EXPORT-IMPORT BANK
of the UNITED STATES
ANNUAL REPORT 2014
ii I
What is
Ex-Im Bank?
independent
agency
Ex-Im Bank is an independent,
self-sustaining federal agency
which operates
at no cost to U.S. taxpayers.
benefiting
small businesses
Nearly 90 percent of the number
of Ex-Im Bank’s authorizations
directly benefit small businesses,
which does not include small
businesses benefiting indirectly
as suppliers to Ex-Im’s
larger customers.
earning for
taxpayers
In FY 2014
Ex-Im Bank generated
a surplus of $674.7 million
for U.S. taxpayers.
promoting
job creation
Over the past five years,
Ex-Im Bank authorizations
supported more than 1.3
million American jobs.
ii I
2014 ANNUAL REPORT I 1
What is
Ex-Im Bank?
Mission
The Export-Import Bank of the United States (Ex-Im Bank) is the official
export credit agency of the United States. Ex-Im Bank is an independent,
self-sustaining federal agency that exists to support American jobs by
facilitating the export of U.S. goods and services.
When businesses in the United States or their customers are unable to access private export financing,
Ex-Im Bank fills in the gaps for American businesses by equipping them with the tools necessary to
compete for global sales. In doing so, the Bank levels the playing field for U.S. exporters facing foreign
competition in overseas markets.
Because it is backed by the full faith and credit of the United States, Ex-Im Bank assumes credit and
country risks that the private sector is unable or unwilling to accept. The Bank’s charter requires that
all transactions it authorizes demonstrate a reasonable assurance of repayment. The Bank consistently
maintains a low default rate, and closely monitors credit and other risks in its portfolio.
2014 Ex-Im Bank Leadership Team
Left to right: Chairman and President Fred P. Hochberg, Vice Chair and First Vice President Wanda Felton, Board Director Patricia Loui, and
Board Director Sean Mulvaney.
2 I
Table of Contents
$2.3t
Overall exports of American
goods and services reached a
record $2.3 trillion this year,
up from $1.4 trillion only
five years ago.
We’re getting
results.
Ex-Im Bank is working
with the private sector to
support U.S. jobs.
Fred P. Hochberg
Chairman and President
Mission and Leadership 1
Global Map of Success Stories and Markets 4
Chairman’s Message 6-8
FY 2014 Highlights 9
Supporting American Jobs 10
Success Story: Fritz-Pak 11
Keeping America Competitive 12-13
Success Story: SpaceX
14-15
Responsible Risk Management 16-17
A Focus on Our Customers 18
Success Story: SynTouch 19
Empowering American Small Businesses 20-21
U.S. Map of Ex-Im Small Business Support by State 22
Success Story: Ace Pump Corp. 23
Success Story: Howe Corp. 24-25
Supporting America’s Most Critical Industries 26
Success Story: Decas Cranberry Products 27
Building Infrastructure in Emerging Markets 28-29
Realizing Opportunities in Sub-Saharan Africa 30-31
CONTENTS
Ex-Im Bank
insurance powers
exports from an
innovative American
start-up.
Vikram Pandit
Research and Development
Technician, SynTouch
A small business is still
a leader in refrigeration
100 years later.
Mary Howe
President, Howe Corp.
24
19
6
EXPORT-IMPORT BANK
of the UNITED STATES
2 I
2014 ANNUAL REPORT I 3
Success Story: W.S. Darley & Company 32-33
Financing Environmentally Beneficial Exports 34
Environmental Dynamics Success Story 35
A Commitment to the Environment 36
Generating Revenues for the American Taxpayer 37
FY2014 FINANCIAL REPORT
FY 2014 Financial Report Table of Contents 38
Ex-Im Bank Portfolio 39
FY 2014 Authorizations 40
Management’s Discussion and Analysis of Results
of Operations and Financial Condition 50
Management Report on Financial Statement
and Internal Accounting Controls 72
Financial Statements’ Table of Contents 73
Balance Sheets 74
Statements of Net Costs 75
Statements of Changes in Net Position 76
Combined Statements of Budgetary Resources 77
Notes to the Financial Statements 78
Independent Auditors’ Report 95
Independent Auditors’ Report on Internal Control 97
Directors and Officers 100
EX-IM BANK REGIONAL EXPORT
FINANCE CENTERS
Inside Back Cover
“
We may be small,
but we think big. In an age where
everything seems to be made
someplace else, we’re thriving here
in Texas. Our success is due to hard
work, attention to customers’ needs
and belief in the future. Yet there’s no
doubt this success is also in no small
part due to the services provided by
Ex-Im Bank.
Gabriel Ojeda, President,
Fritz-Pak
”
Fritz-Pak success story on page 11
Ex-Im Bank finances
the export of
American-made fire
trucks to Nigeria.
32
Peter Darley
Part-Owner, Chief Operating
Officer and Executive Vice
President,
W.S. Darley & Co.
4 I
Ex-Im Featured 2014 Success Stories
MADE IN THE USA, SOLD WORLDWIDE
ACE PUMP CORP. I Memphis, TN
EXPORT: Industrial Pumps
MARKETS: Paraguay, Chili, France, Belgium
and Mexico
Ex-Im Bank Product: Small Business Export Credit
Insurance
See page 23
FRITZ-PAK I Mesquite, TX
EXPORT: Concrete Additives and Plasters
MARKETS: Worldwide, including Mexico, Brazil,
India, and Taiwan
Ex-Im Bank Product: Small Business Export Credit
Insurance
See page 11
DECAS CRANBERRY PRODUCTS I Carver, MA
EXPORT: Cranberries
MARKETS: Worldwide, including South Africa,
Thailand, Bosnia and Herzegovina
Ex-Im Bank Product: Multibuyer Export Credit
Insurance
See page 27
HOWE CORP. I Chicago, IL
EXPORT: Ice-Making Equipment
MARKETS: Worldwide, primarily Latin America
Ex-Im Bank Product: Multibuyer Export Credit
Insurance
See page 24
EXPORT-IMPORT BANK
of the UNITED STATES
4 I
2014 ANNUAL REPORT I 5
Ex-Im Featured 2014 Success Stories
68%
of our authorizations this year
supported U.S. exports to
emerging markets, where
commercial banks are often more
reluctant to lend.
SYNTOUCH I LOS ANGELES, CA
EXPORT: Tactile-Sensing Technologies
MARKETS: Worldwide, including China,
Netherlands, Germany, and Australia
Ex-Im Bank Product: Export Credit Insurance
See page 19
ENVIRONMENTAL DYNAMICS
INTERNATIONAL INC. (EDI) I Columbia, MO
EXPORT: Water and Wastewater Treatment
MARKETS: India, China and Turkey
Ex-Im Bank Product: Working Capital Loan Guarantee
See page 35
W.S. DARLEY & CO. I ITASCA, IL
EXPORT: Firefighting Trucks
MARKETS: Nigeria
Ex-Im Bank Product: Direct Loan
See page 32
SPACEX I HAWTHORNE, CA
EXPORT: Spacecraft Launches
MARKETS: Israel, Hong Kong and Bulgaria
Ex-Im Bank Product: Direct Loan
See page 14
For more small business success stories, visit:
www.exim.gov/about/whatwedo/successstories
6 I CHAIRMAN’S MESSAGE
EXPORT-IMPORT BANK of the UNITED STATES
Chairman’s Message
$27.5b
In FY 2014, Ex-Im Bank supported
$27.5 billion worth of U.S. exports
and 164,000 export-related American
jobs. Over the past six years, the Bank
has supported over 1.3 million jobs in
communities across the country.
With the U.S. economy on the move—and with worldwide demand for
quality, innovative goods on the rise—there have never been greater
opportunities for American small businesses to prosper on the global
stage.
Of course, there are obstacles, too—that’s something I can tell you from
20 years of firsthand experience running a small business. Withstanding
swings in the general economy, obtaining lines of credit, and reaching
customers in new markets can pose a challenge to even the savviest and
most innovative entrepreneurs.
Ex-Im Bank exists to equip American businesses with the tools they need
to become more successful exporters. We know that when entrepreneurs
are empowered to win export sales against their foreign competitors,
businesses grow, our economy improves, and layoffs are replaced with
‘Now Hiring’ signs in communities across our country.
In the following pages, you can see for yourself how Ex-Im Bank has made
a positive impact for just a few of the thousands of American businesses
that come to us for export credit tools. If you’re a business owner, these
are the results we stand ready to deliver for you, too.
THEY’RE ‘PLAN A’
Let’s be clear: America’s private sector capital markets are the highest-
functioning, most efficient in the world, and do a great job of financing
U.S. exports.
But commercial banks don’t always have the capacity or willingness to
equip American businesses that want to sell their goods and services
overseas. Even in strong economic periods, small businesses generally
have trouble securing working capital loans or insurance packages to back
their exports—and when the economy dips, banks can become even more
reluctant to finance export orders of any size.
6 I CHAIRMAN’S MESSAGE 2014 ANNUAL REPORT I 7
Chairman’s Message
WE’RE ‘PLAN B’
Ex-Im Bank’s role is to fill in those gaps. We don’t compete with
the private sector (in fact, about 98 percent of our transactions
include a partnering private financial entity). Instead we provide
a backstop to ensure that the American export economy remains
vibrant in a world of fluctuating markets and global ebbs and
flows. U.S. businesses know that Ex-Im Bank will be there to
support their growth during all kinds of economic weather,
girding small businesses and picking up the slack when uncertain
times force commercial financiers to scale down—a bank for all
seasons.
So we expect occasional drop-offs in our total authorizations—
that’s often another signal of an economy in recovery and an
increasingly fertile private lending environment. While Ex-Im
Bank’s total financing decreased in FY 2014, overall exports
of U.S. goods and services are poised for a fifth consecutive
record-breaking year. We’re proud to be a part of that growth,
particularly when it means opening doors to the world’s most
promising markets for American small businesses—and, on a
number of fronts, we had a strong 2014.
SUPPORTING JOBS, SERVING TAXPAYERS
• This year, we authorized $20.5 billion of financing in support
of $27.5 billion worth of U.S. exports and more than 164,000
American jobs.
•
Out of over 3,700 authorizations in 2014, more than 3,300—
or nearly 90 percent—directly served U.S. small businesses,
which accounted for one quarter of authorizations by dollar
volume.
•
Our support for U.S. manufactured exports reached nearly
$16.6 billion.
•
About one out of every five authorizations we completed this
year directly served minority- or women-owned businesses.
•
In sub-Saharan Africa, we authorized a record of more than $2
billion for U.S. exports—the strongest year we’ve ever had.
•
Nearly $14 billion—more than 68 percent—of our authorizations
this year supported U.S. exports to emerging markets, where
commercial banks are often more reluctant to lend.
•
From a risk management perspective, we had an historically
low default rate of 0.175 percent as of September 30, 2014.
•
Once again this year, we generated a surplus for American
taxpayers above and beyond the cost of our operating
expenses and prudent reserve requirements. In October, we
wired $674.7 million to the U.S. Treasury to support deficit
reduction, while over the last two decades we have generated a
surplus of 6.9 billion for American taxpayers.
Nearly
of the n
90%
umber of authorizations
in 2014 directly served U.S. small
businesses.
1out of every5
authorizations we completed
this year directly served
minority- or women-owned
businesses.
in support of U.S.
manufactured exports
$16.6b
Nearly
88 I I CHAIRMAN’S MESSAGE
EXPORT-IMPORT BANK of the UNITED STATES
We’re always striving to better manage our business and
improve our operations. As a result, this year we recalibrated
our business development efforts to more expertly serve our
customers based on industry sectors rather than geography.
We also opened a new customer contact center and rolled out
new online tools to make it easier than ever to do business with
Ex-Im Bank. On the risk management side, we established an
Enterprise Risk Committee charged with the comprehensive and
systematic oversight of the full range of risks faced by the Bank.
We’ve also cut our internal budget expenses to levels 19 percent
lower than they were five years ago. And we achieved all of
these results with an efficient, dedicated staff of approximately
450 employees—I couldn’t be more proud of our team of public
servants.
WHAT’S AHEAD
When FY 2014 began, my hope was that I would be able to
announce in our annual report that Congress had put into place
a long-term reauthorization of Ex-Im Bank—one that would
deliver five years of certainty and confidence to U.S. exporters
and their employees. Regrettably, I can’t do that.
I can say that we’ve made some progress: Congress has
extended our charter until June of 2015, and I’m optimistic that
we’ll be able to work out a long-term, bipartisan solution. As
a former businessman, I know that exporters large and small
need more than month-to-month solutions in order to win
deals, invest in innovation, and add new jobs locally. There’s
more than enough uncertainty out there when you’re running
a business without having to worry about the availability of
financing.
The conversation surrounding Ex-Im Bank’s reauthorization has
meant that we’ve had more public attention this year than ever
before—and a positive side effect has been that more American
small businesses have had the opportunity to learn about how
Ex-Im Bank tools can empower them to reach global markets and
add local jobs.
So we look forward to serving many more new customers in the
year ahead—and that’s critical given the vast opportunities for
American businesses that lie beyond our borders. Two hundred
million people are forecasted to join the global middle class each
year for the next five years, and they’ll be eager to buy quality,
innovative products stamped “made in USA”.
The opportunities ahead in emerging markets are without
precedent, but every country will be racing to seize them in
order to add jobs and grow their economies. Of course, we face
enormous challenges to win that race. We’ve seen a dramatic
rise in the proportion of global export financing that fails to play
by international lending and transparency rules in China, Russia,
and other countries. We’ve also seen an increased emphasis
on exports as an economic silver bullet in countries around the
world. And we’re facing the specter of new multilateral export
financiers in the form of the Asian Infrastructure Investment Bank
and the New Development Bank.
These challenges are stark, but they do nothing to shake my
optimism about America’s future. We can win the global export
race—after all, American workers still produce the highest quality,
most innovative goods and services in the world. But U.S.
businesses and their buyers abroad need certainty and confidence
if we’re going to lead the world in export-fueled growth.
For 80 years, Ex-Im has been a vital tool for expanding
opportunity, promoting American leadership on the global stage,
and adding middle class jobs here at home—and we want to
continue to be there to support U.S. businesses in strengthening
their communities through jobs. So we’re going to keep focusing
on our customers, keep making it simpler for small businesses to
access our products, and keep getting the word out about a fact
that thousands of entrepreneurs from Maine to Hawaii already
know to be true—exports create jobs.
Sincerely,
Fred P. Hochberg
Chairman and President
8 I
2014 ANNUAL REPORT I 9
8 I CHAIRMAN’S MESSAGE
FY2014
Highlights
MAJOR HIGHLIGHTS:
American jobs supported
164,000
of U.S. exports supported
at no cost to American
taxpayers
$27.5b
in direct support for
small business exporters
$5b+
OTHER KEY FY2014 HIGHLIGHTS:
Total Ex-Im Bank Financing
• Authorized$20.5billioninnancingtosupport
$27.5 billion of U.S. exports worldwide
Supporting U.S. Jobs
• Ex-ImBank’sauthorizationssupported
approximately 164,000 American jobs.
Small Business Support
• Authorizedmorethan$5billionin
financing and insurance for American
small business exporters
• Nearly90percentofthenumberofEx-ImBank’s
authorizations were for small businesses.
Minority- and Woman-Owned Support
• AlmostoneinveEx-ImBankauthorizations
were for minority- and/or woman-owned
businesses.
Prudent Financial Management
• InFY2014,Ex-ImBanksent$674.7millionto
the U.S. Treasury for deficit reduction.
Supporting America’s Manufacturers
• TheBankauthorizednearly$16.6billion
to support exports from America’s
manufacturing industries.
Building Trade with Sub-Saharan Africa
• AuthorizationssupportingU.S.exportsto
sub-Saharan Africa topped a record-breaking
more than $2 billion.
10 I
SUPPORTING
American Jobs
Ex-Im Bank plays a key role in supporting good-paying, export-
backed American jobs all across the country, contributing to a fifth
consecutive year of record-breaking exports for the United States.
In FY 2014, the United States exported a total of $2.3 trillion
in goods and services—47.5 percent above 2009 levels, and
the best year ever for American exports. More and more,
exports are fueling America’s economic resurgence—and
Ex-Im Bank’s support is playing a pivotal role in that trend,
particularly when it comes to empowering U.S. small
businesses to reach global markets.
Through our financing, Ex-Im Bank fulfills its mission to
support American job growth. Over the past six years,
Ex-Im Bank has financed the sale of just under $217 billion in
U.S. exports, supporting over 1.3 million American jobs.
In FY 2014, Ex-Im Bank approved over 3,700 authorizations
with a total estimated export value of nearly $27.5 billion.
This support equipped U.S. businesses to create or sustain
approximately 164,000 export-related U.S. jobs.
Over the past six years,
Ex-Im Bank has supported more
than 1.3 million American jobs
across the country.
1.3m
AMERICAN JOBS
JOBS CALCULATION METHODOLOGY
Ex-Im Bank began calculating the jobs associated with
its financing in FY 2010. Ex-Im Bank’s jobs estimate
methodology follows the standard government-wide
jobs calculation methodology designated by the Trade
Promotion Coordinating Committee (TPCC), which
uses employment data computed by the Bureau of
Labor Statistics (BLS) to calculate the number of jobs
associated with Ex-Im Bank supported exports of goods
and services.
Ex-Im Bank uses the latest available domestic
employment requirements table (ERT) as computed by
the BLS to calculate the number of jobs associated with
Ex-Im Bank supported goods and services. The ERT
quantifies the number of direct and indirect production
related jobs associated with a million dollars of final
demand for 196 detailed industries.
The ERT is derived from a set of data showing the
relationship between industries, known as input-output
tables. These tables are based on historical relationships
between industry inputs (e.g., labor) and outputs (e.g.,
goods for consumption). For more information, see
“Management’s Discussion and Analysis.”
For jobs estimates based on FY 2014 authorizations,
Ex-Im Bank supports a baseline average of 6,190 jobs
per $1 billion of U.S. exports. This average is weighted,
however, based on each industry’s relative jobs per $1
billion average at time of calculation.
10 I
2014 ANNUAL REPORT I 11
Ex-Im Bank Insurance
Empowers Texas Family
Business to Go Global
and Rehire Workers
Fritz-Pak is a family-owned business that
manufactures 40 dierent made-in-America specialty
products for the global construction industry, including
concrete additives and plasters for swimming pools.
Today, Gabriel Ojeda’s company is a growing small
business, eyeing an expansion. But times weren’t
always so great. After tripling sales throughout the
2000s, the global recession hit Fritz-Pak hard, and
they were forced to lay o employees.
Gabriel began looking abroad for overseas sales
opportunities that could replace lost domestic sales.
Equipping themselves with Ex-Im Bank’s export credit
insurance, the Ojedas were able to oer their new
foreign buyers credit terms while protecting against the
risk of not being paid.
Today, exports account for 35 percent of Fritz-Pak’s
total sales—and they have been able to hire their laid
o employees back.
EXPORTER:
Fritz-Pak, Mesquite, Texas
Markets:
Worldwide, including Mexico, Brazil, India, and Taiwan
Ex-Im Bank Product:
Export Credit Insurance
Pictured: Delvin Dorrough,
Fritz-Pak
“
We may be small,
but we think big. In an age where
everything seems to be made
someplace else, we’re thriving here
in Texas. Our success is due to hard
work, attention to customers’ needs
and belief in the future. Yet there’s no
doubt this success is also in no small
part due to the services provided by
Ex-Im Bank.
Gabriel Ojeda, President,
Fritz-Pak
”
12 I
KEEPING AMERICA
Competitive
For more than 80 years, Ex-Im Bank has leveled the playing field for U.S.
exporters facing off against financing offered by foreign governments.
As other countries double down on exports—and, in particular, as they
operate outside of established financing rules—the need for Ex-Im Bank
is greater than ever.
America enjoys the single greatest competitive advantage
there is: Products stamped “made in the U.S.A.” are
still known the world over for their reliability, quality, and
innovation. That’s a hard-earned distinction—and a testament
to the ingenuity of U.S. entrepreneurs and workers.
If purely free market elements such as quality and price were
the only factors at play for international buyers deciding how
to source their projects, most American exporters would
have little to worry about. But too often, government-backed
financing can become an overriding factor that tilts the playing
field away from U.S. businesses in favor of foreign companies
backed by their respective governments.
Ex-Im Bank is one of about 60 export credit agencies
(ECAs) operating around the world today. While every ECA
supports its domestic businesses through financing, not
everyone plays by the same rules when it comes to lending or
transparency.
As recently as 1999, nearly 100 percent of official export
credit support worldwide adhered to the internationally
agreed-upon lending and transparency standards outlined by
the Organisation for Economic Cooperation and Development
(OECD). Under the terms of the OECD’s Arrangement on
Officially Supported Export Credits, countries abided by
agreed-upon financing rules establishing loan term limits,
minimum fees and a number of other best practices.
But as countries that were not party to the OECD
Arrangement began to escalate their official export support,
the global landscape shifted. By 2004, only about two-thirds
of official support for exports around the world was governed
by OECD standards; by 2013—as described in Ex-Im Bank’s
most recent Competitiveness Report to Congress—that
number had dropped to one-third.
Today, U.S. exporters are facing a competitive landscape in
which the vast majority of official export financing is routinely
opaque and unchecked by basic, prudent standards. Instead
of putting their quality products up against other countries’
quality products, more and more, American businesses
are being forced to pit their goods and services against
unconstrained guarantees, aggressive financing, and flexible
payment schedules promised by foreign governments.
This trend disadvantages American businesses, threatens
U.S. job growth, and distorts global markets. Ex-Im Bank
exists to support U.S. companies by leveling the playing
field—by equipping American exporters with financing that is
both competitive and reflective of global best practices, Ex-Im
Bank helps level the global export playing field and return it as
much possible to one driven by free market principles such
as quality and price. The competitive edge that Ex-Im Bank
provides to U.S. businesses empowers them to more readily
compete on the merits of their goods and services.
Globally, countries are turning to exports as a means to grow
their economies and spur job creation—their elevated ECA
activity is a reflection of that commitment. At the same time,
even as the economy has recovered, commercial banks are
still somewhat reluctant to wholly finance certain areas of the
export finance arena, especially in emerging markets.
