive year, OFS has earned 

unmodified opinions on its financial statements and its internal 

control over financial reporting from the GAO. In 2013, OFS was also

awarded its fourth consecutive Certificate of Excellence in 

Accountability Reporting by the Association of Government Accountants. 

This marks my last financial report, as I will step down as Assistant 

Secretary for Financial Stability this month. Since the spring of 

2009, it has been an honor and privilege to serve my country by 

helping to respond to this terrible financial crisis. TARP did what it 

was supposed to do--it helped to stabilize our financial system and it 

did so faster, better and cheaper than most people expected. We should 

never forget the true costs of the financial crisis in human suffering 

and economic damage--the jobs lost, the foreclosed homes, the

college educations that could not be financed, and the retirements 

that must be postponed. But without the government's forceful 

response, the damage would have been far worse and the costs to repair 

that damage would have been far higher. 

Sincerely, 

Signed by: 

Timothy G. Massad: 

Assistant Secretary for Financial Stability: 

[End of section] 

Executive Summary: 

The U.S. Department of Treasury’s (Treasury), Office of Financial 

Stability (OFS) presents to the reader the fiscal year 2013 Agency 

Financial Report (AFR) for the Troubled Asset Relief Program (TARP). 

The enclosed Management’s Discussion and Analysis (MD&A) is required 

supplementary information to the financial statements and provides a 

high level overview of OFS, which is the office within the Treasury 

that was established to implement TARP, pursuant to the Emergency 

Economic Stabilization Act of 2008 (EESA). 

Five years ago, the U.S. financial system faced challenges on a scale 

not seen since the Great Depression. The banks and financial markets 

that American families and businesses rely on to meet their everyday 

financing needs were on the brink of failure. By October 2008, major 

financial institutions were threatened and many of them tried to shore 

up their balance sheets by shedding risky assets and hoarding cash. 

People were rapidly losing trust and confidence in the stability of 

America’s financial system and the capacity of the government to 

contain the damage. Without immediate and forceful action by the 

federal government, the U.S. economy faced the risk of falling into a 

second Great Depression. 

It was out of these extraordinary circumstances in the fall of 2008 

that TARP was created as a central part of a series of emergency 

measures by the federal government. Collectively, TARP and the federal 

government’s other emergency programs helped to prevent the collapse 

of our financial system. As a result of the careful design, 

implementation, and coordination of these programs, the federal 

government was able to limit the broader financial and economic damage 

caused by the crisis. Although we are still recovering, these measures 

were critical to restarting economic growth, and in restoring access 

to capital and credit. 

Since late 2010 when OFS’s authority to make new commitments under 

TARP expired, OFS has focused on carefully winding down TARP’s 

investment programs, recovering the OFS’s outstanding investments, and 

continuing to implement the various housing programs under TARP to 

help struggling homeowners avoid foreclosure. While the total 

disbursed for TARP programs was $421.6 billion, OFS has collected 

$405.5 billion (or $423.0 billion if including the $17.5 billion in 

proceeds from the additional Treasury AIG shares discussed on page 14) 

through repayments, sales, dividends, interest, and other income. As 

of September 30, 2013, only $23.5 billion in investments remain 

outstanding. 

The MD&A highlights the establishment of OFS, its background, mission, 

organizational structure, and programs. OFS administers programs that 

fall into two major categories: Investment and Housing. In total, OFS 

has responsibility for 12 individual programs. Most of these programs 

have either been closed or are in the process of winding down. 

Each year, OFS reports on our Operational Goals, which were developed 

by management to achieve our strategic goal of ensuring the overall 

stability and liquidity of the financial system, preventing avoidable 

foreclosures, and by preserving homeownership. The first operational 

goal for OFS is to complete the wind-down of the TARP investment 

programs. OFS is continuing to implement the three-pronged exit 

strategy, announced in May 2012, for the Capital Purchase Program 

(CPP). That strategy includes waiting for those banks that are able to 

repay in full in the near future to do so, restructuring OFS’s 

investments in limited cases, and selling investments through auctions 

in cases where the bank is not expected to repay in the near future. 

As of September 30, 2013, both the Targeted Investment Program (TIP) 

and the Asset Guarantee Program (AGP) were closed and have generated 

positive returns on behalf of taxpayers. 

As of September 30, 2013, OFS has substantially completed the wind-

down of the three TARP credit market programs which resulted in a 

positive return on behalf of taxpayers. OFS has recovered all debt and 

equity investments made in the Public-Private Investment Program 

(PPIP). OFS’s loan commitment made through the Term Asset-Backed 

Securities Loan Facility (TALF) was fully repaid or extinguished 

during fiscal year 2013. The Small Business Administration 7(a) 

Securities Purchase Program (SBA 7(a)) was successfully closed during 

fiscal year 2012 with the processing of the fifth and final 

disposition of securities. 

OFS continues to wind-down the Automotive Industry Financing Program 

(AIFP) with the sale of 399 million shares of GM common stock during 

fiscal year 2013. These sales were conducted according to the plan 

announced in December 2012 to sell OFS’s remaining shares in GM within 

the next 12-15 months, subject to market conditions. In November 2013, 

per an August 2013 agreement, OFS collected a total of $5.9 billion 

from Ally, as it repurchased all of its MCP stock from OFS and paid 

the agency to eliminate certain rights under the original agreement. 

OFS is actively seeking to wind-down the remaining investment. 

OFS exited its remaining holdings in the American International Group, 

Inc. (AIG) Investment Program in December 2012 and sold remaining 

warrants in March 2013. As of September 30, 2013, OFS does not hold 

any residual interest in AIG. 

OFS’s second operational goal is to continue helping struggling 

homeowners avoid foreclosure. The Making Home Affordable Program (MHA) 

is helping homeowners and assisting in stabilizing the housing market. 

On May 30, 2013, the Administration extended the application deadline 

for MHA programs through December 31, 2015, to provide struggling 

homeowners additional time to access sustainable mortgage relief, and 

to align the end date with other key assistance programs. The largest 

program within MHA is the Home Affordable Modification Program (HAMP). 

Under this program more than 1.4 million homeowners have had their 

mortgages modified permanently. HAMP has also set new standards and 

changed practices throughout the mortgage servicing industry in 

fundamental ways. In addition, the Hardest Hit Fund provides funding 

to 18 states and the District of Columbia to provide assistance to 

struggling homeowners through locally-tailored programs. All 19 

programs are fully operational and have created extensive 

infrastructures to operate these programs, including selecting and 

training networks of housing counselors to assist with applications, 

creating portals to aid homeowners in applying for assistance, and 

hiring underwriters and other staff to review and approve applications. 

The third operational goal of OFS is to minimize the cost of the TARP 

programs to the taxpayer. OFS manages TARP investments to minimize 

costs to taxpayers by carefully managing the timely exit of these 

investments to reduce taxpayers’ exposure, returning TARP funds to 

reduce the federal debt, and continuing to replace government 

assistance with private capital in the financial system. OFS has taken 

a number of steps during fiscal years 2012 and 2013 to dispose of its 

outstanding investments in a manner that balances the need to exit 

these investments as quickly as practicable with maximizing returns on 

behalf of taxpayers. OFS also takes steps to ensure that TARP 

recipients comply with any TARP-related statutory or contractual 

obligations such as executive compensation requirements and 

restrictions on dividend payments. 

OFS’s final goal is to continue to operate with the highest standards 

of transparency, accountability, and integrity. OFS posts a variety of 

reports online that provide the reader with regular and comprehensive 

information about how TARP funds are being spent, who has received 

them and on what terms, and how much has been collected to date. As 

part of this effort, in June 2013, OFS enhanced and expanded the 

existing TARP Tracker on its website to enable users to view the flow 

of funds for a specific time period or over the lifetime of a TARP 

program. OFS also publishes the audited annual report. In addition, 

OFS continues to maintain productive working relationships with three 

oversight bodies charged with auditing and reviewing the TARP 

activities. 

In addition to discussing program performance, the MD&A also addresses 

OFS’s financial performance in the Fiscal Year 2013 and 2012 Financial 

Summary and Cumulative Net Income section. OFS provides an overview of 

its financial data and explains its fiscal year 2013 net income from 

operations and related loans, equity investments and other credit 

programs. 

Finally, the Systems, Controls, and Legal Compliance section of the 

MD&A provides a discussion of the actions OFS has taken to address its 

management control responsibilities. This section includes OFS’s 

assurance related to the Federal Manager’s Financial Integrity Act, 

the determination of its compliance with both the Federal Financial 

Management Improvement Act and the Improper Payment Elimination and 

Recovery Act. 

[End of section] 

Part 1: Management’s Discussion And Analysis: 

Background, OFS Organization Structure and Programs: 

Background: 

In response to the worst financial crisis since the Great Depression, 

the Troubled Asset Relief Program (TARP) was created pursuant to the 

Emergency Economic Stabilization Act (EESA) on October 3, 2008. To 

carry out the authorities given to the Secretary of the Treasury to 

implement TARP, the U.S. Department of the Treasury (Treasury) 

established the Office of Financial Stability (OFS) within the Office 

of Domestic Finance. EESA authorized the Secretary of the Treasury to 

establish TARP to "purchase, and to make and fund commitments to 

purchase, troubled assets from any financial institution, on terms and 

conditions as are determined by the Secretary" to restore the liquidity 

and stability of the financial system. The terms "troubled assets" and 

"financial institution" are defined within EESA, which can be found 

at: [hyperlink, 

http://www.gpo.gov/fdsys/pkg/BILLS-110hr1424enr/pdf/BILLS-

110hr1424enr.pdf]. In addition, Section 109 of EESA provides authority 

to assist homeowners. 

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the 

Dodd-Frank Act), signed into law in July 2010, reduced total TARP 

purchase authority from $700 billion to a cumulative $475 billion. 

OFS's authority to make new commitments under TARP expired on October 

3, 2010. OFS is carefully managing the disposition of TARP financial 

assets to recover OFS's outstanding investments while continuing to 

implement initiatives to help struggling homeowners avoid foreclosure. 

OFS Organization Structure: 

OFS is headed by the Assistant Secretary for Financial Stability. 

Reporting to the Assistant Secretary are six major organizations the: 

Office of the Chief Investment Officer, Office of Finance and 

Operations, Office of the Chief of Home Ownership Preservation, Office 

of Financial Agents, Office of the Chief Reporting Officer, and Office 

of the Chief Compliance Officer. A Chief Counsel's Office also reports 

to the Assistant Secretary and to the Office of the General Counsel in 

the Department of the Treasury. 

OFS is not envisioned as a permanent organization, so to the maximum 

extent possible when economically efficient and appropriate, OFS 

utilizes private sector expertise in support of the execution and 

liquidation of TARP programs. These firms assist in the areas of 

custodial services, accounting and internal controls, administrative 

support, legal advisory, financial advisory, and information 

technology. 

The OFS organization chart follows: 

Top level: 

Assistant Secretary for Financial Stability: 

* Chief Counsel. 

Second level, reporting to Secretary for Financial Stability: 

* Office of Finance and Operations; 

* Office of the Chief of Home Ownership Preservation; 

* Office of Financial Agents; 

* Office of the Chief Reporting Officer; 

* Office of the Chief Compliance Officer. 

[End of figure] 

OFS Programs: 

Bank Support Programs (CPP, TIP, AGP, CDCI, CAP, SCAP): 

By late September 2008, several major financial institutions had 

already failed. Many others were at risk of failure and people were 

rapidly losing confidence in the nation's financial system as a whole. 

Therefore beginning in early October 2008, OFS launched five programs 

to help stabilize the nation's banking institutions. A total of $245.5 

billion was invested through TARP bank support programs. 

Capital Purchase Program: 

The Capital Purchase Program (CPP) was launched in October 2008 to help 

stabilize the financial system by providing capital to viable financial 

institutions of all sizes throughout the nation. Without a viable 

banking system, lending to businesses and consumers could have frozen 

and the financial crisis might have spiraled further out of control. 

Based on market indicators at the time, it was clear that financial 

institutions needed additional capital to absorb losses and restart the 

flow of credit to businesses and consumers to avert a potential 

collapse of the system. 

With the additional capital, CPP participants were better equipped to 

undertake new lending and continue to provide other services to 

consumers and businesses, even while absorbing write-downs and charge-

offs on loans that were not performing. OFS received preferred stock or 

debt securities in exchange for the CPP investments. Most financial 

institutions participating in the CPP pay OFS a five percent dividend 

on preferred shares for the first five years and a nine percent rate 

thereafter. In addition, OFS received warrants to purchase common 

shares or other securities from the banks at the time of the CPP 

investment. The purpose of the additional securities was to enable OFS 

to receive additional returns on its investments as banks recover.OFS 

has focused on winding down the CPP according to the exit strategy 

announced on May 3, 2012. That strategy includes a combination of 

repayments in the case of banks which are expected to repay in the near 

future, selling OFS's positions in banks that are unlikely to repay in 

the near-term through auctions, and restructuring some investments, 

typically in connection with a merger or other plan of the bank to 

infuse capital, in a way that maximizes timely OFS collections and 

helps avoid bank failures. 

Targeted Investment Program: 

OFS established the Targeted Investment Program (TIP) in December 2008. 

The program gave OFS the necessary flexibility to provide funding to 

financial institutions that were critical to the functioning of the 

U.S. financial system to prevent a loss of confidence in these critical 

institutions. This could have resulted in substantial disruption to 

financial markets, threatened the financial strength of similarly 

situated financial institutions and undermined the overall economy. 

OFS invested a total of $40.0 billion in two institutions - Bank of 

America (BofA) and Citigroup - under the TIP. These investments were 

made in addition to those that the banks received under the CPP. 

Similar to the CPP, OFS invested in preferred stock and received 

warrants to purchase common stock in each institution. 

The TIP investments provided for annual dividends of eight percent, 

which was higher than the initial CPP rate. The program also imposed 

greater reporting requirements and more onerous terms on the companies 

than under the CPP terms, including restricting common stock dividends 

to $0.01 per share per quarter, restrictions on executive compensation, 

restrictions on corporate expenses, and other measures. 

Asset Guarantee Program: 

Under the Asset Guarantee Program (AGP), TARP commitments were used to 

support two institutions - BofA and Citigroup. They were selected 

because of the large number of illiquid assets that both of them held 

at the time of the financial crisis and the severe impact that their 

failure would have had on the broader economy. In January 2009, OFS, 

the Federal Reserve, and the Federal Deposit Insurance Corporation 

(FDIC) agreed in principle to share potential losses on a $118 billion 

pool of financial instruments owned by BofA. However, in May 2009, 

before the transaction was finalized, BofA decided to terminate 

negotiations, and in September 2009, the government and BofA entered 

into an agreement under which the bank agreed to pay a termination fee 

of $425 million to the government, $276 million of which went to OFS. 

In January 2009, OFS, the Federal Reserve, and the FDIC similarly 

agreed to share potential losses on a $301 billion pool of Citigroup's 

covered assets. The arrangement was finalized and, as a premium for 

the guarantee, OFS and the FDIC received $7.0 billion of Citigroup 

preferred stock of which $2.2 billion was OFS's portion. OFS also 

received warrants to purchase 66.5 million shares of common stock. 

Community Development Capital Initiative: 

OFS created the Community Development Capital Initiative (CDCI) on 

February 3, 2010, to help viable certified Community Development 

Financial Institutions (CDFIs) and the communities they serve cope with 

effects of the financial crisis. It was put in place to help keep day-

to-day financing available to families and businesses in hard-hit 

communities that are underserved by traditional banks. 

Since many CDFIs don't have the same access to capital markets as 

larger banks, the CDCI was designed with more generous terms than the 

CPP. Under this program, CDFI banks, thrifts, and credit unions 

received investments aggregating $570 million in capital with an 

initial dividend or interest rate of two percent, compared to the five 

percent rate offered under the CPP. To encourage repayment while 

recognizing the unique circumstances facing CDFIs, the dividend rate 

increases to nine percent after eight years, compared to after five 

years under the CPP. CDFIs that participated in the CPP and were in 

good standing were allowed to exchange their CPP securities for 

securities under the more favorable terms of this program. 

Capital Assistance Program (CAP) and the Supervisory Capital Assessment 

Program (SCAP): 

In 2009, Treasury worked with federal banking regulators to develop a 

comprehensive "stress test" known as the Supervisory Capital Assessment 

Program (SCAP). The purpose of the SCAP was to determine the health of 

the nation's 19 largest bank holding companies with unprecedented 

transparency and help restore confidence in the banking system. In 

conjunction with the SCAP, Treasury announced that it would provide 

capital under TARP through the Capital Assistance Program (CAP) to 

those institutions that needed additional capital but were unable to 

raise it through private sources. The CAP closed on November 9, 2009, 

without making any investments. 

For additional information on the bank support programs please visit 

the OFS website at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-stability/TARP-

Programs/bank-investment-programs/Pages/default.aspx]. 

Credit Market Programs (PPIP, TALF, SBA 7(a)): 

As the financial crisis reached its peak, banks were not making new 

loans to businesses, or even to one another. As a result, many 

businesses could not get loans for new investments, municipalities and 

state governments could not issue bonds at reasonable rates, and 

families could not get credit. The securitization markets--which 

provide financing for credit cards, student loans, auto loans, and 

other consumer loans as well as small business loans--had basically 

stopped functioning. OFS launched three programs in 2009 to help 

unfreeze these markets and bring down the cost of borrowing for 

families and businesses: the Public-Private Investment Program (PPIP), 

the Term Asset-Backed Securities Loan Facility (TALF), and the SBA 7(a) 

Securities Purchase Program. Although the specific goals and 

implementation methods of each program differed, the overall goal of 

these three programs was the same--to restart the flow of credit to 

meet the critical needs of small businesses and consumers. 

Public-Private Investment Program: 

On March 23, 2009, OFS launched the Legacy Securities Public-Private 

Investment Program (PPIP) to help restart the market for non-agency 

residential mortgage-backed securities (RMBS) and commercial mortgage-

backed securities (CMBS), thereby allowing banks and other financial 

institutions to re-deploy capital and extend new credit to households 

and businesses. 

The purpose of PPIP was to draw new private capital into the market for 

legacy RMBS and CMBS by providing financing on attractive terms as well 

as a matching equity investment from OFS. Using up to $22.1 billion of 

TARP funds alongside equity capital raised from private investors, PPIP 

was designed to generate significant purchasing power and demand for 

troubled RMBS and CMBS. This in turn would help to increase the amount 

of credit available to consumers and small businesses. 

Term Asset-Backed Securities Loan Facility: 

The Term Asset-Backed Securities Loan Facility (TALF) is a joint OFS-

Federal Reserve program that was designed to restart the asset-backed 

securities (ABS) and commercial mortgage-backed securities (CMBS) 

markets that had ground to a virtual standstill during the early months 

of the financial crisis. 

Under the TALF, the Federal Reserve Bank of New York (FRBNY) provided 

non-recourse funding to any qualified borrower that owned eligible 

collateral. On fixed days each month, borrowers were allowed to request 

three-year, or in certain cases, five-year TALF loans. If the borrower 

did not repay the loan, the FRBNY would enforce its rights to the 

collateral and sell it to TALF, LLC-a special purpose vehicle (SPV) 

established specifically to purchase and manage these assets. OFS 

initially committed $20.0 billion in subordinated loans to the SPV but 

did not directly lend to TALF borrowers. 

Small Business Administration 7(a) Securities Purchase Program: 

OFS launched the Small Business Administration (SBA) 7(a) Securities 

Purchase Program to help facilitate the recovery of the secondary 

market for small business loans, and thus help free up credit for small 

businesses. Under this program, OFS purchased securities comprised of 

the guaranteed portion of SBA 7(a) loans, which finance a wide range of 

small business needs, including working capital, machinery, equipment, 

furniture, and fixtures. OFS invested approximately $367 million in 31 

SBA 7(a) securities between March and September 2010. These securities 

were comprised of 1,001 loans from 17 different industries, including 

retail, food services, manufacturing, scientific and technical 

services, healthcare, and educational services. Through its purchases, 

OFS injected liquidity into this market to help restart the flow of 

credit, enabling pool assemblers to purchase additional small business 

loans from loan originators. 

For additional information on the credit market programs, please visit 

the OFS website at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-stability/TARP-

Programs/credit-market-programs/Pages/default.aspx]. 

Automotive Industry Financing Program (AIFP): 

The Automotive Industry Financing Program (AIFP) was launched in 

December 2008 to help prevent the disorderly liquidations of General 

Motors (GM) and Chrysler, and thus significant disruption of the U.S. 

auto industry. The potential for such a disruption at that time posed a 

significant risk to financial market stability and threatened the 

overall economy. It could have also had disastrous consequences for 

other auto manufacturers and the many suppliers and other businesses 

that depended on the automotive industry. This could have led to a loss 

of as many as one million American jobs. Recognizing that both GM and 

Chrysler were on the verge of collapse, OFS extended loans to both 

companies and their financing entities. 

In 2009, OFS agreed to provide additional funds conditioned on each 

company and its stakeholders participating in a fundamental 

restructuring. Sacrifices were made by unions, dealers, creditors and 

other stakeholders, and the restructurings were achieved through 

bankruptcy court proceedings in record time. In total OFS disbursed 

$79.7 billion in loans and equity investments to GM, Chrysler, and 

General Motors Acceptance Corporation (now known as Ally Financial). As 

a result, General Motors Company (New GM), Chrysler Group LLC (New 

Chrysler), and Ally are more competitive and viable companies, 

supporting American jobs and the economy. Operating results have 

improved, the industry added jobs, and TARP investments are being 

repaid. 

For additional information on the AIFP, please visit the OFS website 

at: [hyperlink, http://www.treasury.gov/initiatives/financial-

stability/TARP-Programs/automotive-programs/Pages/default.aspx]. 

American International Group, Inc. (AIG) Investment Program: 

On September 15, 2008, Lehman Brothers filed for bankruptcy. This 

triggered the start of a run on money market funds generally. The day 

after that, AIG - one of the largest and most complex financial firms 

in the world - was on the verge of failure. Confidence was already 

fragile in the financial system as a whole and firms were trying to 

shore up their balance sheets by selling risky assets, reducing 

exposure to other financial institutions, and hoarding cash. At the 

time, AIG was one of the most complex financial firms in the world 

providing credit for other financial products. When the financial 

crisis hit, AIG had hundreds of billions of dollars in commitments 

without the capital and liquid assets to back them up. Millions of 

people depended on AIG for their life savings and it had a huge 

presence in many critical financial markets, including municipal bonds. 

Therefore, with AIG facing potentially fatal liquidity problems and 

with the crisis threatening to intensify and spread more broadly 

throughout the economy, OFS and the Federal Reserve provided assistance 

to AIG. This assistance was provided because the consequences of a 

company of AIG's size and scope failing at that time, in those 

circumstances, would have had far-reaching and catastrophic effects for 

the economy and for American families and businesses. 

During this time, the Federal Reserve and OFS took a series of steps to 

prevent AIG's disorderly failure and mitigate the systemic risks. The 

initial assistance to AIG was provided by the FRBNY before the passage 

of EESA and the creation of TARP. After EESA became law, OFS and the 

FRBNY continued to work together to address the challenges posed by 

AIG. In 2008 and 2009, OFS funds were used to provide further support 

to AIG. In fiscal year 2011, OFS, the FRBNY, the trustees of the AIG 

Credit Facility Trust (the Trust)[Footnote 1] and AIG completed a 

restructuring of the assistance provided by OFS and the FRBNY. A series 

of integrated transactions and corporate actions were executed to 

accelerate the repayment of U.S. taxpayer funds and to promote AIG's 

transition from a majority government owned and supported entity to a 

financially sound and independent entity. Following the restructuring, 

OFS's total investment in AIG was $67.8 billion. 

For additional information on the AIG Investment Program, please visit 

the Office of Financial Stability website at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-stability/TARP-

Programs/aig/Pages/default.aspx]. 

Housing Programs: 

OFS established several housing programs under TARP to address the 

historic housing crisis and help struggling homeowners avoid 

foreclosure wherever possible. These programs have helped homeowners 

avoid foreclosure and introduced important new reforms for the mortgage 

servicing industry to help make mortgage modifications become more 

sustainable and affordable. 

Making Home Affordable (MHA): 

In early 2009, OFS launched the Making Home Affordable® Program (MHA) 

to help struggling homeowners avoid foreclosure and stabilize the 

housing market. MHA is only one part of the Administration's broader 

efforts to strengthen the housing market. Since its inception, MHA has 

helped homeowners avoid foreclosure by providing a variety of solutions 

to modify or refinance their mortgages, get temporary forbearance if 

they are unemployed, or transition out of homeownership through a short 

sale or a deed-in-lieu of foreclosure. OFS has committed $29.9 billion 

under the MHA program. 

MHA is aimed at helping homeowners who are experiencing financial 

hardships to remain in their homes until their financial position 

improves or they relocate to a more sustainable living situation. In 

most cases, this means making their monthly mortgage payments more 

affordable and sustaining those new mortgage terms over time so 

homeowners can avoid the pain and substantial cost of foreclosure. At 

the same time, MHA protects the interests of taxpayers by disbursing 

funds only when transactions are completed and only as long as those 

contracts remain in place. Therefore, funds will be disbursed over many 

years. 

The cornerstone of MHA is the Home Affordable Modification Program 

(HAMP), which provides eligible homeowners the opportunity to reduce 

their monthly mortgage payments to more affordable levels. OFS also 

introduced additional programs under MHA to help homeowners who are 

unemployed, "underwater" on their loan (those who owe more on their 

home than it is currently worth), or are struggling with a second lien. 

It also includes options for homeowners who would like to transition to 

a more affordable living situation through a short sale or deed-in-lieu 

of foreclosure. In early 2012, the Administration announced important 

enhancements to MHA that expanded the pool of eligible borrowers. 

Extending the reach of HAMP will assist a broader pool of struggling 

homeowners, offer support for tenants at risk of displacement due to 

foreclosure, and provide more robust relief to those who participate. 

On May 30, 2013, the Administration extended the application deadline 

for MHA programs to December 31, 2015. Extending the program for two 

years will benefit many additional families while maintaining clear 

standards and accountability for the mortgage industry. Taken together, 

these enhancements will help the housing market recover faster from an 

unprecedented crisis. 

In addition to HAMP, MHA includes several additional programs to help 

homeowners refinance or address specific types of mortgages, in 

conjunction with the Federal Housing Administration (FHA), the United 

States Department of Agriculture (USDA), and the Department of Veterans 

Affairs (VA). 

Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit 

Housing Markets (Hardest Hit Fund): 

The Administration established the Hardest Hit Fund in February 2010 to 

provide targeted aid to homeowners in states hit hardest by the 

economic and housing market downturn. As part of the Administration's 

overall strategy for restoring stability to housing markets, the 

Hardest Hit Fund provides funding for state Housing Finance Agencies 

(HFAs) to develop locally-tailored foreclosure prevention solutions in 

areas that have been hardest hit by home price declines and high 

unemployment. From its initial announcement, this program evolved from 

a $1.5 billion initiative focused on HFAs in the five states with the 

steepest home price declines and the vast majority of underwater 

homeowners to a broader-based $7.6 billion initiative encompassing 18 

states and the District of Columbia (DC). 

Hardest Hit Fund programs vary state to state, but may include such 

programs as mortgage payment assistance for unemployed or underemployed 

homeowners, principal reduction to help homeowners get into more 

affordable mortgages, funding to eliminate homeowners' second lien 

loans, funding for blight elimination activities, and help for 

homeowners who are transitioning out of their homes and into more 

affordable living situations. 

For additional information on the housing programs, please visit the 

OFS website at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-stability/TARP-

Programs/housing/Pages/default.aspx]. 

[End of section] 

OFS Operational Goals: 

OFS's Operational Goals were developed by management to achieve our 

strategic goal to ensure the overall stability and liquidity of the 

financial system, prevent avoidable foreclosures, and preserve 

homeownership. The following discussion of OFS operational goals 

focuses largely on the significant events that occurred during fiscal 

years 2013 and 2012. A more comprehensive discussion of each program, 

including its development and prior years' performance, can be found in 

the TARP Four Year Retrospective which is available at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/default.aspx]. 

Operational Goal One: Complete the Wind-down of the Investment 

Programs: 

Banking Support Programs: 

OFS disbursed a total of $245.5 billion under the various TARP bank 

programs. As of September 30, 2013, OFS has collected more than $273.4 

billion through repayments, dividends, interest, warrant sales, and 

other income, representing $27.9 billion in excess of disbursements. No 

more taxpayer money is being invested in banks under TARP. The final 

investment under the CPP - the largest bank program under TARP - was 

made in December 2009. OFS is focused on recovering TARP funds in a 

manner that continues to promote the nation's financial stability while 

maximizing returns on behalf of the taxpayers. 

Capital Purchase Program: 

In fiscal year 2013, OFS made substantial progress winding down the CPP 

according to the three-pronged exit strategy announced in May 2012 and 

described in further detail below. From inception of the program 

through September 30, 2013, OFS has received $197.9 billion in CPP 

repayments/sales, along with $12.0 billion in dividends and interest, 

and $14.7 billion of proceeds in excess of cost totaling $224.7 

billion. As of September 30, 2013, $3.1 billion in CPP gross 

investments remained outstanding, including 24 institutions that are in 

bankruptcy or receivership, representing an aggregate investment of 

$771 million that is currently not collectible. 

Under this program, OFS provided capital to 707 financial institutions 

in 48 states, Puerto Rico, and DC, including more than 450 small and 

community banks and 22 CDFIs. The largest investment was $25.0 billion 

and the smallest was $301,000. 

OFS received preferred stock or debt in each bank in which it made an 

investment, as well as warrants. Under the terms of the CPP, 

participating financial institutions may repay the funds they received 

at any time, so long as they have the approval of their regulators. OFS 

cannot demand repayment of CPP preferred stock, nor is OFS's approval 

required for financial institutions to repay. 

OFS announced a three-pronged exit strategy for the program on May 3, 

2012. That strategy includes waiting for those banks that are capable 

of repaying in the near future to repay at par, selling banking 

investments to private investors through auctions in cases where the 

bank is not expected to be able to repay in the near future, and, in a 

limited number of cases, restructuring investments. Throughout fiscal 

year 2013, OFS continued to implement that exit strategy by 

periodically selling preferred stock and subordinated debt in CPP 

participants through both public and private auctions. OFS held 14 

auctions with combined proceeds of $1.5 billion during fiscal year 2013 

compared to 6 auctions with $1.3 billion in proceeds in fiscal year 

2012. During fiscal year 2013 and 2012, 173 and 96 investments were 

repaid or sold for a total of $4.8 billion and $8.2 billion, 

respectively. 

Another component of OFS's exit strategy for the CPP is to restructure 

certain investments in limited cases when the terms result in the best 

return for taxpayers. This is typically done in connection with a 

merger or the bank's plan to raise new capital and is generally 

proposed by the bank. OFS agrees to receive cash (sometimes at a 

discount to the original par value of the investment) or other 

securities, which can be more easily sold. 

Under the CPP, OFS has also received warrants to purchase common shares 

or other securities from the banks. OFS has followed a policy of 

disposing of warrants as soon as practicable if no agreement is reached 

on a repurchase. As of September 30, 2013, OFS has collected $7.9 

billion in net proceeds from the sale of warrants since inception. OFS 

periodically releases a Warrant Disposition Report that provides detail 

about its sale of warrants. These reports can be found at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/Warrant-Disposition-Reports.aspx]. 

Additional information on the CPP, including details on the programs 

purpose, overview, and status can be found at the following website: 

[hyperlink, http://www.treasury.gov/initiatives/financial-

stability/TARP-Programs/bank-investment-

programs/cap/Pages/default.aspx]. 

