Fannie Mae Clears Another Hurdle

With its 2005 10-K and 2002-2004 restatements done, CFO Robert Blakely gives way to former AOL finance chief Steven M. Swad.

Fannie Mae filed its 2005 10-K, and said that with the company nearing the point at which it is current with its financials, Robert T. Blakely would turn over the CFO’s job to former AOL finance chief Steven M. Swad.

Blakely, who joined the embattled mortgage-lending giant to manage its restatement process after previously helping clean up scandal-ridden WorldCom, will stay on as executive vice president through the end of the year. He will focus on completing the company’s “last remaining historical filing,” the 2006 10-K annual report, Fannie Mae said.

“Swad will drive the company’s return to timely filing of its financial statements,” the company added. He previously was executive vice president and CFO of AOL and has also served as executive vice president of finance and administration at Turner Entertainment Group, and vice president, financial planning and analysis, at Time Warner. He also served as depurty chief accountant at the Securities and Exchange Commission.

In reporting 2005 results, Fannie Mae said its net income for the year was $6.3 billion, or $6.01 a share, up from $5 billion, or $4.94 a share, the prior year. It also said it would increase its quarterly dividend to 50 cents from 40 cents. For stockholders of record on May 18, it would pay the 40-cent -a-share regular quarterly dividend and a 10-cent special dividend.

The company had previously said it expected to file its 2006 10-K by the end of 2007, but it said that timing is under review “in light of today’s filing.” It said it would provide periodic updates on its progress toward timely financial reporting. Still, president and CEO Daniel H. Mudd called the 2005 10-K filing “an important milestone.” Added Blakely: “Work is already underway on the 2006 financials, and we’re building momentum towards catching up and becoming current.”

Said Mudd: “Bob Blakely came to Fannie Mae with a daunting job — to serve as chief financial officer at a critical moment for our company, to lead our new financial organziation, and to oversee a large, complex financial restatement. He did it all with great skill and confidence.” He added that after two monumental restatements, at Fannie Mae and WorldCom, he now wishes the CFO “as much peace and quiet as he can bear.”

Dennis R. Beresford, the chair of Fannie Mae’s audit committee and former Financial Accounting Standards Board chairman, said of new CFO Swad: “Steve is highly skilled in finance with in-depth knowledge of a number of Fannie Mae’s most critical accounting policies. He has demonstrated leadership in multiple facets of finance, including his invaluable work at the U.S. Securities and Exchange Commission while I was chairman of the FASB.”

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