These gaps in the private sector, combined with rising global
competition, have made ECAs such as Ex-Im Bank more vital
than ever. As competition continues to heat up in markets
around the world, Ex-Im Bank will continue to stand behind
12 I
2014 ANNUAL REPORT I 13
American exporters, so that global sales and U.S. jobs aren’t
lost over access to competitive financing.
For more information on competitiveness in export finance,
please find Ex-Im Bank’s 2013 Report to the U.S. Congress at
www.exim.gov.
THE WORLD OF OFFICIAL MEDIUM- AND LONG-TERM EXPORT CREDIT
OECD Countries:
Australia
Austria
Belgium
Canada
Croatia*
Czech Republic
Denmark
Estonia*
Finland
France
Japan
Germany
Greece*
Hungary
Israel**
Italy
Latvia*
Luxembourg*
Netherlands
New Zealand*
Norway
Poland
Portugal
Romania*
Slovenia
Slovak Republic
South Korea
Spain
Sweden
Switzerland
Turkey**
United Kingdom
United States
Non-OECD Countries:
Belarus
Bosnia
Brazil***
(non-aircraft)
China
India
Indonesia
Jamaica
Macedonia
Malaysia
Philippines
Russia
Saudi Arabia
South Africa
Thailand
Ukraine
United Arab Emirates
* Very little or no medium- or long-term financing activity reported
** OECD countries not participating in the OECD General Arrangement: Israel and Turkey
*** Non-OECD countries participating in the Aircraft Sector Understanding (ASU) but not the OECD General Arrangement: Brazil
14 I
EMPLOYEE
GROWTH
4,000
EMPLOYEES MAKE UP
THE SPACEX
WORKFORCE...UP
FROM 150 EMPLOYEES
A DECADE AGO
AUTHORIZING
LOAN TO HELP FINANCE
THE 2015 SPACEX
LAUNCH OF THE AMOS-6
COMMUNCATIONS SATELLITE
$105m
+
Ex-Im Bank Boosts
Spacecraft Launching
Company in Global Markets
Founded in a garage in 2002, SpaceX was created to
design, manufacture and launch advanced spacecraft. With
export financing options limited, the company faces intense
competition from French, Russian and Chinese companies
in sales of overseas satellite launches. To overcome these
obstacles, SpaceX is relying on Ex-Im Bank to support them.
SpaceX is turning international opportunities into realities in
markets in Asia, South Asia, and Europe. The company has
grown from about 150 employees a decade ago to nearly
4,000 today. Their manufacturing facilities and supply chains
are here in America—and that means U.S. jobs.
Most recently, Ex-Im Bank authorized a $105.4 million loan
to Space Communication Ltd. of Ramat Gan, Israel, to finance
the 2015 SpaceX launch of the Amos-6 communications
satellite. The transaction is Ex-Im Bank’s third in support
of a SpaceX launch, and it will support approximately 600
quality U.S. jobs in California and elsewhere.
EXPORTER:
SpaceX, Hawthorne, California
Markets:
Israel, Hong Kong, and Bulgaria
Ex-Im Bank Product:
Direct Loan
EXPORT-IMPORT BANK of the UNITED STATES
14 I
2014 ANNUAL REPORT I 15
“
We appreciate Ex-Im Bank’s
support of both SpaceX and the
U.S. space industry. Ex-Im Bank
helps SpaceX compete success-
fully with international launch service
providers, bringing overseas satellite
launch business and high-tech jobs
back to American soil.
Gwynne Shotwell, President and COO,
SpaceX
”
16 I
RESPONSIBLE
Risk Management
As we support U.S. jobs wherever and whenever we can, safeguarding
taxpayer dollars remains a quintessential part of our DNA. As a result, we
have a robust risk management system based on vigilance, transparency,
and accountability, which has resulted in our extremely low default rate.
Ex-Im Bank’s framework is built on a foundation of effective
underwriting in order to satisfy our congressional mandate
that every authorization we approve comes with “a reasonable
assurance of repayment.” To that end, almost 80 percent of our
exposure in FY 2014 was backed by collateral or a sovereign
guarantee.
Ex-Im Bank delivers to Congress quarterly reports on our
portfolio default rate—an important measure of the Bank’s
“
At Ex-Im Bank, we are protecting U.S.
taxpayers by taking a comprehensive and
systematic approach to risk management.
While our rigorous underwriting and
portfolio management procedures have
resulted in very low default rates, we
continue to focus on reducing operational
risks as well, in areas such as information
systems and staffing.
C.J. Hall, Executive Vice President and
Chief Risk Ocer
”
C.J. Hall, Executive Vice President and Chief Risk Officer
16 I
2014 ANNUAL REPORT I 17
$113.8
$112.0
$106.6
$89.2
$75.2
0.60%
0.40%
0.29%
0.24%
0.18%
120
110
100
90
80
70
60
50
0.7%
0.6%
0.5%
0.4%
0.3%
0.2%
0.1%
0.0%
FY 2010 FY 2011 FY 2012 FY 2013 FY2014
FY 2010-FY2014 Exposure and Default Rate
Exposure ($billions)
Default Rate (percentage)
success on the risk management front. The active default rate
reflects the total amount of overdue required payments (claims
paid on guarantees and insurance transactions plus loans that
are past due) divided by the total amount of disbursed financing
involved. Our active default rate as of September 30, 2014,
was 0.175 percent.
The historically low default rates Ex-Im Bank has accrued of
late are due to a comprehensive risk management framework
with a strong emphasis on continuous improvement. This has
led to a relatively low number of defaults, coupled with high
recovery rates on those credits that have entered default.
Since the Federal Credit Reform Act went into effect in 1992,
the Bank has succeeded in recovering approximately 50 cents
for every dollar defaulted in the portfolio.
To further strengthen our risk management program,
in FY 2014 Ex-Im Bank established an Enterprise Risk
Committee comprised of senior vice presidents of the Bank
and chaired by the Bank’s executive vice president and chief
risk officer. The mandate of the Enterprise Risk Committee
is to maintain oversight of the comprehensive and systematic
risk management regime within the Bank. This regime extends
beyond repayment risk in the portfolio to include operational
risk—such as systems and staffing risk—as well as the full
range of legal, market, and strategic risks faced by the Bank.
The Enterprise Risk Committee meets at least once per month,
and incorporates oversight of several subordinate committees
focused on specific areas of risk.
Although Ex-Im Bank always strives to support U.S. exporters
in winning deals and adding jobs, we also go to great lengths to
ensure that we’re not taking undue risks—and that the credits
we extend routinely result in solid performance for exporters
and taxpayers alike.
as of September 30, 2014
0.175%
DEFAULT RATE
18 I
A FOCUS ON
Our Customers
We can’t fulfill our mission of supporting U.S. job growth if we’re not
providing customers with a seamless, efficient experience from start to
finish. We work every day to ensure that doing business with Ex-Im Bank
is as simple and productive as possible.
In the past year, Ex-Im Bank has seen major progress when it
comes to better serving our customers: the businesses that
equip themselves with Ex-Im Bank financing in order to pursue
sales abroad and add jobs here at home. Whether it’s cutting red
tape, rolling out new tools, or finding smarter ways to connect
businesses with the products we offer, we’re constantly
listening to our customers and seeking out ways to improve.
As a customer-oriented organization, we survey our customers
in order to serve them better. The 2014 survey of our small
business customers revealed strong results: 86 percent
reported that they were “satisfied” or “extremely satisfied”
with Ex-Im Bank, while 95 percent indicated that they would
recommend Ex-Im Bank to other exporters.
EX-IM BANK CUSTOMER SURVEY RESULTS
Question:
During the past five years,
have your U.S. exports
grown, stayed about the
same size or decreased?
SMALL BUSINESS GROWTH
Statement:
Ex-Im Bank assistance
helped to expand my
export business.
HOW EX-IM IMPACTS
SMALL BUSINESS
The survey also found that exports have increased during
the past five ye
ars for the majority of respondents, with 65
percent reporting growth in their export business. Those
responses aligned with our renewal levels for our most popular
small business products—one potential measure of customer
satisfaction. Small businesses renewed a total of 722 Express
Insurance policies in FY 2014, as compared with 421 the prior
year, and Working Capital Delegated Authority renewals (used
by our private financial institution partners to provide customers
with rapid response under strict guidelines and audits) jumped
to 195 from 113 over that time span as well.
A major objective this year was to speed up claims processing
cycle times, which had been flagged by our customers in years
past as the operational area most in need of improvement.
Thanks to the hard work of our team, average claims
processing times have been cut by 40 percent in just two
years, dropping from 73 days in 2012 to 44 days in 2014—
without compromising due diligence.
Another major development has been the creation of a
customer contact center. The contact center serves as a single
point of entry for export ready customers seeking information
and guidance via telephone, e-mail, and—starting in 2015—
live online chat. The goal of the contact center is to improve
communications with customers by answering questions in
real time.
Additionally, we now hold quarterly webinars with the Bankers’
Association for Finance and Trade (BAFT), a forum that has
proven to be helpful for bringing Ex-Im Bank together with
the voices of our customers and partners. The number of
participants has tripled over the course of the year.
In the year ahead, we’ll continue listening to our customers,
implementing new reforms and doing everything we can to
improve the ease of doing business with Ex-Im Bank.
65%
Agree/Strongly Agree
21%
Neither Agree nor
Disagree
9%
Disagree/Strongly
Disagree
5%
N/A
75% TO 100%
SMALL BUSINESS
64.5%
Exports have grown
26%
Stayed about
the same
9.5%
Decreased
18 I
2014 ANNUAL REPORT I 19
Ex-Im Bank Insurance
Powers Exports
from an Innovative
American Startup
When innovative American manufacturers are
looking to go global, Ex-Im Bank is there. That’s the
case with SynTouch, a pioneering technology firm
in southern California. Founded in 2008, SynTouch
develops and makes the only technology in the world
that replicates—and sometimes exceeds—the human
sense of touch. The company provides tactile sensing
solutions for industrial and medical applications.
Because the costs of manufacturing each advanced
fingertip-sized sensor can run into the thousands,
SynTouch cannot aord buyer nonpayment—particularly
when buyers are located thousands of miles away in
global markets. That’s why the company purchased
Ex-Im Bank’s Express Insurance, which protects
against losses due to commercial and political risks,
covering 95 percent of invoice sales to customers
overseas.
Instead of losing sleep over whether they’ll get paid,
the engineers at SynTouch can focus on researching
manufacturing improvements, developing new uses for
their groundbreaking technology and growing sales.
Today, SynTouch has 25 international customers in 14
countries.
EXPORTER:
SynTouch, Los Angeles, California
Markets:
Worldwide, including China, Netherlands,
Germany, and Australia
Ex-Im Bank Product:
Express Insurance
“
The services Ex-Im Bank provides
are critical for small business to
expand exports into international
markets. Payment terms are an
important part of the equation in
working with distributors, and Ex-Im
Bank’s insurance policy allows
us to remain competitive.
David Groves, Chief Operating Ocer,
SynTouch
”
20 I
EMPOWERING AMERICAN
Small Businesses
Small businesses are the engine of the American economy, responsible
for creating two out of every three new jobs. At Ex-Im Bank, we’re
committed to supporting that job growth by equipping small businesses
with the financing they need to reach new customers and win sales
overseas.
Ex-Im Bank Small Business Group
Pictured left to right: Tamara Maxwell, Business Development,
Minority- and Women-Owned Businesses; James Burrows, Senior
Vice President; and Sean Luke, Business Development Specialist
Ex-Im Bank helps U.S. small businesses to achieve the
kind of growth that can only come from reaching beyond
our nation’s borders to customers abroad, particularly in
emerging markets where demand for reliable “made in the
USA” goods and services is strong.
We are expanding our small business portfolio and
reaching new customers through the coordinated efforts
of the Bank’s Small Business Group, state and local trade
organizations, lenders, and brokers.
In FY 2014, 545 U.S. small businesses were first-time users
of Ex-Im Bank products. Nearly half of our small business
authorizations—over 1,600 out of more than 3,300—
involved authorized amounts under $500,000.
Increased Support for Minority- and Women-Owned
Businesses
Since FY 2009, Ex-Im Bank has significantly increased its
financing to support the growth of minority-owned and
women-owned businesses, approving more financing over
the past six years than in the previous 16 years combined.
EXPORT-IMPORT BANK
of the UNITED STATES
20 I
2014 ANNUAL REPORT I 21
EX-IM BANK’S FINANCING
BENEFITING SMALL BUSINESS
$5b+
DIRECT SUPPORT
Measured by total dollar volume, Ex-Im
Bank’s small business authorizations in
FY 2014 were more than $5 billion, nearly
25 percent of the total dollar volume
of overall authorizations.
Ex-Im Bank’s direct small business support accounts for
the overwhelming majority of the Bank’s authorizations. In
FY 2014, the Bank approved more than 3,300 small business
authorizations—nearly 90 percent of the total number of Ex-
Im Bank authorizations.
SMALL BUSINESS OUTREACH
Throughout FY 2014, Ex-Im Bank leadership and staff
engaged small businesses across the country in town hall
style discussions known as Global Access Forums—a
chance for small companies to gain insight into how they can
expand sales by reaching foreign buyers. Since Ex-Im Bank
joined with the U.S. Chamber of Commerce and the National
Association of Manufacturers to launch the Global Access
for Small Business initiative in January 2011, the Bank has
sponsored more than 75 Global Access Forums nationwide.
To reach more companies that are often underserved by
export credit, Ex-Im Bank staff have participated in seminars
nationwide sponsored by women business centers, small
business associations, minority-focused chambers of
commerce, and other organizations.
Ex-Im Bank’s 12 regional export finance centers focus
exclusively on small business. Our three regional
headquarters are located in Miami, Chicago, and Irvine,
California.
PRIVATE SECTOR PARTICIPATION
Ex-Im Bank leverages its resources by working with private
sector lenders, insurance brokers, and other financial
and trade institutions. The Bank works to expand these
partnerships to make its financing products more accessible
to small businesses.
By the end of FY 2014, 123 lenders were enrolled in Ex-Im
Bank’s Working Capital Guarantee Program, 97 of which
have delegated authority, under rigorous audit and lending
guidelines, to provide Ex-Im Bank’s guarantee of working
capital loans without prior Bank approval. A total of 13 new
lenders were added in FY 2014.
An additional five brokers were added to the Bank’s roster of
80 active brokers providing Ex-Im Bank’s insurance to small
businesses.
KNOWN INDIRECT SMALL BUSINESS
SUPPORT IN LONG-TERM TRANSACTIONS
When Ex-Im Bank authorizes a long-term loan or loan
guarantee to support U.S. exports from a large U.S. exporter,
Ex-Im Bank is also unleashing opportunity for American small
business suppliers to grow their sales.
While Ex-Im Bank is limited in in its ability to gather supply
chain data from large U.S. exporters due to trade secrets
and other business concerns, Ex-Im Bank can estimate that,
at a minimum, the $12.7 billion authorized for long-term
transactions in FY 2014 supported American small business
exports worth at least $650 million. These small businesses
were identified to Ex-Im Bank as suppliers of the principal
exporters in these long-term authorizations. This figure is in
addition to the direct support for small businesses included
in long-term authorizations, which spurred small business
exports valued at an estimated $330 million.
22 I
SMALL BUSINESS SUPPORT BY STATE IN FY 2014
WA
OR
CA
ID
NV
AZ
UT
WY
MT
ND
SD
CO
NM
TX
OK
KS
MN
IA
MO
AR
LA
MS
TN
IL
WI
MI
IN
OH
PA
NY
VA
WV
NC
SC
GA
AL
FL
ME
KY
VT
NH
AK
NE
MD
RI
NJ
CT
MA
DE
PR
HI
DC
SMALL BUSINESS EXPORTS MAKE UP 20 PERCENT OR MORE
OF EX-IM SUPPORTED EXPORTS IN 42 STATES.
75% TO 100%
SMALL BUSINESS
STATE
TOTAL
EXPORTS
SMALL
BUSINESS
HI
$1.6 MILLION 100%
IA
$14.6 MILLION 93%
ME
$5.3 MILLION 100%
MD
$110.6 MILLION 86%
MS
$20.5 MILLION 75%
MT
$478,000 100%
OK
$140.9 MILLION 92%
OR
$132.3 MILLION 86%
RI
$5.7 MILLION 80%
VT
$11.1 MILLION 93%
WV
$802,000 99%
50% TO 74%
SMALL BUSINESS
STATE
TOTAL
EXPORTS
SMALL
BUSINESS
FL
$785.7 MILLION 70%
IN
$118.4 MILLION 72%
KY
$41.3 MILLION 72%
LA
$114 MILLION 60%
MO
$83.9 MILLION 67%
NH
$29.2 MILLION 60%
ND
$1.8 MILLION 67%
OH
$277.7 MILLION 60%
SD
$5.1 MILLION 66%
UT
$12.7 MILLION 73%
20% TO 49%
SMALL BUSINESS
STATE
TOTAL
EXPORTS
SMALL
BUSINESS
AL $46.7 MILLION 48%
AZ
$203.4 MILLION 42%
AR
$69.3 MILLION 26%
CA
$1.6 BILLION 32%
CO
$30 MILLION 49%
CT $145.7 MILLION 24%
GA
$469.7 MILLION 42%
ID
$26.5 MILLION 26%
MA
$191.9 MILLION 30%
MI $266.8 MILLION 47%
MN $252.9 MILLION 39%
NE
$106.8 MILLION 49%
NV $11.3 MILLION 36%
NJ
$292.5 MILLION 34%
NM
$14.8 MILLION 39%
NY
$574.4 MILLION 45%
NC
$256.2 MILLION 26%
PA
$568.7 MILLION 42%
PR
$41.4 MILLION 31%
TN
$159.3 MILLION 36%
TX $1.2 BILLION 43%
WI $210.2 MILLION 46%
0% TO 19%
SMALL BUSINESS
STATE
TOTAL
EXPORTS
SMALL
BUSINESS
AK
$9.6 MILLION 0%
DE
$5.6 MILLION 13%
DC $46.8 MILLION 4%
IL
$962.5 MILLION 13%
KS
$119 MILLION 14%
SC
$983.9 MILLION 3%
VA
$306.2 MILLION 17%
WA
$7.2 BILLION 1%
WY
$19.9 MILLION 15%
NOTE: Map data shows estimated Ex-Im-assisted exports per state
with percentages of these sales by small businesses. Estimates are
based on disbursements of Ex-Im financing in FY 2014.
EXPORT-IMPORT BANK
of the UNITED STATES
22 I
2014 ANNUAL REPORT I 23
A Small Business
Pumps Up Sales with
Ex-Im Bank’s Financing
Roy Bell III runs Ace Pump Corp., the small industrial
pump company his grandfather started at the end of
World War II. You can find their pumps on everything
from tractors and concrete trucks to highway anti-icing
vehicles and asphalt milling machines.
Since 2009, Ace Pump has used Ex-Im Bank’s export
credit insurance to protect against the risk of buyer
nonpayment in faraway markets and to extend open
credit terms to foreign customers that lack access
to aordable working capital financing. Today, export
sales represent one-fifth of total business, and Ace has
expanded its workforce in Tennessee by 10 percent.
But insurance isn’t the only way Ex-Im Bank supports
Ace Pump. Roy’s small business is also a supplier to CNH
Industrial, a larger American company that uses Ex-Im
Bank financing to win sales in global markets. Each time
CNH Industrial makes use of Ex-Im financing to a win a
deal overseas, Ace Pump is one of the hundreds of small
business suppliers that see an uptick in their business
as well. It’s an example of how Ex-Im Bank is supporting
U.S. small businesses indirectly through direct export
financing, as part of larger businesses’ supply chains.
EXPORTER:
Ace Pump Corp.
Memphis, Tennessee
Markets:
Paraguay, Chile, France, Belgium,
and Mexico
Ex-Im Bank Product:
Multibuyer Export Credit Insurance
Pictured: Christine Howry,
Ace Pump Corp.
“
There’s no doubt that Ex-Im Bank
products have empowered us twice over—
allowing us to grow our own international
sales, while also supporting our U.S.
customers who incorporate our products
into their larger equipment that is exported
worldwide. Exports are now a foundational
part of our business, and Ex-Im Bank is an
indispensable tool in winning deals that
add jobs here in Tennessee.
Roy Bell III,
owner, Ace Pump Corp.
”
24 I
sales
$5.9
numBers
MIllION
IN EXPORT SAlES
emploYee
30+
growtH
MORE THAN
30 EMPlOyEES
A Woman-Led
Small Business is Still
a Leader in Refrigeration
100 Years Later
In 1912, William Henry Howe and his sons began designing,
producing, and servicing state-of-the-art refrigeration and
ice-making equipment. Today, William Henry Howe’s great-
gran
ddaughter Mary runs Howe Corp., overseeing a team of
about 30 employees to manufacture commercial and industrial
refrigeration equipment in the heart of Chicago.
In 2007, Mary Howe’s international customers began asking if
they could have more time to pay—but as a small manufacturer,
Howe Corp. didn’t have the cash on-hand to aord longer terms
for payment. Mary began covering her export sales with Ex-Im
Bank insurance starting in late 2008. This insurance enabled
the company to fulfill sales orders and keep the factory running.
As a result, the company has obtained new customers in Latin
America. Howe’s policy has been renewed six times, and the
company has recently added two additional employees due to
the Bank’s support of $5.9 million in export sales.
EXPORTER:
Howe Corp., Chicago, Illinois
Markets:
Worldwide, primarily Latin America
Ex-Im Bank Product:
Multibuyer Export Credit Insurance
EXPORT-IMPORT BANK
of the UNITED STATES
24 I
2014 ANNUAL REPORT I 25
“
The interesting thing is when
domestic sales drop off, often the
export sales pick up, and it fills
the gap. With the economy the
way it is, Ex-Im Bank’s support
helps our sales remain steady.
Mary Howe, President,
Howe Corp.
”
26 I
SUPPORTING AMERICA’S MOST
Critical Industries
The United States has always produced goods, technologies and services
that are able to compete and win in global markets based on their quality,
innovation, and price—and Ex-Im Bank is there to ensure that they can
compete on financing as well.