Targeted Investment Program: 

OFS completed the wind-down of the TIP in December 2009 when both BofA 

and Citigroup repaid their TIP investments in full. This resulted in 

net proceeds of $4.4 billion in excess of disbursements. OFS received 

$3.0 billion in total TIP dividends during the life of the program. OFS 

also received warrants from each institution which provided additional 

returns on the investments. OFS sold the BofA warrants in fiscal year 

2010 for $1.2 billion and the Citigroup warrant in fiscal year 2011 for 

$190 million. Additional information on TIP, including details on the 

programs purpose, overview, and status can be found at the following 

website: [hyperlink, http://www.treasury.gov/initiatives/financial-

stability/TARP-Programs/bank-investment-

programs/tip/Pages/default.aspx]. 

Asset Guarantee Program: 

As of September 30, 2013, OFS has fully wound down the AGP and received 

more than $4.1 billion in proceeds from the AGP without disbursing any 

claim payments. Additional information on the AGP, including details on 

the programs purpose, overview, and status can be found at the 

following website: [hyperlink, 

http://www.treasury.gov/initiatives/financial-stability/TARP-

Programs/bank-investment-programs/agp/Pages/default.aspx].  

Community Development Capital Initiative: 

Unlike the CPP, OFS did not take substantial actions during fiscal year 

2013 to wind-down the CDCI because of the unique circumstances facing 

participating institutions. In particular, many CDCI participants lack 

the same access to capital markets that CPP institutions have, making 

it more challenging for them to repay their investments. 

OFS completed funding through this program in September 2010 with a 

total investment amount of $570 million for 84 institutions. Of this 

amount, $363 million (nearly $356 million from principal and nearly $8 

million from warrants) represented exchanges by 28 CPP institutions 

converting into the CDCI. During fiscal years 2013 and 2012, OFS 

collected a total of $97 million and $14 million, respectively, in 

repayments, dividends and interest from institutions in the CDCI 

program. As of September 30, 2013, $475 million in CDCI investments 

remained outstanding. 

OFS will continue to closely monitor the performance of the CDCI and 

make decisions regarding the program's wind-down at a later date. 

Additional information on CDCI, including details on the program's 

purpose, overview, and status can be found at the following website: 

[hyperlink, http://www.treasury.gov/initiatives/financial-

stability/TARP-Programs/bank-investment-

programs/cdci/Pages/default.aspx]. 

Credit Market Programs: 

OFS has now substantially completed the wind-down of all three credit 

market programs that were launched under TARP. A total of $19.1 billion 

was disbursed through these programs and a total of $23.5 billion has 

been collected through September 30, 2013. 

Public Private Investment Program: 

During fiscal year 2013, OFS completed the wind-down of the PPIP. 

During fiscal year 2013 and 2012, 6 and 2 PPIFs wound down, repaying 

$5.7 billion and $5.6 billion in debt and $4.1 billion and $1.7 billion 

in equity capital invested by OFS, respectively. In addition, during 

fiscal years 2013 and 2012, OFS received $271 million and $1.4 billion 

in interest and investment income and $1.2 billion and $223 million in 

net proceeds in excess of costs, respectively from these PPIFs. The 

final outstanding equity repayment was made in June 2013. As of 

September 30, 2013, no debt or equity investments are outstanding. 

The latest PPIP Quarterly Report includes a summary of PPIP capital 

activity, portfolio holdings and current pricing, and program and fund 

performance through September 30, 2013. OFS has published 16 quarterly 

reports on PPIP to date and expects to provide additional information 

as the program completes its wind-down. These reports can be found at 

the following website: [hyperlink, 

http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/Public-Private-Investment-Program-Quarterly-

Report.aspx]. 

Term Asset-Backed Securities Loan Facility: 

OFS originally committed to provide credit protection of up to $20.0 

billion in the form of a subordinated loan commitment to TALF, LLC to 

support up to $200.0 billion of lending by the FRBNY. OFS's commitment 

was later reduced to $4.3 billion in July 2010 after the program closed 

to new lending. In June 2012, the Federal Reserve Board and OFS agreed 

that it was appropriate to further reduce the credit protection OFS 

provides the TALF, LLC to $1.4 billion from $4.3 billion as the 

underlying TALF loan portfolio decreased through scheduled and 

voluntary payments. During 2013 this amount was further reduced to $100 

million - the initial loan amount disbursed to fund the TALF, LLC. 

During fiscal year 2013, OFS's original disbursed investment through 

the program was fully repaid with interest. As of September 30, 2013, 

the balance of outstanding TALF loans provided by FRBNY had declined to 

$101 million from $1.5 billion on September 30, 2012, due to scheduled 

and voluntary prepayments by borrowers. All loans that have not been 

repaid-in-full are current in their payments of principal and interest 

and are fully collateralized by the residual balance held by the TALF, 

LLC. As of September 30, 2013, accumulated income earned from 

investments in TALF, LLC totaled $583 million, all of which occurred 

during fiscal year 2013. 

Additional information on TALF, including details on the programs 

purpose, overview, and status can be found at the following website: 

[hyperlink, http://www.treasury.gov/initiatives/financial-

stability/TARP-Programs/credit-market-

programs/talf/Pages/default.aspx].  

Small Business Administration 7(a) Securities Purchase Program: 

During fiscal year 2012, OFS completed the fifth and final disposition 

of securities within the SBA 7(a) Securities Purchase Program, marking 

the successful wind-down of the program. OFS collected a total of $376 

million through the program. This includes $334 million in sales, $29 

million in principal payments, and $13 million in interest payments 

over the life of the program. These cash collections exceeded OFS's 

original investment amount by $9 million, excluding purchased accrued 

interest. 

Additional information on SBA 7(a), including details on the program's 

purpose, overview, and status can be found at the following website: 

[hyperlink, http://www.treasury.gov/initiatives/financial-

stability/TARP-Programs/credit-market-

programs/sba7a/Pages/default.aspx]. 

Automotive Industry Financing Program: 

OFS made substantial progress in the wind-down of the AIFP during 

fiscal year 2013. In total, OFS disbursed $79.7 billion in loans and 

equity investments to the auto industry through the AIFP. As of 

September 30, 2013, OFS has collected $53.3 billion through sales, 

repayments, dividends and interest under this program. 

In December 2012, OFS announced its intent to fully exit its investment 

in GM within the next 12-15 months. Concurrently with that 

announcement, GM purchased 200 million shares of GM common stock from 

OFS, for proceeds of $5.5 billion. In early 2013, OFS commenced the 

disposition of its remaining 300 million common shares of GM common 

stock through a series of pre-arranged written trading plans. In June 

2013, OFS sold an additional 30 million shares of GM common stock in an 

underwritten sale in connection with the inclusion of GM common stock 

in the S&P 500 index for proceeds of $1.0 billion. The total amount 

collected for fiscal year 2013 was $12.0 billion. As of September 30, 

2013, 101 million common shares remained outstanding valued at $3.6 

billion. OFS expects to complete the disposition of all remaining 

shares by the end of 2013. 

OFS invested $16.3 billion in Ally Financial (Ally) under TARP. As of 

September 30, 2013, OFS's outstanding investment in Ally stood at $13.7 

billion. Ally made substantial progress in completing the two strategic 

initiatives OFS previously said were critical to maximize recovery of 

the investment - the Chapter 11 proceeding of Ally's mortgage 

subsidiary, Residential Capital LLC ("ResCap"), to address Ally's 

legacy mortgage liabilities and the sale of its international auto 

finance operations. During fiscal 2013, Ally, ResCap, and ResCap's 

major creditors agreed on terms for a plan of reorganization and the 

settlement of certain claims against Ally. The bankruptcy court has 

approved this agreement and is expected to rule on the plan of 

reorganization in early fiscal year 2014. Ally also sold or entered 

into agreements to sell all of its international auto finance 

operations for a total of $9.2 billion. 

On August 19, 2013, Ally entered into private placement agreements with 

investors of Ally common stock for an aggregate price of $1.0 billion 

(later increased to $1.3 billion in November 2013). Concurrently, Ally 

also entered into agreements with OFS to repurchase all of the 

outstanding MCP stock and terminate the MCP's Share Adjustment Right 

(SAR), which provided OFS with the right to receive additional common 

stock of Ally under certain circumstances if certain events occurred 

prior to December 30, 2016. Ally repurchased all of its MCP stock from 

OFS for $5.2 billion in November 2013. In addition, OFS received an 

additional $725 million for the elimination of the SAR. OFS is actively 

seeking to wind-down the remaining investment in Ally, which represents 

approximately 63 percent of Ally's common stock after Ally's private 

placement completed in November 2013. 

Additional information on the AIFP, including details on the programs 

purpose, overview, and status can be found at the following website: 

[hyperlink, http://www.treasury.gov/initiatives/financial-

stability/TARP-Programs/automotive-programs/Pages/default.aspx]. 

American International Group (AIG) Investment Program: 

In fiscal year 2013, OFS exited all remaining holdings in AIG. During 

the financial crisis, the OFS's and the FRBNY's peak support for AIG 

totaled $182.3 billion. That included $69.8 billion that OFS committed 

and $112.5 billion committed by the FRBNY, including $22.1 billion of 

these commitments which were later canceled. As a result of the 

combined efforts of AIG, OFS, and the Federal Reserve, $22.7 billion in 

excess of the total of funds disbursed has been recovered through sales 

and other income. 

In fiscal year 2011, Treasury, including OFS, the FRBNY, the trustees 

of the AIG Facility Trust (Trust)[Footnote 2] and AIG completed a 

restructuring of government investments in AIG. As part of the 

restructuring, Treasury received 1.7 billion AIG shares (1.1 billion 

TARP shares and 563 million additional Treasury shares from the trust 

established by the FRBNY for the benefit of Treasury). Since the 

restructuring, OFS managed both the TARP and additional Treasury shares 

and sold them on a pro-rata basis. 

During fiscal year 2012, AIG completed the repayment of OFS's preferred 

interests in the AIG SPVs for proceeds of $9.6 billion. In addition, 

OFS conducted four offerings that sold a total of 1.2 billion shares of 

AIG common stock (including 806 million TARP shares) at prices that 

ranged from $29.00 per share to $32.50 per share. Total proceeds from 

these sales amounted to $38.2 billion, consisting of $25.2 billion in 

proceeds to OFS and additional proceeds to the Treasury for the 

additional Treasury shares of $13.0 billion. The proceeds to OFS from 

such common stock sales were $9.9 billion less than cost. 

During fiscal year 2013, OFS sold its and Treasury's remaining 234 

million shares of AIG common stock in two underwritten public offerings 

for aggregate proceeds of approximately $7.6 billion. The proceeds from 

these sales consisted of $5.0 billion to OFS and additional proceeds to 

the Treasury for additional Treasury shares of $2.6 billion. On March 

1, 2013, AIG repurchased warrants issued to OFS in 2008 and 2009 for 

approximately $25 million. OFS disbursed a total of $67.8 billion to 

AIG, and following this sale, OFS's cumulative net proceeds from 

repayments, sales, dividends, interest, and other income related to AIG 

assets totaled $55.3 billion, and OFS has no residual interest in AIG. 

OFS sold all the TARP and additional Treasury shares at an average 

price of $31.18 per share. Because the additional Treasury shares came 

from the trust, the additional Treasury shares were provided to 

Treasury at no cost and are not included in the OFS financial 

statements. The TARP shares had a cost basis of $43.53 per share. 

However, the figure of $28.73 per share was often referred to as 

Treasury's "break-even" price for AIG common stock sales in order for 

Treasury to recover the TARP AIG investment because that number 

averages the cost over the TARP shares and the additional Treasury 

shares. Thus, the average price realized was in excess of that break-

even price. While TARP recovered less than its total investment, this 

was offset by the proceeds from the additional Treasury shares of AIG, 

resulting in overall proceeds exceeding disbursements for Treasury. 

[End of Operational Goal One] 

Operational Goal Two: Continue Helping Families in Need to Avoid 

Foreclosure: 

Making Home Affordable (MHA): 

Consistent with OFS's goal of continuing to help struggling homeowners 

find solutions to avoid foreclosure wherever possible, OFS is 

continuing to implement the MHA program and to reach as many homeowners 

as possible. As of September 30, 2013, 91 non-GSE servicers are 

participating in MHA. As of September 30, 2013, OFS has commitments to 

fund up to $29.9 billion in MHA payments and has disbursed $6.5 billion 

since inception. 

OFS publishes quarterly assessments of servicer performance containing 

data on compliance with program guidelines as well as program results 

metrics. OFS believes that these assessments have set the standard for 

transparency about mortgage servicer efforts to assist homeowners and 

encourage servicers to improve processes and performance for 

foreclosure prevention activities. 

MHA performance highlights for fiscal year 2013 can be found at: 

[hyperlink, http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/Making-Home-Affordable-Program-Performance-

Report.aspx]. 

Additional information on MHA, including details on the programs 

purpose, overview, and status can be found at the following website: 

[hyperlink, http://www.treasury.gov/initiatives/financial-

stability/TARP-Programs/housing/mha/Pages/default.aspx]. 

Home Affordable Modification Program (HAMP): 

The largest program within MHA is the Home Affordable Modification 

Program (HAMP). HAMP offers responsible homeowners who are at risk of 

foreclosure the opportunity to obtain reduced monthly mortgage payments 

that are affordable and sustainable over the long-term. 

As of September 30, 2013, approximately 1.3 million homeowners have 

received permanent modifications through HAMP.[Footnote 3] This 

includes modifications on both non-GSE loans (for which the cost is 

paid by TARP) and GSE loans (for which the cost is paid by the GSEs). 

Homeowners participating in HAMP have collectively experienced nearly a 

40 percent median reduction in their mortgage payments--representing 

more than $546 per month. MHA has also encouraged the mortgage industry 

to adopt similar programs that have helped millions more at no cost to 

taxpayers by establishing standards and best practices for loss 

mitigation evaluations. As of September 30, 2013, homeowners in HAMP 

have had their principal reduced by an estimated $22.3 billion. 

On May 30, 2013, the Administration extended the application deadline 

for MHA programs through December 2015 to provide struggling homeowners 

additional time to access sustainable mortgage relief, and to align the 

end dates for key assistance programs. OFS and the U.S. Department of 

Housing and Urban Development (HUD) announced that the new deadline was 

determined in coordination with the Federal Housing Finance Agency 

(FHFA) to align with extended deadlines for the Home Affordable 

Refinance Program (HARP) and the Streamlined Modification Initiative 

for homeowners with loans owned or guaranteed by Fannie Mae and Freddie 

Mac. 

Housing Finance Agency Innovation Fund for the Hardest Hit Housing 

Markets (Hardest Hit Fund): 

In addition to MHA, OFS also operates the Hardest Hit Fund, which 

allows participating HFAs in the nation's hardest hit housing and 

unemployment markets to design innovative, locally-targeted 

foreclosure prevention programs. As of September 30, 2013, all 19 HFAs 

are fully operational and have created extensive infrastructures to 

operate these programs, including selecting and training networks of 

housing counselors to assist with applications, creating homeowner 

portals to aid homeowners in applying for assistance, and hiring 

underwriters and other staff to review and approve applications. The 

five largest servicers (Bank of America, JPMorgan Chase, Wells Fargo, 

Citibank, and GMAC) are currently participating in programs in all 19 

jurisdictions, primarily through mortgage payment assistance and 

mortgage loan reinstatement assistance. 

As of September 30, 2013, the 19 HFAs have collectively drawn 

approximately $2.9 billion (38.3 percent) of the $7.6 billion allocated 

under the program. For fiscal years 2013 and 2012, this program has 

disbursed $1.4 billion and $861 million, respectively. Each state draws 

down funds as they are needed, but must have no more than five percent 

of their allocation on hand before they can draw down additional funds. 

States have until December 31, 2017, to have entered into agreements 

with borrowers. 

Each HFA submits a quarterly report on the progress of its program. 

These reports include the states' performance on metrics set by OFS on 

various aspects of their programs. Direct links to each state's most 

recent performance report can be found at: 

[hyperlink, http://www.treasury.gov/initiatives/financial-

stability/TARP-Programs/housing/Pages/Program-Documents.aspx]. 

Additional information on the Hardest Hit Fund, including details on 

the program's purpose, overview, and status can be found at the 

following website: [hyperlink, 

http://www.treasury.gov/initiatives/financial-stability/TARP-

Programs/housing/hhf/Pages/default.aspx]. 

FHA Refinance Program: 

On March 26, 2010, the Department of Housing and Urban Development 

(HUD) and Department of the Treasury announced enhancements to the 

Federal Housing Administration Refinance Program (FHA Refinance), 

designed to make homeownership more affordable for borrowers whose 

homes are worth less than the remaining amounts on their mortgage loans 

(negative equity). TARP funds were made available by OFS through an 

$8.0 billion letter of credit facility, in order to fund a share of the 

losses experienced by FHA associated with this program (subsequently 

reduced to $1.0 billion in fiscal year 2013 due to low utilization). As 

of September 30, 2013, FHA guaranteed 3,015 Refinance loans with a 

total face value of almost $489 million covered under OFS's letter of 

credit facility. One default has been realized resulting in $47,840 in 

claim payments by OFS. 

[End of Operational Goal Two] 

Operational Goal Three: Minimize Cost to Taxpayer: 

OFS manages TARP investments to minimize costs to taxpayers by managing 

the timely exit of these investments to reduce taxpayers' exposure, 

return TARP funds to reduce the federal debt, and continue to replace 

government assistance with private capital in the financial system. OFS 

has taken a number of steps during fiscal years 2013 and 2012 to 

dispose of OFS's outstanding investments in a manner that balances the 

need to exit these investments as quickly as practicable with 

maximizing returns for taxpayers. OFS also takes steps to ensure that 

TARP recipients comply with any TARP-related statutory or contractual 

obligations such as executive compensation requirements and 

restrictions on dividend payments. 

OFS's exit strategies for TARP investment programs depend on each 

investment and are subject to market conditions. In disposing of TARP 

investments, OFS takes a disciplined portfolio approach - reviewing 

each investment and closely monitoring risk and performance. In 

addition to repayments by participants, OFS has disposed of investments 

to third parties through public and private offerings and auctions. 

Utilizing auctions promotes competition and produces prices that are 

market-driven. 

Risk Assessment: 

OFS has developed procedures to identify and mitigate investment risk. 

These procedures are designed to identify TARP recipients that face a 

heightened financial risk and determine appropriate responses to 

preserve OFS's investment on behalf of taxpayers, while maintaining 

financial stability. Specifically, OFS's external asset managers review 

publicly available information to identify recipients for which pre-

tax, pre-provision earnings and capital may be insufficient to offset 

future losses and maintain required capital. For certain institutions, 

OFS and its external asset managers engage in heightened monitoring and 

due diligence that reflects the severity and timing of the challenges. 

Compliance: 

OFS also takes steps to ensure that TARP recipients comply with their 

TARP-related statutory and contractual obligations. Statutory 

obligations include executive compensation restrictions. Contractual 

obligations vary by investment type. For most of OFS's preferred stock 

investments, TARP recipients must comply with restrictions on payment 

of dividends and on repurchases of junior securities. Recipients of 

exceptional assistance (currently GM and Ally) must comply with 

additional restrictions on executive compensation, lobbying, corporate 

expenses and internal controls and must provide quarterly compliance 

reports. 

In addition, all mortgage servicers participating in MHA are subject to 

program guidelines, which require the servicer to offer MHA assistance 

to all eligible borrowers and to have systems that can process all MHA-

eligible loans. Servicers are subject to periodic, on-site compliance 

reviews performed by OFS's compliance agent, Making Home Affordable-

Compliance (MHA-C), a separate, independent division of Freddie Mac, to 

ensure that servicers' obligations under MHA requirements are being 

met. In fiscal year 2011, OFS began publishing quarterly assessments of 

the largest servicers comprising approximately 89% of the HAMP mortgage 

servicing market and continued publishing these quarterly assessments 

throughout fiscal year 2013. These assessments have helped force the 

industry to improve its practices. 

[End of Operational Goal Three] 

Operational Goal Four: Continue to Operate with the Highest Standards 

of Transparency, Accountability, and Integrity: 

To protect taxpayers and help ensure that every dollar is directed 

toward promoting financial stability, OFS established comprehensive 

accountability and transparency measures. OFS is committed to operating 

its investment and housing programs in full view of the public. This 

includes providing regular and comprehensive information about how TARP 

funds are being spent, who has received them and on what terms, and how 

much has been collected to date. 

All of this information, along with numerous reports of different 

frequencies is posted on the Financial Stability section of the 

Treasury.gov website, which can be found at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/default.aspx]. 

These reports include: 

* A Daily TARP Update, which features detailed financial data related 

to each TARP investment program including the status of disbursements 

and all collections by category; 

* A monthly report to Congress that details how TARP funds have been 

used, the status of recovery of such funds by program, and information 

on the estimated cost of TARP; 

* A monthly report on dividend and interest payments; 

* A monthly report on Making Home Affordable; 

* A report of each transaction (such as an investment or repayment) 

within two business days of each transaction; 

* A quarterly report on the Hardest Hit Fund; 

* A quarterly report on PPIP that provides detailed information on the 

funds, their investments, and returns. It is typically released within 

one month after the end of each quarter; and: 

* A semi-annual report on warrant dispositions. 

In addition, OFS regularly publishes data files related to MHA and 

transaction reports that show activity related to MHA and HHF. The 

release of the data file fulfills a requirement within the Dodd-Frank 

Act to make available loan-level data about the program. OFS updates 

the file monthly and will expand reporting to include newer initiatives 

that are part of MHA. Researchers interested in using the MHA Data File 

can access the file and user guide at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/mha_publicfile.aspx]. 

Audited Financial Statements: 

OFS prepares separate financial statements for TARP on an annual basis. 

This is the fifth OFS Agency Financial Report (AFR), and includes the 

audited financial statements for the fiscal years ended September 30, 

2013 and September 30, 2012. Additional reports for prior periods are 

available at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/Annual-Agency-Financial-Reports.aspx]. 

In its five years of operation, TARP's financial statements have 

received five unmodified audit opinions from its auditor, the GAO. OFS 

also received a Certificate of Excellence in Accountability Reporting 

(CEAR) from the Association of Government Accountants for fiscal years 

2012, 2011, 2010 and the period ending September 30, 2009. 

TARP Retrospective Reports and the TARP Tracker: 

In March 2013, OFS published the Troubled Asset Relief Program Four 

Year Retrospective Report - An Update on The Wind-Down of TARP. This 

serves as an update to OFS's TARP Three-Year Anniversary report, which 

was published in October 2011. In October 2010, OFS published the TARP 

Two Year Retrospective, which contains a comprehensive history of each 

TARP program. These reports include information on TARP programs and 

the effects of TARP and additional emergency measures taken by the 

federal government to stabilize the financial system following the 2008 

crisis. 

In addition, during fiscal year 2013, OFS launched an expanded version 

of its existing TARP Tracker, which is an online, interactive tool that 

allows users to track the flow of TARP funds in greater detail over the 

lifetime of each individual TARP investment area. The expanded 

capability allows users to view each investment area separately to get 

a clearer sense of what has occurred in a particular program, including 

a scroll of events, major transactions, and legislative actions that 

have impacted the program. 

Readers are invited to refer to these documents at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/default.aspx]. 

Oversight by Four Separate Agencies: 

Congress also established four avenues of oversight for TARP: 

* The Financial Stability Oversight Board, established by EESA Section 

104; 

* Specific responsibilities for the GAO as set out in EESA Section 116; 

* The Special Inspector General for TARP, established by EESA Section 

121; and: 

* The Congressional Oversight Panel (COP), established by EESA Section 

125. COP concluded its operations in accordance with EESA on April 3, 

2011. 

OFS has productive working relationships with all of these bodies, and 

cooperates with each oversight agency's effort to produce periodic 

audits and reports that focus on the many aspects of TARP. Individually 

and collectively, the oversight bodies' audits and reports have made 

and continue to make important contributions to the development, 

strengthening, and transparency of TARP programs. 

Congressional Hearings and Testimony: 

OFS officials have testified in numerous Congressional hearings since 

TARP was created. Copies of their written testimony are available at: 

[hyperlink, http://www.treasury.gov/initiatives/financial-

stability/news-room/Pages/default.aspx]. 

[End of section] 

Fiscal Year 2012 and 2013 Financial Summary and Cumulative Net Income: 

OFS's fiscal year 2013 net income from operations of $7.7 billion 

includes the reported net income related to loans, equity investments, 

and other credit programs. For the fiscal year ended September 30, 

2013, OFS reported net subsidy income for six programs -CPP, CDCI, 

TALF, PPIP, AGP, and AIFP. These programs collectively reported net 

subsidy income of $11.9 billion. Also, for the fiscal year ended 

September 30, 2013, OFS experienced net subsidy cost for two programs - 

AIG and FHA Refinance Program totaling $34 million. Fiscal year 2013 

expenses for the Treasury housing programs under TARP of $4.0 billion 

and administrative costs of $248 million bring the total reported 

fiscal year net income from operations to $7.7 billion. For the fiscal 

year ended September 30, 2012, the net income from operations was $7.7 

billion. These net income amounts reported in the financial statements 

reflect only transactions through September 30, 2013 and September 30, 

2012, respectively, and therefore are different than lifetime cost 

estimates made for budgetary purposes. 

Over time the cost of TARP programs will change. As described later in 

the OFS audited financial statements, these estimates are based in part 

on currently projected economic factors. These economic factors will 

likely change, either increasing or decreasing the lifetime cost of 

TARP. 

TARP Program Summary: 

Table 1 provides a financial summary for TARP programs since its 

inception on October 3, 2008, through September 30, 2013. For each 

program, the table provides utilized TARP authority (which includes 

purchases made, legal commitments to make future purchases, and offsets 

for guarantees made), the amount actually disbursed, repayments to OFS 

from program participants or from sales of the investments, write-offs 

and losses, net outstanding balance as of September 30, 2013, and cash 

inflows on the investments in the form of dividends, interest or other 

fees. As of September 30, 2013, $30 billion of the $456.6 billion in 

purchase and guarantee authority remained unused. 

Table 1: TARP Summary[1]; From TARP Inception through September 30, 

2013; (Dollars in billions). 

Bank Support Programs: 

Capital Purchase Program[5]; 

Purchase Price or Guarantee Amounts: $204.9; 

Total Disbursed: $204.9; 

Investment Sales and Repayments: ($197.9)[6]; 

Write-offs and Losses[3]: ($3.9); 

Outstanding Balance[4]: $3.1; 

Received from Investments: $26.8. 

Targeted Investment Program; 

Purchase Price or Guarantee Amounts: $40.0; 

Total Disbursed: $40.0; 

Investment Sales and Repayments: ($40.0); 

Write-offs and Losses[3]: [Empty]; 

Outstanding Balance[4]: [Empty]; 

Received from Investments: $4.4. 

Asset Guarantee Program; 

Purchase Price or Guarantee Amounts: $5.0; 

Total Disbursed: [Empty]; 

Investment Sales and Repayments: [Empty]; 

Write-offs and Losses[3]: [Empty]; 

Outstanding Balance[4]: [Empty]; 

Received from Investments: $4.1. 

Community Development Capital Initiative; 

Purchase Price or Guarantee Amounts: $0.6; 

Total Disbursed: $0.6; 

Investment Sales and Repayments: ($0.1); 

Write-offs and Losses[3]: [Empty]; 

Outstanding Balance[4]: $0.5; 

Received from Investments: [Empty]. 

Credit Market Programs: 

Public-Private Investment Program; 

Purchase Price or Guarantee Amounts: $19.6; 

Total Disbursed: $18.6; 

Investment Sales and Repayments: ($18.6); 

Write-offs and Losses[3]: [Empty]; 

Outstanding Balance[4]: [Empty]; 

Received from Investments: $3.8. 

Term Asset-Backed Securities Loan Facility; 

Purchase Price or Guarantee Amounts: $0.1; 

Total Disbursed: $0.1; 

Investment Sales and Repayments: ($0.1); 

Write-offs and Losses[3]: [Empty]; 

Outstanding Balance[4]: [Empty]; 

Received from Investments: $0.6. 

SBA 7(a) Securities Purchase Program; 

Purchase Price or Guarantee Amounts: $0.4; 

Total Disbursed: $0.4; 

Investment Sales and Repayments: ($0.4); 

Write-offs and Losses[3]: [Empty]; 

Outstanding Balance[4]: [Empty]; 

Received from Investments: [Empty]. 

Other Programs: 

Automotive Industry Financing Program; 

Purchase Price or Guarantee Amounts: $79.7; 

Total Disbursed: $79.7; 

Investment Sales and Repayments: ($47.1); 

Write-offs and Losses[3]: ($12.7); 

Outstanding Balance[4]: $19.9; 

Received from Investments: $6.2. 

American InternationalGroup Investment Program2[2]; 

Purchase Price or Guarantee Amounts: $67.8; 

Total Disbursed: $67.8; 

Investment Sales and Repayments: ($54.3); 

Write-offs and Losses[3]: ($13.5); 

Outstanding Balance[4]: [Empty]; 

Received from Investments: $1.0. 

Sub-total for Investment Programs; 

Purchase Price or Guarantee Amounts: $418.1; 

Total Disbursed: $412.1; 

Investment Sales and Repayments: ($358.5); 

Write-offs and Losses[3]: ($30.1); 

Outstanding Balance[4]: $23.5; 

Received from Investments: $46.9. 

Treasury Housing Programs under TARP; 

Purchase Price or Guarantee Amounts: $38.5[7]; 

Total Disbursed: $9.5; 

Investment Sales and Repayments: $N/A; 

Write-offs and Losses[3]: $N/A; 

Outstanding Balance[4]: $N/A; 

Received from Investments: $N/A. 

Total for TARP Program; 

Purchase Price or Guarantee Amounts: $456.6; 

Total Disbursed: $421.6; 

Investment Sales and Repayments: ($358.5); 

Write-offs and Losses[3]: ($30.1); 

Outstanding Balance[4]: $23.5; 

Received from Investments: $46.9. 

[1] This table shows TARP activity for the period from inception 

through September 30, 2013, on a cash basis. Received from investments 

includes dividends and interest income reported in the Statement of Net 

Cost, and proceeds from sale and repurchases of assets in excess of 

costs. 

[2] The amounts for AIG reflect only the operations of TARP and 

do not reflect proceeds received from the sale of shares of AIG common 

stock held by Treasury outside of TARP (additional Treasury shares). 

For further details, see the discussion of the American International 

Group Investment Program, beginning on page 14. 

[3] Losses represent proceeds less than cost on sales of assets which 

are reflected in the financial statements within "net proceeds from 

sales and repurchases of assets in excess of (less than) cost." 

[4] Total disbursements less repayments, write-offs and losses do not 

equal the total outstanding balance because the disbursements for the 

Treasury housing programs under TARP generally do not require (and OFS 

does not expect) repayments. 

[5] OFS received $31.9 billion in proceeds from sales of Citigroup 

common stock, of which $25.0 billion is included at cost in investment 

sales, and $6.9 billion of net proceeds in excess of cost is included 

in Received from Investments. 

[6] Includes $2.2 billion of SBLF refinancing outside of TARP and CDCI 

exchanges from CPP of $363 million. 

[7] Individual obligation amounts are $29.9 billion for the Making 

Home Affordable Program, $7.6 billion for the Hardest Hit Fund, and 

$1.0 billion committed for the FHA Refinance Program. 

[End of table] 

Most TARP funds were used to make investments in preferred stock or to 

make loans. OFS has generally received dividends on the preferred stock 

and interest payments on the loans from the institutions participating 

in TARP programs. These payments represent additional proceeds received 

on OFS's TARP investments. From inception through September 30, 2013 

OFS received a total of $24.2 billion in dividends and interest. 

OFS has conducted several sales of its investments in banking 

institutions as part of its exit strategy for winding down TARP. OFS 

plans to continue to sell its investments in banks that are not 

expected to repay OFS in the foreseeable future. These sales are being 

conducted over time and in stages and include both common and preferred 

stock and debentures. During fiscal years 2013 and 2012, OFS sold its 

investments in 113 and 40 banks for combined proceeds of $1.5 billion 

and $1.3 billion, respectively, through individual public and private 

auctions. These auctions resulted in net proceeds less than cost of 

$455 million and $180 million for those investments, respectively. 

OFS also received warrants in connection with most of its investments, 

which provides an opportunity for OFS on behalf of taxpayers to realize 

additional proceeds on investments. Since the program's inception, 

through September 30, 2013, OFS has received $9.5 billion in gross 

proceeds from the disposition of warrants associated with 204 CPP 

investments, both TIP investments, AGP, and AIG, consisting of (i) $4.0 

billion from issuer repurchases at agreed upon values and (ii) $5.5 

billion from auctions. TARP's Warrant Disposition Report is posted on 

the OFS website at the following link: [hyperlink, 

http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/Warrant-Disposition-Reports.aspx]. 

Summary of TARP Equity Investments: 

Table 2 provides information on the estimated values of TARP direct 

loan and equity investments by program, as of the end of fiscal years 

2013 and 2012. OFS housing programs under TARP are excluded from the 

chart because no repayments are expected. The Outstanding Balance 

column represents the amounts disbursed by OFS relating to the loans 

and equity investments that were outstanding as of September 30, 2013 

and 2012. The Estimated Value of the Investment column represents the 

present value of net cash inflows that OFS estimates it will receive 

from the loans and equity investments. These estimates include market 

risk assumptions. For equity securities, this amount represents fair 

value. The total difference of $5.6 billion (2013) and $22.9 billion 

(2012) between the two columns is considered the "subsidy cost 

allowance" under the Federal Credit Reform Act methods OFS follows for 

budget and accounting purposes. 

See Note 6 in the financial statements for further discussion. 

Table 2: Summary of TARP Direct Loans and Equity Investments; (Dollars 

in billions): 

Bank Support Programs: 

Program: Capital Purchase Program; 

Outstanding Balance as of September 30, 2013[1]: $3.1; 

Estimated Value of Investment as of September 30, 2013: $1.8; 

Outstanding Balance as of September 30, 2012[1]: $8.7; 

Estimated Value of Investment as of September 30, 2012: $5.7. 

Program: Community Development Capital Initiative; 

Outstanding Balance as of September 30, 2013[1]: $0.5; 

Estimated Value of Investment as of September 30, 2013: $0.4; 

Outstanding Balance as of September 30, 2012[1]: $0.6; 

Estimated Value of Investment as of September 30, 2012: $0.4. 

Credit Market Programs: 

Program: Public-Private Investment Program; 

Outstanding Balance as of September 30, 2013[1]: $0.0; 

Estimated Value of Investment as of September 30, 2013: $0.0; 

Outstanding Balance as of September 30, 2012[1]: $9.8; 

Estimated Value of Investment as of September 30, 2012: $10.8. 

Program: Term Asset-Backed Securities Loan Facility; 

Outstanding Balance as of September 30, 2013[1]: $0.0; 

Estimated Value of Investment as of September 30, 2013: $0.1; 

Outstanding Balance as of September 30, 2012[1]: $0.1; 

Estimated Value of Investment as of September 30, 2012: $0.7. 

Other Programs: 

Program: Automotive Industry Financing Program; 

Outstanding Balance as of September 30, 2013[1]: $19.9; 

Estimated Value of Investment as of September 30, 2013: $15.6; 

Outstanding Balance as of September 30, 2012[1]: $37.2; 

Estimated Value of Investment as of September 30, 2012: $17.5. 

Program: American International Group Investment Program; 

Outstanding Balance as of September 30, 2013[1]: $0.0; 

Estimated Value of Investment as of September 30, 2013: $0.0; 

Outstanding Balance as of September 30, 2012[1]: $6.7; 

Estimated Value of Investment as of September 30, 2012: $5.1. 

Program: Total; 

Outstanding Balance as of September 30, 2013[1]: $23.5; 

Estimated Value of Investment as of September 30, 2013: $17.9; 

Outstanding Balance as of September 30, 2012[1]: $63.1; 

Estimated Value of Investment as of September 30, 2012: $40.2. 

[1] Before subsidy cost allowance. 

[End of table] 

The ultimate cost of TARP will not be known for some time, but it is 

not expected to change significantly as only a few investment programs 

remain open with much of the original disbursed investments repaid. The 

financial performance of the remaining programs will depend on many 

factors, such as future economic and financial conditions, and the 

business prospects of specific institutions. The cost estimates are 

sensitive to slight changes in model assumptions, such as general 

economic conditions, specific stock price volatility of the entities in 

which OFS has an equity interest, estimates of expected defaults, and 

prepayments. Wherever possible, OFS uses market prices of tradable 

securities to estimate the fair value of TARP investments. Use of 

market prices was possible for TARP investments that trade in public 

markets or are closely related to tradable securities. For those TARP 

investments that do not have direct analogs in private markets, OFS 

uses internal market-based models to estimate the market value of these 

investments. All future cash flows are adjusted for market risk. 

Further details on asset valuation can be found in Note 6 of the 

Financial Statements. 

Comparison of Estimated Lifetime TARP Costs Over Time: 

Market conditions and the performance of specific financial 

institutions are critical determinants of TARP's estimated lifetime 

cost. The changes in OFS estimates since TARP's inception through 

September 30, 2013, provide a good illustration of this impact. Table 3 

provides information on how OFS's estimated lifetime cost of TARP has 

changed over time. These costs for the non-housing programs fluctuate 

in large part due to changes in the market prices of common stock for 

AIG and GM and the estimated value of the Ally stock. This table 

assumes that all expected investments and disbursements for Treasury 

housing programs under TARP are completed, and adhere to general 

government budgeting guidance. This table will not tie to the financial 

statements since it includes repayments and disbursements expected to 

be made in the future. Table 3 is consistent with the estimated TARP 

lifetime cost disclosures on the OFS web site at: [hyperlink, 

http://www.treasury.gov/initiatives/financial-

stability/Pages/default.aspx]. 

The cost amounts in Table 3 are based on assumptions regarding future 

events, which are inherently uncertain. 

Table 3: Estimated Lifetime TARP Costs (Income)[1]; (Dollars in 

billions): 

Estimated Lifetime Cost (Income) as of September 30: 

Bank Support Programs: 

Program: Capital Purchase Program; 

2009[5]: ($14.6); 

2010: ($11.2); 

2011: ($13.0); 

2012: ($14.9); 

2013: ($16.1). 

Program: Targeted Investment Program; 

2009[5]: ($1.9); 

2010: ($3.8); 

2011: ($4.0); 

2012: ($4.0); 

2013: ($4.0). 

Program: Asset Guarantee Program[2]; 

2009[5]: ($2.2); 

2010: ($3.7); 

2011: ($3.7); 

2012: ($3.9); 

2013: ($4.0). 

Program: Community Development Capital Initiative; 

2009[5]: $0.4; 

2010: $0.3; 

2011: $0.2; 

2012: $0.2; 

2013: $0.1. 

Credit Market Programs: 

Program: Public-Private Investment Program; 

2009[5]: $1.4; 

2010: ($0.7); 

2011: ($2.4); 

2012: ($2.4); 

2013: ($2.7). 

Program: Term Asset-Backed Securities Loan Facility; 

2009[5]: ($0.3); 

2010: ($0.4); 

2011: ($0.4); 

2012: ($0.5); 

2013: ($0.6). 

Program: SBA 7(a) Securities Purchase Program; 

2009[5]: $ N/A; 

2010: [Empty]; 

2011: [Empty]; 

2012: [Empty]; 

2013: [Empty]. 

Other Programs: 

Program: Automotive Industry Financing Program; 

2009[5]: $34.5; 

2010: $14.7; 

2011: $23.6; 

2012: $24.3; 

2013: $14.7. 

Program: American International Group Investment Program[3]; 

2009[5]: $56.8; 

2010: $36.9; 

2011: $24.3; 

2012: $15.3; 

2013: $15.2. 

Program: Subtotal; 

2009[5]: $74.1; 

2010: $32.1; 

2011: $24.6; 

2012: $14.1; 

2013: $2.6. 

Treasury Housing Programs under TARP[4]; 

2009[5]: $50.0; 

2010: $45.6; 

2011: $45.6; 

2012: $45.6; 

2013: $37.7. 

Program: Total; 

2009[5]: $124.1; 

2010: $77.7; 

2011: $70.2; 

2012: $59.7; 

2013: $40.3. 

[1] Estimated program costs (+) or savings (in parentheses) over the 

life of the program, including interest on re-estimates and excluding 

administrative costs. 

[2] Prior to the termination of the guarantee agreement, OFS 

guaranteed up to $5.0 billion of potential losses on a $301.0 billion 

portfolio of loans. 

[3] The amounts for AIG reflect only the operations of TARP and do not 

reflect proceeds received from the sale of shares of AIG common stock 

held by Treasury outside of TARP (additional Treasury shares). For 

further details, see the discussion of the American International 

Group Investment Program, beginning on page 14. 

[4] The estimated lifetime cost for Treasury Housing Programs under 

TARP represent the total commitment except for the FHA Refinance 

Program, which is accounted for under credit reform. The estimated 

lifetime cost of the FHA Refinance Program represents the total 

estimated subsidy cost associated with total obligated amount. 

[5] Estimated lifetime cost for 2009 includes funds for projected 

disbursements and anticipated obligations. 

[End of table] 

[End of section] 

Key Trends/Factors Affecting TARP Future Activities and Ultimate

Cost: 

This section provides additional TARP analytic information and 

enhanced sensitivity analysis focusing on the remaining TARP 

dollars/continued taxpayer exposure and what is likely to affect the 

expected future return. As of September 30, 2013, one TARP program

– the AIFP – has more than $5.0 billion still outstanding and remains 

at the most risk of additional taxpayer loss. Going forward, the

collections or costs from the AIFP and the expenditures for Treasury 

housing programs under TARP are expected to most significantly affect 

changes to the lifetime cost of TARP. 

Automotive Industry Financing Program: 

As of September 30, 2013, OFS’s gross AIFP investments outstanding in 

GM and Ally Financial totaled $19.9 billion, with an estimated value 

of $15.6 billion. The future value of OFS’s investment in GM will depend

on the market price of GM common stock, which is affected by a variety 

of factors specific to the financial condition and results of 

operations of GM as well as factors pertaining to the industry and the 

overall economy, such as the competitiveness of U.S. manufacturers, 

both domestically and internationally, and macroeconomic conditions

(unemployment, Gross Domestic Product growth, etc.) which affect the 

overall trends in auto sales. The future value of OFS’s investment in 

Ally will depend on industry and macroeconomic factors as well as

company-specific factors, including in particular the ability of the 

company to resolve the bankruptcy of its subsidiary, Residential 

Capital, LLC (ResCap), in a timely and cost-effective manner, and the 

proceeds realized from the sale of its international operations. 

Treasury Housing Programs Under TARP: 

OFS committed $38.5 billion to fund Treasury housing programs under 

TARP. From inception through September 30, 2013, $9.5 billion has been 

disbursed under these programs, consisting of $6.5 billion for MHA,

$2.9 billion for the Hardest Hit Fund, and $0.1 billion for the FHA 

Refinance Program. If all active modifications made as of September 30,

2013, in association with MHA were to remain current and receive 

incentives for five years, OFS estimates that $13.3 billion in incentive

fees will ultimately be disbursed for MHA alone. The program is 

continuing to enter into new modifications as the termination date

was extended to December 31, 2015. Separately, $7.6 billion has been 

allocated for the Hardest Hit Fund and $1.0 billion for the FHA 

Refinance Program. 

Sensitivity Analysis: 

The ultimate value of TARP investments will only be known in time. 

Realized values will vary from current estimates in part because

economic and financial conditions will change. Many TARP investments 

do not have readily observable values and their values can only be

estimated by OFS. 

Sensitivity analysis is one way to get some feel for the degree of 

uncertainty around the OFS estimates. In the analysis reported here,

OFS focuses on the AIFP as it is the only remaining program with 

outstanding investments in excess of $5.0 billion. 

AIFP Analysis: 

The most important inputs to the valuation of OFS’s outstanding 

investments under the AIFP are the market price of New GM common stock 

and the change in the estimated value of Ally Financial common stock, 

which is based on the price paid by private investors in November, 

2013. Table 4 shows the change in estimated value of OFS outstanding 

AIFP investments based on a 10 percent increase and 10 percent 

decrease in the trading price of the New GM common stock and 

separately a 10 percent increase and 10 percent decrease in the 

estimated value of the Ally Financial common stock. Figure A shows 

that the GM securities have recently been trading within the range 

used in the analysis as well as outside of this range, illustrating 

the uncertainty around the cost estimates. 

Table 4: Impact on AIFP Valuation: 

Impact of GM on AIFP: 

September 30, 2013 Reported Value for AIFP: $15.60; 

Effect of 10% Increase: $15.95; 

Effect of 10% Decrease: $15.25. 

Percent change from current: 

September 30, 2013 Reported Value for AIFP: N/A; 

Effect of 10% Increase: 2.24%; 

Effect of 10% Decrease: (2.24%). 

Impact of Ally (formerly GMAC) on AIFP: 

September 30, 2013 Reported Value for AIFP: $15.60; 

Effect of 10% Increase: $16.79; 

Effect of 10% Decrease: $14.40. 

Percent change from current: 

September 30, 2013 Reported Value for AIFP: N/A; 

Effect of 10% Increase: 7.66%; 

Effect of 10% Decrease: (7.66%). 

[End of table] 

Figure A shows the daily closing price of the New GM common stock 

during fiscal years 2012 and 2013. The closing price for September 30, 

2013 was $35.97. The dashed lines represent the high and low price 

used in the sensitivity analysis. 

Figure A: Daily Price of GM Common Stock: 

[Refer to PDF for image: multiple line graph] 

Graph depicts the following for the time period October 2011 through 

September 2013: 

Daily closing price; 

Increase 10%; 

Decrease 10%. 

[End of figure] 

[End of section] 

Systems, Controls, and Legal Compliance: 

Text box: 

Management Assurance Statement: 

The Office of Financial Stability‘s (OFS) management is responsible 

for establishing and maintaining effective internal control and 

financial management systems that meet the objectives of the Federal 

Managers‘ Financial Integrity Act (FMFIA), 31 U.S.C. 3512(c),(d). OFS 

has evaluated its management controls, internal controls over 

financial reporting, and compliance with the federal financial systems 

standards. As part of the evaluation process, we considered the 

results of extensive documentation, assessment and testing of controls 

across OFS, as well as the results of independent audits. We conducted 

our reviews of internal controls in accoradnce with FMFIA and Office 

of Management and Budget (OMB) Circular A-123. 

As a result of our reviews, management concludes that the management 

control objectives described below, taken as a whole, were achieved as 

of September 30, 2013. Specifically, this assurance is provided 

relative to Section 2 (internal controls) and 4 (systems controls) of 

FMFIA. OFS further assures that the financial management systems 

relied upon by OFS are in substantial compliance with the requirements 

imposed by the Federal Financial Management Improvement Act (FFMIA). 

OFS‘ internal controls are designed to meet the management objectives 

established by Treasury and listed below: 

(a) Programs achieve their intended results; 

(b) Resources are used consistent with overall mission; 

(c) Programs and resources are free from waste, fraud, and 

mismanagement; 

(d) Laws and regulations are followed; 

(e) Controls are sufficient to minimize any improper or erroneous 

payments; 

(f) Performance information is reliable; 

(g) System security is in substantial compliance with all relevant 

requirements; 

(h) Continuity of operations planning in critical areas is sufficient 

to reduce risk to reasonable levels; and; 

(i) Financial management systems are in compliance with federal 

financial systems standards, i.e., FMFIA Section 4 and FFMIA. 

In addition, OFS management conducted its assessment of the 

effectiveness of internal control over financial reporting, which 

includes safeguarding of assets and compliance with applicable laws 

and regulations, in accordance with OMB Circular A-123, Management's 

Responsibility for Internal Control, Appendix A, Internal Control over 

Financial Reporting. Based on the results of this evaluation, OFS 

provides unqualified assurance that internal control over financial 

reporting is appropriately designed and operating effectively as of 

September 30, 2013, with no related material weaknesses noted. 

Sincerely, 

Signed by: 

Timothy G. Massad: 

Assistant Secretary for Financial Stability: 

[End of text box] 

Internal Control Program: 

OFS continues to have a high performing internal control program in 

compliance with the Federal Managers’ Financial Integrity Act (FMFIA). 

FMFIA and OMB Circular A-123, Management’s Responsibility for Internal

Control, require agencies to evaluate and report on internal controls 

in place to ensure effectiveness and efficiency of operations, 

compliance with applicable laws and regulations, and reliability of 

financial reporting. OFS has completed these rigorous assessments 

since fiscal year 2009. 

OFS has a Senior Assessment Team (SAT) to guide the organization’s 

efforts to meet the statutory and regulatory requirements surrounding 

a sound system of internal control. OFS’s internal control framework is

based on the principles of the Committee of Sponsoring Organizations 

of the Treadway Commission (COSO). The SAT leverages this framework in 

communicating control objectives across OFS and its third-party 

service providers. Furthermore, managers throughout OFS are 

responsible for ensuring that effective internal controls are 

implemented in their areas of responsibility. Senior management 

throughout OFS provides assurance statements annually concerning 

whether there is reasonable assurance that the objectives of internal 

control are met. Senior management also reports on and takes steps to 

correct control weaknesses and tracks those weaknesses through 

resolution. 

OFS management believes that maintaining integrity and accountability 

in all programs and operations is critical to its mission and 

demonstrates responsible stewardship over assets and resources. It 

also promotes responsible leadership and maximizes desired

program outcomes. OFS has received unmodified opinions from the GAO on 

its financial statements and internal control over financial reporting 

since fiscal year 2009, its first full year of operation. OFS 

continues to refine its internal controls assessment process

to ensure that management can identify risks and deficiencies and make 

timely corrective actions. The OFS fiscal year 2013 self-assessment of 

its system of internal controls did not identify any significant 

deficiencies or material weaknesses. 

Information Technology Systems: 

In fiscal year 2013, OFS continued to utilize and improve the Core 

Investment Transaction Flow (CITF), TARP’s system of record and

accounting translation engine. OFS fine-tuned several standardized 

management reports from CITF to improve their usefulness to management 

decision-making and added functionality to capture key data elements for

use in preparing the financial statements and associated notes. 

Other financially relevant systems are supported by financial agents, 

which provide services to OFS. The financial agency agreements 

maintained by the Treasury Office of the Fiscal Assistant Secretary in

support of OFS require financial agents to design and implement 

suitably robust security plans and internal control programs, to be

reviewed and approved by OFS at least annually. 

In addition, OFS utilizes financial systems maintained by Treasury 

Departmental Offices and various Treasury bureaus. These systems are 

in compliance with federal financial management systems standards and 

undergo regular independent audits. 

Compliance with the Improper Payments Elimination and Recovery Act 

(IPERA): 

The Improper Payments Elimination and Recovery Act of 2010 (IPERA) 

requires agencies to review their programs and activities annually to 

identify those susceptible to significant improper payments. IPERA 

significantly increases agency payment recapture efforts by requiring

reviews of all programs with annual payments of $1 million or more, if 

cost-effective. IPERA requires agencies to report information on their 

significant improper payments and recapture audit programs to the 

President and Congress annually. 

The elimination of improper payments is a major focus of OFS senior 

management. Managers are held accountable for developing and 

strengthening financial management controls to detect and prevent 

improper payments, and thereby better safeguard taxpayer dollars. OFS 

carried out its fiscal year 2013 IPERA review per Treasury-wide

guidance and did not assess any programs or activities as susceptible 

to significant erroneous payments. However, management did identify a 

number of Making Home Affordable (MHA) investor cost share payments 

that were erroneously calculated due to data discrepancies between 

servicer files and the MHA system of record. Data that servicers 

upload to the MHA system of record is used to calculate these incentive

payments. The overall impact of the data errors on incentive payments 

was immaterial. 

In fiscal year 2012 and again in fiscal year 2013, OFS concluded that 

a payment recapture audit was not cost-effective as all programs were 

deemed to have a low risk of significant improper payments. For many

programs, OFS already has procedures in place to review payments for 

completeness and accuracy prior to and after disbursement. For the MHA 

program, nearly 2,000 business rules have been integrated into the MHA 

system of record to ensure the eligibility, accuracy and 

appropriateness of incentive payments. Management leverages OFS’s

extensive internal control testing results or assessment results, as 

well as the Bureau of the Fiscal Service’s testing results over 

administrative disbursements. 

On April 12, 2012, OMB issued Memorandum M-12-11 “Reducing Improper 

Payments through the ‘Do Not Pay List,’” based on a Directive provided 

by the President in June 2010. The President directed agencies to 

“review current pre-payment and pre-award procedures and ensure that a 

thorough review of available databases with relevant information on 

eligibility occurs before the release of any Federal funds.” In order to

achieve this mission, the President directed the creation of a single 

point of entry through which agencies would access relevant data 

before determining eligibility for Federal funding commonly referred 

to as the “Do Not Pay List.” Prior to the release of this Directive, 

OFS already had strong controls in place to help ensure payment 

eligibility. During fiscal year 2013, OFS implemented the “Do Not Pay 

List” solution to monitor administrative disbursements and, to date;

the “Do Not Pay” Business Center has not identified any potential OFS 

improper payments. Going forward, OFS will, as appropriate, integrate 

additional “Do Not Pay List” functionality into its operations. 

Areas for Improvement: 

Over the next year, OFS management will focus on maintaining its 

internal control environment in several key areas as follows: 

* As programs continue to wind-down, OFS will remain vigilant to

maintain effective processes and controls. OFS management will take 

steps to sustain adequate segregation of duties and the right level of 

institutional knowledge among remaining staff as the size of the 

organization decreases. 

* Third-party service providers will continue to support critical

services as programs continue to wind-down. OFS will oversee and

monitor closely these third parties to safeguard OFS resources and

help ensure the operational efficiency of programs and processes. 

* As OFS programs conclude and staff continues to decrease, OFS plans 

to streamline the number and depth of policies and procedures to make 

them more efficient and reduce the maintenance burden. OFS will manage 

this process through the SAT to ensure that any resulting risk is 

minimal and controlled. 

* OFS has developed information technology capabilities to increase

efficiency and automate manual processes. Continuing to leverage

existing information technology assets will help reduce risks 

associated with human error. In fiscal year 2014, OFS will work to

right-size the information technology environment to better align with 

the decreasing level of activity due to the ongoing wind down of OFS 

programs. 

Limitations of the Financial Statements: 

The principal financial statements have been prepared to report the 

financial position and results of operations of OFS’s TARP programs,

consistent with the requirements of 31 U.S.C. 3515(b). While the 

statements have been prepared from the books and records of OFS and 

the Department of the Treasury in accordance with section 116 of EESA 

and Generally Accepted Accounting Principles (GAAP) for Federal 

entities and the formats prescribed by OMB, the statements are in

addition to the financial reports used to monitor and control 

budgetary resources which are prepared from the same books and

records. 

The statements should be read with the realization that they are for a 

component of the U.S. Government, a sovereign entity. 

Part 1 Footnotes: 

[1] The independent trust established to manage the Department of the 

Treasury's beneficial interest in Series C preferred AIG shares. 

[2] The independent trust established to manage the Treasury's 

beneficial interest in preferred AIG shares from the FRBNY. 

[3] 667,093 of these modifications were OFS funded. 

[4] During fiscal year 2013, the OFS held investments in SPVs under the 

TALF and PPIP programs; in fiscal year 2012, the OFS held investments 

in SPVs under the TALF, PPIP and AIG Investment Programs. 

[5] The Department of the Treasury retained no ownership interest in 

AIG at September 30, 2013. It owned 80 million shares of AIG common 

stock, approximately 5.4 percent of AIG's common stock equity, at 

September 30, 2012. 

[6] This consists of equity investments made under CPP and CDCI. 

[7] Subsidies obligated in nonbudgetary financing accounts consist of 

negative subsidies and downward reestimates, which are reductions of 

subsidy cost, transferred from the financing accounts to the Treasury 

General Fund. These transfers occur in the same fiscal year as the 

obligations. 

[End of Part 1] 

Part 2: Financial Section: 

Message From The Chief Financial Officer (CF0): 

The Office of Financial Stability’s (OFS) Agency Financial Report for 

fiscal year 2013 provides readers information on financial results 

relating to the Troubled Asset Relief Program (TARP) as required by 

the Emergency Economic Stabilization Act (EESA) of 2008 and other 

laws. It is a critical part of our efforts to ensure the highest level 

of transparency and accountability to the American people. 

For fiscal year 2013, the Government Accountability Office (GAO) 

provided OFS unmodified audit opinions on the fair presentation of our 

financial statements and the effectiveness of our internal control 

over financial reporting. In addition, the auditors determined that we 

had no material weaknesses or significant deficiencies relating to 

internal control over our accounting and financial reporting 

processes. Since the inception of TARP in 2009, the program has 

consistently received unmodified audit opinions – a remarkable 

achievement for a start-up organization with complex programs. 

I would like to acknowledge senior management’s commitment to good 

governance as well as the discipline, transparency, and care exhibited 

by OFS employees in creating and executing our organization’s policies 

and procedures. We were honored to have received the Certificate of 

Excellence in Accountability Reporting (CEAR) award from the 

Association of Government Accountants for each of the four periods 

from inception through the fiscal year 2012. 

For fiscal year 2013, net income from operations was $7.7 billion, 

resulting in a cumulative net cost of operations of $12.6 billion 

since inception. Cumulative net cost of operations consists of (1) 

total net subsidy cost of $1.6 billion, and (2) housing costs and 

administrative costs of $9.7 billion and $1.3 billion, respectively. 

Total cumulative net subsidy cost consists of net subsidy income from 

the CPP, TIP, AGP, PPIP, SBA and TALF investments totaling $27.4 

billion, offset primarily by net subsidy cost from investments in AIG 

of $15.2 billion, and automobile company investments of $13.7 billion. 

During fiscal year 2013, OFS collected a total of $35.9 billion 

through repayments, sales, dividends, and other receipts. OFS’s gross 

outstanding loan and equity investment balance as of September 30, 

2013 was $23.5 billion, comprising $19.9 billion in AIFP, $3.1 billion 

in CPP, and the remainder in CDCI and TALF. OFS is committed to 

exiting investments in a timely manner while maximizing collections on 

behalf of the taxpayer. 

In fiscal year 2013, OFS continued to maintain rigorous internal 

control processes around transaction processing, disbursements, 

collections, and financial reporting. OFS further standardized and 

automated its subsidiary ledger reporting supporting the validation 

and reconciliation of financial data and continued enhancements to 

various financial reports. In the upcoming fiscal year, OFS will seek 

to streamline and simplify internal control processes in order to 

accommodate the continued wind-down of TARP investment programs. 

I feel fortunate to play a role in the continuing tradition of sound 

fiscal stewardship at OFS. This organization recognizes the importance 

of a robust control environment and will continue to uphold the 

highest standards of integrity as we carry out our fiduciary 

responsibilities to the American people. 

Sincerely, 

Signed by: 

Lorenzo Rasetti: 

Chief Financial Officer: 

[End of section] 

Government Accountability Office Auditor’s Report: 

GAO:

United States Government Accountability Office: 

441 G St. N.W. 

Washington, DC 20548: 

Independent Auditor's Report: 

To the Assistant Secretary for Financial Stability: 

In our audits of the fiscal years 2013 and 2012 financial statements of 

the Troubled Asset Relief: 

Program (TARP), which is implemented by the Office of Financial 

Stability (OFS),[Footnote 1] we found: 

* the OFS financial statements for TARP as of and for the fiscal years 

ended September 30, 2013, and 2012, are presented fairly, in all 

material respects, in accordance with U.S. generally accepted 

accounting principles; 

* OFS maintained, in all material respects, effective internal control 

over financial reporting for TARP as of September 30, 2013; and: 

* no reportable noncompliance for fiscal year 2013 with provisions of 

applicable laws, regulations, contracts, and grant agreements we 

tested. 

The following sections discuss in more detail (1) our report on the 

financial statements and on internal control over financial reporting, 

which includes two emphasis of matters related to certain factors 

affecting the valuation of TARP direct loans, equity investments and 

asset guarantee program and the TARP reporting entity, and required 

supplementary information (RSI) and other information included with the 

financial statements; (2) our report on compliance with laws, 

regulations, contracts, and grant agreements; and (3) agency comments. 

In addition to our responsibility to audit OFS's annual financial 

statements for TARP, we also are required under the Emergency Economic 

Stabilization Act of 2008 (EESA)[Footnote 2] to report at least every 

60 days on the findings resulting from our oversight of the actions 

taken under TARP.[Footnote 3] This report responds to both of these 

requirements. We have issued numerous other reports on TARP in 

connection with this 60-day reporting responsibility, which can be 

found on GAO's website at [hyperlink, http://www.gao.gov. 

Report on the Financial Statements and on Internal Control over 

Financial Reporting: 

In accordance with EESA, we have audited the OFS financial statements 

for TARP. The OFS financial statements for TARP comprise the balance 

sheets as of September 30, 2013, and 2012; the related statements of 

net cost of operations, changes in net position, and budgetary 

resources for the fiscal years then ended; and the related notes to 

the financial statements. We also have audited OFS's internal control 

over financial reporting for TARP as of September 30, 2013, based on 

criteria established under 31 U.S.C. § 3512(c), (d), commonly known as 

the Federal Managers' Financial Integrity Act (FMFIA). 

We conducted our audits in accordance with U.S. generally accepted 

government auditing standards. We believe that the audit evidence we 

obtained is sufficient and appropriate to provide a basis for our audit 

opinions. 

Management's Responsibility: 

OFS management is responsible for (1) the preparation and fair 

presentation of these financial statements in accordance with U.S. 

generally accepted accounting principles; (2) preparing, measuring, and 

presenting the RSI in accordance with U.S. generally accepted 

accounting principles; (3) preparing and presenting other information 

included in documents containing the audited financial statements and 

auditor's report, and ensuring the consistency of that information with 

the audited financial statements and the RSI; (4) maintaining effective 

internal control over financial reporting, including the design, 

implementation, and maintenance of internal control relevant to the 

preparation and fair presentation of financial statements that are free 

from material misstatement, whether due to fraud or error; (5) 

evaluating the effectiveness of internal control over financial 

reporting based on the criteria established under FMFIA; and (6) 

providing its assertion about the effectiveness of internal control 

over financial reporting as of September 30, 2013, based on its 

evaluation, included in the accompanying Management's Report on 

Internal Control over Financial Reporting in appendix I. 

Auditor's Responsibility: 

Our responsibility is to express an opinion on these financial 

statements and an opinion on OFS's internal control over financial 

reporting for TARP based on our audits. U.S. generally accepted 

government auditing standards require that we plan and perform the 

audits to obtain reasonable assurance about whether the financial 

statements are free from material misstatement, and whether effective 

internal control over financial reporting was maintained in all 

material respects. We are also responsible for applying certain limited 

procedures to the RSI and other information included with the financial 

statements. 