Satellites – $941 million authorized to support As part of our mission to promote U.S. jobs, Ex-Im Bank has
identified ke
y industrial sectors with high potential for U.S.
export growth. These sectors include agribusiness, aircraft
and avionics, satellites, mining, oil-and-gas development,
and power generation, including renewable energy.
Competitive financing is a necessary component for U.S.
exporters to succeed in these sectors abroad, particularly
when foreign competitors are backed by financing and other
aid from their respective governments. By equipping U.S.
businesses with financing tools, Ex-Im Bank is leveling the
playing field for large and small exporters alike.
FY 2014 AUTHORIZATIONS* HIGHLIGHTS:
Manufacturing (non-aircraft) – $8.1 billion
authorized in support of U.S. manufacturing
other than aircraft, including other transportation
vehicles, large agricultural equipment, product-
manufacturing machinery, consumer products,
and much more
Forty-three percent of the dollar value of non-
aircraft manufacturing-related authorizations
directly supported small business exports.
•
$149 million authorized to provide liquidity
and risk protection to U.S. textile mills
• $93 million authorized to support U.S.
exports of medical equipment and products
Services – $1.1 billion authorized to finance
exports of all types of U.S.-produced services,
including engineering, design, construction,
aircraft engine maintenance, computer software,
oil and gas drilling, architecture, transportation
services, legal services, training, and consulting
(This aggregate amount includes authorizations
that are also reported under other sectors.)
exports of U.S.-manufactured satellites and launch
services
Agribusiness – $501 million authorized to support
more than $1.2 billion of U.S. exports of agricultural
goods and services, including commodities, livestock,
foodstuffs, farm equipment, chemicals, supplies, and
services
Eighty-three percent of the dollar value of the Bank’s
agribusiness authorizations directly supported small
business exports.
Aircraft and Avionics – $8.4 billion authorized
to support exports of U.S.-manufactured large
commercial aircraft, business aircraft and
helicopters, aircraft engines, avionics, and related
services provided by American workers
•
$7.2 billion in financing to support the export of
61 new U.S.-manufactured commercial aircraft
• $915.5 million in support of U.S.-manufactured
business aircraft and helicopters
• $243.1 million to support the export of aircraft
spare engines and engine maintenance, repair, and
overhaul (MRO) services
Oil and Gas – $1.3 billion authorized to support
U.S. goods and services exports related to the
development of onshore and offshore oil- and
gas-field projects
Power Generation – $462 million authorized to
support U.S. exports related to power-generation
projects
•
$198 million to support U.S. exports related to
renewable energy sources such as wind and solar
Mining – $746 million authorized for U.S. exports of
mining-related equipment and services
*Authorizations amounts reported are not necessarily mutually exclusive
by category but indicate overall breakout of financing by industry.
EXPORT-IMPORT BANK
of the UNITED STATES
26 I
2014 ANNUAL REPORT I 27
A Family-Owned
Business Refuses to Let
their Sales Get Bogged
Down
In 1934, a trio of Greek brothers immigrated to
Massachusetts and began producing one of the world’s
most iconic American products: cranberries. Now into
its eighth decade, Decas Cranberry Products is still a
family-owned business with 450 acres of cranberry
bogs and seven warehouse locations throughout the
United States. Decas contracts with over 120
independent growers nationwide, and produces more
than 30 million pounds of cranberry products annually.
Decas Cranberry came to Ex-Im Bank because they knew
that achieving the next 80 years of success would require
reaching more customers in global markets. Using Ex-Im
Bank’s insurance to protect against the risk of buyer
nonpayment, Decas now confidently sells to customers in
over 35 countries.
As an exporter in the produce sector, Decas is not alone
as an Ex-Im Bank customer. Demand for grown- and
made-in-America agricultural and foodstus products
is expanding, and Ex-Im Bank is there to make sure
companies like Decas Cranberry can stock global grocery
store shelves around the world.
EXPORTER:
Decas Cranberry Products,
Carver, Massachusetts
Markets:
Worldwide, including South Africa, Thailand,
Bosnia and Herzegovina
Ex-Im Bank Product:
Multibuyer Export Credit Insurance
“
Decas has benefitted greatly
because Ex-Im Bank was there to
provide us security with all our
foreign sales.
Norman Beauregard, Chief Financial Ocer,
Decas Cranberry Products
”
28 I
BUILDING INFRASTRUCTURE IN
Emerging Markets
Worldwide demand is rising in emerging markets for all kinds of
infrastructure development, including civil aviation, roads and bridges,
power plants, telecommunications, and other vital capital goods and
services. Ex-Im Bank empowers America to seize these tremendous
opportunities, meeting global demand, and adding quality jobs here
at home.
Working on behalf of U.S. exporters, Ex-Im Bank has
financed more global infrastructure projects in the past four
years than in the previous 17 years combined, helping to
keep the United States competitive against foreign rivals in
some of the world’s fastest-growing markets.
In FY 2014, $13.9 billion (more than 68 percent) of Ex-Im Bank’s
authorizations supported U.S. exports to emerging markets,
in comparison with more than $6.5 billion (nearly 32 percent)
authorized for exports to advanced economies.
PERCENTAGE OF
TOTAL AUTHORIZATIONS
PERCENTAGE OF TOTAL
SMALL BUSINESS AUTHORIZATIONS
EX-IM BANK FY2014 AUTHORIZATIONS: EXPORT DESTINATION BREAKOUT
(in millions)
Total Authorizations Percent of T
otal Authorizations Small Business Authorizations
Percentage of Total Small
Business Authorizations
Advanced Economies 6,528.5 31.9% 1,915.8 37. 9%
Emerging Markets 13,939.4 68.1% 3,134.4 62.1%
Grand Total
20,467.9 100% 5,050.2 100%
75% TO 100%
SMALL BUSINESS
68.1%
Emerging Markets
31.9%
Advanced
Economies
62.1%
Emerging Markets
37.9%
Advanced
Economies
EXPORT-IMPORT BANK
of the UNITED STATES
28 I
2014 ANNUAL REPORT I 29
FY 2014 AUTHORIZATIONS BY REGION
● NORTH AMERICA: $3.1 BILLION ● LATIN AMERICA/CARIBBEAN: $2.5 BILLION ● AFRICA: $2.1 BILLION
● EUROPE: $2.4 BILLION ● ASIA: $4.9 BILLION ● OCEANIA: $0.8 BILLION —ALL OTHER: $4.7 BILLION
LATIN AMERICA/
CARIBBEAN
$2.5b
AFRICA
$2.1b
NORTH
AMERICA
$3.1b
ASIA
$4.9b
EUROPE
$2.4b
OCEANIA
$0.8b
KEY FY2014 AUTHORIZATIONS:
• $ 11.6 billion to support U.S. exports in infrastructure projects,
including large transportation equipment. This financing
represents nearly 56.6 percent of total authorizations for FY 2014.
• $3.4billionforlong-termstructuredandproject-nance
authorizations, including financing for a range of infrastructure
projects, such as oil and gas development, power generation,
mining projects, liquefied natural gas production and
telecommunications.
Approximately 58.5 percent of these authorizations are related
to emerging markets.
• $8.1 billion to support U.S. exports of aircraft and aviation-related
exports. Approximately 75.9 percent of these authorizations are
for exports to emerging markets.
DEFINING INFRASTRUCTURE:
Consistent with the World Bank and the Organisation for
Economic Cooperation and Development, Ex-Im Bank
defines infrastructure to include the large physical networks
necessary for the functioning of commerce, such as
highways, railroads, power generation plants, pipelines,
satellites, and radio transmission systems. Infrastructure
also includes the goods and services essential to
maintaining a country’s health, cultural, and social
standards, including educational and healthcare equipment
and services. Also included in the Bank’s definition of
infrastructure are transportation components, such as
aircraft and locomotives, and equipment and services
related to mining industries.
30 I
REALIZING OPPORTUNITIES IN
Sub-Saharan Africa
Ex-Im Bank plays a critical role in enabling American exporters to tap the
tremendous sales opportunities in sub-Saharan Africa—home to seven out
of 10 of the fastest-growing economies in the world.
In the past five years, Ex-Im Bank has approved more
than $6.3 billion in financing for U.S. exports to sub-
Saharan Africa, including a record-topping $2.1 billion in
authorizations in FY 2014.
Ex-Im Bank-supported U.S. exports to sub-Saharan Africa
accounted for approximately 8 percent of an estimated
more than $25 billion of total U.S. manufacturing exports to
the region in FY 2014.
Relative to American exports writ large, Ex-Im Bank
finances a higher proportion of U.S. goods and services in
sub-Saharan Africa than in any other region. In FY 2014,
10 percent of Ex-Im Bank’s authorizations by dollar volume
supported U.S. exports to sub-Saharan Africa.
NOTEWORTHY FY2014 AUTHORIZATIONS:
• $563 million loan guarantee to finance the sale
of nearly 300 electric-diesel locomotives from GE
Transportation in Erie and Grove City, Pa., to Transnet
SOC Ltd., South Africa’s leading rail, port, and freight
company—supporting approximately 2,500 U.S. jobs
in Pennsylvania and other states
• $842millionloanguaranteetonanceBoeingaircraft
to Kenya Airways—supporting an estimated 5,400 jobs
throughout Boeing’s supply chain in states across
America
• $17millionloanguaranteefortheWestAfrican
Development Bank (BOAD) to finance U.S. exports of
power-generation equipment to the Azito power
project in Côte d’Ivoire—supporting 100 jobs in
Schenectady, N.Y., and Bangor, Maine.
Rick Angiuoni
Director, Africa
Global Business Development Division
Ben Todd
Senior Business Development Ocer, Africa
Global Business Development Division
EXPORT-IMPORT BANK
of the UNITED STATES
30 I
2014 ANNUAL REPORT I 31
KENYA
ETHIOPIA
SUDAN
SOUTH SUDAN
ERITREA
NIGER
MAURITANIA
MALI
NIGERIA
SOMALIA
NAMIBIA
CHAD
SOUTH AFRICA
TANZANIA
ANGOLA
MADAGASCAR
COMOROS
MOZAMBIQUE
BOTSWANA
ZAMBIA
GABON
CENTRAL
AFRICAN
REPUBLIC
UGANDA
SWAZILAND
LESOTHO
MALAWI
BURUNDI
RWANDA
TOGO
BENIN
GHANA
CÔTE
D'IVOIRE
LIBERIA
SIERRA LEONE
GUINEA
BURKINA FASO
GAMBIA
CAPE
VERDE
CAMEROON
SAO TOME & PRINCIPE
ZIMBABWE
CONGO
DEM. REP.
OF CONGO
EQUATORIAL GUINEA
DJIBOUTI
SENEGAL
GUINEA-
BISSAU
EXPORTER:
W.S. Darley & Company, Itasca, IL
Export: Fire-Fighting Trucks
Market: Nigeria
Ex-Im Bank Product:
Direct Loan
EXPORTER:
Cargill Inc., Minneapolis, MN
Export: Wheat
Market: Liberia
Ex-Im Bank Product:
Export Credit Insurance
EXPORTER:
General Electric Co.
Schenectady, NY
Export: Steam Turbines
Market:
Côte d’Ivoire (Azito Power Project)
Ex-Im Bank Product:
Loan Guarantee for BOAD
EXPORTER:
The Boeing Co., Everett, WA
Export: Commercial Aircraft
Market: Kenya
Ex-Im Bank Product:
Loan Guarantee
for Kenya Airways
EXPORTER:
Strength of Nature Co.
Savannah, GA
Export:
Hair Care Products
Markets:
Ghana, Tanzania, Nigeria, Senegal
Ex-Im Bank Product:
Export Credit Insurance
EXPORTER:
GE Transportation,
Erie, Grove City, PA
Export: Locomotive Kits
Market: South Africa
Ex-Im Bank Product:
Loan Guarantee
WORKING TOGETHER WITH OTHER
U.S. GOVERNMENT AGENCIES
U.S.-Africa Leaders Summit – Ex-Im Bank played a key
role in this first-of-its kind event, held in August 2014 in
Washington, D.C., where President Obama welcomed leaders
from across the African continent to strengthen ties with the
United States and promote U.S.-African trade and investment.
Ex-Im Bank hosted events for young African leaders and
African heads of state and CEOs to discuss trade opportunities.
Power Africa – President Obama launched this innovative
public-private initiative in 2013 to expand electric power
generation in sub-Saharan Africa, where more than 600 million
people lack regular access to electricity. Through Power Africa,
the president has set a goal of adding more than 30,000
megawatts (MW) of new, cleaner electricity-generating
capacity, and increasing access to electricity for at least 60
million households and businesses.
Ex-Im Bank has pledged up to $5 billion in support of this
initiative and has approved financing for projects that will
contribute to Power Africa’s goals.
Doing Business in Africa – Ex-Im Bank participates in this
campaign with other U.S. agencies to raise awareness among
American businesses—including members of African Diaspora
communities—about the continent’s potential for expanding
U.S. exports. For this initiative, Ex-Im Bank has pledged to
support $3 billion in financing for sub-Saharan Africa over the
next two years and participate in 50 related events.
The Bank has partnered on export-focused events with the
U.S. Foreign Service, Foreign Commercial Service, U.S. Trade
and Development Agency, U.S. Agency for International
Development, the Millennium Challenge Corp., and other U.S.
government entities to encourage economic engagement
pursuant to the Africa Growth and Opportunity Act.
BUILDING RELATIONSHIPS WITH AFRICAN
INSTITUTIONS
Ex-Im Bank maintains strong ties with a number of banks in
the sub-Saharan region. This year, we worked with BOAD on
the Azito power project and with the African Export-Import
Bank (Afreximbank) on support for the export of U.S.-
manufactured aircraft to Kenya Airways. The Bank also signed
a memorandum of understanding (MOU) with PTA Bank.
During the U.S.-African Leaders Summit, Ex-Im Bank signed a
$1 billion MOU for the financing of U.S. exports to Angola.
In Partnership with:
32 I
EXPORT-IMPORT BANK of the UNITED STATES
A DIRECT
LOAN OF
$15m+
TO THE GOVERNMENT OF
LAGOS TO UNDERWRITE
THE PURCHASE OF 32
DARLEY FIREFIGHTING
VEHICLES
EMPLOYEE
GROWTH
MANUFACTURING
JOBS SUPPORTED
100
Ex-Im Bank Finances
Export of American-Made
Fire Trucks to Nigeria
In 1926, a conversation with Henry Ford helped prompt
Chicago businessman William Stuart Darley to transform his
business from an equipment manufacturer to a producer of
fire trucks. Today, W.S. Darley & Co. still manufactures and
distributes fire trucks and pumps to a range of customers,
including overseas buyers.
One of those overseas buyers is the state of Lagos, Nigeria.
The governor of Lagos declared the state of the region’s
firefighting capacity an urgent matter of state security.
That’s when the city of Lagos turned to W.S. Darley to
upgrade its fleet of fire trucks.
When private financing proved to be unavailable, Darley
sought support from Ex-Im Bank, which authorized a
$15.7 million direct loan to the government of Lagos in
order to underwrite the purchase of 32 state-of-the-art
Darley firefighting vehicles. The fire trucks—built at Darley’s
manufacturing center in Chippewa Falls, Wis.—will support
approximately 100 U.S. manufacturing jobs.
EXPORTER:
W.S. Darley & Co., Itasca, Illinois
Markets:
Nigeria
Ex-Im Bank Product:
Direct Loan
STATES
32 I
2014 ANNUAL REPORT I 33
“
Ex-Im Bank has helped us
compete globally. The ability of a
buyer to obtain a loan due to Ex-Im
Bank’s support is critical to beating
competition. Our ability to sell
internationally is enhanced with
the U.S. government by our side.
Peter Darley, Part-owner,
Chief Operating Ocer
and Executive Vice President
W.S. Darley & Co.
”
34 I
EXPORT-IMPORT BANK of the UNITED STATES
FINANCING ENVIRONMENTALLY
Beneficial Exports
At Ex-Im Bank, we’re not only committed to fiscal responsibility,
we’re committed to the environment as well. We’ve long been
recognized as a global leader among financial institutions when it
comes to supporting environmentally beneficial exports.
Since 1992, Ex-Im Bank has fulfilled a congressional mandate
to promote the use of its financing products for U.S. exports
that are environmentally beneficial, including those related to
the production of renewable sources of energy.
Renewable energy means jobs – more than a million clean
energy jobs and counting in the United States alone, generated
by industries such as solar, wind, and biomass.
In support of these high-tech jobs, Ex-Im Bank is a committed
partner of U.S. exporters of renewable energy and other
environmentally beneficial technologies. We provide export
financing that empowers exporters to seize sales opportunities
in global markets, many of which are investing substantially in
clean energy development.
RENEWABLE ENERGY FINANCING
Ex-Im Bank has significantly increased its support of American
exports related to renewable energy production of late,
authorizing an aggregated total of nearly $2 billion in financing
for these exports since 2009. This total dwarfs the $210.9
million in renewable energy authorizations the Bank financed
between 2002 and 2008.
Because we can offer payment terms up to 18 years in the
renewable sector, Ex-Im Bank has a unique role to play in
supporting clean energy exporters to win deals in rising
renewable markets such as India and Central America. This
makes a world of difference on renewable energy projects,
which tend to be more front-loaded when it comes to capital
requirements.
FY2014 AUTHORIZATIONS:
• $336millioninnancingtosupportnearly$550million
of U.S. exports of environmentally beneficial goods
and services. Nearly 60 percent of these authorizations
supported renewable energy exports.
• $198millionforrenewableenergyexportsinwind,solar,
and other industries, primarily to Central and Latin America
• $25millionsupportingexportsforsolarenergyproduction
and expansion of production capacity for related materials
and equipment
• $151millionforexportsforwindenergyproduction,
including a 50-megawatt wind farm in Uruguay and two
wind farms in Peru
• $22millionforexportsrelatedtoenergygenerationby
other renewable technologies including hydroelectric,
geothermal, and biomass
Ex-Im Bank authorized $336 million
to support nearly $550 million in
environmentally beneficial U.S. exports
in FY 2014 – almost 60 percent of which
supported exports related to
renewable energy production.
$550m
Nearly
34 I
2014 ANNUAL REPORT I 35
A Small Business in
Missouri Brings Clean
Water to the World
The United Nations has estimated that more than
three-quarters of a billion people lack access to safe
drinking water worldwide, and there is a global demand
for clean water resources. For Environmental Dynamics
International Inc. (EDI), based in Columbia, Mo., Ex-Im
Bank’s financing products have made it possible to help
meet that demand by reaching customers in developing
markets with its water and wastewater treatment
technologies.
EDI began using Ex-Im Bank’s insurance policy in
1997 to expand into new markets in Latin America and
Asia. Now they use the Bank’s working capital loan
guarantee through Regions Bank. These funds give EDI
the flexibility to purchase materials in advance and also
cover the long lead time for payments.
With Ex-Im Bank’s support, EDI’s export orders
surpassed its U.S. domestic volume in 2008, and now
account for about 55 percent of the small business’s
total volume—about $15 million annually. EDI sells their
products in over 100 countries on all seven continents.
EXPORTER:
Environmental Dynamics International Inc.
(EDI), Columbia, Missouri
Markets:
India, China, Turkey, and many more
Ex-Im Bank Product:
Working Capital Loan Guarantee and Export Credit
Insurance
Pictured: Albert Jesse,
Environmental Dynamics International Inc.
“
Ex-Im Bank’s export credit
insurance has enabled
Environmental Dynamics
International to offer
competitive credit terms to a
larger foreign customer base
while minimizing the risk.
Charles E. Tharp, President,
Environmental Dynamics
International, Inc.
”
36 I
EXPORT-IMPORT BANK of the UNITED STATES
A COMMITMENT TO
The Environment
A global leader in environmental stewardship, Ex-Im Bank is committed
to promoting U.S. exports and jobs with an eye towards environmental
responsibility. When it comes to assessing, monitoring, and reporting on
environmental impacts, Ex-Im Bank is the most transparent export credit
agency in the world.
In response to 1992 legislation reauthorizing the Bank, in
1994 Ex-Im Bank became the first export credit agency (ECA)
to adopt a set of environmental guidelines applicable to the
projects that it finances. The Bank subsequently entered into
negotiations with the other ECAs under the Organisation for
Economic Cooperation and Development (OECD) to develop
a set of common environmental guidelines, referred to as the
“Common Approaches,” that have been adopted by all of the
official export credit agencies of the OECD.
Ex-Im Bank is the only ECA to provide transparency on
greenhouse gas emissions. We report the level of carbon
dioxide (CO
2
) emissions associated with approved and
requested projects in our annual report and on our website,
respectively. Tracked projects are those associated with fossil-
fuel exploration and/or production, or those in which CO
2
production is expected to exceed more than 25,000 tons
per year.
FY2014 CO
2
EMISSIONS REPORTING:
•
Approved a total of 62 loans, guarantees, and working
capital guarantees, as well as approximately 84 new
and renewed export credit insurance policies, to
finance U.S. exports related to foreign energy
development, production, and transmission.
These activities include electric power generation and
transmission, coal mining, oil-and-gas field exploration
and development, production, pipelines, and refineries.
The estimated export value of these transactions
exceeded $3.4 billion, supporting more than 20,300
U.S. jobs.
• Authorized $278 million for U.S. exports for two
new fossil fuel power plants. The Bank estimates
that the aggregate amount of CO
2
emissions produced
directly by these projects will total approximately 2.35
million metric tons per year, an amount that reflects the
relatively modest level of greenhouse gas emissions
produced by natural gas fueled plants. Of this amount,
1.96 million metric tons are associated with a cogeneration
plant in Saudi Arabia and 0.39 million metric tons are
associated with a combined-cycle natural gas-fired power
plant in Turkey.
• Authorized $1.3 billion for three transactions
supporting the development of onshore and offshore
oil-and-gas field developments. The Bank estimates
that the aggregate amount of CO
2
emissions produced
directly by these projects will total approximately 3.42
million metric tons per year. Of this amount, 2.7 million
metric tons are associated with a transaction
supporting numerous onshore and offshore
developments in Mexico, 0.04 million metric tons are
associated with the export of one offshore drilling rig
to Mexico, and 0.68 million metric tons are associated
with the export of five onshore drilling rigs to
Argentina.
• Authorized $703 million for the support of U.S. exports
to be used in the development of other projects that
produce CO
2
emissions. The Bank estimates that the
aggregate amount of CO
2
emissions produced directly
by these projects will total approximately 0.53 million
metric tons per year. Of this amount, 0.42 million
metric tons are associated with an iron ore mine in
Australia and 0.11 million metric tons are associated
with a semiconductor manufacturing project in China.
36 I
2014 ANNUAL REPORT I 37
GENERATING REVENUES FOR THE
American Taxpayer
As an independent federal agency, we pride ourselves on delivering for
U.S. taxpayers—and we’ve been self-sustaining since 2008.
For Ex-Im Bank, prudent lending and rigorous risk management
have consistently led to positive deficit reducing funds for
American taxpayers. In October 2014, Ex-Im Bank wired $675
million to the U.S. Treasury to be used for deficit reduction—
the latest in a long line of surplus revenues. Over the last two
decades, Ex-Im Bank has generated $6.9 billion in revenues
for U.S. taxpayers above what the Bank has received after all
expenses, loan loss reserves and administrative costs.
Since 1992, the Bank
has sent to the
U.S. Treasury nearly
$7b
more than it received in
appropriations for program and
administrative costs.
Not only does Ex-Im Bank cost U.S. taxpayers nothing—we’ve
also re
duced our internal expenses as well. Overall budget
expenses have been trimmed by more than 19 percent from
five years ago.
Ex-Im Bank has been officially self-sustaining since 2008.
Maintaining a self-sustaining status means that funding for all
of the Bank’s operations comes entirely from receipts collected
from customers who borrow from the Bank as a natural part of
our financing function.
Ex-Im Bank has been able to accomplish this because, like
any bank, we charge fees and interest on our loan guarantee,
insurance, and direct loan programs; the result being that
Ex-Im Bank does not rely on taxpayer resources to sustain
operations. The self-sustaining initiative is based on the Bank’s
performance since the implementation of the Federal Credit
Reform Act in 1992.
Congress continues its oversight of the Bank’s budget, setting
annual limits on the use of funds for program budget and
administrative expense obligations.
0 $100 $200 $300 $400 $500 $600 $700 800 900
OFFSETTING COLLECTIONS FY2014
0 $100 $200 $300 $400 $500 $600 $700 800 900
Administrative Expenses $105.0
Carry Over $10.0
O
ffice Renovation Expenses $10.5
Return to Taxpayers $674.7
TOTAL $800.2
(dollars in millions)
(dollars in millions)
Admin Expenses
$105.0
Renovation Expenses $10.5
Return to Taxpayers $674.7
Carry Over
$10.0
Total
$800.2
38 I
EXPORT-IMPORT BANK of the UNITED STATES
FY 2014 Financial Report
TABLE OF CONTENTS
$20b+
In FY 2014 the Bank authorized
$20,467.9 million in new direct
loans, loan guarantees, and
insurance.
Ex-Im Bank Portfolio Introduction 39
FY 2014 Authorizations 40
Management’s Discussion and Analysis of Results
of Operations and Financial Condition 50
Management Report on Financial Statement
and Internal Accounting Controls 72
Financial Statements’ Table of Contents 73
Balance Sheets 74
Statement of Net Costs 75
Statements of Changes in Net Position 76
Combined Statement’s of Budgetary Resources 77
Notes to the Financial Statements 78
Independent Auditors’ Report 95
Independent Auditors’ Report on Internal Control 97
Directors and Officers 100
38 I
2014 ANNUAL REPORT I 39
Ex-Im Bank Portfolio
FY2014 AUTHORIZATIONS
• FY 2014 Authorizations: $20.5 billion
• Number of Authorizations: 3,746
• New Authorizations in over 70 Countries
• Small Business Supported: $5.1 billion
(25 percent of Authorizations), 3,347
Authorizations (89 percent of Authorizations)
• Emerging Markets: 68 percent of Total
Authorizations (up from 62 percent in FY 2013)
• Jobs Supported: 164,000
In FY 2014, the Bank approved 3,746 short-, medium-
and long-term authorizations or $20,468 million in
authorizations, which consist of $18,520 million in
guarantees, insurance, and working capital, and $1,948
million in direct loans. These authorizations created or
sustained 164,000 jobs across the United States. Of the
$20,468 million authorized in FY 2014, $5,050 million
benefitted small business across 3,347 transactions.
Demand for Ex-Im Bank financing in emerging markets
has increased in recent years accounting for 68 percent of
all authorizations in FY2014 compared to 62 percent in FY
2013.
SEPTEMBER 2014 EXPOSURE
• Total Exposure: $112.0 billion
• Collateral/Sovereign Backed: Approximately
80 percent
• Emerging Markets: 65 percent of Total Exposure
• Default rate: 0.175 percent
• Fastest Growing Region: Africa—24 percent increase
Ex-Im Bank has a total exposure of $112,008 million across
178 countries. Ex-Im’s portfolio is comprised of 71 percent
guarantees, insurance, and working capital transactions,
with direct loans capturing the remaining 29 percent as of
September 30, 2014.
To ensure that Ex-Im Bank furthers its long track record
of responsible stewardship of taxpayer dollars, the Bank
maintains a comprehensive risk management framework—
one built on a foundation of effective underwriting in order
to satisfy the Bank’s congressional mandate that every
authorization comes with “a reasonable assurance of
repayment.” To that end, about 80 percent of the Bank’s
exposure at the end of FY 2014 is backed by collateral or a
sovereign guarantee. Furthermore, this can be seen in the
Bank’s default rate, which at the end of FY 2014 was 0.175
percent.
In recent years, Ex-Im Bank has seen a shift in its portfolio.
The percentage of Ex-Im Bank’s portfolio represented
by private obligors versus public or sovereign obligors
has increased from 43 percent in FY 2002 to 69 percent
in FY 2014 as the need for private sector financing has
increased.
EXPOSURE
FY 2014
Emerging Markets Advanced Economies
35%
AUTHORIZATIONS
FY 2014
Emerging Markets Advanced Economies
32%
65%65%
35%
65%
32%
68%
40 I
EXPORT-IMPORT BANK of the UNITED STATES
FY 2014 Authorizations
FISCAL YEAR 2014 AUTHORIZATIONS SUMMARY
($ millions)
NUMBER OF
AUTHORIZATIONS
AMOUNT
AUTHORIZED
ESTIMATED
EXPORT VALUE
PROGRAM
BUDGET USED
Program
2014 2013
2014 2013 2014 2013 2014 2013
LOANS
Long-Term Loans
$ , . $,. $,. $, . — $.
Working Capital Loans
. . . . — –
Total Loans
69 71
1, 947.8 6,893.8 2,062.5 8,059.9 — 0.2
GUARANTEES
Long-Term Guarantees
,. ,. ,. ,. . .
Medium-Term Guarantees
. . . . . .
Working Capital Guarantees
,. ,. ,. ,. — —
Total Guarantees
540 674
13,314.0 14,911.8 20,208.8 23,806.2 2.1 11.3
EXPORT-CREDIT INSURANCE
Short-Term
, ,
,. ,.
5,107.3
,. . .
Medium-Term
. .
111.7
. . .
Total Insurance
3,137 3,097
5,206.1 5,542.0 5,219.0 5,545.9 5.5 24.8
Modifications
.
GRAND TOTAL
3,746 3,842 $20,467.9 $27, 3 47.6 $27,490. 2 $37,412.0 $8.7 $36.3
FY2014 SMALL BUSINESS AUTHORIZATIONS
($ millions)
NUMBER AMOUNT
2014 2013 2014 2013
Export-Credit Insurance
, , $,. $,.
Working Capital Loans and Guarantees
,. ,.
Guarantees and Direct Loans
. .
GRAND TOTAL
3,347 3,413 $5,050.2 $5,223.0
40 I 2014 ANNUAL REPORT I 41
FY2014 AUTHORIZATIONS BY MARKET
(in dollars)
LOANS GUARANTEES INSURANCE TOTAL AUTHORIZATIONS EXPOSURE
ALBANIA $,,
ALGERIA ,,
ANGOLA $,, $,, ,,
ANGUILLA ,
ANTIGUA AND BARBUDA ,,
ARGENTINA ,, $,, ,, ,,
ARMENIA ,
ARUBA , , ,,
AUSTRALIA $,, ,, , ,, ,,,
AUSTRIA , , ,,
AZERBAIJAN ,, ,, ,, ,,
BAHAMAS ,,
BAHRAIN , , ,,
BANGLADESH , , ,, ,, ,,
BARBADOS , , ,,
BELARUS ,
BELGIUM , , , ,
BELIZE ,,
BERMUDA ,,
BOLIVIA ,,
BOSNIA AND HERZEGOVINA ,,
BRAZIL ,, ,, ,, ,,,
BRUNEI ,
BULGARIA ,, ,, , ,, ,,
BURKINA FASO ,
CAMBODIA
CAMEROON , , ,,
CANADA ,, ,, ,, ,,,
CAYMAN ISLANDS ,,
CENTRAL AFRICAN REPUBLIC ,
CHILE ,, ,, , , ,,,
CHINA ,,, ,, ,,, ,,,
COLOMBIA ,, ,, ,, ,,,
CONGO ,
CONGO, DEMOCRATIC REPUBLIC OF , , ,,
COSTA RICA ,, , , ,, ,, ,,
CÔTE D'IVOIRE
,,
CROATIA ,
CUBA ,,
CYPRUS ,
CZECH REPUBLIC ,,
DENMARK , , ,,
DOMINICA ,
DOMINICAN REPUBLIC , ,, ,, ,,
ECUADOR ,,
EGYPT ,, ,, ,,
EL SALVADOR ,, ,, ,,
EQUATORIAL GUINEA ,, ,, ,,
ESTONIA , , ,,
(CONTINUED)
42 I
EXPORT-IMPORT BANK of the UNITED STATES
FY2014 AUTHORIZATIONS BY MARKET
(in dollars)
LOANS GUARANTEES INSURANCE TOTAL AUTHORIZATIONS EXPOSURE
ETHIOPIA ,, , ,, ,,,
FIJI ,
FINLAND ,,
FRANCE , , ,,
FRENCH GUIANA ,
FRENCH POLYNESIA ,
GABON ,,
GAMBIA ,
GEORGIA ,
GERMANY ,, ,, ,,,
GHANA , , ,,
GIBRALTAR ,
GREECE ,, ,, ,,
GREENLAND ,
GRENADA ,,
GUATEMALA , , , , ,,
GUYANA ,,
HONDURAS ,, ,, , , ,,
HONG KONG ,, ,, ,, ,,,
HUNGARY ,,
ICELAND , , , ,
INDIA , , ,,,
INDONESIA , , ,,,
IRAQ ,,
IRELAND ,, , ,, , , ,
ISRAEL , ,, ,, ,, ,,
ITALY ,, , ,, ,,
JAMAICA ,, ,, ,, ,,
JAPAN ,, ,, ,,
JORDAN , , ,,
KAZAKHSTAN ,,
KENYA ,, , ,, ,,,
KOREA, REPUBLIC OF ,, , ,, ,,,
KOSOVO ,
KUWAIT ,, ,, ,,
KYRGYZSTAN ,
LATVIA ,
LEBANON
, , , ,
LIBERIA , , ,,
LIBYA ,
LIECHTENSTEIN ,
LITHUANIA ,,
LUXEMBOURG ,, ,, ,,,
MACAU ,
MACEDONIA ,
MADAGASCAR ,
MALAWI ,
MALAYSIA ,,
MALDIVES ,
(CONTINUED)
42 I 2014 ANNUAL REPORT I 43
FY2014 AUTHORIZATIONS BY MARKET
(in dollars)
LOANS GUARANTEES INSURANCE TOTAL AUTHORIZATIONS EXPOSURE
MALI ,,
MALTA ,
MAURITANIA ,
MAURITIUS ,,
MEXICO ,, ,,, ,, ,,, ,,,
MONACO ,
MONGOLIA ,,
MONTENEGRO ,,
MONTSERRAT ,
MOROCCO ,, ,, ,,
MOZAMBIQUE ,,
NAMIBIA ,
NETHERLANDS ,, ,, ,, ,,,
NEW CALEDONIA ,
NEW ZEALAND , , , ,
NICARAGUA ,, ,, ,,
NIGER ,
NIGERIA , , ,, ,, ,,
NORWAY ,, ,, ,,,
OMAN , ,
PAKISTAN ,, ,, ,, ,,
PANAMA ,, ,, ,,
PAPUA NEW GUINEA ,,,
PARAGUAY ,, ,, ,,
PERU ,, ,, ,, ,, ,,
PHILIPPINES , , ,,
POLAND , , ,,
PORTUGAL ,,
QATAR , ,
ROMANIA ,, ,, ,,
RUSSIA ,, ,, ,, ,,,
RWANDA ,
SAMOA ,
SAN MARINO ,
SAUDI ARABIA ,, ,, ,, ,,,
SENEGAL ,,
SERBIA , , ,,
SIERRA LEONE ,
SINGAPORE ,, ,, ,,,
SLOVAK REPUBLIC ,,
SLOVENIA ,,
SOLOMON ISLANDS ,
SOUTH AFRICA ,, , ,, ,, ,
SPAIN , , ,,
SRI LANKA , , ,,
ST. KITTS AND NEVIS ,
ST. LUCIA ,
ST. VINCENT AND GRENADINES ,, ,, ,,
SUDAN ,,
SURINAME ,,
(CONTINUED)
44 I
EXPORT-IMPORT BANK of the UNITED STATES
FY2014 AUTHORIZATIONS BY MARKET
(in dollars)
LOANS GUARANTEES INSURANCE TOTAL AUTHORIZATIONS EXPOSURE
SWAZILAND ,
SWEDEN ,,
SWITZERLAND , , ,,
TAIWAN , , ,,
TAJIKISTAN ,,
TANZANIA ,, ,, ,,
THAILAND ,, ,, ,,
TOGO ,, ,, ,,
TRINIDAD AND TOBAGO ,, ,, ,,
TUNISIA ,
TURKEY ,, ,, ,, ,,,
TURKS AND CAICOS ,,
UGANDA ,,
UKRAINE ,, ,, ,,
UNITED ARAB EMIRATES ,, ,, , , ,,,
UNITED KINGDOM ,, ,, ,, ,,,
UNITED STATES ,, ,,, ,,, ,,,
URUGUAY ,, ,, , , ,,
UZBEKISTAN ,,
VANUATU ,
VARIOUS COUNTRIES UNALLOCABLE ,,
VENEZUELA ,,
VIETNAM , , ,,
VIRGIN ISLANDS (BRITISH) ,,
WEST INDIES (BRITISH) ,
WEST INDIES (FRENCH) ,
ZAMBIA ,, ,, , ,
ZIMBABWE ,
SUBTOTAL 1,947,782,209 13,314,056,139 508,447,307 15,770,285,655 105,860,913,064
MULTIBUYER INSURANCE—
SHORT-TERM
4,697,612,109 4,697,612,109 6,146,921,535
GRAND TOTAL
$1,947,782,209 $13,314,056,139 $5,206,059,416 $ 2 0 ,467, 8 9 7, 7 6 4 $112,007,834,599
(CONTINUED)
44 I 2014 ANNUAL REPORT I 45
FY 2014 LONG-TERM GUARANTEES AND LOANS AUTHORIZATIONS
Country/
Authorization Date
Obligor
Principal Supplier
Guarantor* Credit
Additionality
Code** Product Loans Guarantees
ANGOLA
4/17/2014 TAAG—Linhas Aereas de Angola
The Boeing Co.
088406 1 Commercial Aircraft $181,652,744
Angola Total $181,652,744
ARGENTINA
5/15/2014 Pan American Energy (Sucursal Argentina)
National Oilwell Varco Inc.
Pan American Energy LLC
088250 1 Drilling Rigs $98,451,807
Argentina Total $98,451,807
AUSTRALIA
12/19/2013 Roy Hill Holdings Pty Ltd.
Caterpillar Engine Systems Inc.
086750 3 Mining Machinery and Equipment $635,000,000
2/10/2014 Jabiru Satellite Ltd.
Lockheed Martin Corp.
Newsat Ltd.
086539 3 Communications Satellite $9,869,000
8/21/2014 Virgin Australia Airlines
The Boeing Co.
088835 2 Commercial Aircraft $139,632,049
Australia Total $644,868,999 $139,632,049
AZERBAIJAN
7/17/2014 Silk Way Airlines
The Boeing Co.
Gulfstream Aerospace Corp.
088641 1 Commercial and Business Aircraft $419,487,834
Azerbaijan Total $419,487,834
BANGLADESH
10/31/2013 Biman Bangladesh Airlines
The Boeing Co
086031 1 Commercial Aircraft $277,445,067
Bangladesh Total $277,445,067
BRAZIL
12/19/2013 Líder Táxi Aéreo S.A.
Sikorsky Aircraft Corp.
088402 1 Helicopters $45,789,516
9/18/2014 VRG Linhas Aéreas S.A.
Delta TechOps
088878 2 Aircraft-Engine Maintenance,
Repair and Overhaul (MRO)
Services
$51,604,696
Brazil Total $97,394,212
BULGARIA
12/12/2013 Bulgaria Sat AD
Space Systems/Loral LLC (SSL)
Space Exploration Technologies Corp. (SpaceX)
Bulsatcom AD
086418 2 Communications Satellite and
Launch Services
$150,542,286
Bulgaria Total $150,542,286
(CONTINUED)
* Not all guarantors are reported.
** The following were identified as the primary purpose for seeking Bank support:
1. To assume commercial or political risk that exporter or private financial institutions are unwilling or unable to undertake.
2. To overcome maturity or other limitations in private sector export financing.
3. To meet competition from a foreign, ocially sponsored, export credit agency.
4. Not identified: Insucient information.
Beginning in FY2013, in accordance with 12 U.S.C. Section 635g(h) as amended May 2012, the Bank will separately report reasons 1 and 2.
46 I
EXPORT-IMPORT BANK of the UNITED STATES
FY 2014 LONG-TERM GUARANTEES AND LOANS AUTHORIZATIONS
Country/
Authorization Date
Obligor
Principal Supplier
Guarantor* Credit
Additionality
Code** Product Loans Guarantees
CANADA
3/6/2014 Air Canada
The Boeing Co.
088513 3 Commercial Aircraft $453,818,892
Canada Total $453,818,892
CHILE
6/12/2014 Latam Airlines Group S.A.
The Boeing Co.
088724 3 Commercial Aircraft $246,301,780
Chile Total $246,301,780
CHINA
12/12/2013 China Southern Airlines
The Boeing Co
088162 3 Commercial Aircraft $291,778,000
12/19/2013 Minsheng Financial Leasing Co. Ltd.
Gulfstream Aerospace Corp.
088217 3 Business Aircraft $298,834,009
4/10/2014 Export-Import Bank of China
W. S. Darley & Co.
Ministry of Finance
087602 1 Fire-Fighting Vehicles $18,436,500
4/22/2014 Semiconductor Manufacturing International Shanghai
Varian Semiconductor Equipment Associates Inc.
Semiconductor Manufacturing International Corp.
088009 3 Semiconductor-Manufacturing
Machinery
$68,486,296
5/15/2014 ICBC Financial Leasing Co. Ltd.
The Boeing Co.
088580 1 Commercial Aircraft $300,435,520
6/5/2014 Air China Cargo
The Boeing Co.
088650 3 Commercial Aircraft $733,869,376
6/5/2014 ABC Financial Leasing Co. Ltd.
Gulfstream Aerospace Corp.
088577 2 Business Aircraft $60,925,586
9/4/2014 Air China
The Boeing Co.
088793 3 Commercial Aircraft $424,148,015
China Total $2,196,913,302
COLOMBIA
9/29/2014 Avianca Holdings S.A.
The Boeing Co.
088876 2 Commercial Aircraft $184,448,974
Colombia Total $184,448,974
COSTA RICA
11/18/2013 Inversiones Eólicas de Orosi Dos S.A.
Gamesa Technology Corp.
085968 1 Wind-Power Turbines
(Credit Amendment)
$2,336,248
Costa Rica Total $2,336,248
ETHIOPIA
9/29/2014 Ethiopian Airlines SC
The Boeing Co.
088866 3 Commercial Aircraft $296,235,327
Ethiopia Total $296,235,327
HONDURAS
11/15/2013 Energía Eólica de Honduras S.A.
Gamesa Technology Corp.
087547 2 Wind-Power Turbines
(Credit Amendment)
$1,368,263
Honduras Total $1,368,263
* Not all guarantors are reported.
** The following were identified as the primary purpose for seeking Bank support:
1. To assume commercial or political risk that exporter or private financial institutions are unwilling or unable to undertake.
2. To overcome maturity or other limitations in private sector export financing.
3. To meet competition from a foreign, ocially sponsored, export credit agency.
4. Not identified: Insucient information.
Beginning in FY2013, in accordance with 12 U.S.C. Section 635g(h) as amended May 2012, the Bank will separately report reasons 1 and 2.
(CONTINUED)
46 I 2014 ANNUAL REPORT I 47
FY 2014 LONG-TERM GUARANTEES AND LOANS AUTHORIZATIONS
Country/
Authorization Date
Obligor
Principal Supplier
Guarantor* Credit
Additionality
Code** Product Loans Guarantees
HONG KONG
11/14/2013 Cathay Pacific Airways Ltd.
The Boeing Co.
088147 3 Commercial Aircraft $145,532,000
11/26/2013 Asia Satellite Telecommunications Co. Ltd.
Space Systems/Loral LLC (SSL)
086677 2 Communications Satellite and
Launch (Credit Amendment)
$2,231,470
Hong Kong Total $2,231,470 $145,532,000
IRELAND
1/23/2014 Milestone Aviation Group Ltd.
Sikorsky Aircraft
088132 2 Helicopters $331,120,852
3/6/2014 Intrepid Aviation
The Boeing Co.
088552 2 Commercial Aircraft $92,500,000
Ireland Total $423,620,852
ISRAEL
11/1/2013 Space Communication Ltd.