An audit of financial statements involves performing procedures to 

obtain audit evidence about the amounts and disclosures in the 

financial statements. The procedures selected depend on the auditor's 

judgment, including the auditor's assessment of the risks of material 

misstatement of the financial statements, whether due to fraud or 

error. In making those risk assessments, the auditor considers internal 

control relevant to the entity's preparation and fair presentation of 

the financial statements in order to design audit procedures that are 

appropriate in the circumstances. An audit of financial statements also 

involves evaluating the appropriateness of the accounting policies used 

and the reasonableness of significant accounting estimates made by 

management, as well as evaluating the overall presentation of the 

financial statements. An audit of internal control over financial 

reporting includes obtaining an understanding of internal control over 

financial reporting, assessing the risk that a material weakness 

exists, evaluating the design and operating effectiveness of internal 

control over financial reporting based on the assessed risk, and 

testing relevant internal control over financial reporting. Our audit 

of internal control also considered the entity's process for evaluating 

and reporting on internal control over financial reporting based on 

criteria established under FMFIA. Our audits also included performing 

such other procedures as we considered necessary in the circumstances. 

We did not evaluate all internal controls relevant to operating 

objectives as broadly established under FMFIA, such as those controls 

relevant to preparing performance information and ensuring efficient 

operations. We limited our internal control testing to testing controls 

over financial reporting. Our internal control testing was for the 

purpose of expressing an opinion on whether effective internal control 

over financial reporting was maintained, in all material respects. 

Consequently, our audit may not identify all deficiencies in internal 

control over financial reporting that are less severe than a material 

weakness.[Footnote 4]  

Definitions and Inherent Limitations of Internal Control over Financial 

Reporting: 

An entity's internal control over financial reporting is a process 

effected by those charged with governance, management, and other 

personnel, the objectives of which are to provide reasonable assurance 

that (1) transactions are properly recorded, processed, and summarized 

to permit the preparation of financial statements in accordance with 

U.S. generally accepted accounting principles, and assets are 

safeguarded against loss from unauthorized acquisition, use, or 

disposition, and (2) transactions are executed in accordance with laws 

governing the use of budget authority and with other applicable laws, 

regulations, contracts, and grant agreements that could have a direct 

and material effect on the financial statements. 

Because of its inherent limitations, internal control over financial 

reporting may not prevent, or detect and correct, misstatements due to 

fraud or error. We also caution that projecting any evaluation of 

effectiveness to future periods is subject to the risk that controls 

may become inadequate because of changes in conditions, or that the 

degree of compliance with the policies or procedures may deteriorate. 

Opinion on Financial Statements: 

In our opinion, OFS's financial statements for TARP present fairly, in 

all material respects, TARP's financial position as of September 30, 

2013, and 2012, and its net cost of operations, changes in net 

position, and budgetary resources for the fiscal years then ended in 

accordance with U.S. generally accepted accounting principles. 

Emphasis of Matters: 

Valuation of TARP's Direct Loans, Equity Investments, and Asset 

Guarantee Program: 

As discussed in notes 2 and 6 to OFS's financial statements for TARP, 

the valuation of TARP's direct loans, equity investments, and asset 

guarantee program is based on estimates using economic and financial 

credit subsidy models. The estimates use entity-specific as well as 

relevant market data as the basis for assumptions about future 

performance, and incorporate an adjustment for market risk to reflect 

the variability around any unexpected losses. In valuing the direct 

loans, the equity investments, and the asset guarantee program, OFS 

management considered and selected assumptions and data that it 

believed provided a reasonable basis for the estimated subsidy 

allowance and related subsidy cost or income reported in the financial 

statements.[Footnote 5] However, there are numerous factors that 

affect these assumptions and estimates, which are inherently subject 

to substantial uncertainty arising from the likelihood of future 

changes in general economic, regulatory, and market conditions. The 

estimates have an added uncertainty resulting from the unique nature 

of certain TARP assets. As such, there will be differences between the 

net estimated values of the direct loans, equity investments, and 

asset guarantee program as of September 30, 2013, and 2012 (which 

totaled $17.9 billion and $41.2 billion, respectively) and the amounts 

that OFS will ultimately realize from these assets, and such 

differences may be material. These differences will also affect TARP's 

ultimate cost. Further, TARP's ultimate cost will change as OFS 

continues to incur costs relating to its Treasury Housing Programs. 

[Footnote 6] 

TARP Reporting Entity: 

As discussed in note 1 to the financial statements, while OFS's 

financial statements for TARP reflect activity of OFS in implementing 

TARP, including providing resources to various entities to help 

stabilize the financial markets, the statements do not include the 

assets, liabilities, or results of operations of these entities in 

which OFS has a significant equity interest. According to OFS 

officials, OFS's investments were not made to engage in the business 

activities of the respective entities, and OFS has determined that none 

of these entities meet the criteria for a federal entity. 

Our opinion on OFS's financial statements for TARP is not modified with 

respect to these matters. 

Opinion on Internal Control over Financial Reporting: 

In our opinion, OFS maintained, in all material respects, effective 

internal control over financial reporting for TARP as of September 30, 

2013, based on criteria established under FMFIA. 

During our fiscal year 2013 audit, we identified deficiencies in OFS's 

internal control over financial reporting that we do not consider to be 

material weaknesses or significant deficiencies.[Footnote 7] 

Nonetheless, these deficiencies warrant OFS management's attention. We 

have communicated these matters to OFS management and, where 

appropriate, will report on them separately. 

Other Matters: 

Required Supplementary Information: 

U.S. generally accepted accounting principles issued by the Federal 

Accounting Standards Advisory Board (FASAB) require that RSI be 

presented to supplement the financial statements.[Footnote 8] Although 

not a part of the financial statements, FASAB considers this 

information to be an essential part of financial reporting for placing 

the financial statements in appropriate operational, economic, or 

historical context. We have applied certain limited procedures to the 

RSI in accordance with U.S. generally accepted government auditing 

standards, which consisted of inquiries of management about the 

methods of preparing the RSI and comparing the information for 

consistency with management's responses to the auditor's inquiries, 

the financial statements, and other knowledge we obtained during the 

audit of the financial statements, in order to report omissions or 

material departures from FASAB guidelines, if any, identified by these 

limited procedures. We did not audit and we do not express an opinion 

or provide any assurance on the RSI because the limited procedures we 

applied do not provide sufficient evidence to express an opinion or 

provide any assurance. 

Other Information: 

OFS's other information contains a wide range of information, some of 

which is not directly related to the financial statements.[Footnote 9] 

This information is presented for purposes of additional analysis and 

is not a required part of the financial statements or RSI. We read the 

other information included with the financial statements in order to 

identify material inconsistencies, if any, with the audited financial 

statements. Our audit was conducted for the purpose of forming an 

opinion on OFS's financial statements for TARP. We did not audit and do 

not express an opinion or provide any assurance on the other 

information. 

Report on Compliance with Laws, Regulations, Contracts, and Grant 

Agreements: 

In connection with our audits of OFS's financial statements for TARP, 

we tested compliance with selected provisions of applicable laws, 

regulations, contracts, and grant agreements consistent with our 

auditor's responsibility discussed below. We caution that noncompliance 

may occur and not be detected by these tests. We performed our tests of 

compliance in accordance with U.S. generally accepted government 

auditing standards. 

Management's Responsibility: 

OFS management is responsible for complying with laws, regulations, 

contracts, and grant agreements applicable to OFS. 

Auditor's Responsibility: 

Our responsibility is to test compliance with selected provisions of 

laws, regulations, contracts, and grant agreements applicable to OFS 

that have a direct effect on the determination of material amounts and 

disclosures in the TARP financial statements, and perform certain other 

limited procedures. Accordingly, we did not test compliance with all 

laws, regulations, contracts, and grant agreements applicable to OFS. 

Results of Our Tests for Compliance with Laws, Regulations, Contracts, 

and Grant Agreements: 

Our tests for compliance with selected provisions of applicable laws, 

regulations, contracts, and grant agreements disclosed no instances of 

noncompliance for fiscal year 2013 that would be reportable under U.S. 

generally accepted government auditing standards. However, the 

objective of our tests was not to provide an opinion on compliance with 

laws, regulations, contracts, and grant agreements applicable to OFS. 

Accordingly, we do not express such an opinion. 

Intended Purpose of Report on Compliance with Laws, Regulations, 

Contracts, and Grant Agreements: 

The purpose of this report is solely to describe the scope of our 

testing of compliance with selected provisions of applicable laws, 

regulations, contracts, and grant agreements, and the results of that 

testing, and not to provide an opinion on compliance. This report is an 

integral part of an audit performed in accordance with U.S. generally 

accepted government auditing standards in considering compliance. 

Accordingly, this report on compliance with laws, regulations, 

contracts, and grant agreements is not suitable for any other purpose. 

Agency Comments: 

In commenting on a draft of this report, the Assistant Secretary for 

Financial Stability stated that OFS is proud to receive unmodified 

opinions on its financial statements and its internal control over 

financial reporting. He also stated that OFS is committed to 

maintaining the high standards and transparency reflected in these 

audit results. The complete text of OFS's comments is reprinted in its 

entirety in appendix II. 

Signed by: 

Gary T. Engel: 

Director: 

Financial Management and Assurance: 

December 5, 2013: 

[End of section] 

Appendix I: Management's Report on Internal Control Over Financial 

Reporting: 

Department Of The Treasury: 

Assistant Secretary: 

Washington, D.C. 20220: 

Management's Report on Internal Control Over Financial Reporting: 

The Office of Financial Stability's (OFS) internal control over 

financial reporting (for TARP) is a process effected by those charged 

with governance, management, and other personnel, the objectives of 

which are to provide reasonable assurance that (1) transactions are 

properly recorded, processed, and summarized to permit the preparation 

of financial statements in accordance with U.S. generally accepted 

accounting principles, and assets are safeguarded against loss from 

unauthorized acquisition, use, or disposition; and (2) transactions are 

executed in accordance with laws governing the use of budget authority 

and with other applicable laws, regulations, contracts, and grant 

agreements that could have a direct and material effect on the 

financial statements. 

OFS management is responsible for maintaining effective internal 

control over financial reporting, including the design, implementation, 

and maintenance of internal control relevant to the preparation and 

fair presentation of financial statements that are free from material 

misstatement, whether due to fraud or error. OFS management evaluated 

the effectiveness of OFS's internal control over financial reporting as 

of September 30, 2013, based on the criteria established under 31 

U.S.C. 3512(c), (d) (commonly known as the Federal Managers' Financial 

Integrity Act). 

Based on that evaluation, we conclude that, as of September 30, 2013, 

OFS's internal control over financial reporting was effective. 

Signed by: 

Timothy G. Massad: 

Assistant Secretary for Financial Stability: 

Office of Financial Stability: 

Signed by: 

Lorenzo Rasetti: 

Chief Financial Officer: 

December 5, 2013: 

[End of section] 

Appendix II: OFS Response to Auditor's Report: 

Department Of The Treasury: 

Assistant Secretary: 

Washington, D.C. 20220: 

December 5, 2013: 

Mr. Gary T. Engel: 

Director, Financial Management and Assurance: 

U.S. Government Accountability Office: 

441 G Street, N.W. 

Washington, DC 20548: 

Dear Mr. Engel: 

We have reviewed the Independent Auditor's Report concerning your audit 

of the Office of Financial Stability's (OFS) fiscal year 2013 financial 

statements. OFS is proud to receive unmodified opinions on our 

financial statements and our internal controls over financial 

reporting. 

We appreciate the professionalism and commitment demonstrated by your 

staff throughout the audit process. The process was valuable for us and 

resulted in concrete improvements in our operations and financial 

management efforts. 

OFS is committed to maintaining the high standards and transparency 

reflected in these audit results as we carry out our responsibilities 

for managing the Troubled Asset Relief Program. 

Sincerely, 

Signed by: 

Timothy G. Massad: 

Assistant Secretary for Financial Stability: 

[End of section] 

Financial Statements: 

The Office of Financial Stability (OFS) prepares financial statements 

for the Troubled Asset Relief Program (TARP) as a critical aspect of 

ensuring the accountability and stewardship for the public resources 

entrusted to it and as required by Section 116 of the Emergency 

Economic Stabilization Act of 2008 (EESA). Preparation of these 

statements is also an important part of the OFS's financial management 

goal of providing accurate and reliable information that may be used to 

assess performance and allocate resources. The OFS management is 

responsible for the accuracy and propriety of the information contained 

in the financial statements and the quality of internal controls. The 

statements are, in addition to other financial reports, used to monitor 

and control budgetary resources. The OFS prepares these financial 

statements from its books and records in conformity with the accounting 

principles generally accepted in the United States for federal entities 

and the formats prescribed by the Office of Management and Budget 

(OMB). 

While these financial statements reflect activity: 

of the OFS in executing its programs, including providing resources to 

various entities to help stabilize the financial markets, they do not 

include, as more fully discussed in Note 1, the assets, liabilities, or 

results of operations of commercial entities in which the OFS has a 

significant equity interest. 

The Balance Sheet summarizes the OFS assets, liabilities and net 

position as of September 30, 2013 and 2012. Intragovernmental assets 

and liabilities resulting from transactions between federal agencies 

are presented separately from assets and liabilities resulting from 

transactions with the public. 

The Statement of Net Cost presents the net cost of (income from) 

operations for the years ended September 30, 2013 and 2012. 

The Statement of Changes in Net Position presents the change in OFS's 

net position for two components, Cumulative Results of Operations and 

Unexpended Appropriations, for the years ended September 30, 2013 and 

2012. The ending balances of both components of net position are also 

reported on the Balance Sheet. 

The Statement of Budgetary Resources provides information about funding 

and availability of budgetary resources and the status of those 

resources for the years ended September 30, 2013 and 2012. 

The accompanying notes are an integral part of these financial 

statements. 

Office of Financial Stability (Troubled Asset Relief Program): 

Balance Sheet: 

As of September 30, 2013 and 2012 (Dollars in Millions): 

Assets: 

Intragovernmental Assets: 

Fund Balance with Treasury (Note 3); 

2013: $53,240; 

2012: $75,495. 

Asset Guarantee Program (Note 6); 

2013: [Empty]; 

2012: $967. 

Other; 

2013: $1; 

2012: $1. 

Total Intragovernmental Assets; 

2013: $53,241; 

2012: $76,463. 

Cash on Deposit for Housing Program (Note 4): 

2013: $50; 

2012: $50. 

Troubled Asset Relief Program: 

Direct Loans and Equity Investments, Net (Note 6); 

2013: $18,769; 

2012: $40,231. 

Total Assets; 

2013: $71,160; 

2012: $116,744. 

Liabilities: 

Intragovernmental Liabilities: 

Accounts Payable and Other Liabilities; 

2013: $1; 

2012: $2. 

Due to the General Fund (Note 7); 

2013: $8,139; 

2012: $9,714. 

Principal Payable to the Bureau of the Public Debt (Note 8); 

2013: $11,949; 

2012: $52,828. 

Total Intragovernmental Liabilities; 

2013: $20,089; 

2012: $62,544. 

Accounts Payable and Other Liabilities; 

2013: $87; 

2012: $87. 

Liability for Treasury Housing Programs Under TARP: 

FHA - Refinance Program (Notes 5 and 6); 

2013: $9; 

2012: $7. 

Making Home Affordable Program and Hardest Hit Fund (Note 5);

2013: $263; 

2012: $241. 

Total Intragovernmental Liabilities; 

2013: $20,448; 

2012: $62,879. 

Commitments and Contingencies (Note 9): 

Net Position: 

Unexpended Appropriations; 

2013: $50,663; 

2012: $54,572. 

Cumulative Results of Operations; 

2013: $49; 

2012: ($707). 

Total Net Position; 

2013: $50,712; 

2012: $53,865. 

Total Liabilities and Net Position; 

2013: $71,160. 

2012: $116,744. 

[End of table] 

Statement Of Net Cost: 

For the Years Ended September 30, 2013 and 2012 (Dollars in Millions): 

Strategic Goal: To Ensure The Overall Stability And Liquidity Of The 

Financial System, Prevent Avoidable Foreclosures And Preserve 

Homeownership: 

Gross Cost of (Income from) Operations: 

Program Subsidy Cost (Income) (Note 6): 

Direct Loan and Equity Investment Programs; 

2013: ($11,794); 

2012: ($10,778). 

Other Credit Programs; 

2013: ($116); 

2012: ($201). 

Total Program Subsidy Cost (Income); 

2013: ($11,910); 

2012: ($10,979). 

Interest Expense on Borrowings from the Bureau of the Public Debt 

(Note 10); 

2013: $856; 

2012: $2,252. 

Treasury Housing Programs Under TARP (Note 5); 

2013: $3,961; 

2012: $2,963. 

Administrative Cost; 

2013: $248; 

2012: $268. 

Total Gross Cost of (Income from) Operations; 

2013: ($6,845); 

2012: ($5,496). 

Earned Revenue: 

Dividend and Interest Income - Programs (Note 6); 

2013: ($1,292); 

2012: ($2,733). 

Interest Income on Financing Account (Note 10); 

2013: ($235); 

2012: ($605). 

Subsidy Allowance Amortization (Note 10); 

2013: $671; 

2012: $1,086. 

Total Earned Revenue; 

2013: ($856); 

2012: ($2,252). 

Total Net Cost of (Income from) Operations; 

2013: ($7,701); 

2012: ($7,748). 

[End of table] 

Statement Of Changes In Net Position: 

For the Years Ended September 30, 2012 and 2011 (Dollars in Millions): 

Beginning Balances: 

2013 Unexpended Appropriations: $54,572; 

2013 Cumulative Results of Operations: ($707); 

2012 Unexpended Appropriations: $57,544; 

2012 Cumulative Results of Operations: ($27,836). 

Budgetary Financing Sources: 

Appropriations Received: 

2013 Unexpended Appropriations: $788; 

2013 Cumulative Results of Operations: 0; 

2012 Unexpended Appropriations: $27,593); 

2012 Cumulative Results of Operations: 0. 

Appropriations Used: 

2013 Unexpended Appropriations: ($4,697); 

2013 Cumulative Results of Operations: $4,697; 

2012 Unexpended Appropriations: ($30,565); 

2012 Cumulative Results of Operations: $30,565. 

Other Financing Sources: 

2013 Unexpended Appropriations: 0; 

2013 Cumulative Results of Operations: ($6,945); 

2012 Unexpended Appropriations: 0; 

2012 Cumulative Results of Operations: ($11,184). 

Total Financing Sources: 

2013 Unexpended Appropriations: ($3,909); 

2013 Cumulative Results of Operations: $756; 

2012 Unexpended Appropriations: ($2,972); 

2012 Cumulative Results of Operations: $19,381. 

Net (Cost of) Income from Operations; 

2013 Unexpended Appropriations: 0; 

2013 Cumulative Results of Operations: $7,701; 

2012 Unexpended Appropriations: 0; 

2012 Cumulative Results of Operations: $7,748. 

Net Change: 

2013 Unexpended Appropriations: ($3,909); 

2013 Cumulative Results of Operations: $756; 

2012 Unexpended Appropriations: ($2,972); 

2012 Cumulative Results of Operations: $27,129. 

Ending Balances: 

2013 Unexpended Appropriations: $50,663; 

2013 Cumulative Results of Operations: $49; 

2012 Unexpended Appropriations: $54,572; 

2012 Cumulative Results of Operations: ($707). 

[End of table] 

Statement Of Budgetary Resources: 

For the Years Ended September 30, 2013 and 2012 (Dollars in Millions): 

Budgetary Resources: 

Unobligated Balances Brought Forward: 

2013: 

Budgetary Accounts: $14,350; 

Nonbudgetary Financing Accounts: $17,631; 

2012: 

Budgetary Accounts: $14,166; 

Nonbudgetary Financing Accounts: $21,143. 

Recoveries of Prior Year Unpaid Obligations; 

2013: 

Budgetary Accounts: $7,246; 

Nonbudgetary Financing Accounts: $4,941; 

2012: 

Budgetary Accounts: $146; 

Nonbudgetary Financing Accounts: $6,114. 

Borrowing Authority Withdrawn; 

2013: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: ($2,611); 

2012: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: ($5,832). 

Actual Repayments of Debt, Prior Year Balances; 

2013: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: ($17,738); 

2012: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: ($19,900). 

Appropriations: 

2013: 

Budgetary Accounts: $788; 

Nonbudgetary Financing Accounts: 0; 

2012: 

Budgetary Accounts: $27,593; 

Nonbudgetary Financing Accounts: 0. 

Borrowing Authority: 

2013: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: $208; 

2012: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: $2,659. 

Spending Authority from Offsetting Collections; 

2013: 

Budgetary Accounts: $1; 

Nonbudgetary Financing Accounts: $13,131; 

2012: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: $21,695. 

Total Budgetary Resources (Note 11): 

2013: 

Budgetary Accounts: $22,385; 

Nonbudgetary Financing Accounts: $15,562; 

2012: 

Budgetary Accounts: $41,905; 

Nonbudgetary Financing Accounts: $25,879. 

Status Of Budgetary Resources: 

Obligations Incurred: 

2013: 

Budgetary Accounts: $779; 

Nonbudgetary Financing Accounts: $14,100; 

2012: 

Budgetary Accounts: $27,555; 

Nonbudgetary Financing Accounts: $8,248. 

Unobligated Balance, Apportioned: 

2013: 

Budgetary Accounts: $11; 

Nonbudgetary Financing Accounts: $668; 

2012: 

Budgetary Accounts: $41; 

Nonbudgetary Financing Accounts: $3,946. 

Unapportioned: 

2013: 

Budgetary Accounts: $21,595; 

Nonbudgetary Financing Accounts: $794; 

2012: 

Budgetary Accounts: $14,309; 

Nonbudgetary Financing Accounts: $13,685. 

Total Unobligated Balance: 

2013: 

Budgetary Accounts: $21,606; 

Nonbudgetary Financing Accounts: $1,462; 

2012: 

Budgetary Accounts: $14,350; 

Nonbudgetary Financing Accounts: $17,631. 

Total Status Of Budgetary Resources: 

2013: 

Budgetary Accounts: $22,385; 

Nonbudgetary Financing Accounts: $15,562; 

2012: 

Budgetary Accounts: $41,905; 

Nonbudgetary Financing Accounts: $25,879. 

Change In Obligated Balances: 

Obligated Balance Brought Forward: 

Unpaid Obligations Brought Forward October 1: 

2013: 

Budgetary Accounts: $40,548; 

Nonbudgetary Financing Accounts: $5,926; 

2012: 

Budgetary Accounts: $43,814; 

Nonbudgetary Financing Accounts: $13,158. 

Obligations Incurred: 

2013: 

Budgetary Accounts: $779; 

Nonbudgetary Financing Accounts: $14,100; 

2012: 

Budgetary Accounts: $27,555; 

Nonbudgetary Financing Accounts: $8,248. 

Gross Outlays: 

2013: 

Budgetary Accounts: ($4,675); 

Nonbudgetary Financing Accounts: ($14,092); 

2012: 

Budgetary Accounts: ($30,675); 

Nonbudgetary Financing Accounts: ($9,366). 

Recoveries of Prior Year Unpaid Obligations: 

2013: 

Budgetary Accounts: ($7,246); 

Nonbudgetary Financing Accounts: ($4,941); 

2012: 

Budgetary Accounts: ($146); 

Nonbudgetary Financing Accounts: ($6,114). 

Obligated Balance, Net, End of Year: 

Unpaid Obligations, End of Year: 

2013: 

Budgetary Accounts: $29,406; 

Nonbudgetary Financing Accounts: $993; 

2012: 

Budgetary Accounts: $40,548; 

Nonbudgetary Financing Accounts: $5,926. 

Uncollected Customer Payments from Federal Sources: 

2013: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: ($226); 

2012: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: ($349). 

Obligated Balance, Net, End of Year: 

2013: 

Budgetary Accounts: $29,406; 

Nonbudgetary Financing Accounts: $767; 

2012: 

Budgetary Accounts: $40,548; 

Nonbudgetary Financing Accounts: $5,577. 

Budget Authority and Outlays, Net: 

Budget Authority, Gross: 

2013: 

Budgetary Accounts: $789; 

Nonbudgetary Financing Accounts: $13,339; 

2012: 

Budgetary Accounts: $27,593; 

Nonbudgetary Financing Accounts: $24,354. 

Actual Offsetting Collections: 

2013: 

Budgetary Accounts: ($1); 

Nonbudgetary Financing Accounts: ($36,604); 

2012: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: ($81,269). 

Change in Uncollected Customer Payments from Federal Sources: 

2013: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: $123; 

2012: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: $147. 

Budget Authority, Net; 

2013: 

Budgetary Accounts: $788; 

Nonbudgetary Financing Accounts: ($23,142); 

2012: 

Budgetary Accounts: $27,593; 

Nonbudgetary Financing Accounts: ($56,768). 

Gross Outlays; 

2013: 

Budgetary Accounts: $4,675; 

Nonbudgetary Financing Accounts: $14,092; 

2012: 

Budgetary Accounts: $30,675; 

Nonbudgetary Financing Accounts: $9,366. 

Actual Offsetting Collections: 

2013: 

Budgetary Accounts: ($1); 

Nonbudgetary Financing Accounts: ($36,604); 

2012: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: ($81,269). 

Net Outlays: 

2013: 

Budgetary Accounts: $4,674; 

Nonbudgetary Financing Accounts: ($22,512); 

2012: 

Budgetary Accounts: $30,675; 

Nonbudgetary Financing Accounts: ($71,903). 

Distributed Offsetting Receipts; 

2013: 

Budgetary Accounts: ($13,218); 

Nonbudgetary Financing Accounts: 0; 

2012: 

Budgetary Accounts: ($6,063); 

Nonbudgetary Financing Accounts: 0. 

Agency Outlays, Net: 

2013: 

Budgetary Accounts: ($8,544); 

Nonbudgetary Financing Accounts: 0; 

2012: 

Budgetary Accounts: $24,612; 

Nonbudgetary Financing Accounts: ($71,903). 

[End of table] 

Notes To The Financial Statements: 

Note 1. Reporting Entity: 

The Troubled Asset Relief Program (TARP) was authorized by the 

Emergency Economic Stabilization Act of 2008, as amended (EESA or "the 

Act"). The Act gave the Secretary of the Treasury (the Secretary) broad 

and flexible authority to establish the TARP to purchase and insure 

mortgages and other troubled assets, which permitted the Secretary to 

inject capital into banks and other commercial companies by taking 

equity positions in those entities to help stabilize the financial 

markets. 

The EESA established certain criteria under which the TARP would 

operate, including provisions that impact the budgeting, accounting, 

and reporting of troubled assets acquired under the Act. Section 115: 

of the EESA limited the authority of the Secretary to purchase troubled 

assets up to $700.0 billion outstanding at any one time, calculated as 

the aggregate purchase prices of all troubled assets held. In July 

2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act 

amended Section 115 of the EESA, limiting the TARP's authority to a 

total of $475.0 billion cumulative obligations (i.e. purchases and 

guarantees) and prohibiting any new obligations for programs or 

initiatives that had not been publicly announced prior to June 25, 

2010. Of the maximum $475.0 billion authority under the EESA, OFS had 

utilized (including purchases made, legal commitments to make purchases 

and offsets for guarantees made) $456.6 billion as of September 30, 

2013 and $467.0 billion as of September 30, 2012. The reduction between 

2013 and 2012 reflects the deobligation of unused funds in certain 

programs. 

The TARP developed the following programs: the Capital Purchase Program 

(CPP); the Community Development Capital Initiative (CDCI); the Public-

Private Investment Program (PPIP); the Term Asset-Backed Securities 

Loan Facility (TALF); the SBA 7(a) Securities Purchase Program (SBA 

7(a)); the Automotive Industry Financing Program (AIFP); the American 

International Group, Inc. (AIG) Investment Program (formerly known as 

the Systemically Significant Failing Institutions Program); the Asset 

Guarantee Program (AGP); and the Treasury Housing Programs Under TARP 

(see Notes 5 and 6 for details regarding all of these programs). 

While these financial statements reflect the activity of the OFS in 

executing its programs, including providing resources to various 

entities to help stabilize the financial markets, they do not include 

the assets, liabilities, or results of operations of commercial 

entities in which the OFS has a significant equity interest. Through 

the purchase of troubled assets, the OFS entered into several different 

types of direct loan, equity investment, and other credit programs 

(which consist of the AGP and the Federal Housing Administration (FHA) 

Refinance Program) (collectively, the OFS programs) with private 

entities. The OFS programs were entered into with the intent of helping 

to stabilize the financial markets and mitigating, as best as possible, 

any adverse impact on the economy; they were not entered into to engage 

in the business activities of the respective private entities. Based on 

this intent, the OFS concluded that such programs are considered 

"bailouts," under the provisions of paragraph 50 of Statement of 

Federal Financial Accounting Concepts (SFFAC) No. 2, Entity and 

Display. In addition, these entities are not included in the Federal 

budget and, therefore, do not meet the conclusive criteria in SFFAC No. 

2. As such, the OFS determined that none of these entities should be 

classified as a federal entity. Consequently, their assets, liabilities 

and results of operations were not consolidated in these OFS financial 

statements, but the value of such investments was recorded in the OFS 

financial statements. 

In addition, the OFS has made loans and investments in certain Special 

Purpose Vehicles (SPV)[Footnote 4]. SFFAC No. 2, paragraphs 43 and 44, 

reference indicative criteria such as ownership and control to carry 

out government powers and missions, as criteria in the determination 

about whether an entity should be classified as a federal entity. The 

OFS has concluded that none of the SPVs meet the conclusive or 

indicative criteria to be classified as a federal entity. As a result, 

the assets, liabilities and results of operations of the SPVs are not 

included in these OFS financial statements. Additional disclosures 

regarding certain SPV investments are included in Notes 2 and 6; see 

PPIP, TALF and AIG Investment Program. 

The EESA established the OFS within the Office of Domestic Finance of 

the U. S. Department of the Treasury (Treasury) to administer the TARP 

and required its separate audited financial statements. The OFS 

prepares stand-alone financial statements for TARP to satisfy EESA 

Section 116(b)(1). Additionally, as an office of the Treasury, its 

financial statements are consolidated into Treasury's Agency Financial 

Report. 

Note 2. Summary Of Significant Accounting Policies: 

Basis of Accounting and Presentation: 

The accompanying financial statements include the results of operations 

of the TARP and have been prepared from the accounting records of the 

OFS in conformity with accounting principles generally accepted in the 

United States for federal entities (Federal GAAP), and the OMB Circular 

A-136, Financial Reporting Requirements, as amended. Federal GAAP 

includes the standards issued by the Federal Accounting Standards 

Advisory Board (FASAB). The FASAB is recognized by the American 

Institute of Certified Public Accountants (AICPA) as the official 

accounting standards-setting body for the U.S. Government. 

Section 123(a) of the EESA requires that the budgetary cost of 

purchases of troubled assets and guarantees of troubled assets, and any 

cash flows associated with authorized activities, be determined in 

accordance with the Federal Credit Reform Act of 1990 (FCRA). Section 

123(b) (1) of the EESA requires that the budgetary costs of troubled 

assets and guarantees of troubled assets be calculated by adjusting the 

discount rate for market risks. As a result of this requirement, the 

OFS considered market risk in its calculation and determination of the 

estimated net present value of its direct loans, equity investments and 

other credit programs for budgetary purposes. Similarly, market risk is 

considered in the valuations for financial reporting purposes (see Note 

6 for further discussion). 

Consistent with its accounting policy for equity investments in private 

entities, including SPVs, the OFS accounts for its equity investments 

at fair value. Since fair value is not defined in federal accounting 

standards as established in Statement of Federal Financial Accounting 

Standards (SFFAS) No. 34, The Hierarchy of Generally Accepted 

Accounting Principles, Including the Application of Standards Issued by 

the Financial Accounting Standards Board, the OFS conforms to fair 

value definitions contained in the private sector Financial Accounting 

Standards Codification (ASC) 820, Fair Value Measurement. OFS defines 

fair value of its equity investments as the estimated amount of 

proceeds that would be received if the equity investments were sold to 

a market participant in an orderly transaction. Note 6 presents Direct 

Loan and Equity Investments and the Asset Guarantee Program receivable 

tabulated by the Level of Observation of the inputs used in the 

valuation process. Level 1 assets are measured using quoted market 

prices for identical assets. Level 2 assets are measured using 

observable market inputs other than direct market quotes. Level 3 

assets are measured using unobservable inputs. 