Space Exploration Technologies Corp. (SpaceX)
087586 3 Geosynchronous Satellite Launch
Services
$618,751
Israel Total $618,751
KENYA
3/13/2014 Kenya Airways Ltd.
The Boeing Co.
088412 3 Commercial Aircraft $841,645,781
Kenya Total $841,645,781
KOREA, REPUBLIC OF
12/12/2013 Korean Air Lines
The Boeing Co.
088292 2 Commercial Aircraft $495,773,703
Korea, Republic of Total $495,773,703
LUXEMBOURG
6/19/2014 Cargolux Airlines International S.A.
The Boeing Co.
088735 2 Commercial Aircraft $162,318,000
Luxembourg Total $162,318,000
MEXICO
2/20/2014 Innova S.A. de R.L. de C.V.
Orbital Sciences Corp.
088429 2 Communication Satellite $79,583,800
4/10/2014 Central Panuco S.A de C.V.
Keppel Amfels LLC
Perforadora Central S.A. de C.V.
088368 3 Shipbuilding and Repairing
Services
$172,252,610
8/21/2014 Navistar Financial S.A. de C.V., Sofom
Various U.S. Suppliers
088218 2 Transmissions, Valves and Oil
Coolers
$41,320,000
9/29/2014 Petróleos Mexicanos (Pemex) S.A. de C.V.
Various U.S. Suppliers
Pemex Exploración y Producción
088773 3 Oilfield and Gasfield Equipment
and Services
$800,000,000
9/29/2014 Petróleos Mexicanos (Pemex) S.A. de C.V.
Various U.S. Small Businesses
Pemex Exploración y Producción
088774 3 Oilfield and Gasfield Equipment
and Services
$200,000,000
Mexico Total $79,583,800 $1,213,572,610
(CONTINUED)
* Not all guarantors are reported.
** The following were identified as the primary purpose for seeking Bank support:
1. To assume commercial or political risk that exporter or private financial institutions are unwilling or unable to undertake.
2. To overcome maturity or other limitations in private sector export financing.
3. To meet competition from a foreign, ocially sponsored, export credit agency.
4. Not identified: Insucient information.
Beginning in FY2013, in accordance with 12 U.S.C. Section 635g(h) as amended May 2012, the Bank will separately report reasons 1 and 2.
48 I
EXPORT-IMPORT BANK of the UNITED STATES
FY 2014 LONG-TERM GUARANTEES AND LOANS AUTHORIZATIONS
Country/
Authorization Date
Obligor
Principal Supplier
Guarantor* Credit
Additionality
Code** Product Loans Guarantees
MOROCCO
9/4/2014 OCP Group S.A.
Holtec International
088270 2 Equipment and Services for
Phosphate Production
$92,178,000
Morocco Total $92,178,000
NETHERLANDS
6/12/2014 Energyst Group Services B.V.
Caterpillar Inc.
Energyst B.V.
088272 1 Equipment for Electric-Power
Generation
$16,743,302
Netherlands Total $16,743,302
NIGERIA
7/31/2014 Michharry & Company Nigeria Ltd.
CS Liftboats Inc.
Diamond Bank Ltd.
088502 1 Liftboat and Engineering Services $43,490,923
Nigeria Total $43,490,923
NORWAY
10/24/2013 Norwegian Air Shuttle ASA
The Boeing Co.
088035 1 Commercial Aircraft $193,513,067
Norway Total $193,513,067
PAKISTAN
8/7/2014 Pakistan International Airlines Corp.
General Electric Aviation
088595 1 Components for Aircraft Engine
Overhauls
$76,736,874
Pakistan Total $76,736,874
PERU
8/7/2014 Parque Eólico Marcona, S.R.L.
Siemens Energy Inc.
088334 3 Wind-Power Turbines $12,428,611
8/7/2014 Parque Eólico Tres Hermanas S.A.C.
Siemens Energy Inc.
087793 3 Wind-Power Turbines $52,344,072
Peru Total $64,772,683
RUSSIA
1/23/2014 Vnesheconombank Leasing JSC
The Boeing Co.
088285 3 Commercial Aircraft $703,062,085
2/14/2014 Sberbank***
P&H Mining Equipment Inc.
088305*** 1 Electric Mining Shovel $18,716,807
Russia Total $721,778,892
SAUDI ARABIA
12/12/2013 Power Cogeneration Plant Co.
General Electric Co.
087461 3 Turbine and Turbine-Generator
Set Units
$205,969,443
Saudi Arabia Total $205,969,443
SOUTH AFRICA
7/31/2014 Transnet Ltd.
General Electric Transportation
088827 3 Diesel Locomotive Kits $563,455,620
South Africa Total $563,455,620
* Not all guarantors are reported.
** The following were identified as the primary purpose for seeking Bank support:
1. To assume commercial or political risk that exporter or private financial institutions are unwilling or unable to undertake.
2. To overcome maturity or other limitations in private sector export financing.
3. To meet competition from a foreign, ocially sponsored, export credit agency.
4. Not identified: Insucient information.
Beginning in FY2013, in accordance with 12 U.S.C. Section 635g(h) as amended May 2012, the Bank will separately report reasons 1 and 2.
*** This transaction has been canceled.
(CO
NTINUED)
48 I 2014 ANNUAL REPORT I 49
FY 2014 LONG-TERM GUARANTEES AND LOANS AUTHORIZATIONS
Country/
Authorization Date
Obligor
Principal Supplier
Guarantor* Credit
Additionality
Code** Product Loans Guarantees
THAILAND
6/26/2014 Thai Airways International Ltd.
The Boeing Co.
088703 3 Commercial Aircraft $497,110,947
Thailand Total $497,110,947
TOGO
7/31/2014 Banque Ouest Africaine de Developpement
General Electric Co.
088709 1 Turbine and Turbine-Generator
Set Units
$16,612,844
Togo Total $16,612,844
TURKEY
3/27/2014 Korfez Havacilik Turizm Ve Ticaret A.S.
Gulfstream Aerospace Corp.
088563 1 Business Aircraft $59,937,632
5/1/2014 Turkish Airlines Inc.
General Electric Aviation
088665 3 Spare Aircraft Engines $39,091,873
7/31/2014 Delta Enerji Uretim Ve Ticaret A.S.
General Electric Co.
Palmet Enerji A.S.
088461 3 Gas-Turbine Generator $71,668,348
Turkey Total $170,697,853
UNITED ARAB EMIRATES
10/22/2013 Dubai Aerospace Enterprise (DAE) Ltd.
The Boeing Co.
087679 3 Commercial Aircraft $5,421
1/23/2014 Emirates Airline
The Boeing Co.
088400 3 Commercial Aircraft $284,119,764
United Arab Emirates Total $284,125,185
UNITED KINGDOM
7/14/2014 Inmarsat Investments Ltd.
Boeing Satellite Systems Inc.
Inmarsat S.A. (Switzerland)
088567 3 Communications Satellite $185,907, 2 09
9/29/2014 Viasat Technologies Ltd.
Boeing Satellite Systems Inc.
Viasat Inc.
088346 3 Communications Satellite $524,929,198
United Kingdom Total $710,836,407
URUGUAY
5/15/2014 Astidey S.A.
Gamesa Technology Corp.
087794 2 Wind-Power Turbines $64,463,859
Uruguay Total $64,463,859
MISCELLANEOUS
Private Export Funding Corporation (PEFCO) 003048 4 Interest on PEFCO’S Own Debt $235,989,444
Miscellaneous Total $235,989,444
GRAND TOTAL
$1,927,592,209 $10,786,677,884
* Not all guarantors are reported.
** The following were identified as the primary purpose for seeking Bank support:
1. To assume commercial or political risk that exporter or private financial institutions are unwilling or unable to undertake.
2. To overcome maturity or other limitations in private sector export financing.
3. To meet competition from a foreign, ocially sponsored, export credit agency.
4. Not identified: Insucient information.
Beginning in FY2013, in accordance with 12 U.S.C. Section 635g(h) as amended May 2012, the Bank will separately report reasons 1 and 2.
50 I
EXPORT-IMPORT BANK of the UNITED STATES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
Results of Operations and
Financial Condition
For the Years Ended September30, 2014 and September30, 2013
In FY 2014, the exports in support
of small business were
$10.7 billion or 39.0 percent
of the export value.
$10.7b
September 30, 2014, Ex‑Im Bank
authorized $20,467.9 million
direct loans, loan guarantees
and insurance.
$20b+
In fiscal year 2014, ending
EXECUTIVE SUMMARY
The Export-Import Bank of the United States (“Ex-Im Bank” or “the Bank”)
is an independent executive agency and a wholly-owned U.S. government
corporation. Ex-Im Bank is the official export credit agency of the United
States. Its mission is to support U.S. jobs by facilitating the export of U.S.
goods and services, by providing competitive export financing, and ensuring
a level playing field for U.S. goods and services in the global marketplace.
Ex-Im Bank does not compete with private sector lenders but provides export-
financing products that fill gaps in trade financing. Ex-Im Bank underwrites
credit and country risks that the private sector is unable or unwilling to accept.
The Bank also helps to level the playing field for U.S. exporters by matching the
financing that other governments provide to their exporters. The Bank’s charter
requires reasonable assurance of repayment for the transactions it authorizes
and the Bank closely monitors credit and other risks in its portfolio.
Ex-Im Bank’s main goal is to equip businesses of all sizes with the competitive
financing necessary to win deals in global markets and add jobs here at
home—but Ex-Im Bank only does so when private financing is unavailable. As
a resurgent economy and increasingly fertile lending environment draws more
private lenders back into the export finance arena, Ex-Im Bank has seen its
authorizations ebb from recent highs brought about in the wake of the 2008
financial crisis. Ex-Im’s role is to fill in the gaps when private lenders are unable
or unwilling to provide support for American-made goods and services.
In the fiscal year ended September 30, 2014 (FY 2014), Ex-Im Bank
authorized $20,467.9 million of loan guarantees, insurance and direct loans
in support of an estimated $27,490.2 million of U.S. export sales and of an
estimated 164,000 U.S. jobs. This is a 25.2 percent decrease in authorizations
from FY 2013 of $27,347.6 million. Over the past five fiscal years, annual
authorizations have ranged from $20,467.9 million to $35,784.3 million in
support of estimated U.S. export sales ranging from $26,438.6 million to
$49,988.9 million.
Small business authorizations in FY 2014 totaled $5,050.2 million,
representing 24.7 percent of total authorizations and 39.0 percent of the
direct exports Ex-Im Bank supports. These totals compare to new small
50 I 2014 ANNUAL REPORT I 51
business authorizations in FY 2013 that equaled $5,223.0 million
representing 19.1 percent of total authorizations. In FY 2014, the
number of transactions that were made available for the direct
benefit of small-business exporters was 3,347 transactions (89.3
percent of total transactions), compared to 3,413 small business
transactions (88.8 percent of total transactions) in FY 2013.
In FY 2014, the exports supported for small businesses were
$10.7 billion or 39.0 percent of the export value. This compares
to $11.7 billion or 31.3 percent for FY 2013. For FY 2014, Ex-Im
Bank estimates that the authorizations with indirect small
business support were $0.7 billion compared to $0.8 billion in
FY 2013. The total small business support in FY 2014 was $5.9
billion compared to $6.0 billion in FY 2013. Ex-Im supports the
highest proportion of exports supported that benefits the small
business sector.
Ex-Im Bank currently has exposure in 178 countries throughout
the world. Total exposure decreased by 1.6 percent to $112,007.8
million at September 30, 2014, compared to $113,825.3 million
at September 30, 2013. The decrease in exposure resulted from
repayments and cancellations greater than new authorizations.
The higher level of repayments resulted from higher than usual
authorizations in recent years. Of this total, the Bank’s largest
exposure is in the aircraft-transportation sector, accounting for
45.2 percent of total exposure in FY 2014 and 45.1 percent in
FY 2013. The highest geographic concentration of exposure is in
Asia, with 41.1 percent of total exposure at September 30, 2014,
and 40.8 percent at September 30, 2013. The percentages are in
line with five year trends.
While most of Ex-Im Bank’s financings are denominated in
U.S. dollars, Ex-Im Bank also guarantees notes denominated
in certain foreign currencies. In FY 2014, Ex-Im Bank approved
$1,333.6 million in foreign-currency-denominated transactions.
Total outstanding foreign-currency exposure at September 30,
2014, was $7,329.6 million, which was 6.5 percent of total
exposure. The Bank expects that its demand for authorizations
denominated in a currency other than the U.S. dollar will continue
to be strong, given its borrowers’ interest in matching debt-
service costs with their earnings.
Ex-Im Bank continues its prudent oversight and due diligence
standards to protect taxpayers through its comprehensive risk
management framework. This framework starts with effective
underwriting and includes detailed documentation and pro-
active monitoring efforts to minimize defaults. In FY 2014,
Ex-Im Bank paid $83.9 million in gross claims compared to a
five-year average of $103.7 million. Finally, Ex-Im Bank works
actively and effectively to recover overdue or defaulted accounts.
During FY14, the Bank recovered $38.5 million on previously
defaulted credits.
The overall weighted-average risk rating for new FY 2014
authorizations for short-term rated, medium-term, and long-term
export credit authorizations was 4.09 compared to a weighted-
average risk rating of 3.88 for new authorizations in FY 2013.
In FY 2014, 63.2 percent of Ex-Im Bank’s short-term rated,
medium-term, and long-term new authorizations were in the level
1 to 4 range (AAA to BBB- equivalent) while 25.8 percent were
rated level 5 to 8 (BB+ to B- equivalent). Ex-Im averages a 50%
recovery rate on all defaulted credits.
The overall weighted-average risk rating for the outstanding
portfolio remains relatively unchanged at 3.75 (BBB- equivalent)
in FY 2014 compared to 3.70 (BBB- equivalent) in FY 2013.
Starting in 2003 Ex-Im Bank’s portfolio began to shift from
primarily sovereign and other public sector borrowers to primarily
private sector borrowers. Between FY 2010 and FY 2014,
exposure to public sector obligors has decreased from 32.8
percent to 30.7 percent, while exposure to private sector obligors
has increased from 67.2 percent to 69.3 percent.
Ex-Im Bank reports under generally accepted accounting
principles in the United States applicable to federal agencies
(government GAAP). Under government GAAP standards,
Ex-Im Bank’s net excess costs over revenue for FY 2014 was
$526.1 million and net excess costs over revenue for FY 2013
was $539.9 million. The Statement of Net Cost does not provide
an assessment of Ex-Im Bank’s operational performance.
As mentioned, this statement is set up to present expenditures
of funds for programs, assuming federal agencies do not earn
excess fees or profit. Refer to explanation of Statement of
Net Cost in section VIII. Results of Operations, Statement of
Net Cost.
24.7%
Small business
authorizations in FY 2014
totaled more than $5,050.2
million, representing 24.7 percent
of total authorizations.
52 I
EXPORT-IMPORT BANK of the UNITED STATES
The Bank’s offsetting collections and new obligations presents
the Bank’s operational performance. Refer to Exhibit 3: Ex-Im
Bank had $800.2 million in offsetting collections, after setting
funds aside for credit loss reserves, in FY 2014 and $1,254.8
million in FY 2013. Of these amounts, $674.7 million and
$1,056.9 million, respectively, were sent to the U.S. Treasury.
The remaining funds are used to cover administrative and
program costs. In addition, in both FY 2014 and FY 2013, $23.0
million and $400.0 million, respectively, of previously collected
unobligated funds Ex-Im Bank sent to the U.S. Treasury due to
rescissions. Since 1992, Ex-Im Bank has sent a net $6.9 billion to
the U.S. Treasury which includes excess offsetting collections,
re-estimates, appropriations, and rescissions.
Ex-Im Bank’s strategic plan reinforces the Bank’s ability to
accomplish its mission and meet its congressional mandates in
future years. The Bank’s vision is to create and sustain U.S. jobs
by substantially increasing the number of companies it serves
and expanding their access to global markets. The 2010 to 2014
strategic plan consists of four goals:
•
Expand awareness of Ex-Im Bank services through focused
business development and effective partnerships
• Improve ease of doing business for customers
• Create an environment that fosters high performance and
innovation
• Ensure effective enterprise risk management consistent with
the Bank’s charter requirements.
Through implementation of its strategic plan, Ex-Im Bank works
to support more U.S. companies to export to more countries
and more customers and thereby create more jobs in the
United States.
In FY 2013 and 2014 Ex-Im Bank was recognized as:
• The world’s “Best Export Credit Agency” by Trade
and Forfaiting Review (TFR) as part of their 2013
Excellence Awards
• The Best Global Export Credit Agency (ECA) Award for the
second time and the Best ECA in the Americas Award for the
fourth consecutive time by Trade Finance Magazine
I. MISSION AND ORGANIZATIONAL STRUCTURE
Congressional Authorization and Mission
Ex-Im Bank is an independent executive agency and a wholly
owned U.S. government corporation that was first organized as
a District of Columbia banking corporation in 1934. Ex-Im Bank’s
operations subsequent to September 30, 1991, are subject to
the provisions of the Federal Credit Reform Act of 1990 (P.L.
101-508) (FCRA). The Export-Import Bank Reauthorization
Act of 2012 extended the Bank’s authority until September 30,
2014. In accordance with its enabling legislation, continuation of
Ex-Im Bank as an independent corporate agency of the United
States is subject to periodic extensions granted by Congress.
The Administration has requested a five-year extension of the
Bank’s charter through FY 2019. Congressional authorization has
been temporarily extended through June 30, 2015. Management
believes that Ex-Im Bank’s authorization will be further extended
until a final authorization is passed by Congress. If the charter is
temporarily not extended, the Bank will not be able to authorize
new credits; however, under the terms of its charter the Bank
will continue to service existing loans, guarantees, and insurance
policies. Ex-Im is currently appropriated through a continuing
resolution through December 11, 2014 and management
expects Ex-Im Bank will receive an appropriation when Congress
approves an Omnibus Appropriations Bill funding the entire
U.S. Government.
Ex-Im Bank’s mission is to support U.S. jobs by facilitating the
export of U.S. goods and services, by providing competitive
export financing, and ensuring a level playing field for U.S. goods
and services in the global marketplace. Ex-Im Bank supports U.S.
exports by providing export financing through its loan, guarantee,
and insurance programs in cases where the private sector is
unable or unwilling to provide financing or where such support
is necessary to level the playing field due to financing provided
by foreign governments to their exporters that are in competition
for export sales with U.S. exporters. The Bank’s charter requires
reasonable assurance of repayment for the transactions the Bank
authorizes, and the Bank closely monitors credit and other risks in
its portfolio. In pursuit of its mission of supporting U.S. exports,
Ex-Im Bank offers four financial products: loan guarantees,
working capital guarantees, direct loans and export-credit
insurance. All Ex-Im Bank obligations carry the full faith and credit
of the U.S. government.
Products
From a portfolio perspective, guarantees made up the largest
portion (62.0 percent and 61.8 percent) of Ex-Im Bank’s exposure
at September 30, 2014, and September 30, 2013, respectively.
(in millions) FY 2014 FY 2013
Outstanding Guarantees $60,905.9 54.4% $59,195.7 52.0%
Outstanding Loans 21,560.4 19.2% 18,248.1 16.0%
Outstanding Insurance 2,253.9 2.0% 2,867.0 2.5%
Outstanding Claims 1,219.9 1.1% 1,328.9 1.2%
Total Outstanding 85,940.1 76.7% 81,639.7 71.7%
52 I 2014 ANNUAL REPORT I 53
(in millions) FY 2014 FY 2013
Undisbursed Loans 11,094.3 9.9% 14,755.9 13.0%
Undisbursed Guarantees 8,457.3 7.6% 11,148.6 9.8%
Undisbursed Insurance 6,516.1 5.8% 6,281.1 5.5%
Total Undisbursed 2 6, 06 7.7 23.3% 32,185.6 28.3%
Total Exposure $112,007.8 100.0% $113,825.3 100.0%
Ex-Im Bank loan guarantees cover the repayment risks on the
foreign buyer’s debt obligations incurred to purchase U.S exports.
Ex-Im Bank guarantees to a lender that, in the event of a payment
default by the borrower, it will pay to the lender the outstanding
principal and interest on the loan. Ex-Im Bank’s comprehensive
guarantee covers commercial and political risks for up to 85
percent of the U.S. contract value.
Loans and guarantees extended under the medium-term loan
program typically have repayment terms of one to seven years,
while loans and guarantees extended under the long-term loan
program usually have repayment terms in excess of seven years.
Under the Working Capital Guarantee Program, Ex-Im Bank
provides repayment guarantees to lenders on secured, short-
term working capital loans made to qualified exporters. The
working capital guarantee may be approved for a single loan or a
revolving line of credit.
To ensure that Ex-Im Bank furthers its long track record of
responsible stewardship of taxpayer dollars, Ex-Im Bank
maintains a comprehensive risk management framework—one
built on a foundation of effective underwriting in order to satisfy
our congressional mandate that every authorization Ex-Im Bank
completes comes with “a reasonable assurance of repayment.”
To that end, approximately 80 percent of our authorizations in
FY 2014 were backed by a sovereign guarantee or collateral.
In the aircraft sector of the portfolio, Ex-Im Bank is over
collateralized with a value to loan ratio of 1.4 to 1 of the portfolio
outstanding balance.
When needed, Ex-Im Bank offers fixed-rate loans directly to
foreign buyers of U.S. goods and services. Ex-Im Bank extends
to a company’s foreign customer a fixed-rate loan covering up to
85 percent of the U.S. contract value. Ex-Im Bank’s direct loans
generally carry fixed-interest rate terms under the Arrangement
on Guidelines for Officially Supported Export Credits negotiated
among members of the Organisation for Economic Co-operation
and Development (OECD).
Ex-Im Bank’s Export Credit Insurance Program supports U.S.
exporters sell their goods overseas by protecting them against
the risk of foreign-buyer or other foreign-debtor default for
political or commercial reasons, allowing them to extend credit
to their international customers. Insurance policies may apply to
shipments to one buyer or many buyers, insure comprehensive
(commercial and political) credit risks or only political risks, and
cover short-term or medium-term sales are primarily U.S. dollar
transactions, so there is no foreign currency risk.
Reasonable Assurance of Repayment
Ex-Im Bank’s charter requires a reasonable assurance of
repayment for all credit authorizations in order to ensure that
Ex-Im Bank balances support for U.S. export transactions with
protection of taxpayer resources.
The Bank’s Board of Directors, or a Bank officer acting pursuant
to delegated-approval authority from the Board of Directors,
makes the final determination of reasonable assurance of
repayment, taking into consideration staff recommendations
as well as the environmental impact. Transactions require
the approval of the Board of Directors directly or through
delegated authority.
Budgeting for New Authorizations Under the FCRA
Under the FCRA, the U.S. Government budgets for the present
value of the estimated cost of credit programs. For Ex-Im Bank,
the cost is determined by analyzing the net present value of
expected cash receipts and cash disbursements associated
with all credits authorized during the year. Cash receipts typically
include fees or premia and loan principal and interest, and cash
disbursements typically include loan disbursements and the
payment of claims. Ex-Im Bank collects fees that cover program
obligations and administrative costs.
When expected cash disbursements exceed expected cash
receipts, there is an expected net outflow of funds, resulting
in a “cost” to the Bank. This cost is sometimes referred to as
subsidy or program cost. Ex-Im Bank is required to estimate this
cost annually and to seek budget authority from Congress to
cover that cost. New loans and guarantees with a program cost
cannot be committed unless sufficient program budget authority
is available to cover the calculated credit cost. Ex-Im Bank is
devoting extensive time and resources in exploring ways to
reduce credit subsidy expenses, which are on track to reach zero
subsidies in FY 2015.
When expected cash receipts exceed expected cash
disbursements, there is an expected net inflow of funds to
Ex-Im Bank. The net inflow to the Bank is a “negative” subsidy
or program revenue. Prior to FY 2008, the amount of program
revenue was not credited or retained by the Bank but instead was
transferred to a general fund receipt account at the U.S. Treasury
upon disbursement of the underlying credit.
54 I
EXPORT-IMPORT BANK of the UNITED STATES
Since 1992, the Bank
has sent to the
U.S. Treasury
$6.9b
more than it received in
appropriations for program and
administrative costs.
In FY 2008, Congress changed the form in which budget
authority is provided to the Bank to cover (1) the estimated
costs for that portion of new authorizations where fees are
insufficient to cover expected losses (subsidy or program cost)
and (2) administrative expenses. At the start of the fiscal year,
the U.S. Treasury provides Ex-Im Bank with an appropriation
warrant for program costs as well as administrative expenses.
The amount of the warrant is established by spending limits set
by Congress. Fees collected during the year that are in excess
of expected losses (offsetting collections) are retained by Ex-Im
Bank and used to repay the warrant received at the start of the
year, resulting in a net appropriation of zero and the Bank being
self-financing for budgetary purposes.
This change occurred as a result of an ongoing in-depth analysis
of the Bank’s historical net default experience in relation to the
fees collected on its credit programs. The analysis shows that
fees collected were not only sufficient to cover credit losses, they
were also sufficient to cover administrative costs. In fact, since
the inception of FCRA in 1990, the Bank has sent to the U.S.
Treasury $6.9 billion more than it received in appropriations for
program and administrative costs.
Although Ex-Im Bank is self-financing, Congress continues its
oversight of the Bank’s budget, setting annual limits on its use of
funds for program administrative expense obligations and other
obligations.
Organizational Structure
Ex-Im Bank’s headquarters are located in Washington, D.C. with
business development efforts supported through 12 regional
offices across the country.
Ex-Im Bank is divided into the following key functional areas:
Board of Directors: The board of directors consists of the
president of the Bank, who also serves as the chairman, the first
vice president of the Bank, who serves as vice chairman, and
three additional directors. All are appointed by the president of
the United States with the advice and consent of the Senate.
The board authorizes the Bank’s transactions either directly or
through delegated authority and includes an audit committee.
Office of the Chairman: The president serves as the chief
executive officer of the Bank and chairman of the board of
directors. The president represents the board in its relations with
other officers of the Bank, with agencies and departments of the
government, and with others having business with the Bank. The
president has charge over the business of the Bank. The following
officers report directly to the president of the Bank:
Chief Risk Officer: The Chief Risk Officer serves as the
Bank’s Executive Vice President charged with managing and
directing all Bank programs and operations, including the
Bank’s enterprise-wide risk function.
Chief of Staff: The Chief of Staff is the principal political and
communications problem-solver and advisor to the chairman
and president of the Bank.
Chief Banking Officer: The Chief Banking Officer oversees
the Export Finance Group and develops long term strategy to
meet the Bank’s export goals.
Senior Vice President for Small Business: The Bank’s
charter provides that the head of the small business function
report directly to the president of the Bank.
Office of the Chief of Staff: This group provides overall
direction and management of the Bank’s policies and government
and external affairs, reauthorization efforts, and initiates and
implements long term strategic goals. The following departments
and officers are supervised by this office:
Office of Policy and Planning: The Office of Policy and
Planning is responsible for policy development and analysis
and serves as the Bank’s liaison with the OECD and
Berne Union.
Office of Congressional Affairs: The Office of
Congressional Affairs is responsible for the Bank’s relations
with Congress and other government agencies.
Office of Communications: The Office of Communications
is responsible for marketing, public affairs, and external affairs.
Office of the Chief Banking Officer and Export Finance:
The Office of the Chief Banking Officer leads the Office of Export
Finance, primarily focusing on export strategy, with business
outreach and development in key markets. The Office of Export
Finance is responsible for the origination and processing of
transactions for most lines of business, as well as transaction
54 I 2014 ANNUAL REPORT I 55
servicing, operations, and business development. The following
divisions are supervised by the Chief Banking Officer:
Trade Finance and Insurance
Transportation Group
Customer Experience
Business Credit
Operations and Data Quality
Structured and Project Finance
Business and Product Development
Global Business Development
Business and Product Development: The Senior Vice
President of Business and Product Development, reporting to
the Chief Banking Officer, focuses on promoting products to new
and current customers of Ex-Im Bank. As a senior member of
the Bank, this person serves as the knowledge expert on Bank
products and practices.
Office of the Executive Vice President and Chief Risk
Officer: The Office of the Executive Vice President and Chief
Risk Officer oversees management of the Bank and the full
range of enterprise risk facing the bank, including repayment risk,
market risk, operational risk, legal risk and other risks.
Office of the Chief Financial Officer: The Office of
the Chief Financial Officer is responsible for all financial
operations of the Bank, including budget formulation
and execution, treasury, internal audit, credit accounting
and servicing, financial reporting, asset monitoring and
management, claims and recoveries, and portfolio review.
Office of the General Counsel: The Office of the General
Counsel provides legal counsel to the Bank’s management,
staff, and the Board of Directors and negotiates and
documents the Bank’s transactions. The Office of the
General Counsel also ensures that the Bank complies with all
applicable laws and regulations.
Office of Credit and Risk Management: The Office of
Credit and Risk Management is responsible for reviewing
the creditworthiness of certain proposed transactions and
reviewing transactions for compliance with the Bank’s
individual delegated authority. This group also evaluates the
technical aspects and environmental impact of proposed
projects, and is responsible for credit policy, country risk and
economic analysis.
Office of Resource Management: The Office of Resource
Management directs human resources, contracting,
technology management, facility administration, and
operating services.
Business Process Division: The Business Process Division
is charged with reengineering business processes to enhance
effectiveness and increase productivity through the Total
Enterprise Modernization Project (TEM).
Office of Inspector General: The Office of Inspector General
is an independent office within the Bank created by law to
conduct and supervise audits, inspections, and investigations
relating to the Bank’s programs and supporting operations; to
detect and prevent waste, fraud and abuse; and to promote
economy, efficiency and effectiveness in the administration and
management of the Bank’s programs.
II. FINANCIAL ACCOUNTING POLICY
The accompanying FY 2014 and FY 2013 financial statements
have been prepared in accordance with generally accepted
accounting principles in the United States applicable to federal
agencies. The format of the financial statements and footnotes
are in accordance with form and content guidance provided in
Circular A-136, Financial Reporting Requirements, revised as
of September 18, 2014, issued by the Office of Management
and Budget (OMB). Circular A-136 details the financial data
required to be disclosed, the assertions and reviews over
financial information that must be performed and suggests the
presentation of such information.
Ex-Im Bank follows OMB Circular A-11 as the primary guidance
for calculating the program cost associated with the Bank’s
transactions. In accordance with this guidance, the amount of
program cost calculated on the Bank’s transactions authorized
after FCRA and the associated fees collected equates to the loss
allowance on these transactions, and is disclosed as such on the
financial statements and related notes.
III. STRATEGY AND CONGRESSIONAL MANDATES
Facilitate U.S. Exports to Support U.S. Jobs
Ex-Im Bank supports U.S. jobs by facilitating the export of U.S.
goods and services, by providing competitive export financing,
and ensuring a level playing field for U.S. goods and services in
the global marketplace. Ex-Im Bank’s programs offer effective
financing support, enabling exporters to win export sales where
such support is necessary to match officially supported foreign
competition and to fill financing gaps due to the lack of available
commercial financing. Exports and the jobs they support
56 I
EXPORT-IMPORT BANK of the UNITED STATES
are a critical component of the U.S. economy, with exports
representing about 13.5 percent of the U.S. gross domestic
product as of the second quarter of FY 2014.
Jobs-Calculation Methodology
Ex-Im Bank’s jobs estimate methodology follows the jobs
calculation methodology designated by the Trade Promotion
Coordinating Committee (TPCC), which uses employment data
computed by the Bureau of Labor Statistics (BLS) to calculate the
number of jobs associated with Ex-Im Bank-supported exports of
goods and services.
The Bank uses the latest available domestic employment
requirements table (ERT) as computed by the BLS to calculate
the number of jobs associated with Ex-Im Bank supported goods
and services. The ERT quantifies the number of direct and indirect
production-related jobs associated with a million dollars of final
demand for 196 detailed industries.
The ERT is derived from a set of data showing the relationship
between industries, known as input-output tables. These tables
are based on historical relationships between industry inputs
(e.g., labor) and outputs (e.g., goods for consumption). BLS then
scales these relationships using estimates about labor productivity
(output per person employed) into employment required for one
million dollars of output in that industry (jobs ratios). The TPCC
designated this basic input-output approach as the standard for
U.S. government agencies.
This jobs-calculation methodology has advantages and
disadvantages. For example, an advantage is that it is based on
the input-output approach commonly used in economic analysis;
it captures indirect jobs in the supply chain and can be performed
using limited resources. However, important limitations and
assumptions also accompany this jobs-calculation methodology.
For example, the employment data are a count of jobs that treat
full-time, part-time and seasonal jobs equally. In addition, the data
assume average industry relationships, but Ex-Im’s clients could
be different from the typical firm in the same industry. Further,
the underlying approach cannot answer the question of what
would have happened without the effect of Ex-Im financing, thus
preventing Ex-Im Bank from distinguishing between jobs that
were newly created and those that were maintained.
For jobs estimates based on FY2014 Ex-Im Bank authorizations,
the Bank supports 6,190 jobs per $1 billion of U.S. exports. This
figure is a weighted average based on each industry’s relative
jobs per $1 billion average at time of calculation.
Strategic Plan
Ex-Im Bank’s strategic plan reinforces the Bank’s ability to
accomplish its mission and meet its congressional mandates in
future years. The Bank’s vision is to create and sustain U.S. jobs
by substantially increasing the number of companies it serves
and expanding their access to global markets. The strategic plan
consists of four goals:
•
Expand awareness of Ex-Im Bank services through focused
business development and effective partnerships
• Improve ease of doing business for customers
• Create an environment that fosters high performance
and innovation
• Ensure effective enterprise risk management consistent with
the Bank’s charter requirements.
The 2013 update to the strategic plan added the last goal to
ensure effective enterprise risk management consistent with the
Bank’s charter requirements.
The strategic plan is designed to help guide efforts at all levels
of the organization and is used as a foundation for strategic and
operational discussions internally.
In an effort to provide greater emphasis on enterprise risk
management, Ex-Im Bank established an Enterprise Risk
Committee (ERC) in late 2013. The committee’s primary
goal is to implement, evaluate and manage a comprehensive
and systematic risk structure at the Bank. The committee’s
responsibility includes the full range of risks facing the bank:
Strategic Risk, Repayment Risk, Market Risk, Operational
Risk, and Legal Risk. Other areas of focus for the Enterprise
Risk Committee include, but are not limited to, due diligence
measures, risk rating evaluations, impaired credit monitoring, and
the overall effectiveness of risk management practices.
The Enterprise Risk Committee is chaired by the Chief Risk
Officer and includes as its membership the senior vice presidents
of the Bank, who supervise all of the functional offices of the
bank. The committee meets at least monthly and gives periodic
updates and recommendations to the President and Chairman of
the Board and the Audit Committee of the Board of Directors.
Beginning in FY 2012 and continuing for the next five years, the
Bank began a project to modernize IT systems infrastructure and
business processes. The Total Enterprise Modernization (TEM)
project is making long-deferred technology investments and
business process improvements to grow the Bank’s capacity
to meet customer needs and enhance long-term capabilities
of the Bank.
56 I 2014 ANNUAL REPORT I 57
Results: FY2014 Authorizations
A resurging economy and increasingly liquid lending environment
resulted in more private lenders funding export finance during
the year, as a result, Ex-Im Bank has seen its authorizations ebb
from recent highs brought about in the wake of the 2008 financial
crisis. Ex-Im’s role is to match competition from other ECAs
(export credit agencies) and fill in the gaps when private lenders
are unable or unwilling to provide support for American-made
goods and services. As such, Ex-Im Bank authorizations are, to a
certain extent, contra-cyclical during times of liquidity.
In FY 2014, Ex-Im Bank approved $20,467.9 million in
authorizations. This is a 25.2 percent decrease from
authorizations of $27,347.6 million in FY 2013. The authorizations
supported an estimated U.S. export value of $27,490.2 million
for FY 2014 and $37,412.0 million in FY 2013 and an estimated
164,000 and 205,000 U.S jobs in FY 2014 and FY 2013,
respectively. Full-year authorizations ranged from $20,467.9
million to $35,784.3 million during the past five fiscal years as
shown in Exhibit 1.
EXHIBIT 1: AUTHORIZATIONS BY FISCAL YEAR
(in millions)
Authorizations FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
LONG-TERM
Loans $4,255.5 $6,315.0 $11,751.7 $6,878.4 $1 ,927.6
Guarantees 10,225.0 15,479.4 14,879.6 12,179.7 10,789.2
Subtotal,
Long-Term
14,480.5 21,794.4 26,631.3 19,058.1 12,716.8
MEDIUM-TERM
Loans 5.1 7. 9 12.8 — —
Guarantees 702.5 693.0 186.8 132.5 135.0
Insurance 312.9 238.8 165.0 101.7 98.8
Subtotal,
Medium-
Term
1,020.5 939.7 364.6 234.2 233.8
SHORT-TERM
Working
Capital
2,178.5 3,228.0 3,254.1 2,615.0 2,410.0
Insurance 6,788.3 6,765.0 5,534.3 5,440.3 5,107. 3
Subtotal,
Short-Term
8,966.8 9,993.0 8,788.4 8,055.3 7,517.3
TOTAL
AUTHORI-
ZATIONS
$24,467.8 $32,727.1 $35,784.3 $ 2 7, 347.6 $20,467.9
Long‑term transactions: The Bank’s credit assessment
includes an evaluation of the industry/position and primary
source of repayment, the borrower’s operating performance,
liquidity position, leverage, and ability to service its existing
and prospective debt obligations throughout the term of the
exposure. Consideration may also be given to either credit
enhancements proffered by the borrower and/or those deemed
necessary by Ex-Im Bank. A risk rating is assigned to the
transaction based on this evaluation which in turn establishes the
level of loss reserves the Bank must set aside.
Short‑term and medium‑term transactions: These
transactions are largely underwritten under individual delegated
authority pursuant to prescribed credit standards and information
requirements. Governance and control procedures employed
include periodic credit and compliance reviews, the results
of which are provided to senior management and the Board
of Directors.
Facilitate U.S. Exports by Small Businesses
Small businesses are major creators of jobs in America.
The Bank’s mandate from Congress places significant emphasis
on supporting small business exports. Ex-Im Bank’s Charter
states: “The Bank shall make available, from the aggregate loan,
guarantee and insurance authority available to it, an amount to
finance exports directly by small business concerns (as defined
under Section 3 of the Small Business Act) which shall be not
less than 20 percent of such authority for each fiscal year.”
Ex-Im Bank’s Office of Small Business provides a bank wide
focus on small business support with overall responsibility for
expanding and overseeing small business outreach. This group is
responsible for helping to provide small businesses with financial
assistance to increase export sales and for acting as a liaison
with the Small Business Administration and other departments
and agencies in the U.S. government in matters affecting
small businesses.
Ex-Im Bank’s programs play an important role in providing
export-finance support to small businesses that have the
ability to expand and create American jobs. In 1978, Ex-Im
Bank introduced its first short-term export-credit insurance
policy tailored for small business, In 1985, Congress enacted
a 10 percent mandate on small business authorizations, which
was increased in 2002 to 20 percent. Ex-Im Bank continues to
innovate, design, and implement programs and policies to meet
the needs of the U.S. small business exporter.
Results: FY2014 Small-Business Authorizations
Ex-Im Bank’s objective is to grow small business authorizations
in the context of a reasonable assurance of repayment and in
response to market demand. Small business authorizations in
FY 2014 were $5,050.2 million as compared with small business
authorizations for FY 2013 of $5,223.0 million. In FY 2014,
small business authorizations represented 24.7 percent of total
58 I
EXPORT-IMPORT BANK of the UNITED STATES
authorizations and 39.0 percent or $10.7 billion of the direct
exports Ex-Im Bank supported. This compares to 19.1 percent of
total authorizations and 31.3 percent or $11.7 billion for FY 2013.
During FY 2014, the number of transactions that were executed
for the direct benefit of small business exporters was 3,347
transactions (89.3 percent of the total number of transactions),
compared to 3,413 transactions (88.8 percent of the total number
of transactions) in FY 2013. For FY 2014, Ex-Im Bank estimates
that authorizations with indirect small business support were $0.7
billion compared to $0.8 billion in FY 2013.
In FY 2014, Ex-Im Bank authorized $751.3 million, 3.7 percent
of total authorizations, to support exports by small and medium-
sized business known to be minority-owned and women-owned,
compared to authorizations of $815.6 million, 3.0% of total
authorizations, in FY 2013.
Ex-Im Bank offers two products that primarily benefit small
businesses: working capital guarantees (including supply-chain
finance guarantees) and export-credit insurance. In FY 2014 and
FY 2013 $1,771.5 million and $1,813.8 million, respectively, (74.3
percent and 69.5 percent, respectively), of total authorizations
in the Working Capital Guarantee Program supported small
businesses.
Of the total authorizations under the export-credit insurance
program in FY 2014, $2,917.6 million (57.7 percent) supported
small businesses compared to $2,812.5 million (50.8 percent) in
FY 2013.
Exhibit 2 shows the total dollar amount of authorizations for small
business exports for each year since FY 2010, together with the
percentage of small business authorizations to total authorizations
for that fiscal year.
Facilitate U.S. Exports for Environmentally Beneficial
Goods and Services
Ex-Im Bank’s financing helps mitigate risk for U.S. companies
that offer environmentally beneficial goods and services and also
offers competitive financing terms to international buyers for the
purchase of these goods and services. Ex-Im Bank has an active
portfolio that includes financing for U.S. exports of:
• Renewable energy equipment
• Wastewater treatment projects
• Air pollution technologies
• Waste management services
• Other various environmental goods and services
EXHIBIT 2: SMALL BUSINESS AUTHORIZATIONS
0
$10,000
$20,000
$30,000
$40,000
(in millions)
0%
5%
10%
15%
20%
25%
Percentage
2010
$5,052.9
$24,467.8
20.7%
2011
$6,037.3
$32,727.1
18.4%
2012
$6,122.9
$35,784.3
17.1%
2013
$5,223.0
$27,347.6
19.1%
2014
$5,050.2
$20,467.9
24.7%
Small Business
Authorizations
Total
Authorization
Percentage of
Authorizations
Fiscal Year
Ex-Im Bank support for U.S. environmental companies
ultimately fuels U.S. job creation and the innovative research and
development that allow the U.S. environmental industry to remain
at the forefront worldwide.
Results: FY2014 Environmentally Beneficial
Authorizations
In FY 2014, Ex-Im Bank authorizations of environmentally
beneficial goods and services totaled $335.7 million compared
to $433.1 million in FY 2013. Approximately 1.6 percent of
the Bank’s FY 2014 authorizations supported environmentally
beneficial goods, which was comparable to the percentage in
FY 2013.
Ex-Im Bank’s total number of renewable-energy authorizations,
a subset of the Bank’s environmentally beneficial authorizations,
was unchanged at 32 in FY 2014 from 32 in FY 2013. In FY 2014,
Ex-Im Bank authorizations which support U.S. renewable-
energy exports and services totaled $186.8 million compared to
$257.0 million in FY 2013. FY 2014 authorizations were driven by
financing wind energy projects in Latin America. The decrease
in overall authorizations in FY 2014 was driven primarily by the
lack of financing demand for solar projects in India, Ex-Im Bank’s
major market for solar financing, as the result of transition in the
National Solar Mission in India from Phase 1 to Phase 2.
Ex-Im Bank’s financing is demand driven. Since the creation of
Ex-Im Bank’s Office of Renewable Energy in 2009, Ex-Im Bank
has supported $3,212.2 million in renewable energy transactions.
58 I 2014 ANNUAL REPORT I 59
Facilitate U.S. Exports to Sub-Saharan Africa
Ex-Im Bank provides U.S. exporters with the financing tools
they need to successfully compete for business in Africa. Ex-Im
Bank’s products and initiatives help U.S. exporters in all regions
of Africa, including high-risk and emerging markets. The Bank’s
charter states that the Bank shall “take prompt measures,
consistent with the credit standards otherwise required by law,
to promote the expansion of the Bank’s financial commitments
in sub-Saharan Africa under the loan, guarantee, and insurance
programs of the Bank.” Ex-Im Bank has established an advisory
committee to advise the Board of Directors on the development
and implementation of policies and programs designed to support
those programs.