The OFS uses the present value accounting concepts embedded in SFFAS 

No. 2, Accounting for Direct Loans and Loan Guarantees, as amended 

(SFFAS No. 2), to derive fair value measurements for its equity 

investments in Levels 2 and 3. The OFS concluded that some of the 

equity investments, such as preferred stock, were similar to direct 

loans since there was a stated rate and a redemption feature which, if 

elected, required repayment of the amount invested. Furthermore, 

consideration of market risk provided a basis to arrive at a fair value 

measurement. Therefore, the OFS concluded that SFFAS No. 2 (as more 

fully discussed below) should be followed for reporting and disclosure 

requirements of its equity investments. 

The OFS applies the provisions of FCRA for budgetary accounting and the 

associated FASAB accounting standard SFFAS No. 2 for financial 

reporting for direct loans and other credit programs. Direct loans 

disbursed and outstanding are recognized as assets at the net present 

value of their estimated future cash flows. Outstanding asset 

guarantees are recognized as liabilities or assets at the net present 

value of their estimated future cash flows. Liabilities under the FHA-

Refinance Program are recognized at the net present value of their 

estimated future cash flows when the FHA guarantees loans. 

For direct loans and equity investments, the subsidy allowance account 

represents the difference between the face value of the outstanding 

direct loan and equity investment balance and the net present value of 

the expected future cash flows or fair value, and is reported as an 

adjustment to the face value of the direct loan or equity investment. 

The OFS recognizes dividend income associated with equity investments 

when declared by the entity in which the OFS has invested and when 

received in relation to any repurchases, exchanges and restructurings. 

The OFS recognizes interest income when earned on performing loans; 

interest income is not accrued on non-performing loans. The OFS 

reflects changes, referred to as reestimates, in its determination of 

the value of direct loans, equity investments, and other credit 

programs in the subsidy cost on the Statement of Net Cost annually. 

In certain programs, the OFS has received common stock warrants, 

additional preferred stock (referred to as warrant preferred stock) or 

additional notes as additional consideration. The OFS accounts for any 

proceeds received from the sale of these investments as fees under 

SFFAS No. 2; as such, they are credited to the subsidy allowance rather 

than to income. 

Use of Estimates: 

The OFS has made certain estimates and assumptions relating to the 

reporting of assets, liabilities, revenues, and cost to prepare these 

financial statements. Actual results could significantly differ from 

these estimates. Major financial statement lines that include estimates 

are Direct Loans and Equity Investments, Net, the Asset Guarantee 

Program and the Liabilities for Treasury Housing Programs Under TARP on 

the Balance Sheet, and related Program Subsidy Cost (Income) on the 

Statement of Net Cost (see Note 6). 

The most significant differences between actual results and estimates 

may occur in the valuation of OFS programs. These valuation estimates 

are sensitive to slight changes in model assumptions, such as general 

economic conditions, specific stock price volatility of the entities in 

which the OFS has an equity interest, estimates of expected default, 

and prepayment rates. Forecasts of future financial results have 

inherent uncertainty, and the Direct Loans and Equity Investments, Net 

and Asset Guarantee Program line items, as of fiscal year ends, 

primarily reflect relatively illiquid assets with values that are 

sensitive to future economic conditions and other assumptions. 

Estimates are also prepared for the FHA-Refinance Program to determine 

the liability for losses. 

Credit Reform Accounting: 

The OFS accounts for the cost of direct loans, equity investments and 

other credit programs in accordance with Section 123(a) of the EESA and 

the FCRA for budgetary accounting, and fair value and SFFAS No. 2 for 

financial reporting. The FCRA calls for the establishment of program, 

financing and general fund receipt accounts to segregate and report 

receipts and disbursements. These accounts are classified as either 

budgetary or non-budgetary in the Statement of Budgetary Resources. The 

OFS maintains budgetary program accounts which receive appropriations 

and obligate funds to cover the subsidy cost of direct loans, equity 

investments and other credit programs, and disburses the subsidy cost 

to the OFS financing accounts. The financing accounts are non-budgetary 

accounts that are used to record all of the cash flows resulting from 

the OFS direct loans, equity investments and other credit programs. 

Cash flows include disbursements, borrower repayments, repurchases, 

fees, recoveries, interest, dividends, proceeds from the sale of stock 

and warrants, borrowings from and repayments to Treasury, negative 

subsidy and the subsidy cost received from the program accounts, as 

well as subsidy reestimates and modifications. 

Financing arrangements specifically for the TARP activities are 

provided for in EESA as follows: (1) borrowing for program funds under 

Section 118, reported as "appropriations" in these financial statements 

and (2) borrowing by financing accounts for amounts not covered by 

subsidy cost, under the FCRA and Section 123. The OFS uses budgetary 

general fund receipt accounts to record the receipt of amounts paid 

from the financing accounts when there is a negative subsidy or 

negative modification (a reduction in subsidy cost due to changes in 

program policy or terms that change estimated future cash flows) from 

the original estimate or a downward reestimate. Any assets in these 

accounts are non-entity assets, not available to the OFS, and are 

offset by intragovernmental liabilities. At the end of the fiscal year, 

the fund balance transferred to the U.S. Treasury through the general 

fund receipt accounts is not included in the OFS's reported Fund 

Balance with Treasury. 

SFFAS No. 2 requires that the actual and expected costs of federal 

credit programs be fully recognized in financial reporting. The OFS 

calculated and recorded initial estimates of the future performance of 

direct loans, equity investments, and other credit programs. The data 

used for these estimates were reestimated annually, at fiscal year end, 

to reflect adjustments for market risk, asset performance, and other 

key variables and economic factors. The reestimate data were then used 

to estimate and report the "Program Subsidy Cost (Income)" in the 

Statement of Net Cost. A detailed discussion of the OFS subsidy 

calculation and reestimate assumptions, process and results is provided 

in Note 6. 

Fund Balance with Treasury: 

The Fund Balance with Treasury includes general, financing and other 

funds available to pay current liabilities and finance authorized 

purchases. Cash receipts and disbursements are processed by the 

Treasury, and the OFS's records are reconciled with those of the 

Treasury on a regular basis. 

Available unobligated balances represent amounts that are apportioned 

for obligation in the current fiscal year. Unavailable unobligated 

balances represent unanticipated collections in excess of the amounts 

apportioned which are unavailable. Obligated balances not yet disbursed 

include undelivered orders and unpaid expended authority. See Note 3. 

Direct Loans and Equity Investments, Net: 

Direct Loans and Equity Investments, Net represents the estimated net 

outstanding amount of the OFS direct loans and equity investments. The 

direct loan and equity investment balances have been determined in 

accordance with the provisions of SFFAS No. 2 or at fair value (see 

Note 6). Write-offs of gross direct loan and equity investment balances 

(presented in Note 6 table) are recorded when a legal event occurs, 

such as a bankruptcy with no further chance of recovery or 

extinguishment of a debt instrument by agreement. Under SFFAS No. 2, 

write-offs do not affect the Statement of Net Cost because the written-

off asset is fully reserved. Therefore, the write-off removes the asset 

balance and the associated subsidy allowance. 

Asset Guarantee Program: 

During fiscal year 2010, the OFS and the Federal Deposit Insurance 

Corporation (FDIC) entered into a termination agreement with the Asset 

Guarantee Program's sole participant, Citigroup. As a result, the 

Intragovernmental Asset line item, Asset Guarantee Program, remaining 

on the Balance Sheet at September 30, 2012 was the estimated value of 

certain Citigroup trust preferred securities including dividends 

collected, held by the FDIC for the benefit of OFS. Under the 

termination agreement, the FDIC transferred those securities to the 

OFS, less any losses on FDIC's guarantee of Citigroup debt, in fiscal 

year 2013. OFS then sold the securities. See Note 6. 

General Property and Equipment: 

Equipment with a cost of $50,000 or more per unit and a useful life of 

two years or more is capitalized at full cost and depreciated using the 

straight-line method over the equipment's useful life. Other equipment 

not meeting the capitalization criteria is expensed when purchased. 

Software developed for internal use is capitalized and amortized over 

the estimated useful life of the software if the cost per project is 

greater than $250,000. However, OFS may expense such software if 

management concludes that total period costs would not be materially 

distorted and the cost of capitalization is not economically prudent. 

Based upon these criteria, the OFS reports no capitalized property, 

equipment or software on its Balance Sheet as of September 30, 2013 and 

2012. 

Accounts Payable and Other Liabilities: 

Accounts Payable and Other Liabilities are amounts due to 

intragovernmental or public entities that are anticipated to be 

liquidated during the next operating cycle (within one year from the 

balance sheet date). 

Due to the General Fund: 

Due to the General Fund represents the amount of accrued downward 

reestimates not yet funded, related to direct loans, equity investments 

and other credit programs as of September 30, 2013 and 2012. See Notes 

6 and 7. 

Principal Payable to the Bureau of the Fiscal Service: 

Principal Payable to the Bureau of the Fiscal Service (Fiscal 

Service)(formerly Principal Payable to the Bureau of Public Debt; the 

Department of the Treasury combined the functions of the Bureau of 

Public Debt and the Financial Management Service into the Fiscal 

Service on October 7, 2012) is the net amount due for equity 

investments, direct loans and other credit programs funded by 

borrowings from the Fiscal Service as of the end of the fiscal year. 

Additionally, OFS borrows from the Fiscal Service for payment of 

intragovernmental interest and payment of negative subsidy cost to the 

general fund, as necessary. See Note 8. 

Liabilities for the Treasury Housing Programs Under TARP: 

There are three initiatives in the Treasury Housing Programs: the 

Making Home Affordable Program, the Housing Finance Agency Hardest-Hit 

Fund and the FHA-Refinance Program. The OFS has determined that credit 

reform accounting is not applicable to the Treasury Housing Programs 

Under TARP except for the FHA-Refinance Program. Therefore, liabilities 

for the Making Home Affordable Program and Housing Finance Agency 

Hardest-Hit Fund are accounted for in accordance with SFFAS No. 5, 

Accounting for Liabilities of the Federal Government. In accordance 

with this standard, a liability is recognized for any unpaid amounts 

due and payable as of the reporting date. The liability estimate, as of 

September 30, 2013 and 2012, is based on information about loan 

modifications reported by participating servicers for the Making Home 

Affordable Program and participating states for the Housing Finance 

Agency Hardest-Hit Fund. See Note 5. 

At the end of fiscal year 2010, the OFS entered into a loss-sharing 

agreement with the FHA to support a program in which FHA would 

guarantee refinancing for borrowers whose homes are worth less than the 

remaining amounts owed under their mortgage loans, i.e. "underwater." 

The liability for OFS's share of losses was determined under credit 

reform accounting and shown as FHA-Refinance Program, one of the 

Liabilities for Treasury Housing Programs Under TARP, on the Balance 

Sheet. See Notes 4, 5 and 6. 

Unexpended Appropriations: 

Unexpended Appropriations represents the OFS undelivered orders and 

unobligated balances in budgetary appropriated funds as of September 

30, 2013 and 2012. 

Cumulative Results of Operations: 

Cumulative Results of Operations, presented on the Balance Sheet and on 

the Statement of Changes in Net Position, represents the net results of 

the OFS operations not funded by appropriations or some other source, 

such as borrowing authority, from inception through fiscal year end. At 

September 30, 2012, OFS had $755 million of unfunded upward reestimates 

that resulted in OFS reporting negative Cumulative Results of 

Operations. These unfunded upward reestimates were funded in fiscal 

year 2013. Cumulative Results of Operations in 2013 and 2012 also 

included $50 million reported as Cash on Deposit for Housing Program on 

the Balance Sheet, see Note 4. 

Other Financing Sources: 

The Other Financing Sources line in the Statement of Changes in Net 

Position for each year consists primarily of downward reestimates. Each 

program's reestimates, upward and downward, are recorded separately, 

not netted together. 

Leave: 

A liability for the OFS employees' annual leave is accrued as it is 

earned and reduced as leave is taken. Each year the balance of accrued 

annual leave is adjusted to reflect current pay rates as well as 

forfeited "use or lose" leave. Amounts are unfunded to the extent 

current or prior year appropriations are not available to fund annual 

leave earned but not taken. Sick leave and other types of non-vested 

leave are expensed as taken. The liability is included in the Balance 

Sheet amount for Accounts Payable and Other Liabilities. 

Employee Health and Life Insurance and Workers' Compensation Benefits: 

The OFS employees may choose to participate in the contributory Federal 

Employees Health Benefit and the Federal Employees Group Life Insurance 

Programs. The OFS matches a portion of the employee contributions to 

each program. Matching contributions are recognized as current 

operating expenses. 

The Federal Employees' Compensation Act (FECA) provides income and 

medical cost protection to covered Federal civilian employees injured 

on the job, and employees who have incurred a work-related injury or 

occupational disease. Future workers' compensation estimates are 

generated from an application of actuarial procedures developed to 

estimate the liability for FECA benefits. The actuarial liability 

estimates for FECA benefits include the expected liability for death, 

disability, medical, and miscellaneous costs for approved compensation 

cases. Any FECA amounts relating to OFS employees are expensed as 

incurred. 

Employee Pension Benefits: 

The OFS employees participate in either the Civil Service Retirement 

System (CSRS) or the Federal Employees' Retirement System (FERS) and 

Social Security. These systems provide benefits upon retirement and in 

the event of death, disability or other termination of employment and 

may also provide pre-retirement benefits. They may also include 

benefits to survivors and their dependents, and may contain early 

retirement or other special features. The OFS contributions to 

retirement plans and Social Security, as well as imputed costs for 

pension and other retirement benefit costs administered by the Office 

of Personnel Management, are recognized on the Statement of Net Cost as 

Administrative Cost. Federal employee benefits also include the Thrift 

Savings Plan (TSP). For FERS employees, a TSP account is automatically 

established and the OFS matches employee contributions to the plan, 

subject to limitations. The matching contributions are recognized as 

Administrative Costs on the Statement of Net Cost. 

Related Parties: 

The nature of related parties and descriptions of related party 

transactions are discussed within Notes 1 and 6. 

Note 3. Fund Balances With Treasury: 

Fund Balances with Treasury, by fund type and status, as of September 

30, 2013 and 2012, are presented in the following table. 

Fund Balances: 

General Funds: 

As of September 30, 2013: $36,630; 

As of September 30, 2012: $40,517. 

Program Funds: 

As of September 30, 2013: $14,382; 

As of September 30, 2012: $14,382. 

Financing Funds: 

As of September 30, 2013: $2,228; 

As of September 30, 2012: $20,596. 

Total Fund Balances: 

As of September 30, 2013: $53,204; 

As of September 30, 2012: $75,495. 

Status of Fund Balances: 

Unobligated Balances: 

Available: 

As of September 30, 2013: $68; 

As of September 30, 2012: $3,987. 

Unavailable: 

As of September 30, 2013: $22,389; 

As of September 30, 2012: $27,994. 

Obligated Balances Not Yet Disbursed: 

As of September 30, 2013: $30,173; 

As of September 30, 2012: $43,514. 

Total Status of Fund Balances: 

As of September 30, 2013: $53.240. 

As of September 30, 2012: $75,495. 

[End of table] 

Collections relating to the AGP are deposited in the Troubled Assets 

Insurance Financing Fund (which is within OFS Financing Funds balance) 

as required by the EESA Section 102(d). In fiscal year 2013 the TAIFF 

was closed because the AGP program was: 

completed and investments sold. In fiscal year 2012 the TAIFF balance 

was reduced for AGP-related downward reestimates, repayments of AGP-

related debt and interest payments on debt due to the Bureau of the 

Public Debt. 

Note 4. Cash On Deposit For Housing Program: 

As of September 30, 2013 and 2012, the OFS had $50 million on deposit 

with a commercial bank to facilitate its payments of claims under the 

FHA-Refinance Program as OFS's agent. 

Under terms of the agreement with the commercial bank, unused funds 

will be returned to the OFS upon the termination of the program. 

Note 5. Treasury Housing Programs Under TARP: 

Fiscal years 2013 and 2012 saw continued advancement of programs 

designed to provide stability for both the housing market and 

homeowners. These programs assist homeowners who are experiencing 

financial hardships to remain in their homes until their financial 

position improves or they relocate to a more sustainable living 

situation. The programs fall into three initiatives: 

1) Making Home Affordable Program (MHA); 

2) Hardest-Hit Fund (HHF); and: 

3) FHA-Refinance Program. 

Features of these initiatives follow: 

Housing Program: MHA: Home Affordable Modification Program (HAMP) 

First Lien Modification Program; 

Features: Provides for upfront, monthly and annual incentives to 

servicers, borrowers and investors who participate, whereby the 

investor and OFS share the costs of modifying qualified first liens, 

conditional on borrower performance. 

Housing Program: MHA: Home Affordable Modification Program (HAMP) 

Principal Reduction Alternative Program; 

Features: Pays financial incentives to investors for principal 

reduction in conjunction with a first lien HAMP modification. Home 

Price Depreciation Program (HPDP) Provides financial incentives to 

investors to partially offset losses from home price declines. 

Housing Program: MHA: Home Affordable Modification Program (HAMP) Home 

Affordable Foreclosure Alternatives (HAFA); 

Features: Designed to assist eligible borrowers unable to retain their 

homes through a HAMP modification, by simplifying and streamlining the 

short sale and deed-in-lieu of foreclosure processes and providing 

financial incentives to servicers and investors as well as relocation 

assistance to borrowers who pursue short sales and deeds-in-lieu. 

Housing Program: MHA: Home Affordable Modification Program (HAMP) 

Unemployment Forebearance Program (UP); 

Features: Offers assistance to unemployed homeowners through temporary 

forebearance of a portion of their mortgage payments. This program 

does not require any payments from OFS. 

Housing Program: MHA: Home Affordable Modification Program (HAMP) FHA-

HAMP; 

Features: Provides mortgage modifications similar to HAMP, but for FHA-

insured or guaranteed loans offered by the FHA, VA or USDA. 

Housing Program: MHA: Home Affordable Modification Program (HAMP) 

Second Lien Program (2MP); 

Features: Offers financial incentives to participating servicers who 

modify second liens in conjunction with a HAMP modification. 

Housing Program: MHA: Home Affordable Modification Program (HAMP) 

Treasury/FHA Second Lien Program (FHA 2LP); 

Features: Provides for reduction or elimination of second mortgages on 

homes whose servicers participate in the FHA Refinance Program. 

Housing Program: MHA: Home Affordable Modification Program (HAMP) 

Rural Development Program (RD-HAMP); 

Features: Provides for lower monthly payments on USDA guaranteed loans. 

Housing Program: HHF 

Features: Provides targeted aid to families in the states hardest hit 

by the housing market downturn and unemployment. 

Housing Program: FHA-Refinance Program 

Features: Joint initiative with HUD to encourage refinancing of 

existing underwater mortgage loans not currently insured by FHA into 

FHA insured mortgages. 

[End of table] 

MHA: 

In early 2009, Treasury launched the Making Home Affordable Program 

(MHA) to help struggling homeowners avoid foreclosure. Since its 

inception, MHA has helped homeowners avoid foreclosure by providing a 

variety of solutions to modify or refinance their mortgages, get 

temporary forbearance if they are unemployed, or transition out of 

homeownership via a short sale or deed-in-lieu of foreclosure. The 

cornerstone of MHA is the Home Affordable Modification Program (HAMP), 

which provides eligible homeowners the opportunity to reduce their 

monthly mortgage payments to more affordable levels. Treasury also 

launched programs under MHA to help homeowners who are unemployed, 

"underwater" on their loans (those who owe more on their home than it 

is currently worth), or struggling with second liens. It also includes 

options for homeowners who would like to transition to a more 

affordable living situation through a short sale or deed-in-lieu of 

foreclosure. MHA includes several additional programs to help 

homeowners refinance or address specific types of mortgages, in 

conjunction with the Federal Housing Administration (FHA), the U. S. 

Department of Agriculture (USDA), and the U. S. Department of Veterans 

Affairs (VA). 

In fiscal year 2013, the deadline for applications under the MHA 

programs was extended from December 31, 2013, to December 31, 2015. 

In fiscal year 2012, the OFS made additional changes to MHA programs to 

provide relief to more homeowners and accelerate the housing market 

recovery. HAMP program guidelines were expanded through the 

introduction of a second-level evaluation that expands the population 

of homeowners eligible for the programs, including certain rental 

properties and vacancies, creating a flexible debt-to-income ratio band 

and including certain previous HAMP participants who may have lost good 

standing. Finally, investor incentives for PRA were tripled on first 

liens and doubled on second liens, and servicer incentives were 

restructured to promote early engagement with the borrowers. 

All MHA disbursements are made to servicers either for themselves or 

for the benefit of borrowers and investors, and all payments are 

contingent on borrowers remaining in good standing. 

Fannie Mae, as the MHA Program Administrator, provides direct 

programmatic support as a third party agent on behalf of the OFS. 

Freddie Mac provides compliance oversight of servicers as a third party 

agent on behalf of the OFS, and the servicers work directly with the 

borrowers to modify and service the borrowers' loans. Fees paid to 

Fannie Mae and Freddie Mac are included in administrative costs 

reported on the Statement of Net Cost. 

HHF: 

The HHF was implemented in fiscal year 2010, and provides targeted aid 

to homeowners in the states hit hardest by the housing market downturn 

and unemployment through each state's Housing Finance Agency (HFA). 

States that meet the criteria for this program consist of Alabama, 

Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, 

Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, 

Oregon, Rhode Island, South Carolina, Tennessee, as well as the 

District of Columbia. Approved states develop and roll out their own 

programs with timing and types of programs offered targeted to address 

the specific needs and economic conditions of their state. States have 

until December 31, 2017 to enter into agreements with borrowers. 

In fiscal year 2013, the state HFAs continued to adapt their programs 

to best meet borrower needs in evolving economic and housing markets. A 

total of seven HFAs now offer principal reduction to enable a loan 

modification, refinance, or recast, and other states are strongly 

considering this model. Florida, Illinois and Ohio have utilized HHF 

resources to purchase notes and modify the underlying loan terms, and 

Oregon offers refinancing options to underwater homeowners ineligible 

for other options. Additionally, Michigan has elected to designate a 

portion of its HHF allocation for blight elimination activities that 

target vacant and abandoned urban residences. Ohio has submitted a 

proposal to do the same, and other states are contemplating this 

approach to foreclosure prevention. 

In fiscal year 2012, the state HFAs made substantial eligibility 

changes to existing programs (e.g. Florida, New Jersey) and 

significantly modified principal reduction programs (e.g. Arizona, 

California and Nevada) incorporating curtailments (i.e. unmatched 

principal reduction) that can be applied to all eligible loans 

including GSE loans that historically have not participated in 

principal reduction programs. 

FHA-Refinance Program: 

The FHA-Refinance Program is a joint initiative with the U. S. 

Department of Housing and Urban Development (HUD) which is intended to 

encourage refinancing of existing underwater mortgage loans not 

currently insured by FHA into FHA-insured mortgages. HUD will pay a 

portion of the amount refinanced to the investor and OFS will pay 

incentives to encourage the extinguishment of second liens associated 

with the refinanced mortgages. OFS established a letter of credit that 

obligated the OFS portion of any claims associated with the FHA-

guaranteed mortgages. The OMB determined that for budgetary purposes, 

the FHA-Refinance Program cost is calculated under the FCRA, and 

accordingly OFS determined that it was appropriate to follow SFFAS No. 

2 for financial reporting. Therefore, the liability is calculated at 

the net present value of estimated future cash flows. Homeowners can 

refinance into FHA-guaranteed mortgages through December 31, 2014, and 

OFS will honor its share of claims against the letter of credit through 

September 2020. As of September 30, 2013, 3,015 loans had been 

refinanced. As of September 30, 2012, 1,774 loans had been refinanced. 

OFS deposited $50 million with a commercial bank as its agent to 

administer payment of claims under the program; $47,840 in claim 

payments were made as of September 30, 2013. No claim payments had been 

made as of September 30, 2012. See Notes 4 and 6 for further details 

about the deposit and the program. OFS paid $2 million each year in 

fiscal years 2013 and 2012 to maintain the letter of credit. 

The table below recaps housing program total commitments as of 

September 30, 2013, and payments and accruals as of September 30, 2013 

and 2012. 

Treasury Housing Programs Under TARP (Dollars in Millions): 

MHA: 

Total Commitments as of September 30, 2013[1]: $28,871; 

Fiscal Year Payments through September 30, 2013: $2,541; 

Fiscal Year Payments through September 30, 2012: $2,202; 

Accruals as of September 30, 2013: $263; 

Accruals as of September 30, 2012: $241. 

HFA Hardest Hit Fund: 

Total Commitments as of September 30, 2013[1]: $7,600; 

Fiscal Year Payments through September 30, 2013: $1,396; 

Fiscal Year Payments through September 30, 2012: $861;

Accruals as of September 30, 2013: 0; 

Accruals as of September 30, 2012: 0. 

FHA Refinance[2]: 

Total Commitments as of September 30, 2013[1]: $1,025; 

Fiscal Year Payments through September 30, 2013: $2; 

Fiscal Year Payments through September 30, 2012: $2; 

Accruals as of September 30, 2013: 0; 

Accruals as of September 30, 2012: 0. 

Totals: 

Total Commitments as of September 30, 2013[1]: $38,492; 

Fiscal Year Payments through September 30, 2013: $3,939; 

Fiscal Year Payments through September 30, 2012: $3,065; 

Accruals as of September 30, 2013: $263; 

Accruals as of September 30, 2012: $241. 

[1] Total commitments represent amounts obligated to support all of 

OFS's Housing programs. This differs from the $28,747 outstanding

commitments as of September 30, 2013, which are the remaining funds 

available to be spent. 

[2] Payments do not include $50 million to establish reserve, shown on 

Balance Sheet as Cash on Deposit for Housing Program, nor the subsidy 

cost to fund OFS' share of defaults, which establishes the liability 

for losses, see Note 6. Payments are for the FHA-Refinance Program 

administrative expense only. 

[End of table] 

Note 6. Troubled Asset Relief Program Direct Loans And Equity 

Investments, Net And Other Credit Programs: 

The OFS administers a number of programs designed to help stabilize the 

financial system and restore the flow of credit to consumers and 

businesses. The OFS made direct loans and equity: 

investments under TARP. The OFS also entered into other credit 

programs, which consist of an asset guarantee program and a loss-

sharing program under the TARP. The table below recaps OFS programs by 

title and type: 

Direct Loans and Equity Investments: 

Program: Capital Purchase Program; 

Program Type: Equity Investment/Subordinated Debentures. 

Program: Community Development Capital Initiative; 

Program Type: Equity Investment/Subordinated Debentures. 

Program: Public-Private Investment Program; 

Program Type: Equity Investment and Direct Loan. 

Program: Term Asset-Backed Securities Loan Facility; 

Program Type: Subordinated Debentures. 

Program: SBA 7(a) Security Purchase Program; 

Program Type: Direct Loan. 

Program: Automotive Industry Financing Program; 

Program Type: Equity Investment and Direct Loan. 

Program: American International Group, Inc. Investment Program; 

Program Type: Equity Investment. 

Other Credit Programs: 

Program: Asset Guarantee Program; 

Program Type: Asset Guarantee. 

Program: FHA-Refinance Program; 

Program Type: Loss-sharing Program with FHA. 

Direct Loan and Equity Investment Programs: 

Capital Purchase Program (CPP): 

In October 2008, the OFS began implementation of the TARP with the 

Capital Purchase Program (CPP), designed to help stabilize the 

financial system by assisting in building the capital base of certain 

viable U.S. financial institutions to increase the capacity of those 

institutions to lend to businesses and consumers and support the 

economy. 

The OFS invested a total of $204.9 billion in 707 institutions under 

the CPP program between October 2008 and December 2009. 

Under this program, the OFS purchased senior perpetual preferred stock 

from qualifying U.S. controlled banks, savings associations, and 

certain bank and savings and loan holding companies (Qualified 

Financial Institution or QFI). The senior preferred stock has a stated 

dividend rate of 5.0 percent through year five, increasing to 9.0 

percent in subsequent years. The dividends are cumulative for bank 

holding companies and non-cumulative for others; they are payable when 

and if declared by the institution's board of directors. In addition to 

the senior preferred stock, the OFS received warrants, with a 10-year 

term, as required by section 113(d) of: 

EESA, from public QFIs to purchase a number of shares of common stock. 

QFIs that are Subchapter S corporations issued subordinated debentures 

instead of preferred stock (to comply with tax code regulations) with 

interest rates of 7.7 percent for the first five years and 13.8 percent 

thereafter. 

The OFS received warrants from non-public QFIs for the purchase of 

additional senior preferred stock (or subordinated debentures if 

appropriate) with a stated dividend rate of 9.0 percent (13.8 percent 

interest rate for subordinate debentures) and a liquidation preference 

equal to 5.0 percent of the total senior preferred stock (additional 

subordinate debenture) investment. These warrants were immediately 

exercised and resulted in the OFS holding additional senior preferred 

stock (subordinated debentures) (collectively referred to as "warrant 

preferred stock") of non-public QFIs. 

In addition to the above transactions, the OFS entered into other 

transactions with various financial institutions including exchanging 

existing preferred shares for a like amount of non-tax-deductible Trust 

Preferred Securities, exchanging preferred shares for shares of 

mandatorily convertible preferred securities and selling preferred 

shares to financial institutions that were acquiring the QFIs that have 

issued the preferred shares. Generally, these transactions are entered 

into with financial institutions in poor financial condition with a 

high likelihood of failure. As such, in accordance with SFFAS 2, these 

transactions are considered workouts and not modifications. The changes 

in cost associated with these transactions are captured in the year-end 

reestimates. 

During fiscal year 2012, OFS elected to sell selected CPP investments 

to the public in auction sales. Because auction sales were not 

considered in the budget formulation estimate for the CPP program, OFS 

recorded a modification increasing the cost of the program by $973 

million. During fiscal year 2013, OFS continued auction sales of 

selected remaining CPP investments. 

In fiscal year 2013, OFS sold 113 CPP investments in 14 separate 

auctions for total net proceeds of $1.5 billion. These auction sales 

resulted in net proceeds less than cost of $455 million. In addition, 

other sales and redemptions for 60 institutions resulted in net 

proceeds less than cost of $38 million. 

In fiscal year 2012, OFS sold 40 CPP investments in six separate 

auctions for total net proceeds of $1.3 billion. These auction sales 

resulted in net proceeds less than cost of $180 million. In addition, 

other sales and redemptions for 56 institutions resulted in net 

proceeds less than cost of $105 million. 

During fiscal year 2013, one CPP institution was written off for $104 

million. OFS originally invested $110 million and recovered $6 million. 

There were no write-offs in fiscal year 2012. During fiscal year 2013, 

seven institutions, in which OFS had invested $137 million, were either 

closed by their regulators or declared bankruptcy. During fiscal year 

2012, six institutions, in which OFS had invested $51 million, were 

either closed by their regulators or declared bankruptcy. The OFS does 

not anticipate recovery on these investments and therefore the values 

of these investments are reflected at zero as of September 30, 2013 and 

2012. The ultimate amount received, if any, from the investments in 

institutions that filed for bankruptcy and institutions closed by 

regulators will depend primarily on the outcome of the bankruptcy 

proceedings and of each institution's receivership. 

The following tables provide key data points related to the CPP for the 

fiscal years ending September 30, 2013 and 2012:  

CPP Participating Institutions: 

Number of Institutions Funded: 

2013: 707; 

2012: 707. 

Institutions Paid in Full, Merged or Investments Sold: 

2013: (407); 

2012: (234). 