Results: FY2014 Sub-Saharan Africa Authorizations
The total number of sub-Saharan Africa authorizations increased
2.1 percent to 192 in FY 2014 from 188 in FY 2013. The dollar
amount of authorizations increased 240.1 percent to $2,055.1
million (10.0 percent of total authorizations) in FY 2014 from
$604.2 million (2.2 percent of total authorizations) in FY 2014.
Across the region, there has been substantial investment
in infrastructure, including in ports, electricity capacity, and
transportation. There was an increase in aircraft authorizations
from approximately $160.0 million in FY 2013 to $1,000.0 million
in FY 2014. The main driver of this change is an $835.1 million
authorization to Kenya Airways, a deal that will catalyze Nairobi’s
growth as a major aviation hub, expand Kenya Airways’ fleet of
high-quality aircraft, and support 5,400 manufacturing and other
quality jobs at Boeing’s suppliers across America.
IV. EFFECTIVENESS AND EFFICIENCY
Ex-Im Bank uses various measures to assess the relative
efficiency and effectiveness of the Bank’s programs. As an
overall measure, the Bank’s annual Report to the U.S. Congress
on Export Credit Competition and the Export-Import Bank of the
United States (competitiveness report) compares the Bank’s
competitiveness with that of the other export credit agencies
(ECAs). In addition, Ex-Im Bank uses various leverage measures
to assess efficiency and cost effectiveness.
Ex-Im Bank has been Self-Sustaining Since FY2008
Ex-Im Bank has been self-sustaining for budgetary purposes
since FY 2008. As a result, the Bank does not rely on
Congressional appropriation to sustain operations, which is critical
in a tight budgetary environment. Ex-Im Bank’s program revenue
(i.e., in a given year, fee and interest collections from transactions
that exceed the forecasted loss on those transactions) is retained
as offsetting collections and used to offset the cost of new
obligations in the fiscal year, including prudent reserves to cover
future losses as well as all administrative costs. In FY 2014, Ex-Im
Bank collected $800.2 million in offsetting collections, while
subsidy and administrative obligations totaled $135.6 million;
compared with $1,254.8 million offsetting collections and $132.3
million subsidy and administrative obligations in FY 2013.
For Ex-Im, prudent lending and rigorous risk management have
consistently led to positive returns for American taxpayers.
In FY 2014, Ex-Im wired $674.7 million to the U.S. Treasury
to be used for deficit reduction—the latest in a long line of
surplus revenues. All told, over the last two decades, Ex-Im has
generated $6.9 billion in revenues for U.S. taxpayers above and
beyond the cost of Bank operations and loan loss reserves.
Ex-Im Bank’s self-sustaining status also complies with the
World Trade Organization (WTO) Agreement on Subsidies and
Countervailing Measures, which is an agreement between
138 member countries. This agreement contains a list of
prohibited export subsidies, one of which is official export
credit. The relevant guidance for guarantees and insurance is
that such programs are prohibited subsidies if the activity is
done at premium rates which are inadequate to cover long-term
operating costs and losses. Despite Ex-Im’s self-sustaining
EXHIBIT 3: OFFSETTING COLLECTIONS AND
NEW OBLIGATIONS
0 $200 $400 $600 $800 $1,000 $1,200 $1,400
(in millions)
FY 2014
0
$200 $400 $600 $800 $1,000 $1,200 $1,400
(in millions)
FY 2013
Offsetting
Collections $800.2
Administrative
Expenses $105.5
Program
Costs $8.7
Offsetting
Collections $1,254.8
Administrative
Expenses $89.9
Program
Costs $34.1
For each dollar of expenses (administrative and program cost), the Bank generated $7.01 in osetting
collections in FY 2014.
60 I
EXPORT-IMPORT BANK of the UNITED STATES
0
10
20
30
40
50
60
70
2005–2009 5-year average
7.7
$40.2
2010–2014 5-year average
8.3
$65.7
Count Authorized
per Employee
Dollar Authorized
per Employee
More than
80%
of Ex‑Im Bank’s entire portfolio
is backed by some form
of collateral or sovereign
guarantee.
status, Congress still continues its oversight of the Bank’s budget,
setting annual limits on the use of funds for program budget and
administrative expense obligations. Ex-Im Bank has also devoted
extensive time and resources in exploring ways to reduce credit
subsidy expenses, which are on track to reach zero subsidy in
FY 2015.
Recognition From Customers and Peers
The Bank’s competitiveness report to Congress showed survey
results from exporters and lenders that indicated the Bank’s core
business policies and practices were classified as competitive
with other officially supported foreign competition, primarily other
G-7 ECAs. According to the data, Ex-Im Bank terms, including
policy coverage, interest rates, exposure-fee rates, and risk
premia, consistently matched competitors.
Ex-Im Bank continues to receive recognition from Trade Finance
Magazine. This publication serves as the global magazine for
decision makers in the trade-finance and export communities.
The Bank also received several accolades from Global Finance
Magazine that recognized Ex-Im Bank as the Best Trade Finance
Multilateral Institution or Export Credit Agency.
The landscape of export credit agencies is shifting. Many of
Ex-Im Bank’s competitor ECAs are moving away from their
traditional roles and are evolving into quasi-market players. They
are doing this by allowing greater non-domestic content in the
projects that they support and by venturing into more commercial
endeavors, such as financing into high-income markets. Also,
Ex-Im Bank’s public-policy constraints—economic-impact
analysis, foreign-content policy, local-costs policy, tied-aid policies
and procedures, and U.S. shipping requirements—have the
potential to create tensions between the goals of maximizing U.S.
exporter competitiveness as compared with foreign ECA-backed
competition and satisfying public mandates
Protecting the U.S. Taxpayer
Ex-Im Bank continues its prudent oversight and due diligence
standards to protect taxpayers through its comprehensive risk
management framework. This framework starts with effective
underwriting to ensure a reasonable assurance of repayments.
More than 80 percent of Ex-Im Bank’s entire portfolio is backed
by some form of collateral or a sovereign guarantee. The Bank’s
comprehensive risk management program includes detailed
documentation to ensure the Bank’s rights are protected legally
and that the transaction is not in violation of U.S. government
policy and sanctions. And it continues after a transaction is
approved with pro-active monitoring efforts to minimize defaults.
The Bank believes that a comprehensive risk management
framework with strong emphasis on continuous improvement
minimizes claims and defaults. Ex-Im Bank engages in robust
portfolio management, as well as oversight and governance,
including the setting aside of adequate loan loss reserves.
Ex-Im Bank reports to the U.S. Congress quarterly the current
default rate on its active portfolio. The September 30, 2014
reported number was 0.175 percent. This rate reflects a “total
amount of required payments that are overdue” (claims paid
on guarantees and insurance transactions plus loans past due)
divided by a “total amount of financing involved” (disbursements).
The low default rate is the result of the Bank’s few defaults
coupled with effective portfolio management action on those
credits that do default.
Claims and defaulted loans are paid from fees collected from the
Bank’s customers. Over the last five fiscal years as the Bank’s
authorizations increased 30 percent, the payments on claims
and defaulted loans decreased 71 percent. In FY 2014, Ex-Im
Bank paid gross claims of $40.3 million with $43.7 million of
loans in arrears. These figures represent 0.04 percent of the total
exposure of the Bank.
EXHIBIT 5: TREND OF AUTHORIZATIONS
PER EMPLOYEE
60 I 2014 ANNUAL REPORT I 61
Another efficiency measure (Exhibit 5), examines the trend of
authorizations per employee using five-year averages. The 2010
through 2014 five-year average dollar amount of authorizations
per employee was $65.7 with an average count of 8.3
transactions per employee. This compares to a 2005 through
2009 five-year average of $40.2 and a count of 7.7 transactions
per employee.
V. PORTFOLIO ANALYSIS
Ex-Im Bank’s Portfolio by Program, Region, Industry,
Obligor Type, and Foreign Currency
For financial statement purposes, Ex-Im Bank defines exposure
as the authorized outstanding and undisbursed principal
balance of loans, guarantees, and insurance. It also includes the
unrecovered balance of payments made on claims that were
submitted to Ex-Im Bank in its capacity as guarantor or insurer
under the export guarantee and insurance programs. Exposure
does not include accrued interest or transactions pending final
approval. This corresponds to the way activity is charged against
the Bank’s FY 2014 $140 billion lending limit imposed by Section
6(a)(2) of Ex-Im Bank’s charter.
Working capital guarantees may be approved for a single loan
or a revolving line of credit, with an availability generally of one
year. Guaranteed lenders do not report activity to Ex-Im, the
entire credit is assumed to be “disbursed” when the fee is paid
to Ex-Im. The credit is recorded as repaid in one installment 180
days after the expiry date of the credit unless the Controller’s
office is notified before that time that a claim has been paid.
Under the assumption that the exporter is using the credit up to
the end of the expiry period, six months provides sufficient time
for the guaranteed lender to report defaults to Ex-Im Bank in the
event that the exporter does not repay the credit. If a claim is
paid, the remaining outstanding balance of the credit associated
with the claim is reduced to zero. Exposure is then reflected as
an unrecovered claim.
Since there is typically a delay in reporting shipments under
the insurance program, undisbursed balances remain on the
books for 120 days after the expiry date to allow for the posting
of shipments that took place within the period covered by the
policy but were reported after the expiry date. These unreported
shipments pose some liability in the form of claims that have
been incurred but not yet reported (IBNR). Leaving the policy
open past the expiry date provides a reserve for IBNR.
Ex-Im Bank currently has exposure in 178 countries throughout
the world totaling $112,007.8 million at September 30, 2014. Total
exposure over the five-year period has averaged $99.4 billion.
Exhibit 6 summarizes total Ex-Im Bank exposure by program and
shows each program as a percentage of the total exposure at the
end of the respective fiscal year.
EXHIBIT 6: EXPOSURE BY PROGRAM
(in millions) FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Guarantees $51,828.9 $61,429.1 $66,860.2 $70,344.3 $69,363.2
Loans 11,200.3 16,732.4 28,758.3 33,004.0 32,654.7
Insurance 9,866.5 9,312.9 9,528.7 9,148.1 8,770.0
Receivables from
Subrogated Claims
2,318.2 1,677.6 1,499.2 1,328.9 1,219.9
Total Exposure $75,213.9 $89,152.0 $106,646.4 $113,825.3 $112,007.8
(% of Total) FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Guarantees 68.9% 68.9% 62.7% 61.8% 61.9%
Loans 14.9% 18.8% 27.0% 29.0% 29.2%
Insurance 13.1% 10.4% 8.9% 8.0% 7. 8%
Receivables from
Subrogated Claims
3.1% 1.9% 1.4% 1.2% 1.1%
Total Exposure 100.0% 100.0% 100.0% 100.0% 100.0%
Exhibit 7 summarizes total Ex-Im Bank exposure by geographic
region. The All Other category in Exhibit 7 includes undisbursed
balances of short-term multibuyer insurance that is not allocated
by region until the shipment has taken place.
EXHIBIT 7: GEOGRAPHIC EXPOSURE
(in millions) FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Asia $27,655. 2 $32,832.3 $42,345.3 $46,463.2 $46,007.2
Latin America and
Caribbean
15,606.3 19,728.3 22,104.6 21,454.2 20,105.7
Europe 7,907.3 10,772.7 11,303.8 15,711.8 15,924.2
North America 7,77 3. 9 9,352.9 10,579.3 10,496.9 8,638.1
Oceania 4,601.9 5,372.5 8,305.0 8,255.5 8,258.5
Africa 4,949.4 4,832.5 5,770.8 5,548.3 6,885.1
All Other 6,719.9 6,260.8 6 , 237.6 5,895.4 6,189.0
Total Exposure $75,213.9 $89,152.0 $106,646.4 $113,825.3 $112,007.8
(% of Total) FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Asia 36.8% 36.9% 39.7% 40.8% 41.1%
Latin America and
Caribbean
20.7% 22.1% 20.7% 18.8% 18.0%
Europe 10.5% 12.1% 10.6% 13.8% 14.2%
North America 10.3% 10.5% 9.9% 9.2% 7.7 %
Oceania 6.1% 6.0% 7.8% 7.3% 7. 4%
Africa 6.6% 5.4% 5.4% 4.9% 6.1%
All Other 9.0% 7.0% 5.9% 5.2% 5.5%
Total Exposure 100.0% 100.0% 100.0% 100.0% 100.0%
62 I
EXPORT-IMPORT BANK of the UNITED STATES
Exhibit 8 shows exposure by the major industrial sectors in the
Bank’s portfolio.
EXHIBIT 8: EXPOSURE BY MAJOR
INDUSTRIAL SECTOR
(in millions) FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Air Transportation $35,370.6 $43,014.5 $49,419.6 $51,337.8 $50,668.7
Manufacturing (other) 8,904.7 12,499.8 18,091.0 20,632.3 19,960.7
Oil and Gas 10,408.5 10,916.6 13,938.7 16,718.9 16,381.2
Power Projects 4,599.1 6,818.8 8,649.2 7,370.1 7, 32 5. 3
All Other 15,931.0 15,902.3 16 , 547.9 17,766.2 17,67 1. 9
Total Exposure $75,213.9 $89,152.0 $106,646.4 $113,825.3 $112,007.8
(% of Total) FY 2010 FY 2011 FY 2012 FY 2012 FY 2014
Air Transportation 47. 0 % 48.2% 46.3% 45.1% 45.2%
Manufacturing (other) 11.8% 14.0% 17.0% 18.1% 17.8%
Oil and Gas 13.8% 12.2% 13.1% 14.7% 14.6%
Power Projects 6.1% 7. 6% 8.1% 6.5% 6.5%
All Other 21.3% 18.0% 15.5% 15.6% 15.9%
Total Exposure 100.0% 100.0% 100.0% 100.0% 100.0%
Through the years, there has been a shift in Ex-Im Bank’s
portfolio. As the need for private-sector financing has increased,
the percentage of Ex-Im Bank’s portfolio represented by private
obligors has increased from 67.2 percent in FY 2010 to 69.3
percent in FY 2014.
Of the portfolio at September 30, 2014, 30.7 percent represents
credits to public-sector obligors or guarantors (6.9 percent to
sovereign obligors or guarantors and 23.8 percent to public non-
sovereign entities); 69.3 percent represents credits to private-
sector obligors. Starting in 2003 Ex-Im Bank’s portfolio began to
shift from primarily sovereign and other public-sector borrowers to
primarily private-sector borrowers. A breakdown of public-sector
versus private-sector exposure is shown in Exhibit 9.
EXHIBIT 9: PUBLIC AND PRIVATE OBLIGORS
Year End FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Private Obligors 67. 2% 68.6% 69.3% 71.0% 69.3%
Public Obligors 32.8% 31.4% 30.7% 29.0% 30.7%
Ex-Im Bank provides guarantees in foreign currency to allow
borrowers to better match debt service costs with earnings.
Ex-Im Bank adjusts its reserves to reflect the potential risk of
foreign-currency fluctuation.
In FY 2014, Ex-Im Bank approved $1,333.6 million in transactions
denominated in a foreign currency, representing 6.5 percent of
all new authorizations, as shown in Exhibit 10. In FY 2013, Ex-Im
Bank approved $1,040.1 million in transactions denominated
in a foreign currency, representing 3.8 percent of all new
authorizations. Foreign currency transactions are booked in U.S.
dollars based on the exchange rate at the time of authorization.
The U.S. dollar exposure is adjusted at year end using the latest
exchange rates.
At September 30, 2014, Ex-Im Bank had 97 transactions with
outstanding balances denominated in a foreign currency. Using
the foreign currency exchange rates at September 30, 2014,
Ex-Im Bank adjusted the dollar amount of the outstanding
balances for these transactions. The adjustment was a net
increase in exposure of $163.7 million for a total outstanding
balance of $7,329.6 million of foreign currency denominated
guarantees, representing 6.5 percent of total Bank exposure.
At September 30, 2013, Ex-Im Bank had 138 transactions with
outstanding balances denominated in a foreign currency. Using
the foreign currency exchange rates at September 30, 2013,
Ex-Im Bank adjusted the dollar amount of the outstanding
balances for these transactions. The adjustment was a net
increase in exposure of $524.5 million for a total outstanding
balance of $8,370.2 million of foreign currency denominated
guarantees, representing 7.4 percent of total Bank exposure.
EXHIBIT 10: FOREIGN CURRENCY TRANSACTIONS
(in millions)
0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
2010
$24,467.8
$1,529.3
2011
$32,727.1
$1,896.3
2012
$35,784.3
$1,721.2
2013
$27,347.6
$1,040.1
2014
$20,467.9
$1,333.6
Authorizations
Foreign
Currency
Authorizations
Fiscal Year
The level of foreign currency authorizations is attributable in large
part to borrowers’ desire to borrow funds in the same currency
as they earn funds in order to mitigate the risk involved with
exchange rate fluctuations. The majority of the foreign currency
authorizations support U.S. exports of commercial jet aircraft.
Exhibit 11 shows the U.S. dollar value of the Bank’s outstanding
foreign currency exposure by currency.
62 I 2014 ANNUAL REPORT I 63
EXHIBIT 11: U.S.-DOLLAR VALUE OF OUTSTANDING
FOREIGN-CURRENCY EXPOSURE
FY 2014 FY 2013
Currency
Outstanding
Balance
(in millions)
Percentage
of Total
Outstanding
Balance
(in millions)
Percentage
of Total
Euro $5,186.6 70.8% $5,915.1 70.6%
Canadian Dollar 658.6 9.0% 719.0 8.6%
Japanese Yen 537. 2 7.3% 638.1 7.6%
New Zealand Dollar 225.5 3.1% 278.5 3.3%
South African Rad 214.5 2.9% 168.1 2.0%
Austrlian Dollar 202.2 2.8% 248.4 3.0%
Mexican Peso 185.8 2.5% 240.7 2.9%
Korean Won 105.2 1.4% 122.0 1.5%
British Pound 13.9 0.2% 39.3 0.5%
Swiss Franc – 0.0% 1.0 0.0%
Total 7,32 9.6 100.0% 8,370.2 100.0%
VI. LOSS RESERVES, MAJOR IMPAIRED ASSETS, AND
PARIS CLUB ACTIVITIES
Allowance for Losses on Loans, Guarantees, Insurance
and Subrogated Claims
The total allowance for Ex-Im Bank credits is comprised of an
allowance for loss on all credits and defaulted guarantees and
insurance policies. A provision is charged to earnings as losses
are estimated to have occurred. Write-offs are charged against
the allowance when management determines that a loan or
claim balance is uncollectable. Subsequent recoveries, if any, are
credited to the allowance.
The allowance for Ex-Im Bank credits authorized after FCRA
equates to the amount of credit loss associated with the
applicable credit. Ex-Im Bank has established cash flow models
for expected defaults, fees, and recoveries to estimate the credit
loss for allowance purposes. The models incorporate Ex-Im
Bank’s actual historical loss and recovery experience. In addition,
beginning in FY 2012, based upon industry best practices as
well as recent changes to the portfolio, the Bank incorporated
qualitative factors into the quantitative methodology to calculate
the credit loss allowance.
Due to the fact that financial and economic factors affecting
credit repayment prospects change over time, the net estimated
credit loss of loans, guarantees, and insurance is re-estimated
annually in accordance with OMB guidelines and Statement of
Federal Financial Accounting Standards 18, “Amendments to
Accounting Standards for Direct Loans and Loan Guarantees.”
This re-estimate indicates the appropriate level of funds
necessary to cover projected future claims. Decreases in
estimated credit losses result in excess funds returned to the
U.S. Treasury while increases in estimated credit losses are
covered by additional appropriations that become automatically
available through permanent and indefinite authority, pursuant to
the FCRA.
As indicated in Exhibit 12B and 15, the overall weighted-average
risk rating of the Bank’s portfolio remained relatively unchanged
from a rating of 3.70 at the end of FY 2013 to a rating of 3.75 at
the end of FY 2014.
Prior to FY 2012, Ex-Im Bank relied primarily on quantitative
factors to calculate loss reserves. Because the portfolio grew
significantly over the past few years and the composition of
the portfolio became more complex, the Bank analyzed and
developed for FY 2012 credit loss factors that incorporated
both a quantitative and an enhanced qualitative framework.
The additional qualitative factors are based on the risk profile
of the Bank’s portfolio and were added to the quantitative
factors to better and more accurately measure risk through
the reserve process. The Bank continues to improve both its
quantitative and qualitative framework. In FY 2014 the Bank
includes ten qualitative adjustments into its loss model, of which
seven were built into the quantitative framework. Those built
into the quantitative framework include factors such as loss
curves for sovereign guaranteed transactions and asset backed
aircraft. Those not built into the quantitative framework look at
minimum levels of expected losses, the global macroeconomic
environment, and the recent growth in the Bank’s portfolio.
The estimated credit loss of the outstanding balance of loans,
guarantees and insurance is re-estimated annually in accordance
with OMB guidelines and SFFAS 18, “Amendments to
Accounting Standards for Direct Loans and Loan Guarantees”
This re-estimate indicates the appropriate balance necessary
in the financing accounts to ensure sufficient funds to pay
future estimated claims. Ex-Im Bank can experience downward
reestimates, sending funds to the U.S. Treasury, or upward
reestimates, receiving funds in the form of appropriation from the
U.S. Treasury, which can vary by year. Since the Federal Credit
Reform Act of 1990, Ex-Im Bank has sent over $11 billion in net
downward reestimates to the U.S. Treasury.
The re-estimate of the credit loss of the exposure for FY 1992
through FY 2014 commitments calculated at September 30,
2014, indicated that the net amount of $479.8 million of additional
funds were needed in the financing accounts. This will be
received from the U.S. Treasury in FY 2015. The re-estimate
of the credit loss of the exposure for FY 1992 through FY 2012
commitments calculated at September 30, 2013, indicated that
of the balances in the financing accounts, the net amount of
64 I
EXPORT-IMPORT BANK of the UNITED STATES
$492.5 million of additional funds were needed in the financing
accounts. This amount was received in FY 2014.