Institutions Transferred to CDCI: 

2013: (28); 

2012: (28). 

Institutions Refinanced to SBLF: 

2013: (137); 

2012: (137). 

Institutions Written Off After Bankruptcy or Receivership: 

2013: (3); 

2012: (2). 

Number of Institutions with Outstanding OFS Investments: 

2013: 132; 

2012: 306. 

Institutions in Bankruptcy or Receivership: 

2013: (24); 

2012: (17). 

Number of CPP Institutions Valued at Year-End: 

2013: 108; 

2012: 289. 

Of the Institutions Valued, Number that Have Missed One or More

Dividend Payments: 

2013: 76; 

2012: 157. 

CPP Investments: 

(Dollars in Millions) 

Outstanding Beginning Balance, Investment in CPP Institutions, Gross: 

Fiscal Year 2013: $8,664; 

Fiscal Year 2012: $17,299. 

Repayments and Sales of Investments: 

Fiscal Year 2013: ($4,752); 

Fiscal Year 2012: ($8,223). 

Write-Offs: 

Fiscal Year 2013: ($104); 

Fiscal Year 2012: 0, 

Losses from Sales and Repurchases of Assets in Excess of Cost: 

Fiscal Year 2013: ($665); 

Fiscal Year 2012: ($412). 

Outstanding Balance, Investment in CPP Institutions, Gross: 

Fiscal Year 2013: $3,143; 

Fiscal Year 2012: $8,664. 

Interest and Dividend Collections: 

Fiscal Year 2013: $262; 

Fiscal Year 2012: $572. 

Net Proceeds from Sales and Repurchases of Assets Less Than Cost: 

Fiscal Year 2013: ($493); 

Fiscal Year 2012: ($285). 

[End of table] 

Community Development Capital Initiative (CDCI): 

In February 2010, the OFS announced the Community Development Capital 

Initiative (CDCI) to invest lower cost capital in Community Development 

Financial Institutions (CDFIs). Under the terms of the program, the OFS 

purchased senior preferred stock (or subordinated debt) from eligible 

CDFIs. The senior preferred stock had an initial dividend rate of 2 

percent. CDFIs could apply to receive capital up to 5 percent of risk-

weighted assets. To encourage repayment while recognizing the unique 

circumstances facing CDFIs, the dividend rate increases to 9 percent 

after eight years. 

For CDFI credit unions, the OFS purchased subordinated debt at rates 

equivalent to those offered to CDFIs and with similar terms. These 

institutions could apply for up to 3.5 percent of total assets - an 

amount approximately equivalent to the 5 percent of risk-weighted 

assets available to banks and thrifts. 

CDFIs participating in the CPP, subject to certain criteria, were 

eligible to exchange, through September 30, 2010, their CPP preferred 

shares (subordinated debt) then held by OFS for CDCI preferred shares 

(subordinated debt). These exchanges were treated as disbursements from 

CDCI and repayments to CPP. OFS invested a total of $570 million ($363 

million as a result of exchanges from CPP) in 84 institutions under the 

CDCI. 

During fiscal year 2013, one CDCI institution, in which the OFS 

invested $7 million, was written off; there were no write-offs in 

fiscal year 2012. During fiscal year 2012, this CDCI institution was 

closed by its regulator. The OFS did not anticipate recovery on the 

investment and therefore its value was reflected at zero as of 

September 30, 2012. 

In fiscal year 2013, OFS received $86 million in repayments and $11 

million in dividends and interest from its CDCI investments. In fiscal 

year 2012, OFS received $3 million in repayments and $11 million in 

dividends and interest from its CDCI investments. 

Public-Private Investment Program (PPIP): 

The PPIP was part of the OFS's efforts to help restart the financial 

securities market and provide liquidity for legacy securities. Under 

this program, the OFS (as a limited partner) made equity investments in 

and loans to nine investment vehicles (referred to as Public Private 

Investment Funds or "PPIFs") established by private investment managers 

between September and December 2009. The OFS equity investments were 

used to match private capital and equaled 49.9 percent of the total 

equity invested. Each PPIF elected to receive a loan commitment equal 

to 100 percent of partnership equity. Agreements between the OFS and 

the PPIFs require cash flows from purchased securities received by the 

PPIFs to be distributed in accordance with a priority of payments 

schedule (waterfall) designed to help protect the interests of secured 

parties. Security cash flows collected are disbursed: 1) to pay 

administrative expenses; 2) to pay margin interest on permitted hedges; 

3) to pay current period interest to OFS; 4) to maintain a required 

interest reserve account; 5) to pay principal on the OFS loan when the 

minimum Asset Coverage Ratio Test is not satisfied; 6) to pay other 

amounts on interest rate hedges if not paid under step 2 ; 7) for 

additional temporary investments or to prepay loans (both at the 

discretion of the PPIF); 8) for distributions to equity partners up to 

the lesser of 12 months' net interest collected or 8 percent of the 

funded capital commitments; 9) for loan prepayments to OFS; and 10) for 

distribution to equity partners. 

As a condition of its investment, the OFS also received a warrant from 

each of the PPIFs entitling the OFS to 2.5 percent of investment 

proceeds (excluding those from temporary investments) otherwise 

allocable to the non-OFS partners after the PPIFs return of 100 percent 

of the non-OFS partners' capital contributions. Distributions relating 

to the warrants generally occur upon the final distribution of each 

partnership. 

The PPIFs were allowed to purchase commercial and non-agency 

residential mortgage-backed securities (CMBS and RMBS, respectively) 

issued prior to January 1, 2009, that were originally rated AAA or an 

equivalent rating by two or more nationally recognized statistical 

rating organizations without external credit enhancement and that are 

secured directly by the actual mortgage loans, leases or other assets 

(eligible assets) and not other securities. The PPIFs investment period 

ended December 2012 and as of June 30, 2013, all of the PPIF's 

securities portfolios were completely liquidated. As of September 30, 

2012, the PPIFs' portfolios were comprised of approximately 74 percent 

RMBS and 26 percent CMBS. 

OFS made no disbursements to PPIFs during fiscal year 2013. During 

fiscal year 2012, OFS disbursed $245 million as equity investments and 

$803 million as loans to PPIFs. 

In fiscal year 2013, the six remaining PPIFs liquidated investments and 

fully repaid investors, including OFS. During fiscal year 2013, the OFS 

received $17 million in interest on loans and $5.7 billion in loan 

principal repayments from the PPIFs and received $5.5 billion in equity 

distributions, of which $254 million was recognized as investment 

income, $1.2 billion as net proceeds in excess of cost and $4.1 billion 

as a reduction of the gross investment outstanding. During fiscal year 

2012, the OFS received $124 million in interest on loans and $5.6 

billion in loan principal repayments from the PPIFs and received $3.2 

billion in equity distributions, of which $1.3 billion was recognized 

as investment income, $223 million as net proceeds in excess of cost 

and $1.7 billion as a reduction of the gross investment outstanding. 

One PPIF partnership fully repaid its investors, including OFS, in 

fiscal year 2012. Another had repaid all equity capital in fiscal year 

2012 and distributed additional funds and ceased operations early in 

fiscal year 2013. 

As of September 30, 2013, OFS had no PPIF equity investments or loans 

outstanding. The $10 million positive balance in the PPIP subsidy 

allowance account represents additional proceeds expected upon final 

liquidation of remaining partnerships. The legal commitments to 

disburse up to $1.8 billion in additional loans to remaining PPIFs as 

of September 30, 2012 were canceled in 2013 since all PPIFs had ceased 

operations. Commitments of $984 million to disburse additional equity 

to PPIFs will remain until all distributions have been received from 

PPIFs and all PPIF liabilities have been settled, although a 

requirement for additional disbursement by OFS is highly unlikely. 

As of September 30, 2012, OFS had equity investments in six PPIFs 

outstanding of $4.1 billion and loans outstanding of $5.7 billion for a 

total of $9.8 billion. These investments and loans were valued at $10.8 

billion. 

Term Asset-Backed Securities Loan Facility (TALF): 

The Term Asset-Backed Securities Loan Facility (TALF) was created by 

the Federal Reserve Board (FRB) to provide low cost funding to 

investors in certain classes of Asset-Backed Securities (ABS). The OFS 

agreed to participate in the program by providing liquidity and credit 

protection to the FRB. 

Under the TALF, the Federal Reserve Bank of New York (FRBNY), as 

implementer of the TALF: 

program, originated loans on a non-recourse basis to purchasers of 

certain AAA-rated ABS secured by consumer and commercial loans and 

commercial mortgage backed securities (CMBS). The FRBNY ceased issuing 

new loans on June 30, 2010. As of September 30, 2013, $101 million of 

loans due to the FRBNY remained outstanding. As of September 30, 2012, 

approximately $1.5 billion of loans due to the FRBNY remained 

outstanding. 

As part of the program, the FRBNY created the TALF, LLC, a special 

purpose vehicle that agreed to purchase from the FRBNY any collateral 

it has seized due to borrower default. The TALF, LLC would fund 

purchases from the accumulation of monthly fees paid by the FRBNY as 

compensation for the agreement. Only if the TALF, LLC had insufficient 

funds to purchase the collateral did the OFS commit to invest up to 

$20.0 billion in non-recourse subordinated notes issued by the TALF, 

LLC. In July 2010, the OFS's commitment was reduced to $4.3 billion. In 

June 2012, the OFS's commitment was reduced from $4.3 billion to $1.4 

billion. In fiscal year 2013, the remaining commitment was terminated. 

The OFS disbursed $100 million upon the creation of TALF, LLC in 2009. 

Upon its wind-down, when collateral defaults, reaches final maturity or 

is sold, available cash will be disbursed to FRBNY and OFS according to 

the legal agreement between them. 

In fiscal year 2013, a modification to the terms of the legal agreement 

resulted in $55 million in subsidy income for the program. The 

modification allowed OFS to receive $100 million in repayments, $13 

million in interest and $570 million of contingent interest, recorded 

as proceeds in excess of cost, in fiscal year 2013 rather than in 

fiscal year 2015 as originally expected. 

As of September 30, 2013 and 2012, no TALF loans were in default and 

consequently no collateral was purchased by the TALF, LLC. 

SBA 7(a) Securities Purchase Program: 

In March 2010, the OFS began the purchase of securities backed by Small 

Business Administration 7(a) loans (7(a) Securities) as part of the 

Unlocking Credit for Small Business Initiative. Under this program OFS 

purchased 7(a) Securities collateralized with 7(a) loans (these loans 

are guaranteed by the full faith and credit of the United States 

Government) packaged on or after July 1, 2008. In May 2011, OFS began 

selling its securities to investors. Sales were completed in January of 

2012 and the program closed. 

As of September 30, 2013 and 2012, the OFS held no investment in SBA 

7(a) securities. The OFS invested a total of $367 million (excluding 

purchased accrued interest) and received $363 million in principal 

payments and sales proceeds, as well as $13 million in interest on its 

securities over the course of the program. During fiscal year 2012, the 

OFS sold its remaining SBA securities and received proceeds of $127 

million, including interest. 

Automotive Industry Financing Program (AIFP): 

The Automotive Industry Financing Program (AIFP) was designed to help 

prevent a significant disruption of the American automotive industry, 

which could have had a negative effect on the economy of the United 

States. 

General Motors Company (New GM) and General Motors Corporation (Old 

GM): 

In the period ended September 30, 2009, the OFS provided $51.0 billion 

to General Motors Corporation (Old GM) through various loan agreements 

including the initial loan for general and working capital purposes, 

auto supplier and warranty programs, and the final loan for debtor-in-

possession (DIP) financing while Old GM was in bankruptcy. As of 

September 30, 2011, after various sales and restructurings of its 

investment, the OFS held 500 million shares of common stock of New GM, 

the post-bankruptcy GM entity, and had received a cumulative total of 

$23.9 billion in stock sale proceeds, loan repayments, dividends and 

interest. 

During fiscal year 2013, OFS sold 399 million shares of GM common stock 

for $12.0 billion. The sales resulted in net proceeds less than cost of 

$5.4 billion. During fiscal year 2012, OFS did not sell any of its New 

GM common stock shares. 

At September 30, 2013, the OFS held 101 million shares of the common 

stock of New GM that represented approximately 7.3 percent of the 

common stock of New GM outstanding. Market value of the 101 million 

shares as of September 30, 2013 was $3.6 billion. At September 30, 

2012, the OFS held 500 million shares, approximately 32 percent of the 

common stock of New GM outstanding, with a market value of $11.4 

billion. 

In fiscal year 2011, $986 million of OFS's loan to Old GM was converted 

to an administrative claim. OFS retains the right to recover additional 

proceeds but recoveries are dependent on actual liquidation proceeds 

and pending litigation. OFS recovered $22 million and $26 million in 

fiscal years 2013 and 2012, respectively, on the administrative claim, 

and the outstanding balance at September 30, 2013 was $827 million. OFS 

does not expect to recover any significant additional proceeds from 

this claim. 

Chrysler Group LLC (New Chrysler) and Chrysler Holding LLC (Old 

Chrysler): 

During fiscal years 2009 and 2010, OFS invested $7.8 billion in 

Chrysler Holding LLC (Old Chrysler), including the auto supplier and 

warranty programs, and an additional $4.6 billion in Chrysler Group LLC 

(New Chrysler) under the terms of Chrysler's bankruptcy agreement. 

Prior to fiscal year 2012, pursuant to several agreements with New 

Chrysler that included writeoffs, OFS had received loan repayments, 

interest and additional payments totaling $11.1 billion and had no 

remaining interest in New Chrysler. 

OFS continues to hold a right to receive proceeds from a bankruptcy 

liquidation trust related to Old Chrysler, but no significant cash 

flows are expected. Nothing was received from the trust in fiscal year 

2013; $9 million was received during fiscal year 2012. The underlying 

loan balance was extinguished in the Chrysler bankruptcy. 

Ally Financial Inc. (formerly known as GMAC): 

The OFS invested a total of $16.3 billion in GMAC between December 2008 

and December 2009, to help support its ability to originate new loans 

to GM and Chrysler dealers and consumers and to help address GMAC's 

capital needs. In addition, in May 2009, under the terms of a separate 

$884 million loan to Old GM, OFS exercised its exchange option and 

received 190,921 shares of GMAC common stock from Old GM in full 

satisfaction of the loan. In May 2010, GMAC changed its corporate name 

to Ally Financial, Inc. (Ally), a private bank holding company. As a 

result of original investments, exchanges, conversions, warrant 

exercises and sales, at the beginning of fiscal year 2012, OFS had 

received $5.1 billion in sales proceeds and dividends on its initial 

investment and held 981,971 shares of common stock (73.8 percent of 

Ally's outstanding common stock) and 119 million shares of Series F-2 

mandatorily convertible preferred securities (Series F-2). The Series 

F-2 were convertible into at least 513,000 shares of common stock. 

Per an August 2013 agreement, all of the Series F-2 were repurchased by 

Ally from OFS for $5.2 billion in November 2013. OFS received an 

additional $725 million for the elimination of certain rights under the 

original agreement. This August 2013 agreement also included terms for 

Ally to issue a November 2013 private offering of new common stock at a 

price of $6,000 per share. Following this private offering, OFS's 

ownership was reduced to 63.4 percent of Ally's outstanding common 

stock. See the Valuation Methodology and Subsidy Cost and Reestimate 

sections of Note 6 for further discussion of the effects of this 

agreement. 

The OFS received $534 million in dividends from the Ally investment 

each year in fiscal years 2013 and 2012. 

The investment in Ally was valued at $12.0 billion at September 30, 

2013, considering the effects of the August 2013 agreement: $5.9 

billion for the common stock and $6.1 billion for the Series F-2. 

At September 30, 2012, OFS's investment in Ally was valued at $6.2 

billion based upon a model that calculated an average of three 

valuation benchmarks, since there was no direct market activity 

available. 

American International Group, Inc. (AIG) Investment Program: 

The OFS provided assistance to systemically significant financial 

institutions on a case by case basis in order to help provide stability 

to institutions that were deemed critical to a functioning financial 

system and were at substantial risk of failure as well as to help 

prevent broader disruption to financial markets. OFS invested in one 

institution, AIG, under the program. 

In November 2008, the OFS invested $40.0 billion in AIG in the form of 

Series D 10 percent cumulative perpetual preferred stock. An additional 

$27.8 billion was drawn from a capital facility made available to AIG 

by OFS, secured by additional preferred stock and common stock 

warrants. By January 2011, and as a result of various restructurings of 

both the OFS's and the Federal Reserve Bank of New York's investments 

in AIG, the OFS's entire investment outstanding consisted of $20.3 

billion of interests in two AIG subsidiaries organized as Special 

Purpose Vehicles (the "AIG SPVs") and 1.1 billion shares of AIG common 

stock. 

In fiscal year 2013, OFS sold the remainder of its common stock and 

warrants for $5.0 billion, resulting in proceeds less than cost of $1.7 

billion. 

In fiscal year 2012, OFS received $9.6 billion in distributions from 

the AIG SPVs, paying off the remaining investment balance of $9.1 

billion, recording proceeds in excess of cost of $127 million, and 

collecting $395 million of investment income (including $204 million 

capitalized and recognized as income in fiscal year 2011). OFS also 

sold 806 million shares of common stock for $25.2 billion. These 

proceeds were less than OFS's cost by $9.9 billion. 

As of September 30, 2013, OFS retained no ownership interest in AIG, 

common or preferred, nor any interests in SPVs. At September 30, 2012, 

the OFS owned 154 million shares of AIG common stock, approximately 

10.5 percent of AIG's common stock equity[Footnote 5]. Market value of 

the common stock shares was $5.1 billion. 

On its original $67.8 billion investment in AIG, OFS received $55.3 

billion in repayments, sales proceeds, fees and dividends. OFS also 

incurred net interest cost of $2.7 billion, for a total subsidy cost of 

$15.2 billion, or 22.4 percent of its original investment. 

Valuation Methodology: 

The OFS applies fair value and the provisions of SFFAS No. 2 to account 

for direct loans, equity investments and other credit programs. This 

standard requires measurement of the asset or liability at the net 

present value of the estimated future cash flows. The cash flow 

estimates for each transaction reflect the actual structure of the 

instruments. For each of these instruments, analytical cash flow models 

generate estimated cash flows to and from the OFS over the estimated 

term of the instrument. Further, each cash flow model reflects the 

specific terms and conditions of the program, technical assumptions 

regarding the underlying assets, risk of default or other losses, and 

other factors as appropriate. The models also incorporate an adjustment 

for market risk to reflect the additional return required by the market 

to compensate for variability around the expected losses reflected in 

the cash flows (the "unexpected loss"). 

The adjustment for market risk requires the OFS to determine the return 

that would be required by market participants to enter into similar 

transactions or to purchase the assets held by OFS. Accordingly, the 

measurement of the assets attempts to represent the proceeds expected 

to be received if the assets were sold to a market participant in an 

orderly transaction. The methodology employed for determining market 

risk for equity investments generally involves a calibration to market 

prices of similar securities that results in measuring equity 

investments at fair value. The adjustment for market risk for loans is 

intended to capture the risk of unexpected losses, but not intended to 

represent fair value, i.e. the proceeds that would be expected to be 

received if the loans were sold to a market participant. The OFS uses 

market observable inputs, when available, in developing cash flows and 

incorporating the adjustment required for market risk. For purposes of 

this disclosure, the OFS has classified its programs' asset valuations 

as follows, based on the observability of inputs that are significant 

to the measurement of the asset: 

* Quoted prices for Identical Assets (Level 1): The measurement of 

assets in this classification is based on direct market quotes for the 

specific asset, e.g. quoted prices of common stock. 

* Significant Observable Inputs (Level 2): The measurement of assets in 

this classification is primarily derived from market observable data, 

other than a direct market quote, for the asset. This data could be 

market quotes for similar assets for the same entity. 

* Significant Unobservable Inputs (Level 3): The measurement of assets 

in this classification is primarily derived from inputs which generally 

represent management's best estimate of how a market participant would 

assess the risk inherent in the asset. These unobservable inputs are 

used because there is little to no direct market activity. 

The following table displays the assets held by the observability of 

inputs significant to the measurement of each value: 

(Dollars in Millions): 

As of September 30, 2013: 

Program: Capital Purchase Program; 

Quoted Prices for Identical Assets Level 1): $125; 

Significant Observable Inputs (Level 2): 0; 

Significant Unobservable Inputs (Level 3): $1,668; 

Total: $1,793. 

Program: CDCI and TALF; 

Quoted Prices for Identical Assets Level 1): $18; 

Significant Observable Inputs (Level 2): 0; 

Significant Unobservable Inputs (Level 3): $451; 

Total: $469; 

Program: Public-Private Investment Program; 

Quoted Prices for Identical Assets Level 1): 0; 

Significant Observable Inputs (Level 2): 0; 

Significant Unobservable Inputs (Level 3): $10; 

Total: $10. 

Program: Automotive Industry Financing Program; 

Quoted Prices for Identical Assets Level 1): $3,647; 

Significant Observable Inputs (Level 2): $11,950; 

Significant Unobservable Inputs (Level 3): 0; 

Total: $15,597. 

Program: Total TARP Programs; 

Quoted Prices for Identical Assets Level 1): $3,790; 

Significant Observable Inputs (Level 2): $11,950; 

Significant Unobservable Inputs (Level 3): $2,129; 

Total: $17,869. 

As of September 30, 2012: 

Program: Capital Purchase Program; 

Quoted Prices for Identical Assets Level 1): $327; 

Significant Observable Inputs (Level 2): 0; 

Significant Unobservable Inputs (Level 3): $5,407; 

Total: $5,734, 

Program: CDCI and TALF; 

Quoted Prices for Identical Assets Level 1): $9

Significant Observable Inputs (Level 2): 0; 

Significant Unobservable Inputs (Level 3): $1,095; 

Total: $1,104. 

Program: Public-Private Investment Program; 

Quoted Prices for Identical Assets Level 1): 0; 

Significant Observable Inputs (Level 2): 0; 

Significant Unobservable Inputs (Level 3): $10,778; 

Total: $10,778. 

Program: Automotive Industry Financing Program; 

Quoted Prices for Identical Assets Level 1): $11,376; 

Significant Observable Inputs (Level 2): 0; 

Significant Unobservable Inputs (Level 3): $6,170; 

Total: $17,546. 

Program: American International Group Inc. Investment Program; 

Quoted Prices for Identical Assets Level 1): $5,067; 

Significant Observable Inputs (Level 2): 0; 

Significant Unobservable Inputs (Level 3): $2; 

Total: $5,069. 

Program: Total TARP Programs; 

Quoted Prices for Identical Assets Level 1): $16,779; 

Significant Observable Inputs (Level 2): $967; 

Significant Unobservable Inputs (Level 3): $23,452; 

Total: $41,198. 

[End of table] 

The following provides a description of the methodology used to develop 

the cash flows and incorporate the market risk into the measurement of 

the OFS assets. 

Financial Institution Equity Investments[Footnote 6] 

The estimated values of preferred equity investments are the net 

present values of the expected dividend payments and proceeds from 

repurchases and sales. The model assumes that the key decisions 

affecting whether or not institutions pay their preferred dividends are 

made by each institution based on the strength of its balance sheet. 

The model assumes a probabilistic evolution of each institution's 

asset-to-liability ratio (the asset-to-liability ratio is based on the 

estimated fair value of the institution's assets against its 

liabilities). Each institution's assets are subject to uncertain 

returns and institutions are assumed to manage their asset-to-liability 

ratios in such a way that they revert over time to a target level. 

Historical: 

volatility is used to scale the likely evolution of each institution's 

asset-to-liability ratio. 

In the model, when equity decreases, i.e. the asset-to-liability ratio 

falls, institutions are increasingly likely to default, either because 

they enter bankruptcy or are closed by regulators. The probability of 

default is estimated based on the performance of a large sample of U.S. 

banks over the period 1990-2012. At the other end of the spectrum, 

institutions call their preferred shares when the present value of 

expected future dividends exceeds the call price; this occurs when 

equity is high and interest rates are low. Inputs to the model include 

institution-specific accounting data obtained from regulatory filings, 

an institution's stock price volatility and historical bank failure 

information, as well as market prices of comparable securities trading 

in the market. The market risk adjustment is obtained through a 

calibration process to the market value of certain trading securities 

of financial institutions within TARP programs or other comparable 

financial institutions. The OFS estimates the values and projects the 

cash flows of warrants using an option-pricing approach based on the 

current stock price and its volatility. Investments in common stock 

that are exchange traded are valued at the quoted market price as of 

year end. 

Public-Private Investment Program: 

At September 30, 2013, since the PPIFs no longer held security 

portfolios, the valuation represents expected proceeds to OFS upon 

final liquidation of the remaining PPIFs. For the valuations at 

September 30, 2012, OFS estimated cash flows by simulating the 

performance of the collateral supporting the residential mortgage-

backed securities (RMBS) and commercial mortgage-backed securities 

(CMBS) held by the PPIF (i.e. performance of the residential and 

commercial mortgages). Inputs used to simulate the cash flows, which 

considered market risks, included unemployment forecasts, home price 

appreciation/depreciation forecasts and the current term structure of 

interest rates and historical pool performance as well as estimates of 

the net income and value of commercial real estate supporting the CMBS. 

The simulated cash flows were then run through a financial model that 

defined distributions of the RMBS/CMBS to determine the estimated cash 

flows to the PPIF. Once determined, those cash flows were run through 

the defined payment hierarchy of the PPIFs to determine the expected 

cash flows to the OFS through both the equity investments and the 

loans. 

Term Asset-Backed Securities Loan Facility: 

For TALF, the OFS model derives the cash flows to the Federal Reserve 

Bank of New York (FRBNY) TALF LLC SPV, and ultimately the OFS, by 

simulating the performance of underlying collateral. Loss probabilities 

on the underlying collateral are calculated based on analysis of 

historical loan loss and charge-off experience by credit sector and 

subsector. Historical mean loss rates and volatilities are 

significantly stressed to reflect recent and projected performance. 

Simulated losses are run through cash flow models to project impairment 

to the TALF-eligible securities. Simulation outcomes consisting of a 

range of loss scenarios are probability-weighted to generate the 

expected net present value of future cash flows. 

Automotive Industry Financing Program: 

Shares of common stock in General Motors Company (New GM) held by OFS 

were valued by multiplying the publicly traded share price by the 

number of shares held plus the value of any traded but not settled 

shares as of September 30, 2013 and 2012. Traded but not settled shares 

were valued based on the actual trade proceeds. 

To value its holdings in Ally at September 30, 2013, OFS considered 

observable market data from the August 2013 agreement for the 

repurchase of the Series F-2 and Ally's private offering of new common 

stock at a price of $6,000 per share. Proceeds and dividends received 

in November related to the Series F-2 repurchase were discounted to 

September 30, 2013 at a risk-free discount rate to reflect the timing 

and certainty of the expected cash flows. OFS's investment in 981,971 

shares of common stock was valued at the price per share in Ally's 

private offering. 

To value its holdings in Ally common equity and Series F-2 mandatorily 

convertible preferred securities, on an "if-converted" basis at 

September 30, 2012, the OFS used an average of valuation multiples such 

as price-to-earnings, price-to-tangible book value, and asset manager 

valuations to estimate the value of the shares. The multiples were 

based on those of comparable publicly-traded entities. The adjustment 

for market risk was incorporated in the data points used to determine 

the measurement for Ally, since all points relied on market data. 

American International Group, Inc. Investment Program: 

The OFS investment in AIG common stock was valued by multiplying the 

publicly traded share price by the number of shares held as of 

September 30, 2012. OFS had no investment in AIG common stock remaining 

as of September 30, 2013. 

Asset Guarantee Program: 

As of September 30, 2012, the instruments within the AGP, consisting of 

Citigroup Trust Preferred Securities receivable from the FDIC with an 

$800 million liquidation preference value plus accrued dividends and 

interest, were valued in a manner broadly analogous to the previously 

described methodology used for financial institution equity 

investments. As of September 30, 2013, no instruments remained. 

Subsidy Cost and Reestimates: 

The recorded subsidy cost of a direct loan, equity investment or other 

credit program is based upon the calculated net present value of 

expected future cash flows. The OFS's actions, as well as changes in 

legislation that change these estimated future cash flows change 

subsidy cost, and are recorded as modifications. The cost or reduction 

in cost of a modification is recognized when it occurs. 

During fiscal year 2013, modifications occurred in the AGP and TALF 

programs that resulted in subsidy income of $94 million and $55 

million, respectively. During fiscal year 2012, a modification occurred 

in the CPP, increasing subsidy cost by $973 million. 

The purpose of reestimates is to update original program subsidy cost 

estimates to reflect actual cash flow experience as well as changes in 

equity investment valuations or forecasts of future cash flows. 

Forecasts of future cash flows are updated based on actual program 

performance to date, additional information about the portfolio, 

additional publicly available relevant historical market data on 

securities performance, revised expectations for future economic 

conditions, and enhancements to cash flow projection methods. 

For fiscal years 2013 and 2012, financial statement reestimates for all 

programs were performed using actual financial transaction data through 

September 30. For fiscal years 2013 and 2012, a mix of market and 

security specific data publicly available as of August 31 and September 

30 each year was used for all programs. 

Net downward reestimates for the fiscal years ended September 30, 2013 

and 2012, totaled $11.8 billion and $11.9 billion, respectively. 

Descriptions of the reestimates, by OFS Program, are as follows: 

CPP: 

The $1.1 billion downward reestimate for CPP for the year ended 

September 30, 2013 was the result of a reduction in the projected 

number of institutions that would be sold via asset sales, repayments 

and improved market values of the outstanding investments. 

The $2.9 billion downward reestimate for CPP for the year ended 

September 30, 2012 was the result of improved market values of the 

outstanding investments and the effect of receiving $8.2 billion in 

repayments, which reduced the remaining investment by about one-half, 

in fiscal year 2012. 

CDCI: 

The CDCI program continued to experience improved investment 

performance with several institutions repaying in full, resulting in a 

$32 million downward reestimate for the year ended September 30, 2013. 

The CDCI program reflected improved investment performance, resulting 

in a $30 million downward reestimate for the year ended September 30, 

2012. 

PPIP: 

The $380 million net downward reestimate for the PPIP for the year 

ended September 30, 2013, was primarily due to accelerated repayments. 

The $240 million upward reestimate for the PPIP for the year ended 

September 30, 2012, was due primarily to accelerated repayments and 

changes in projected performance of the PPIP portfolio. 

TALF: 

The investments in the TALF continued to experience improved market 

conditions and accelerated repayments, resulting in a $33 million 

downward reestimate for the year ended September 30, 2013. The $55 

million downward modification reflects principal and interest 

repayments occurring in February 2013, with contingent interest paid 

over time beginning in February 2013. Prior to the modification, 

principal, interest and contingent interest would have occurred in 

March 2015. 

The investments in the TALF experienced improved market conditions and 

accelerated repayments, resulting in a $96 million downward reestimate 

for the year ended September 30, 2012. 

SBA 7(a): 

The SBA 7(a) Securities Purchase Program was closed in fiscal year 

2012, with a $1 million downward closing reestimate. 

AIFP: 

Improvements in the common stock share price for New GM accounted for 

$4.4 billion of the $10.2 billion in downward reestimates for AIFP as 

of September 30, 2013. The price improved throughout fiscal year 2013, 

from $22.75 per share at September 30, 2012 to $35.97 per share at 

September 30, 2013. The remaining $5.8 billion in downward reestimates 

for AIFP was due to increases in the valuation of the outstanding 

investment in Ally, reflecting observable market data from the August 

2013 agreement for the repurchase of the Series F-2 and for Ally's 

private offering. 

The $230 million upward reestimate for the year ended September 30, 

2012, was due to a decline of $1.6 billion in the value of the Ally 

investment, partially offset by an increase in the common stock market 

price of New GM, from $20.18 per share at September 30, 2011 to $22.75 

per share at September 30, 2012. 

AIG Investment Program: 

The $32 million net upward reestimate for the year ended September 30, 

2013 was due primarily to the sale of the remaining 155 million shares 

of AIG common stock at a price of $32.50 per share, slightly lower than 

the September 30, 2012 price of $32.79 per share. The AIG program was 

closed out in fiscal year 2013. 

The $9.2 billion downward reestimate for the year ended September 30, 

2012 was due primarily to sales of 806 million shares of common stock 

at prices higher than the September 30, 2011 price of $21.95 per share 

and the effect of valuing the remaining 155 million shares at the 

September 30, 2012 price of $32.79 per share. 

Summary Table: 

The following table recaps gross direct loans or equity investments, 

subsidy allowance, net direct loans or equity investments, 

reconciliation of subsidy cost allowance and subsidy cost, by TARP 

program, as of and for the years ended September 30, 2013 and 2012. OFS 

authority expired October 3, 2010 and no commitments were made 

thereafter, so there were no budget execution subsidy rates for fiscal 

years 2013 and 2012. 

Troubled Asset Relief Program Loans and Equity Investments (Dollars in 

Millions): 

As of September 30, 2013: 

Direct Loans and Equity Investment Programs: 

Direct Loans and Equity Investments Outstanding, Gross; 

Total: $23,496; 

CPP: $3,143; 

PPIP: 0; 

AIFP: $19,878; 

AIG: 0; 

CDCI-TALF-SBA: $475. 

Subsidy Cost Allowance; 

Total: ($5,627); 

CPP: ($1,350); 

PPIP: $10;

AIFP: ($4,281); 

AIG: 0; 

CDCI-TALF-SBA: ($6). 

Direct Loans and Equity Investments Outstanding, Net; 

Total: $17,869; 

CPP: $1,793; 

PPIP: $10;

AIFP: $15,597; 

AIG: 0; 

CDCI-TALF-SBA: $469. 

Obligations for Loans and Investments not yet Disbursed; 

Total: $984; 

CPP: 0; 

PPIP: $984; 

AIFP: 0; 

AIG: 0; 

CDCI-TALF-SBA: 0. 

Reconciliation of Subsidy Cost Allowance: 

Balance, Beginning of Period; 

Total: $22,842; 

CPP: $2,930; 

PPIP: ($1,015);

AIFP: $19,706; 

AIG: $1,658; 

CDCI-TALF-SBA: ($437). 

Subsidy Cost (Income) for Disbursements and Modifications; 

Total: ($55); 

CPP: 0; 

PPIP: 0;

AIFP: 0; 

AIG: 0; 

CDCI-TALF-SBA: ($55). 

Dividend and Interest Income; 

Total: $1,092; 

CPP: $262; 

PPIP: $271; 

AIFP: $534; 

AIG: 0; 

CDCI-TALF-SBA: $25. 

Net Proceeds from Sales and Repurchases of Assets in Excess of (Less 

than) Cost; 

Total: ($5,790); 

CPP: ($493); 

PPIP: $1,173; 

AIFP: ($5,361); 

AIG: ($1,679); 

CDCI-TALF-SBA: $570. 

Net Interest Expense on Borrowings from BPD and Financing Account 

Balance; 

Total: ($612); 

CPP: ($105); 

PPIP: ($59); 

AIFP: ($412); 

AIG: ($11); 

CDCI-TALF-SBA: ($25). 

Balance, End of Period, Before Reestimates; 

Total: $17,366; 

CPP: $22,490; 

PPIP: $370; 

AIFP: $14,467; 

AIG: ($32); 

CDCI-TALF-SBA: $71. 

Subsidy Reestimates - Upward (Downward); 

Total: ($11,739); 

CPP: ($1,140); 

PPIP: ($380); 

AIFP: ($10,186); 

AIG: $32; 

CDCI-TALF-SBA: ($65). 

Balance, End of Period; 

Total: $22,842; 

CPP: $2,930; 

PPIP: ($1,015); 

AIFP: $19,706; 

AIG: $1,658; 

CDCI-TALF-SBA: ($437). 

Reconciliation of Subsidy Cost (Income): 

Subsidy Cost (Income) for Modifications; 

Total: ($55); 

CPP: 0; 

PPIP: 0; 

AIFP: 0; 

AIG: 0; 

CDCI-TALF-SBA: ($55). 

Subsidy Reestimates - Upward (Downward); 

Total: ($11,739); 

CPP: ($1,140); 

PPIP: ($380); 

AIFP: ($10,186); 

AIG: $32; 

CDCI-TALF-SBA: $65. 

Total Direct Loan and Equity Investment Programs Subsidy Cost (Income); 

Total: ($11,739); 

CPP: ($1,140); 

PPIP: ($380); 

AIFP: ($10,186); 

AIG: $32; 

CDCI-TALF-SBA: ($120). 

As of September 30, 2012: 

Direct Loans and Equity Investment Programs: 

Direct Loans and Equity Investments Outstanding, Gross; 

Total: $63,073; 

CPP: $8,664; 

PPIP: $9,763.

AIFP: $37,252; 

AIG: $6,727; 

CDCI-TALF-SBA: $667. 

Subsidy Cost Allowance; 

Total: ($22,842); 

CPP: ($2,930); 

PPIP: $1,015;

AIFP: ($19,760); 

AIG: ($1,658); 

CDCI-TALF-SBA: $437. 

Direct Loans and Equity Investments Outstanding, Net; 

Total: $40,231; 

CPP: $5,734; 

PPIP: $10,778;

AIFP: $17,546; 

AIG: $5,069; 

CDCI-TALF-SBA: $1,104. 

New Loans or Investments Disbursed; 

Total: $1,048; 

CPP: 0; 

PPIP: $1,048; 

AIFP: 0; 

AIG: 0; 

CDCI-TALF-SBA: 0. 

Obligations for Loans and Investments not yet Disbursed; 

Total: $4,358; 

CPP: 0; 

PPIP: $3,058; 

AIFP: 0; 

AIG: 0; 

CDCI-TALF-SBA: $1,300. 

Reconciliation of Subsidy Cost Allowance: 

Balance, Beginning of Period; 

Total: $42,301; 

CPP: $4,857; 

PPIP: ($2,434);

AIFP: $19,440; 

AIG: $20,717; 

CDCI-TALF-SBA: ($279). 

Subsidy Cost (Income) for Disbursements and Modifications; 

Total: $942; 

CPP: $973; 

PPIP: ($31);

AIFP: 0; 

AIG: 0; 

CDCI-TALF-SBA: 0. 

Dividend and Interest Income; 

Total: $2,733; 

CPP: $572; 

PPIP: $1,426; 

AIFP: $534; 

AIG: $191; 

CDCI-TALF-SBA: $10. 

Net Proceeds from Sales and Repurchases of Assets in Excess of (Less 

than) Cost; 

Total: ($9,788; 

CPP: ($285); 

PPIP: $223; 

AIFP: $9; 

AIG: ($9,735); 

CDCI-TALF-SBA: 0. 

Net Interest Income (Expense) on Borrowings from BPD and Financing 

Account Balance; 

Total: ($1,626); 

CPP: ($290); 

PPIP: ($439); 

AIFP: ($507); 

AIG: ($349); 

CDCI-TALF-SBA: ($41). 

Balance, End of Period, Before Reestimates; 

Total: $34,562; 

CPP: $5,827; 

PPIP: ($1,255); 

AIFP: $19,476; 

AIG: $10,842; 

CDCI-TALF-SBA: ($310). 

Subsidy Reestimates - Upward (Downward); 

Total: ($11,720); 

CPP: ($2,897); 

PPIP: $240; 

AIFP: $230; 

AIG: ($9,166); 

CDCI-TALF-SBA: ($127). 

Balance, End of Period; 

Total: $22,842; 

CPP: $2,930; 

PPIP: ($1,015); 

AIFP: $19,706; 

AIG: $1,658; 

CDCI-TALF-SBA: ($437). 

Reconciliation of Subsidy Cost (Income): 

Subsidy Cost (Income) for Disbursements; 

Total: ($31); 

CPP: 0; 

PPIP: ($31); 

AIFP: 0; 

AIG: 0; 

CDCI-TALF-SBA: 0. 

Subsidy Cost (Income) for Modifications; 

Total: $973; 

CPP: $973; 

PPIP: 0; 

AIFP: 0; 

AIG: 0; 

CDCI-TALF-SBA: 0. 

Subsidy Reestimates - Upward (Downward); 

Total: ($11,720); 

CPP: ($2,897); 

PPIP: $240; 

AIFP: $230; 

AIG: ($9,166); 

CDCI-TALF-SBA: ($127). 

Total Direct Loan and Equity Investment Programs Subsidy Cost (Income); 

Total: ($10,778); 

CPP: ($1,924); 

PPIP: $209; 

AIFP: $230; 

AIG: ($9,166); 

CDCI-TALF-SBA: ($127). 

[End of table] 

Other Credit Programs: 

Asset Guarantee Program: 

The Asset Guarantee Program (AGP) provided guarantees for assets held 

by systemically significant financial institutions that faced a risk of 

losing market confidence due in large part to a portfolio of distressed 

or illiquid assets. 

Section 102 of the EESA required the Secretary to establish the AGP to 

guarantee troubled assets originated or issued prior to March 14, 2008, 

including mortgage-backed securities. The OFS completed its only 

transaction under the AGP in January 2009, when it finalized the terms 

of a guarantee agreement with Citigroup. Under the agreement, the OFS, 

the Federal Deposit Insurance Corporation (FDIC), and the FRBNY 

(collectively the USG Parties) provided protection against the 

possibility of large losses on an asset pool of approximately $301.0 

billion of loans and securities backed by residential and commercial 

real estate and other such assets, which remained on Citigroup's 

balance sheet. The OFS's guarantee was limited to $5.0 billion. 

As a premium for the guarantee, Citigroup issued $7.0 billion of 

cumulative perpetual preferred stock (subsequently converted to Trust 

Preferred Securities with similar terms) with an 8 percent stated 

dividend rate and a warrant for the purchase of common stock; $4.0 

billion and the warrant were issued to the OFS, and $3.0 billion was 

issued to the FDIC. In December 2009, the USG Parties and Citigroup 

agreed to terminate the guarantee agreement. Citigroup canceled $1.8 

billion of the preferred stock previously issued to OFS. In addition, 

the FDIC agreed to transfer to the OFS $800 million of their Trust 

Preferred Securities (TruPS) plus dividends by December 31, 2012. The 

amount OFS was to receive would be reduced by any losses FDIC incurred 

on its Citigroup guaranteed debt. The additional preferred shares from 

the FDIC were included in the subsidy calculation for AGP, based on the 

net present value of expected future cash inflows. 

Only the $800 million of TruPS-related receivable from the FDIC valued 

at $967 million was on the OFS Balance Sheet at September 30, 2012. The 

TruPS were received, exchanged for subordinated notes, and the notes 

sold in 2013 for $894 million. In addition, OFS received $200 million 

of dividends on the TruPS in 2013 and the program was closed. 

A downward modification of $94 million due to the exchange of TruPS 

into subordinated notes and immediate sale of the notes, and net 

reestimates including the closing downward reestimate of $24 million 

resulted in subsidy income for fiscal year 2013. For fiscal year 2012, 

the AGP program recorded a $207 million downward reestimate, due to 

revised expectations about the timing of receipt of dividends, interest 

on the dividends and the TruPS from the FDIC. 

The following table details the changes in the receivable account and 

the AGP subsidy cost during fiscal years 2013 and 2012: 

Reconciliation of Asset Guarantee Program Receivable: 

(Dollars in Millions): 

Balance, Beginning of Period; 

Fiscal Year 2013: $967; 

Fiscal Year 2012: $739. 

Subsidy income for modifications; 

Fiscal Year 2013: $94; 

Fiscal Year 2012: 0. 

Dividend Revenue; 

Fiscal Year 2013: ($200); 

Fiscal Year 2012: 0. 

Proceeds from Sales in Excess of Cost; 

Fiscal Year 2013: ($894); 

Fiscal Year 2012: 0. 

Net Interest Expense on Borrowings from BPD and Financing Account 

Balance; 

Fiscal Year 2013: $9; 

Fiscal Year 2012: $21. 

Balance, End of Period, Before Reestimates; 

Fiscal Year 2013: ($24); 

Fiscal Year 2012: $760.  

Subsidy Reestimates - Downward; 

Fiscal Year 2013: $24; 

Fiscal Year 2012: $207. 

Balance, End of Period; 

Fiscal Year 2013: 0; 

Fiscal Year 2012: $967. 

Reconciliation of Subsidy Cost (Income): 

Subsidy income for modifications; 

Fiscal Year 2013: $94; 

Fiscal Year 2012: 0. 

Subsidy Reestimates - (Downward); 

Fiscal Year 2013: ($24); 

Fiscal Year 2012: ($207). 

Total Subsidy Cost (Income); 

Fiscal Year 2013: ($118); 

Fiscal Year 2012: ($207). 

[End of table] 

FHA-Refinance Program: 

The OFS entered into a loss-sharing agreement with the FHA to support a 

program in which FHA guarantees refinancing of borrowers whose homes 

were worth less than the remaining amounts owed under their mortgage 

loans. OFS has established a $50 million account, held by a commercial 

bank serving as its agent, from which any required reimbursements for 

losses will be paid to third party claimants, including banks or other 

investors. 

During fiscal year 2013, $182 million of loans were disbursed by the 

FHA. As of September 30, 2013, 3,015 loans that FHA guaranteed, with a 

total value of $489 million, had been refinanced under the program 

through May 2013. Effective June 1, 2013, the Treasury Coverage Ratio, 

which governs the amount of losses financed by OFS, was recalculated 

and it was determined that OFS's guarantee was no longer needed during 

the remainder of fiscal year 2013. During fiscal year 2012, $234 

million of loans were disbursed by the FHA. As of September 30, 2012, 

1,774 loans that FHA had guaranteed, with a total value of $307 

million, had been refinanced under the program. 

OFS's maximum exposure related to FHA's guarantee totaled $59 million 

and $41 million at September 30, 2013 and 2012, respectively. OFS's 

guarantee resulted in a liability of $9 million at September 30, 2013 

and a liability of $7 million at September 30, 2012. The liability was 

calculated, using credit reform accounting, as the present value of the 

estimated future cash outflows for the OFS's share of losses incurred 

on any defaults of the disbursed loans. As of September 30, 2013, 

$47,840 of claims had been paid by OFS under the program. As of 

September 30, 2012, no claims had been paid. 

At September 30, 2013, OFS's obligation for subsidy for undisbursed 

loans was $1.0 billion. This was reduced in fiscal year 2013 from the 

$8.1 billion outstanding at September 30, 2012, due to adjustments to 

expected participation in the program. 

Budget subsidy rates for the program, entirely for defaults, were set 

at 2.48 percent and 4.0 percent for loans guaranteed in fiscal years 

2013 and 2012, respectively. 

The program recorded $3 million downward reestimates each year, for 

fiscal years 2013 and 2012, due to reductions in market risks and lower 

than projected defaults. 

The following table details the changes in the FHA-Refinance Program 

Liability and the Subsidy Cost for the program during fiscal years 2013 

and 2012: 

Reconciliation of FHA-Refinance Program Liability: 

(Dollars in Millions): 

Balance, Beginning of Period; 

Fiscal Year 2013: $7; 

Fiscal Year 2012: $1. 

Subsidy Cost for Guarantees (Defaults); 

Fiscal Year 2013: $5; 

Fiscal Year 2012: $9. 

Balance, End of Period, Before Reestimates; 

Fiscal Year 2013: $12;

Fiscal Year 2012: $10. 

Subsidy Reestimates - (Downward); 

Fiscal Year 2013: ($3); 

Fiscal Year 2012: ($3). 

Balance, End of Period; 

Fiscal Year 2013: $9; 

Fiscal Year 2012: $7. 

Reconciliation of Subsidy Cost (Income): 

Subsidy Cost for Guarantees (Defaults); 

Fiscal Year 2013: $5; 

Fiscal Year 2012: $9. 

Subsidy Reestimates - (Downward); 

Fiscal Year 2013: ($3); 

Fiscal Year 2012: ($3). 

Total Subsidy Cost (Income); 

Fiscal Year 2013: $2; 

Fiscal Year 2012: $6. 

[End of table] 

Note 7. Due To The General Fund: 

As of September 30, 2013, the OFS accrued $8.1 billion of downward 

reestimates payable to the General Fund. As of September 30, 2012, the 

OFS accrued $9.7 billion of downward reestimates payable to the General 

Fund. Due to the General Fund is a Non-Entity liability on the Balance 

Sheet. 

Note 8. Principal Payable To The Bureau Of The Fiscal Service (Fiscal 

Service): 

Equity investments, direct loans and other credit programs accounted 

for under federal credit reform are funded by subsidy appropriations 

and borrowings from the Fiscal Service. The OFS also borrows funds to 

pay the Treasury General Fund for negative program subsidy costs and 

downward reestimates (these reduce program subsidy cost) in advance of 

receiving the expected cash flows that cause the negative program 

subsidy or downward reestimate. The OFS makes periodic principal: 

repayments to the Fiscal Service based on the analysis of its cash 

balances and future disbursement needs. All debt is intragovernmental 

and covered by budgetary resources. See additional details on borrowing 

authority in Note 11, Statement of Budgetary Resources. 

Debt transactions for the fiscal years ended September 30, 2013 and 

2012, were as follows: 

Beginning Balance, Principal Payable to the BPD; 

As of September 30, 2013: $52,828; 

As of September 30, 2012: $129,497. 

New Borrowings; 

As of September 30, 2013: $208; 

As of September 30, 2012: $2,658. 

Repayments; 

As of September 30, 2013: ($41,087); 

As of September 30, 2012: ($79,327).  

Ending Balance, Principal Payable to the BPD; 

As of September 30, 2013: $11,949; 

As of September 30, 2012: $52,828. 

[End of table] 

Borrowings from the Fiscal Service by TARP program, outstanding as of 

September 30, 2013 and 2012, were as follows: 

Capital Purchase Program; 

As of September 30, 2013: $1,210; 

As of September 30, 2012: $5,150. 

CDCI, TALF, and SBA 7(a); 

As of September 30, 2013: $551; 

As of September 30, 2012: $1,020. 

Public-Private Investment Program; 

As of September 30, 2013: $305; 

As of September 30, 2012: $16,317. 

Automotive Industry Financing Program; 

As of September 30, 2013: $9,883; 

As of September 30, 2012: $17,845. 

American International Group, Inc. Investment Program; 

As of September 30, 2013: 0; 

As of September 30, 2012: $11,736. 

Asset Guarantee Program; 

As of September 30, 2013: 0; 

As of September 30, 2012: $760. 

Total Borrowings Outstanding; 

As of September 30, 2013: $11,949; 

As of September 30, 2012: $52,828. 

[End of table] 

As of September 30, 2013, borrowings carried remaining terms ranging 

from 3 to 28 years, with interest rates from 2.5 percent to 3.8 

percent. As of September 30, 2012, borrowings carried remaining terms 

ranging from 2 to 29 years, with interest rates from 1.0 percent to 4.4 

percent. 

Note 9. Commitments And Contingencies: 

The OFS is party to various legal actions and claims brought by or 

against it. In the opinion of management and the Chief Counsel, the 

ultimate resolution of these legal actions and claims will not have a 

material effect on the OFS financial statements. The OFS has not 

incurred any loss: 

contingencies that would be considered probable or reasonably possible 

for these cases; therefore, no liability was established. Refer to Note 

5 for additional commitments relating to the Treasury Housing Programs 

under TARP and Note 6 relating to Direct Loans and Equity Investments, 

Net and Other Credit Programs. 

Note 10. Statement Of Net Cost: 

The Statement of Net Cost (SNC) presents the net cost of (income from) 

operations for the OFS under the strategic goal of ensuring the overall 

stability and liquidity of the financial system, preventing avoidable 

foreclosures and preserving homeownership. The OFS has determined that 

all initiatives and programs under the TARP fall within this strategic 

goal. 

The OFS SNC reports the annual accumulated full cost of the TARP's 

output, including both direct and indirect costs of the program 

services and output identifiable to TARP, in accordance with SFFAS No. 

4, Managerial Cost Accounting Concepts and Standards. 

The OFS SNC for fiscal year 2013 includes $856 million of 

intragovernmental costs relating to interest expense on borrowings from 

the Fiscal Service and $235 million intragovernmental revenues relating 

to interest income on financing account balances. The OFS SNC for 

fiscal year 2012 includes $2.3 billion of intragovernmental costs 

relating to interest expense on borrowings from the Fiscal Service and 

$605 million in intragovernmental revenues relating to interest income 

on financing account balances. 

Subsidy allowance amortization on the SNC is the difference between 

interest income on financing fund account balances, dividends and 

interest income on direct loans, equity investments and other credit 

programs from TARP participants, and interest expense on borrowings 

from the Fiscal Service. Credit reform accounting requires that only 

subsidy cost, not the net of other costs (interest expense and dividend 

and interest income), be reflected in the SNC. The subsidy allowance 

account is used to present the loan or equity investment at the 

estimated net present value of future cash flows. The OFS SNC includes 

$671 million and $1.1 billion of subsidy allowance amortization for 

fiscal years 2013 and 2012, respectively. 

Note 11. Statement Of Budgetary Resources: 

The Statement of Budgetary Resources (SBR) presents information about 

total budgetary resources available to the OFS and the status of those 

resources. For the year ended September 30, 2013, the OFS's total 

resources in budgetary accounts were $22.4 billion and resources in 

non-budgetary financing accounts, including borrowing authority and 

spending authority from collections of loan principal, liquidation of 

equity investments, interest, dividends and fees were $15.6 billion. 

For the year ended September 30, 2012, the OFS's total resources in 

budgetary accounts were $41.9 billion and resources in non-budgetary 

financing accounts were $25.9 billion. 

Permanent Indefinite Appropriations: 

The OFS receives permanent indefinite appropriations annually, if 

necessary, to fund increases in the projected subsidy costs of direct 

loans, equity investments and other credit programs as determined by 

the reestimation process required by the FCRA. 

Additionally, Section 118 of the EESA states that the Secretary may 

issue public debt securities and use the resulting funds to carry out 

the Act and that any such funds expended or obligated by the Secretary 

for actions authorized by this Act, including the payment of 

administrative expenses, shall be deemed appropriated at the time of 

such expenditure or obligation. 

Borrowing Authority: 

The OFS is authorized to borrow from the Fiscal Service whenever funds 

needed to disburse direct loans and equity investments, and to enter 

into asset guarantee and loss-sharing arrangements, exceed subsidy 

costs and collections in the non-budgetary financing accounts. For the 

year ended September 30, 2013, the OFS had no borrowing authority 

available, of the $208 million authorized, since the authority was 

used. For the year ended September 30, 2012, the OFS had borrowing 

authority available of $2.6 billion, of the $2.7 billion authorized. 

The OFS uses dividends and interest received as well as principal 

repayments on direct loans and: 

liquidation of equity investments to repay debt in the non-budgetary 

direct loan, equity investment and other credit program financing 

accounts. These receipts are not available for any other use per credit 

reform accounting guidance. 

Apportionment Categories of Obligations Incurred: Direct versus 

Reimbursable Obligations: 

All of the OFS apportionments are Direct and are Category B. Category B 

apportionments typically distribute budgetary resources on a basis 

other than calendar quarters, such as by activities, projects, objects 

or a combination of these categories. The OFS obligations incurred are 

direct obligations (obligations not financed from intragovernmental 

reimbursable agreements).Undelivered Orders: 

Undelivered orders as of September 30, 2013 were $29.1 billion in 

budgetary accounts and $1.0 billion in non-budgetary financing 

accounts. Undelivered orders as of September 30, 2012 were $40.2 

billion in budgetary accounts and $5.9 billion in non-budgetary 

financing accounts. 

Explanation of Differences Between the Statement of Budgetary Resources 

and the Budget of the United States Government: 

Federal agencies and entities are required to explain material 

differences between amounts reported in the SBR and the actual amounts 

reported in the Budget of the U.S. Government (the President's Budget). 

The President's Budget for 2015, with the "Actual" column completed for 

fiscal year 2013, has not yet been published as of the date of these 

financial statements. The President's Budget is currently expected to 

be published and delivered to Congress in early February 2014. It will 

be available from the Government Printing Office. 

The 2014 President's Budget, with the "Actual" column completed for the 

year ended September 30, 2012, was published in April 2013, and 

reconciled to the SBR. The only differences between the two documents 

were due to: 

* Rounding; 

* Expired funds that are not shown in the "Actual" column of the 

President's Budget. 

Note 12. Reconciliation Of Obligations Incurred To Net Cost Of (Income 

From) Operations: 

The OFS presents the SNC using the accrual basis of accounting. This 

differs from the obligation-based measurement of total resources 

supplied, both budgetary and from other sources, on the SBR. The 

reconciliation of obligations incurred to net cost of operations shown 

below categorizes the differences: 

between the two, and illustrates that the OFS maintains reconcilable 

consistency between the two types of reporting. 

The Reconciliation of Obligations Incurred to Net Cost of (Income from) 

Operations for the fiscal years ended September 30, 2013 and 2012 

follows: 

Resources Used to Finance Activities: 

(Dollars in millions): 

Budgetary Resources Obligated: 

Obligations Incurred; 

2013: $14,879; 

2012: $35,803. 

Spending Authority from Offsetting Collections and Recoveries; 

2013: ($48,668); 

2012: ($87,383). 

Offsetting Receipts; 

2013: ($13,218); 

2012: ($6,063). 

Net Obligations; 

2013: ($47,007); 

2012: ($57,642). 

Other Resources; 

2013: $1; 

2012: $1. 

Total Resources Used to Finance Activities; 

2013: ($47,006); 

2012: ($57,642). 

Resources Used to Finance Items Not Part of Net Cost of (Income from) 

Operations: 

Net Obligations in Direct Loan, Equity Investment and Asset Guarantee 

Financing Funds; 

2013: $27,322; 

2012: $78,988. 

Change in Resources Obligated for Goods, Services and Benefits Ordered 

but not yet Provided; 

2013: $11,164; 

2012: $3,157. 

Resources that Fund Prior Period Expenses and Net Downward 

Reestimates; 

2013: $8,957; 

2012: ($23,294). 

Total Resources Used to Finance Items Not Part of Net Cost of (Income 

from) Operations; 

2013: $47,443; 

2012: $58,851. 

Total Resources Used to Finance the Net Cost of (Income from) 

Operations; 

2013: $437; 

2012: $1,209. 

Components of Net Cost of (Income from) Operations that Will Not 

Require or Generate Resources in the Current Period: 

Accrued Net Downward Reestimates at Year-End; 

2013: ($8,139); 

2012: ($8,958). 

Other; 

2013: $1; 

2012: $1. 

Total Components of Net Cost of (Income from) Operations that Will Not 

Require or Generate Resources in the Current Period; 

2013: ($8,138); 

2012: ($8,957). 

Net Cost of (Income from) Operations; 

2013: ($7,701); 

2012: ($7,748). 

[End of table] 

Office Of Financial Stability (Troubled Asset Relief Program): 

Required Supplementary Information Combined Statement Of Budgetary 

Resources For the Year Ended September 30, 2013 (Unaudited): 

Dollars in Millions: 

Budgetary Resources: 

Unobligated Balances Brought Forward; 

Combined Budgetary Accounts: $14,350; 

Combined Nonbudgetary Financing Accounts: $17,631; 

TARP Programs Budgetary Accounts: $14,071; 

TARP Programs Nonbudgetary Financing Accounts: $17,631; 

TARP Administrative Budgetary Accounts: $279; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Recoveries of Prior Year Unpaid Obligations; 

Combined Budgetary Accounts: $7,246; 

Combined Nonbudgetary Financing Accounts: $4,941; 

TARP Programs Budgetary Accounts: $7,219; 

TARP Programs Nonbudgetary Financing Accounts: $4,941;

TARP Administrative Budgetary Accounts: $27; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Borrowing Authority Withdrawn; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: ($2,611); 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: ($2,611); 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Actual Repayment of Debt, Prior Year Balance; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: ($17,738); 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: ($17,738); 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Unobligated Balance from Prior Year Budget Authority, Net: 

Combined Budgetary Accounts: $21,596;

Combined Nonbudgetary Financing Accounts: $2,223; 

TARP Programs Budgetary Accounts: $21,290;

TARP Programs Nonbudgetary Financing Accounts: $2,223; 

TARP Administrative Budgetary Accounts: $306;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Appropriations; 

Combined Budgetary Accounts: $788; 

Combined Nonbudgetary Financing Accounts: 0;

TARP Programs Budgetary Accounts: $483; 

TARP Programs Nonbudgetary Financing Accounts: 0; 

TARP Administrative Budgetary Accounts: $305; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Budget Authority: 

Combined Budgetary Accounts: 0; 

Combined Nonbudgetary Financing Accounts: $208;

TARP Programs Budgetary Accounts: 0; 

TARP Programs Nonbudgetary Financing Accounts: $208; 

TARP Administrative Budgetary Accounts: 0; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Spending Authority from Offsetting Collections; 

Combined Budgetary Accounts: $1;

Combined Nonbudgetary Financing Accounts: $13,131; 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: $13,131; 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Total Budget Resources (Note 11); 

Combined Budgetary Accounts: $22,385; 

Combined Nonbudgetary Financing Accounts: $15,562; 

TARP Programs Budgetary Accounts: $21,773; 

TARP Programs Nonbudgetary Financing Accounts: $15,562; 

TARP Administrative Budgetary Accounts: $612; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Status Of Budgetary Resources: 

Obligations Incurred; 

Combined Budgetary Accounts: $779; 

Combined Nonbudgetary Financing Accounts: $14,100; 

TARP Programs Budgetary Accounts: $483; 

TARP Programs Nonbudgetary Financing Accounts: $14,100; 

TARP Administrative Budgetary Accounts: $296; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Unobligated Balance: Apportioned; 

Combined Budgetary Accounts: $11; 

Combined Nonbudgetary Financing Accounts: $668; 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: $668; 

TARP Administrative Budgetary Accounts: $11; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Unapportioned; 

Combined Budgetary Accounts: $21,595; 

Combined Nonbudgetary Financing Accounts: $794; 

TARP Programs Budgetary Accounts: $21,290; 

TARP Programs Nonbudgetary Financing Accounts: $794; 

TARP Administrative Budgetary Accounts: $305; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Total Unobligated Balance; 

Combined Budgetary Accounts: $21,606; 

Combined Nonbudgetary Financing Accounts: $1,462; 

TARP Programs Budgetary Accounts: $21,290; 

TARP Programs Nonbudgetary Financing Accounts: $1,462; 

TARP Administrative Budgetary Accounts: $316; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Total Status Of Budgetary Resources; 

Combined Budgetary Accounts: $22,385; 

Combined Nonbudgetary Financing Accounts: $15,562; 

TARP Programs Budgetary Accounts: $21,773; 

TARP Programs Nonbudgetary Financing Accounts: $15,562; 

TARP Administrative Budgetary Accounts: $612; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Change In Obligated Balances: 

Obligated Balance Brought Forward: 

Unpaid Obligations Brought Forward, October 1; 

Combined Budgetary Accounts: $40,548; 

Combined Nonbudgetary Financing Accounts: $5,926; 

TARP Programs Budgetary Accounts: $40,384; 

TARP Programs Nonbudgetary Financing Accounts: $5,926; 

TARP Administrative Budgetary Accounts: $164; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Obligations Incurred;

Combined Budgetary Accounts: $779; 

Combined Nonbudgetary Financing Accounts: $14,100; 

TARP Programs Budgetary Accounts: $483; 

TARP Programs Nonbudgetary Financing Accounts: $14,100; 

TARP Administrative Budgetary Accounts: $296; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Gross Outlays; 

Combined Budgetary Accounts: ($4,675); 

Combined Nonbudgetary Financing Accounts: ($14,092); 

TARP Programs Budgetary Accounts: ($4,427); 

TARP Programs Nonbudgetary Financing Accounts: ($14,092); 

TARP Administrative Budgetary Accounts: ($248); 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Recoveries of Prior Year Unpaid Obligations; 

Combined Budgetary Accounts: ($7,246); 

Combined Nonbudgetary Financing Accounts: ($4,941); 

TARP Programs Budgetary Accounts: ($7,219); 

TARP Programs Nonbudgetary Financing Accounts: ($4,941);

TARP Administrative Budgetary Accounts: ($27); 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Unpaid Obligations, end of year; 

Combined Budgetary Accounts: $29,406; 

Combined Nonbudgetary Financing Accounts: $993; 

TARP Programs Budgetary Accounts: $29,211; 

TARP Programs Nonbudgetary Financing Accounts: $993; 

TARP Administrative Budgetary Accounts: $185; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Uncollected Payments from Federal Sources: 

Uncollected Payments Brought Forward, October 1; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: ($349); 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: ($349); 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Change in Uncollected Payments; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: $123; 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: $123; 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Uncollected Payments from Federal Sources, end of year; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: ($226); 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: ($226); 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Obligated Balance, Net, end of year; 

Combined Budgetary Accounts: $29,406; 

Combined Nonbudgetary Financing Accounts: $767; 

TARP Programs Budgetary Accounts: $29,211; 

TARP Programs Nonbudgetary Financing Accounts: $767; 

TARP Administrative Budgetary Accounts: $185; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Obligated Balance (Net, of unpaid obligations and uncollected payment 

above): 

Unpaid Obligations, Net, brought forward, October 1; 

Combined Budgetary Accounts: $40,548; 

Combined Nonbudgetary Financing Accounts: $5,577; 

TARP Programs Budgetary Accounts: $40,384; 

TARP Programs Nonbudgetary Financing Accounts: $5,577; 

TARP Administrative Budgetary Accounts: $164; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Obligated Balance, Net, End of Year; 

Combined Budgetary Accounts: $29,406; 

Combined Nonbudgetary Financing Accounts: $767; 

TARP Programs Budgetary Accounts: $29,221; 

TARP Programs Nonbudgetary Financing Accounts: $767; 

TARP Administrative Budgetary Accounts: $185; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Budget Authority and Outlays, Net: 

Budget Authority, Gross; 

Combined Budgetary Accounts: $789; 

Combined Nonbudgetary Financing Accounts: $13,339; 

TARP Programs Budgetary Accounts: $483; 

TARP Programs Nonbudgetary Financing Accounts: $13,339; 

TARP Administrative Budgetary Accounts: $306; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Actual Offsetting Collections; 

Combined Budgetary Accounts: ($1);

Combined Nonbudgetary Financing Accounts: ($36,604); 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: ($36,604); 

TARP Administrative Budgetary Accounts: ($1);

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Change in Uncollected Customer Payments from Federal Sources; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: $123; 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: $123; 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Budget Authority and Outlays, Net: 

Budget Authority, Gross: 

Combined Budgetary Accounts: $789; 

Combined Nonbudgetary Financing Accounts: $13,339; 

TARP Programs Budgetary Accounts: $483; 

TARP Programs Nonbudgetary Financing Accounts: $13,339; 

TARP Administrative Budgetary Accounts: $306; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Actual Offsetting Collections: 

Combined Budgetary Accounts: ($1); 

Combined Nonbudgetary Financing Accounts: ($36,604); 

TARP Programs Budgetary Accounts: 0; 

TARP Programs Nonbudgetary Financing Accounts: ($36,604); 

TARP Administrative Budgetary Accounts: 0; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Change in Uncollected Customer Payments from Federal Sources; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: $123; 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: $123; 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Budget Authority, Net: 

Combined Budgetary Accounts: $788; 

Combined Nonbudgetary Financing Accounts: ($23,142); 

TARP Programs Budgetary Accounts: $483; 

TARP Programs Nonbudgetary Financing Accounts: ($23,142); 

TARP Administrative Budgetary Accounts: $305; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Gross Outlays: 

Combined Budgetary Accounts: $4,675; 

Combined Nonbudgetary Financing Accounts: $14,092; 

TARP Programs Budgetary Accounts: $4,427; 

TARP Programs Nonbudgetary Financing Accounts: $14,092; 

TARP Administrative Budgetary Accounts: $248; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Actual Offsetting Collections: 

Combined Budgetary Accounts: ($1); 

Combined Nonbudgetary Financing Accounts: ($36,604); 

TARP Programs Budgetary Accounts: 0; 

TARP Programs Nonbudgetary Financing Accounts: ($36,604); 

TARP Administrative Budgetary Accounts: 0; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Net Outlays: 

Combined Budgetary Accounts: $4,674; 

Combined Nonbudgetary Financing Accounts: $22,512; 

TARP Programs Budgetary Accounts: $4,427; 

TARP Programs Nonbudgetary Financing Accounts: ($22,512); 

TARP Administrative Budgetary Accounts: $247; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Distributed Offsetting Receipts; 

Combined Budgetary Accounts: ($13,218); 

Combined Nonbudgetary Financing Accounts: 0;

TARP Programs Budgetary Accounts: ($13,218); 

TARP Programs Nonbudgetary Financing Accounts: 0;

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Agency Outlays, Net; 

Combined Budgetary Accounts: ($8,544); 

Combined Nonbudgetary Financing Accounts: ($22,512); 

TARP Programs Budgetary Accounts: ($8,791); 

TARP Programs Nonbudgetary Financing Accounts: ($22,512); 

TARP Administrative Budgetary Accounts: $275; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

[End of table] 

Office Of Financial Stability (Troubled Asset Relief Program): 

Required Supplementary Information Combined Statement Of Budgetary 

Resources For the Year Ended September 30, 2012 (Unaudited): 

Dollars in Millions: 

Budgetary Resources: 

Unobligated Balances Brought Forward; 

Combined Budgetary Accounts: $14,166; 

Combined Nonbudgetary Financing Accounts: $21,143; 

TARP Programs Budgetary Accounts: $13,967; 

TARP Programs Nonbudgetary Financing Accounts: $21,143; 

TARP Administrative Budgetary Accounts: $199; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Recoveries of Prior Year Unpaid Obligations; 

Combined Budgetary Accounts: $146; 

Combined Nonbudgetary Financing Accounts: $6,114; 

TARP Programs Budgetary Accounts: $104; 

TARP Programs Nonbudgetary Financing Accounts: $6,114;

TARP Administrative Budgetary Accounts: $42; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Borrowing Authority Withdrawn; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: ($5,832); 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: ($5,832); 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Actual Repayment of Debt, Prior Year Balance; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: ($19,900); 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: ($19,900); 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Unobligated Balance from Prior Year Budget Authority, Net: 

Combined Budgetary Accounts: $14,312;

Combined Nonbudgetary Financing Accounts: $15,245; 

TARP Programs Budgetary Accounts: $14,071;

TARP Programs Nonbudgetary Financing Accounts: $1,525; 

TARP Administrative Budgetary Accounts: $241;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Appropriations; 

Combined Budgetary Accounts: 0; 

Combined Nonbudgetary Financing Accounts: 0;

TARP Programs Budgetary Accounts: $27,270; 

TARP Programs Nonbudgetary Financing Accounts: 0; 

TARP Administrative Budgetary Accounts: $323; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Budget Authority: 

Combined Budgetary Accounts: $27,593; 

Combined Nonbudgetary Financing Accounts: $2,659;

TARP Programs Budgetary Accounts: 0; 

TARP Programs Nonbudgetary Financing Accounts: $2,659; 

TARP Administrative Budgetary Accounts: 0; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Spending Authority from Offsetting Collections; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: $21,695; 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: $21,695; 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Change in Unfilled Orders Without Advance; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: ($23,320); 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: ($23,320); 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Total Budget Resources (Note 11); 

Combined Budgetary Accounts: $41,905; 

Combined Nonbudgetary Financing Accounts: $25,879; 

TARP Programs Budgetary Accounts: $41,341; 

TARP Programs Nonbudgetary Financing Accounts: $25,879; 

TARP Administrative Budgetary Accounts: $564; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Status Of Budgetary Resources: 

Obligations Incurred; 

Combined Budgetary Accounts: $27,555; 

Combined Nonbudgetary Financing Accounts: $8,248; 

TARP Programs Budgetary Accounts: $27,270; 

TARP Programs Nonbudgetary Financing Accounts: $8,248; 

TARP Administrative Budgetary Accounts: $285; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Unobligated Balance: Apportioned; 

Combined Budgetary Accounts: $41; 

Combined Nonbudgetary Financing Accounts: $3,946; 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: $3,946; 

TARP Administrative Budgetary Accounts: $41; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Unapportioned; 

Combined Budgetary Accounts: $14,309; 

Combined Nonbudgetary Financing Accounts: $13,685; 

TARP Programs Budgetary Accounts: $14,071; 

TARP Programs Nonbudgetary Financing Accounts: $13,685; 

TARP Administrative Budgetary Accounts: $238; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Total Unobligated Balance; 

Combined Budgetary Accounts: $14,350; 

Combined Nonbudgetary Financing Accounts: $17,631; 

TARP Programs Budgetary Accounts: $14,071; 

TARP Programs Nonbudgetary Financing Accounts: $17,631; 

TARP Administrative Budgetary Accounts: $279; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Total Status Of Budgetary Resources; 

Combined Budgetary Accounts: $41,905; 

Combined Nonbudgetary Financing Accounts: $25,879; 

TARP Programs Budgetary Accounts: $41,341; 

TARP Programs Nonbudgetary Financing Accounts: $25,879; 

TARP Administrative Budgetary Accounts: $564; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Change In Obligated Balances: 

Obligated Balance Brought Forward: 

Unpaid Obligations; 

Combined Budgetary Accounts: $43,814; 

Combined Nonbudgetary Financing Accounts: $13,158; 

TARP Programs Budgetary Accounts: $43,618; 

TARP Programs Nonbudgetary Financing Accounts: $13,158; 

TARP Administrative Budgetary Accounts: $196; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Uncollected Customer Payments from Federal Sources; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: ($496); 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: ($496); 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Obligated Balance, Net, Brought Forward; 

Combined Budgetary Accounts: $43,814 

Combined Nonbudgetary Financing Accounts: $12,662; 

TARP Programs Budgetary Accounts: $43,618; 

TARP Programs Nonbudgetary Financing Accounts: $12,662; 

TARP Administrative Budgetary Accounts: $196; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Obligations Incurred;

Combined Budgetary Accounts: $27,555; 

Combined Nonbudgetary Financing Accounts: $8,248; 

TARP Programs Budgetary Accounts: $27,270; 

TARP Programs Nonbudgetary Financing Accounts: $8,248; 

TARP Administrative Budgetary Accounts: $285; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Gross Outlays; 

Combined Budgetary Accounts: ($30,675); 

Combined Nonbudgetary Financing Accounts: ($9,366); 

TARP Programs Budgetary Accounts: ($30,400); 

TARP Programs Nonbudgetary Financing Accounts: ($9,366); 

TARP Administrative Budgetary Accounts: ($275); 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Recoveries of Prior Year Unpaid Obligations; 

Combined Budgetary Accounts: ($146); 

Combined Nonbudgetary Financing Accounts: ($6,114); 

TARP Programs Budgetary Accounts: ($104); 

TARP Programs Nonbudgetary Financing Accounts: ($6,114); 

TARP Administrative Budgetary Accounts: ($42); 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Obligated Balance, Net, End of Period: 

Unpaid Obligations, Gross, End of Period; 

Combined Budgetary Accounts: $40,548; 

Combined Nonbudgetary Financing Accounts: $5,926; 

TARP Programs Budgetary Accounts: $40,384; 

TARP Programs Nonbudgetary Financing Accounts: $5,926; 

TARP Administrative Budgetary Accounts: $164; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Uncollected Customer Payments from Federal Sources; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: $349; 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: $349; 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Obligated Balance, Net, End of Period; 

Combined Budgetary Accounts: $40,548; 

Combined Nonbudgetary Financing Accounts: $5,577; 

TARP Programs Budgetary Accounts: $40,384; 

TARP Programs Nonbudgetary Financing Accounts: $5,577; 

TARP Administrative Budgetary Accounts: $164; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Budget Authority and Outlays, Net: 

Budget Authority, Gross; 

Combined Budgetary Accounts: $27,593; 

Combined Nonbudgetary Financing Accounts: $24,354; 

TARP Programs Budgetary Accounts: $27,270; 

TARP Programs Nonbudgetary Financing Accounts: $24,354; 

TARP Administrative Budgetary Accounts: $323; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Actual Offsetting Collections; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: ($81,269); 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: ($81,269); 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Change in Uncollected Customer Payments from Federal Sources; 

Combined Budgetary Accounts: 0;

Combined Nonbudgetary Financing Accounts: $147; 

TARP Programs Budgetary Accounts: 0;

TARP Programs Nonbudgetary Financing Accounts: $147; 

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Budget Authority, Net: 

Combined Budgetary Accounts: $27,593); 

Combined Nonbudgetary Financing Accounts: ($56,768); 

TARP Programs Budgetary Accounts: $27,270; 

TARP Programs Nonbudgetary Financing Accounts: ($56,768); 

TARP Administrative Budgetary Accounts: $323; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Gross Outlays: 

Combined Budgetary Accounts: $30,675; 

Combined Nonbudgetary Financing Accounts: $9,366; 

TARP Programs Budgetary Accounts: $30,400; 

TARP Programs Nonbudgetary Financing Accounts: $9,366; 

TARP Administrative Budgetary Accounts: $275; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Actual Offsetting Collections: 

Combined Budgetary Accounts: 0; 

Combined Nonbudgetary Financing Accounts: ($81,269); 

TARP Programs Budgetary Accounts: 0; 

TARP Programs Nonbudgetary Financing Accounts: ($81,269); 

TARP Administrative Budgetary Accounts: 0; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Net Outlays: 

Combined Budgetary Accounts: $30,675; 

Combined Nonbudgetary Financing Accounts: ($71,903); 

TARP Programs Budgetary Accounts: $30,400; 

TARP Programs Nonbudgetary Financing Accounts: ($71,903); 

TARP Administrative Budgetary Accounts: $275; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Distributed Offsetting Receipts; 

Combined Budgetary Accounts: ($6,063); 

Combined Nonbudgetary Financing Accounts: 0;

TARP Programs Budgetary Accounts: ($6,063); 

TARP Programs Nonbudgetary Financing Accounts: 0;

TARP Administrative Budgetary Accounts: 0;

TARP Administrative Nonbudgetary Financing Accounts: 0. 

Agency Outlays, Net; 

Combined Budgetary Accounts: $24,612; 

Combined Nonbudgetary Financing Accounts: ($71,903); 

TARP Programs Budgetary Accounts: $24,337; 

TARP Programs Nonbudgetary Financing Accounts: ($71,903); 

TARP Administrative Budgetary Accounts: $275; 

TARP Administrative Nonbudgetary Financing Accounts: 0. 

[End of table] 

Office of Financial Stability - Troubled Asset Relief Program

Other Information: 

Schedule Of Spending:

For the Years Ended September 30, 2013 and 2012 (Unaudited): 

(Dollars in MIllions) 

What Is Available To Spend? 

Total Resources per Statement of Budgetary Resources (SBR): 

2013: 

Budgetary Accounts: $22,385; 

Nonbudgetary Financing Accounts: $15,562; 

2012: 

Budgetary Accounts: $41,905; 

Nonbudgetary Financing Accounts: $25,879. 

Less Amount Apportioned (not yet agreed to be spent); 

2013: 

Budgetary Accounts: ($11); 

Nonbudgetary Financing Accounts: ($668); 

2012: 

Budgetary Accounts: ($41); 

Nonbudgetary Financing Accounts: ($3,946). 

Less Amount Unapportioned (not yet available to be spent); 

2013: 

Budgetary Accounts: ($21,595); 

Nonbudgetary Financing Accounts: ($794); 

2012: 

Budgetary Accounts: ($14,309); 

Nonbudgetary Financing Accounts: ($13,685). 

Amount Available To Spend-Obligations Incurred Per SBR; 

2013: 

Budgetary Accounts: $779; 

Nonbudgetary Financing Accounts: $14,100; 

2012: 

Budgetary Accounts: $27,555; 

Nonbudgetary Financing Accounts: $8,248. 

How Was The Amount Spent? 

Personnel Compensation; 

2013: 

Budgetary Accounts: $17. 

Nonbudgetary Financing Accounts: 0; 

2012: 

Budgetary Accounts: $22; 

Nonbudgetary Financing Accounts: 0. 

Personnel Benefits; 

2013: 

Budgetary Accounts: $5; 

Nonbudgetary Financing Accounts: 0; 

2012: 

Budgetary Accounts: $6; 

Nonbudgetary Financing Accounts: 0. 

Travel and Transportation; 

2013: 

Budgetary Accounts: $1; 

Nonbudgetary Financing Accounts: 0; 

2012: 

Budgetary Accounts: $1; 

Nonbudgetary Financing Accounts: 0. 

Supplies and Materials; 

2013: 

Budgetary Accounts: $1; 

Nonbudgetary Financing Accounts: 0; 

2012: 

Budgetary Accounts: $2; 

Nonbudgetary Financing Accounts: 0. 

Other Services; 

2013: 

Budgetary Accounts: $272; 

Nonbudgetary Financing Accounts: $26; 

2012: 

Budgetary Accounts: $254; 

Nonbudgetary Financing Accounts: $20. 

Interest; 

2013: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: $856; 

2012: 

Budgetary Accounts: 0; 

Nonbudgetary Financing Accounts: $2,252. 

Subsidies, including Reestimates for Previously Disbursed Loans and 

Investments Outstanding[7]: 

2013: 

Budgetary Accounts: $483; 

Nonbudgetary Financing Accounts: $13,218; 

2012: 

Budgetary Accounts: $27,270; 

Nonbudgetary Financing Accounts: $5,976. 

Amount Available To Spend-Obligations Incurred Per SBR: 

2013: 

Budgetary Accounts: $779; 

Nonbudgetary Financing Accounts: $14,100; 

2012: 

Budgetary Accounts: $27,555; 

Nonbudgetary Financing Accounts: $8,248. 

To Whom Were The Obligations Made? 

Federal Agencies and Entities; 

2013: 

Budgetary Accounts: $505; 

Nonbudgetary Financing Accounts: $14,074; 

2012: 

Budgetary Accounts: $27,306; 

Nonbudgetary Financing Accounts: $8,228. 

Non-Federal Companies - Freddie Mac/Fannie Mae for Housing 

2013: 

Budgetary Accounts: $215; 

Nonbudgetary Financing Accounts: 0; 

2012: 

Budgetary Accounts: $164; 

Nonbudgetary Financing Accounts: 0. 

Non-Federal Companies - All Other; 

2013: 

Budgetary Accounts: $41; 

Nonbudgetary Financing Accounts: $26; 

2012: 

Budgetary Accounts: $60; 

Nonbudgetary Financing Accounts: $20. 

Non-Federal Individuals; 

2013: 

Budgetary Accounts: $18; 

Nonbudgetary Financing Accounts: 0; 

2012: 

Budgetary Accounts: $25; 

Nonbudgetary Financing Accounts: 0. 

Amount Available To Spend-Obligations Incurred Per SBR: 

2013: 

Budgetary Accounts: $779; 

Nonbudgetary Financing Accounts: $14,100; 

2012: 

Budgetary Accounts: $27,555; 

Nonbudgetary Financing Accounts: $8,248. 

[End of table] 

The Schedule of Spending presents an overview of obligations incurred 

subtotaled by purpose and again by type of entity to be paid. 

Obligations are legally binding agreements that usually result in 

outlays, immediately or in the future. The schedule presents more 

detail than the Statement of Budgetary Resources, although the data 

used to populate both is the same. 

The section "How Was the Amount Spent" presents obligations committed 

to in each fiscal year for services received, supplies purchased, 

subsidies and program loans or investments made, even if actual receipt 

of services or goods has not yet occurred or payments have not yet been 

made for particular obligations. While most obligations become 

contractual agreements for which services and goods are received in the 

same fiscal year as established, certain obligations or portions of 

obligations reported here may never be used. These unused amounts, when 

closed, are reported as "Recoveries of Prior-Year Unpaid Obligations" 

on the SBR.[Footnote 7] 

Part 2 Footnotes: 

[1] Section 101 of the Emergency Economic Stabilization Act of 2008, 

Pub. L. No. 110-343, div. A, 122 Stat 3765, 3767 (Oct. 3, 2008), 

classified at 12 U.S.C. § 5211, established OFS within the Department 

of the Treasury (Treasury) to implement TARP. 

[2] EESA is classified, in part, as amended, as sections 5201 through 

5261 of Title 31 of the United States Code. Section 116(b) of EESA, 12 

U.S.C. § 5226(b), requires that Treasury annually prepare and submit 

to Congress and the public audited fiscal year financial statements 

for TARP that are prepared in accordance with generally accepted 

accounting principles. Section 116(b) further requires that GAO audit 

TARP's financial statements annually in accordance with generally 

accepted auditing standards. 

[3] EESA § 116(a)(3), 12 U.S.C. § 5226(a)(3). 

[4] A material weakness is a deficiency, or combination of 

deficiencies, in internal control over financial reporting, such that 

there is a reasonable possibility that a material misstatement of the 

entity's financial statements will not be prevented, or detected and 

corrected, on a timely basis. A deficiency in internal control exists 

when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, 

to prevent, or detect and correct, misstatements on a timely basis. 

[5] The subsidy cost or income is composed of (1) the change in the 

subsidy cost allowance, net of write-offs; (2) net intragovernmental 

interest cost; (3) certain inflows from the direct loans and equity 

investments (e.g., dividends, interest, net proceeds from sales and 

repurchases of assets in excess of cost, and other realized fees); and 

(4) the change in the estimated discounted net cash flows related to 

other credit programs (asset guarantee program and Federal Housing 

Administration refinance program). 

[6] The Dodd-Frank Wall Street Reform and Consumer Protection Act, 

Pub. L. No. 111-203, title XIII, § 1302, 124 Stat. 1376, 2133 (July 

21, 2010), (1) limited Treasury's authority to purchase or guarantee 

troubled assets to a maximum of $475 billion; (2) changed this limit 

to a cap on all purchases and guarantees made without regard to 

subsequent sale, repayment, or cancellation of assets or guarantees; 

and (3) prohibited Treasury, under EESA, from incurring any 

obligations for a program or initiative unless the program or 

initiative had already been initiated prior to June 25, 2010. 

[7] A significant deficiency is a deficiency, or a combination of 

deficiencies, in internal control that is less severe than a material 

weakness, yet important enough to merit attention by those charged with 

governance. 

[8] RSI is comprised of "Management's Discussion and Analysis" and the 

"Combined Statement of Budgetary Resources" that are included with the 

financial statements. 

[9] Other information is comprised of information included with the 

financial statements, other than RSI and the auditor's report. 

[End of Part 2] 

Part 3: Appendices: 

Appendix A: Tarp Glossary: 

Asset-Backed Security (ABS): A financial instrument representing an 

interest in a pool of other assets, typically consumer loans. Most ABS 

are backed by credit card receivables, auto loans, student loans, or 

other loan and lease obligations. 

Asset Guarantee Program (AGP): A TARP program under which OFS, together 

with the Federal Reserve and the FDIC, agreed to share losses on 

certain pools of assets held by systemically significant financial 

institutions that faced a high risk of losing market confidence due in 

large part to a portfolio of distressed or illiquid assets. 

Automotive Industry Financing Program (AIFP): A TARP program under 

which OFS provided loans or equity investments in order to avoid a 

disorderly bankruptcy of one or more auto companies that would have 

posed a systemic risk to the country's financial system. 

Capital Purchase Program (CPP): A TARP program pursuant to which OFS 

invested in preferred equity securities and other securities issued by 

financial institutions. 

Commercial Mortgage-Backed Securities (CMBS): A financial instrument 

representing an interest in a commercial real estate mortgage or a 

group of commercial real estate mortgages. 

Community Development Capital Initiative (CDCI): A TARP program that 

provides low-cost capital to Community Development Financial 

Institutions to encourage lending to small businesses and help 

facilitate the flow of credit to individuals in underserved 

communities. 

Community Development Financial Institution (CDFI): A financial 

institution that focuses on providing financial services to low-and 

moderate-income, minority and other underserved communities, and is 

certified by the CDFI Fund, an office within OFS that promotes 

economic revitalization and community development. 

Debtor-In-Possession (DIP): A debtor-in-possession in U. S. bankruptcy 

law has filed a bankruptcy petition but still remains in possession of 

its property. DIP financing usually has priority over existing debt, 

equity and other claims. 

Emergency Economic Stabilization Act (EESA): The law that created the 

Troubled Asset Relief Program (TARP). 

Government-Sponsored Enterprises (GSEs): Private corporations created 

by the U.S. Government. Fannie Mae and Freddie Mac are GSEs. 

Home Affordable Modification Program (HAMP): A TARP program OFS 

established to help responsible but struggling homeowners reduce their 

mortgage payments to affordable levels and avoid foreclosure. 

Legacy Securities: CMBS and non-agency RMBS issued prior to 2009 that 

were originally rated AAA or an equivalent rating by two or more 

nationally recognized statistical rating organizations without ratings 

enhancement and that are secured directly by actual mortgage loans, 

leases or other assets and not other securities. 

Making Home Affordable (MHA): A comprehensive plan to stabilize the 

U.S. housing market and help responsible, but struggling, homeowners 

reduce their monthly mortgage payments to more affordable levels and 

avoid foreclosure. HAMP is part of MHA. 

Mortgage-Backed Securities (MBS): A type of ABS representing an 

interest in a pool of similar mortgages bundled together by a financial 

institution. 

Non-Agency Residential Mortgage-Backed Securities: RMBS that are not 

guaranteed or issued by Freddie Mac, Fannie Mae, any other GSE, Ginnie 

Mae, or a U.S. federal government agency. 

Preferred Stock: Equity ownership that usually pays a fixed dividend 

and gives the holder a claim on corporate earnings superior to common 

stock owners. Preferred stock also has priority in the distribution of 

assets in the case of liquidation of a bankrupt company. 

Public-Private Investment Fund (PPIF): An investment fund established 

to purchase Legacy Securities from financial institutions under PPIP. 

Public-Private Investment Program (PPIP): A TARP program designed to 

support the secondary market in mortgage-backed securities. The program 

is designed to increase the flow of credit throughout the economy by 

partnering with private investors to purchase Legacy Securities from 

financial institutions. 

Qualifying Financial Institution (QFI): Private and public U.S.-

controlled banks, savings associations, bank holding companies, certain 

savings and loan holding companies, and mutual organizations. 

Residential Mortgage-Backed Securities (RMBS): A financial instrument 

representing an interest in a group of residential real estate 

mortgages. 

SBA: U.S. Small Business Administration. 

SBA 7(a) Securities Purchase Program: A TARP program under which OFS 

purchased securities backed by the guaranteed portions of the SBA 7(a) 

loans. 

Servicer: An administrative third party that collects mortgage 

payments, handles tax and insurance escrows, and may even bring 

foreclosure proceedings on past due mortgages for institutional loan 

owners or originators. The loan servicer also generates reports for 

borrowers and mortgage owners on the collections. 

Targeted Investment Program (TIP): A TARP program created to stabilize 

the financial system by making investments in institutions that are 

critical to the functioning of the financial system. : 

Term Asset-Backed Securities Loan Facility (TALF): A program under 

which the Federal Reserve Bank of New York made term non-recourse loans 

to buyers of AAA-rated Asset-Backed Securities in order to stimulate 

consumer and business lending. 

Troubled Asset Relief Program (TARP): The Troubled Asset Relief 

Program, which was established under EESA to help stabilize the 

financial system and prevent a systemic collapse. 

Trust Preferred Security (TruPS): A security that has both equity and 

debt characteristics, created by establishing a trust and issuing debt 

to it. TruPS are treated as capital, not debt, for regulatory purposes. 

Warrant: A financial instrument that represents the right, but not the 

obligation, to purchase a certain number of shares of common stock of a 

company at a fixed price. 

[End of Appendix A] 

Appendix B: Abbreviations And Acronyms: 

ABS: Asset-Backed Securities: 

AGP: Asset Guarantee Program: 

AIFP: Automotive Industry Financing Program: 

AIG: American International Group, Inc. 

CAP: Capital Assistance Program: 

CDFI: Community Development Financial Institution: 

CMBS: Commercial Mortgage-Backed Securities: 

CP: Commercial Paper: 

COP: Congressional Oversight Panel: 

CPP: Capital Purchase Program: 

CDCI: Community Development Capital Initiative: 

DIP: Debtor-In-Possession: 

EESA: Emergency Economic Stabilization Act of 2008: 

FCRA: Federal Credit Reform Act of 1990: 

FHA: Federal Housing Administration: 

FRBNY: Federal Reserve Bank of New York: 

GAO: Government Accountability Office: 

GSE: Government-Sponsored Enterprise: 

HAFA: Home Affordable Foreclosure Alternatives: 

HHF: Hardest Hit Fund: 

HAMP: Home Affordable Modification Program: 

HPDP: Home Price Decline Protection: 

MBS: Mortgage-Backed Security: 

MHA: Making Home Affordable Program: 

OFS: Office of Financial Stability: 

OMB: Office of Management and Budget: 

PPIF: Public-Private Investment Fund: 

PPIP: Public-Private Investment Program: 

PRA: Principal Reduction Alternative: 

QFI: Qualifying Financial Institution: 

RMBS: Residential Mortgage-Backed Securities: 

SCAP: Supervisory Capital Assessment Program: 

SIGTARP: Special Inspector General for the Troubled Asset Relief 

Program: 

SPV: Special Purpose Vehicle: 

TAIFF: Troubled Assets Insurance Financing Fund: 

TALF: Term Asset-Backed Securities Loan Facility: 

TARP: Troubled Asset Relief Program: 

TIP: Targeted Investment Program: 

TruPS: Trust Preferred Securities: 

USDA: U. S. Department of Agriculture: 

[End of Appendix B] 

Office of Financial Stability: 

Contact information: 

Department of the Treasury – Office of Financial Stability:

1500 Pennsylvania Avenue NW:

Washington, DC 20220:

Telephone 202-622-2000: 

Treasury Press Office 202-622-2960: 

Websites: 

[hyperlink, http://www.FinancialStability.gov] 

[hyperlink, http://www.MAKINGHOMEAFFORDABLE.gov] 

Documents Referenced in the AFR: 

Monthly Reports to Congress: 

[hyperlink, http://http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/Monthly-Report-to-Congress.aspx] 

The Financial Crisis Response in Charts – April 2012: 

[hyperlink, http://http://www.treasury.gov/resource-center/data-chart-

center/Documents/20120413_FinancialCrisisResponse.pdf]. 

Anniversary Reports: 

[hyperlink, http://http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/TARP-Annual-Retrospectives.aspx] 

Agency Financial Reports, including 2013, 2012, 2011, 2010 and 2009: 

[hyperlink, http://http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/Annual-Agency-Financial-Reports.aspx] 

Housing Scorecard: 

[hyperlink, 

http://http://portal.hud.gov/hudportal/HUD?src=/initiatives/Housing_Scor

ecard] 

Making Home Affordable Monthly Reports: 

[hyperlink, http://http://www.treasury.gov/initiatives/financial-

stability/reports/Pages/Making-Home-Affordable-Program-Performance-

Report.aspx] 

[End of document]