The total allowance for losses at September 30, 2014, for loans,
claims, guarantees and insurance commitments is $5,045.2
million, representing 4.5 percent of total exposure of $112,007.8
million (Exhibit 12B). This compares to the allowance for losses
at September 30, 2013, for loans, claims receivable, guarantees
and insurance commitments of $4,631.4 million representing
4.1 percent of total exposure of $113,825.3 million.
EXHIBIT 12A: OUTSTANDING EXPOSURE AND
ALLOWANCE BY PROGRAM
(in millions) FY 2014 FY 2013
Outstanding Loans $21,560.4 $18,248.1
Allowance for Loan Losses 2,409.9 1,92 7.2
Percent Allowance to Outstanding Balance 11.1% 10.6%
Outstanding Defaulted Guarantees and Insurance 1,219.9 1,328.9
Allowance for Defaulted Guarantees and Insurance 1,014.6 1,083.4
Percent Allowance to Outstanding Balance 83.2% 81.5%
Outstanding Guarantees & Insurance 63,159.8 62,062.7
Liability for Guarantees & Insurance 1,620.7 1,620.8
Percent Allowance to Outstanding Balance 2.6% 2.6%
Total reserves $5,045.20 $4,631.40
The allowances for losses for Ex-Im Bank credits authorized after
the Federal Credit Reform Act of 1990 (FCRA) equates to the
amount of estimated credit loss associated with the applicable
loans, claims, guarantees, and insurance. According to SFFAS 2,
Accounting for Direct Loans and Guarantees, direct loans
disbursed and outstanding are recognized as assets at the present
value of their estimated net cash flows. The difference between
the outstanding principal of the loans and the present value of
their net cash inflows is recognized as the allowance for credit
losses. For guaranteed loans outstanding, the present value of
estimate net cash flows of the loan guarantee is recognized as a
guaranteed loan liability.
The total allowance for
losses at September 30, 2014
was over
$5b+
this was for loans, guarantees
and insurance commitments.
Ex-Im Bank’s credit programs generally have fees and interest
rates higher than the expected default and funding costs, resulting
in the net present value of cash inflows to be greater than the
outstanding principal of the credit. This has caused a slight
decrease in the allowance for credit losses as a percent of total
credits outstanding.
EXHIBIT 12B: LOSS RESERVES AND
EXPOSURE SUMMARY
(in millions) FY 2014 FY 2013
Outstanding Guarantees and Insurance $63,159.8 $62,062.7
Outstanding Loans 21,560.4 18,248.1
Outstanding Defaulted Guarantees and Insurance 1,219.9 1,328.9
Total Outstanding $85,940.1 $81,639.7
Undisbursed Guarantees and Insurance $14,973.4 $17,429.7
Undisbursed Loans 11,094.3 14,755.9
Total Undisbursed $26,067.7 $32,185.6
Total Exposure $112,007.8 $113,825.3
Weighted-Average Risk Rating or Total Exposure 3.75 3.70
Loss Reserves
Liability for Guarantees and Insurance $1,620.7 $1,620.8
Allowance for Loan Losses 2,409.9 1,92 7.2
Allowance for Defaulted Guarantees and Insurance 1,014.6 1,083.4
Total Reserves $5,045.2 $4,631.4
Loss Reserve as Percentage of Outstanding Balance 5.9% 5.7%
Loss Reserve as Percentage of Total Exposure 4.5% 4.1%
Major Impaired Assets
Impaired Credits are defined as those transactions risk rated as
Budget Cost Level (“BCL”) 9-11 and on the verge of impairment
due to political, commercial, operational and/or technical events or
situations, and/or Acts of God that have affected the Borrower’s
ability to service repayment of Ex-Im Bank credits.
At September 30, 2014, Ex-Im Bank’s aggregate amount of
impaired credits exposure was $294.3 million compared to
$434.0 million in September 30, 2013.
Paris Club Activities
The Paris Club is a group of 20 permanent member-creditor
countries that meet regularly in Paris to discuss and provide
debt relief to qualifying debtor countries. The U.S. Treasury
and State Department are members of the organization and
represent the interests of all U.S. agencies that hold international
debt. In FY 2014 and FY 2013, no countries and two countries,
respectively, received Paris Club treatment of their debt owed to
Ex-Im Bank (Exhibit 13).
64 I 2014 ANNUAL REPORT I 65
After over a decade of intermittent discussions, The Paris Club
reached an agreement with Argentina in FY 2014 on a plan
to clear Argentina’s outstanding debt. This agreement was
negotiated with Paris Club creditors similar to a traditional Paris
Club agreement. Argentina agreed to repay Ex-Im Bank the
full outstanding principal, interest, and late interest of $562.2
million at renegotiated terms. This agreement remains to be
implemented by the Paris Club.
EXHIBIT 13: PARIS CLUB BILATERAL AGREEMENTS
(in thousands) FY 2014 FY 2013
Country Principal Forgiven Principal Forgiven
Guinea $– $6,049.0
Cote d’Ivoire – 98,876.0
Total – 104,925.0
VII. PORTFOLIO-RISK RATING SYSTEM
AND RISK PROFILE
The Interagency Country Risk Assessment System
(ICRAS)
OMB established the Interagency Country Risk Assessment
System (ICRAS) to provide a framework for uniformly measuring
the costs of the U.S. government’s international credit programs
across the various agencies that administer them. To operate this
framework, OMB chairs an interagency working group composed
of the agencies with international loan programs, as well as the
Departments of State and U.S. Treasury, the Federal Deposit
Insurance Corp. and the Federal Reserve Board. In addition, OMB
consults annually with the Congressional Budget Office.
The ICRAS methodology determines both the risk levels for
lending to sovereign governments and non-sovereign borrowers.
One of OMB’s key goals in developing this system was to
pattern ICRAS after systems in the private sector. Therefore
ICRAS adopts similar ratings and rating methodologies as the
private rating agencies, such as Moody’s, Standard & Poor’s and
Fitch IBCA.
Risk Ratings
ICRAS rates every country to which U.S. government agencies
have outstanding loans or loan guarantees or are anticipating
making new credits available. ICRAS rates countries on the basis
of economic, political and social variables. There are 11 sovereign
and nine non sovereign risk categories and each country receives
two ratings: a sovereign-risk rating and a non-sovereign-risk
rating. ICRAS currently has risk ratings for 201 sovereign and 203
non-sovereign markets.
ICRAS rates countries on the basis of economic, political and
social variables. Throughout the rating process analysts use
private-sector ratings as one of the benchmarks for determining
the ICRAS rating in keeping with the principle of congruence to
private ratings. When ICRAS ratings significantly deviate from
Moody’s, S&P’s, Fitch IBCA’s or OECD ratings, the reasoning is
substantiated in an ICRAS paper and is the subject of interagency
discussion. This presumption serves as a key reference point
throughout the ICRAS process.
The ratings are based, in general, on a country’s (1) ability to
make payments, as indicated by relevant economic factors
and (2) willingness to pay, as indicated by payment record and
political and social factors. Four categories, ratings 1 through 4,
are roughly equivalent to “creditworthy” or “investment grade”
private bond ratings. Three categories, ratings 9 to 11, are
for countries either unable to pay fully, even with extended
repayment periods, or currently unwilling to make a good faith
effort. In between are categories reflecting various degrees of
potential or actual payment difficulties.
ICRAS Default Estimates
Ex-Im Bank has established cash flow models for expected
defaults, fees and recoveries to estimate the credit loss for each
approved credit. For new authorizations in FY 2014 and FY 2013,
the models incorporated Ex-Im Bank’s actual historical loss and
recovery experience.
Exposure Risk Profile
In accordance with the risk rating system detailed above, Ex-Im
Bank classifies credits into 11 risk categories, with level 1 being
the lowest risk. Ex-Im Bank generally does not authorize new
credits that would be risk-rated worse than level 8. On this scale,
level 3 is approximately equivalent to Standard and Poor’s BBB,
level 4 approximates BBB-, and level 5 approximates BB. In
addition, certain credits and capitalized interest included in gross
loans receivable are reserved at 100 percent.
The increase in the new authorization weighted-average risk
rating is primarily related to the increase in demand for Ex-Im
Bank-supported financing among higher risk-rated obligors.
The overall weighted-average risk rating for FY 2014 short-term
rated, medium-term, and long-term export-credit authorizations
was 4.09 compared to a weighted-average risk rating of 3.88 in
FY 2013 and 3.71 on average for the last five years. For FY 2014,
63.2 percent of Ex-Im Bank’s short-term rated, medium-term,
and long-term new authorizations were in the level 1 to 4 range
(AAA to BBB-) while 25.8 percent were rated level 5 to 8
(BB+ to B-).
Exhibit 14 shows the risk profile of Ex-Im Bank’s short-term
rated, medium-term, and long-term authorizations in FY 2014 and
FY 2013 and the past five-year average-risk profile.
66 I
EXPORT-IMPORT BANK of the UNITED STATES
Weighted-Average
Risk Level
1
2
3
4
5
6
7
Fiscal Year 2010 2011 2012 2013 2014
Total Exposure 4.13 3.87 3.66 3.70 3.75
New Business 3.87 3.81 3.23 3.88 4.09
EXHIBIT 14: SHORT-TERM RATED, MEDIUM-TERM, AND LONG-TERM AUTHORIZATIONS BY RISK CATEGORY
0
5
10
15
20
25
30
35
Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 Level 9 Level 10
2013 2.50% 12.67% 31.36% 16.64% 24.62% 9.80% 1.96% 0.43% 0.01% 0.01%
2014 1.82% 11.04% 33.45% 13.35% 14.23% 23.21% 2.05% 0.82% 0.02% 0.00%
5 year average 3.48% 18.44% 25.94% 18.84% 19.20% 11.74% 1.63% 0.73% 0.01% 0.01%
Risk Level Category
Percentage of Short-Term Rated, Medium-Term
and Long-Term Authorizations
Changes in the Portfolio-Risk Level
At September 30, 2014, Ex-Im Bank had a portfolio exposure
of $112,007.8 million of loans, guarantees, insurance and
outstanding claims receivable. Exhibit 15 shows the weighted–
average risk rating for new authorizations and the outstanding
portfolio over the past five fiscal years. The new business risk
rating includes all short-term rated, medium-term, and long-term
transactions authorized in each respective fiscal year and reflects
the weighted-average risk rating for these authorizations. The
outstanding portfolio includes new business transactions and the
existing portfolio risk-rated at the end of each fiscal year.
The risk rating for the outstanding portfolio remained fairly
constant at 3.75 in FY 2014 as compared to 3.70 in FY 2013
(Exhibit 15).
EXHIBIT 15: CREDIT-QUALITY RISK PROFILE
VIII. RESULTS OF OPERATIONS
Ex-Im Bank reports under generally accepted accounting
principles in the United States applicable to federal agencies
(government GAAP) and in accordance with form and content
guidance provided in OMB Circular A-136, Financial Reporting
Requirements
, revised as of September 18, 2014. Under
government GAAP standards, the Bank reported total net excess
program costs over revenue of $526.1 million for the year ended
September 30, 2014, and $539.9 million for the year ended
September 30, 2013. The Statement of Net Cost does not
provide an assessment of Ex-Im Bank’s operational performance.
As mentioned, this statement is set up to present expenditures
of funds for programs, assuming federal agencies do not earn
excess fees or profit. Refer to explanation of Statement of Net
Cost in section Statement of Net Cost below.
Although the Bank may on occasion receive appropriations
when it is determined that additional funds are needed through
the credit loss re-estimate of the Bank’s existing portfolio, the
Bank no longer receives annual appropriations from Congress
to cover administrative costs and program costs for new loan,
guarantee and insurance authorizations. Instead, the Bank covers
these costs from the fees collected on a cash basis (offsetting
collections) from the Bank’s credit program customers. Fees
collected are first used to cover the costs of the Bank’s loan,
guarantee, and insurance programs by setting aside prudent
reserves for credit losses. Fees collected in excess of those set
aside for reserves (offsetting collections) are then used to cover
administrative and program costs up to limits set by Congress.
The disposition of fees collected in excess of amounts set aside
for administrative and program costs are determined by the
Bank’s annual appropriation act passed by the U.S. Congress.
Ex-Im Bank continues to devote time and resources in exploring
ways to reduce credit subsidy expenses or program cost, which
are on track to reach zero subsidies in FY 2015.
66 I 2014 ANNUAL REPORT I 67
In FY 2014, Ex-Im Bank collected $800.2 million in offsetting
collections, of which $105.0 million was used to cover
administrative expense obligations, $10.0 million was retained
and is available for obligation until September 30, 2017, $10.5
million to cover the ongoing renovations to Bank Headquarters,
and $674.7 million was sent to the U.S. Treasury. Program
costs of $8.7 million were obligated from available funds carried
over from prior years. $23.0 million was sent to Treasury in a
rescission.
In FY 2013, Ex-Im had $1,254.8 million in offsetting collections,
of which $89.9 million was used to cover administrative-expense
obligations, $108.0 million was retained and is available for
obligation until September 30, 2016, and $1,056.9 million was
sent to the U.S. Treasury. Program costs of $34.1 million were
obligated from available funds carried over from prior years.
$400.0 million was sent to Treasury in a rescission.
The receipt of appropriations through the re-estimate process
and the transfer of excess offsetting collections to the U.S.
Treasury are governed by separate processes and different
statutory requirements. The credit loss re-estimate applies to the
entire portfolio, and, if necessary, funds required for an upward
re-estimate are provided by specific appropriations pursuant to
the FCRA. New obligations made in the current fiscal year for
administrative and program costs are covered by fee collections
and the use and restriction of those collections is defined in the
Bank’s annual appropriations acts and frequently results in the
transfer of some offsetting collections to the U.S. Treasury.
Significant Financial Data
Exhibit 16 presents certain financial data from the Balance
Sheets and the Statements of Net Costs. This financial data is
highlighted due to a significant change (10 percent or more) and/
or significant dollar difference between the applicable periods for
FY 2014 and FY 2013. More detailed financial information can be
found in the financial statements and notes.
EXHIBIT 16: SIGNIFICANT FINANCIAL DATA
(in millions)
Balance Sheets FY 2014 FY 2013
Fund Balance with the U.S. Treasury $4,058.6 $3,387.0
Loans Receivable, Net 19,284.4 16, 4 47. 5
Receivables from Subrogated Claims, Net 207. 3 247.0
Other Assets 28.6 33.7
Borrowings from the U.S. Treasury 21,633.6 18,101.8
Payment Certificates 21.4 33.1
Claims Payable 2.2 12.5
Other Liabilities 216.2 263.6
Statements of Net Costs
Fee & Other Income $566.6 $47 7.0
Insurance Premium & Other Income 36.4 48.0
Balance Sheet
Ex-Im Bank follows generally accepted accounting principles in
the United States applicable to federal agencies (government
GAAP) and OMB guidance when preparing its financial
statements and related footnotes. This guidance is set up around
receiving appropriations and use of funds for programs.
In FY 2014, Ex-Im Bank had a negative Net Position in the
Balance Sheet of $1,030.5 million. The main variable impacting
Ex-Im’s Net Position is the Cumulative Results of Operations,
which represent distribution of funds to the U.S. Treasury rather
than the results of operational activities. The Federal Credit
Reform Act of 1990 requires federal agencies to transfer excess
funds to the U.S. Treasury
Most of Ex-Im Bank’s funds transfers to the U.S. Treasury are
in the form of dividends declared and paid, liquidating account
transfers, excess fees, and net reestimate. Prior to 1992, Ex-Im
Bank declared and paid dividends to the U.S. Treasury that
totaled $1.1 billion. Additionally, since Credit Reform Act of 1990,
which took effect in 1992, Ex-Im has sent a net $6.9 billion to
the U.S. Treasury, which includes $813 million from its liquidating
accounts to the US Treasury and has sent a net total of $11.0
billion in downward reestimate to the US Treasury. Ex-Im has
also transferred to Treasury $2.7 billion in excess fees (negative
subsidy). These dividends and transfers are accounted as a
reduction of Cumulative Results of Operations, resulting in the
negative Cumulative Results of Operations of $2,244.9 million.
Fund Balance with the U.S. Treasury: The Fund Balance
with the U.S. Treasury increased by $671.6 million from
$3,387.0 million at September 30, 2013 to $4,058.6 million
at September 30, 2014. The change is primarily attributed to
approximately $1,887.4 million in loan principal repayments,
interest, and guarantee fee collections, $3,531.8 million in net
borrowings from Treasury, and $671.6 million in exposure fee
collections; and $492.5 million received for the FY 2013 net
credit-loss reserve re-estimate. This is offset by $4,513.5 million
in direct-loan disbursements, $549.2 million in net Treasury
interest expense, a rescission of $23.0 million and the transfer of
$674.7 million in offsetting collections to the U.S. Treasury.
Loans Receivable, Net: Loans Receivable increased $2,836.9
million from $16,447.5 million at September 30, 2013 to
$19,284.4 million at September 30, 2014 primarily as a result of
$4,513.5 million in direct loan disbursements, offset by a $241.4
million decrease in allowance of doubtful accounts and $1,575.5
million of direct loan repayments.
Receivables from Subrogated Claims, Net: Receivables
from Subrogated Claims, Net decreased $39.7 million from
$247.0 million at September 30, 2013 to $207.3 million at
68 I
EXPORT-IMPORT BANK of the UNITED STATES
Ex‑Im Bank paid
$40.3m
in claims
on a $112.0 billion portfolio.
September 30, 2014. The decrease is related to claim recoveries
exceeding claim payments.
Other Assets: Other Assets decreased $5.1 million from $33.7
million at September 30, 2013 to $28.6 million at September 30,
2014. The change mostly relates to a decrease in commitment
fee receivable.
Borrowings from the U.S. Treasury: Borrowings from the
U.S. Treasury increased $3,531.8 million from $18,101.8 million
at the end of FY 2013 to $21,633.6 million as of September 30,
2014. The increase is attributable to additional borrowings used to
fund direct loans.
Payment Certificates: Payment Certificates decreased $11.7
million from $33.1 million at the end of FY 2013 to $21.4 million
as of September 30, 2014. The decrease is mostly due to the
payment certificates repayments.
Claims Payable: Claims Payable decreased $10.3 million
from $12.5 million at September 30, 2013, to $2.2 million at
September 30, 2014. The decreasing balance in more reflective of
a timing issue than an identifiable trend.
Other Liabilities: Other Liabilities decreased $47.5 million
from $263.6 million at September 30, 2013 to $216.2 million
at September 30, 2014. The change is mostly related to the
reduction of fees deferred and funds received pending application.
Statement of Net Cost
As mentioned, Ex-Im Bank’s Statement of Net Costs follows
generally accepted accounting principles in the United States
applicable to federal agencies. This government GAAP statement
is set up to present expenditures of funds for programs hence
the name Net Costs, associated cash flows, and assumes federal
agencies do not earn excess fees or profits. Ex-Im Bank’s net
excess cost over revenue for FY 2014 was $526.1 million.
The Statement of Net Cost does not provide an assessment of
Ex-Im Bank’s operational performance. Operationally, Ex-Im Bank
earned $800.2 million in offsetting collections after setting funds
aside for credit loss reserves. Of these amounts, $674.7 million
was sent to the U.S. Treasury. The remaining funds were used
to cover administrative and program expenses. The Statement of
Net Cost is set up to present expenditures of funds for programs,
assuming federal agencies do not earn excess fees or profit. The
excess fees and the interest the Bank collects flow through the
Statement of Net Cost. However, they have no impact on the
bottom line. All fees, including those in excess of the requirement
for loan loss reserves, are fully offset at the Provision for Credit
Losses in this statement. This happens whether or not Ex-Im is
collecting excess fees (offsetting collections). Additionally, when
these excess fees are sent to the U.S. Treasury, they do not have
an impact on the Statement of Net Cost and only flow through
the Balance Sheet, through the Cumulative Results of Operations
line as discussed above.
Fees & Other Income: Fees and Other Income increased
$89.6 million from $477.0 million as of September 30, 2013
to $566.6 million in the same period in FY 2014. The change
represents activity resulting from increased levels of loan,
guarantee and insurance authorizations over the past few years.
Insurance Premium & Other Income: Insurance Premium
and Other Income decreased $11.7 million from $48.0 million
as of September 30, 2013 to $36.4 million in the same period in
FY 2014. This was due to a decrease in authorizations.
Significant Factors Influencing Financial Results
The most significant factor that determines Ex-Im Bank’s
financial results and condition is a change in the risk level of
Ex-Im Bank’s loan, guarantee and insurance portfolio, and the
adjustment to the allowance for credit losses that must be made
to reflect the change in risk. The level of risk of individual credits
or groups of credits may change in an unexpected manner as
a result of international financial, economic and political events.
Consequently, significant and unanticipated changes in Ex-Im
Bank’s allowance for credit losses may occur in any year.
The major risks to the Bank in its credit portfolio are repayment
risk and market risk. Other risks the Bank must assess and
attempt to minimize are strategic risk, operational risk, and
legal risk.
Repayment Risk: In fulfilling its mission to support U.S. jobs
by facilitating the export of U.S. goods and services, by providing
competitive export financing, and ensuring a level playing field
for U.S. goods and services in the global marketplace, Ex-Im
Bank must balance the risks associated with assuming credit
and country risks that the private sector is unable or unwilling
68 I 2014 ANNUAL REPORT I 69
to accept with the requirement of reasonable assurance of
repayment for its credit authorizations. Repayment risk is the risk
that a borrower will not pay according to the original agreement
and the Bank may eventually have to write-off some or all of the
obligation. Repayment risk is primarily composed of:
Credit Risk: The risk that an obligor may not have sufficient
funds to service its debt or may not be willing to service its
debt even if sufficient funds are available.
Country Risk: The risk that payment may not be made to
the Bank, its guaranteed lender, or its insured as a result of
expropriation of the obligor’s property, war, or inconvertibility
of the borrower’s currency into U.S. dollars.
Market Risk: Risks stemming from the nature of the markets
in which the Bank operates. Principal components of market
risk are:
Concentration Risk: Risks from the composition of the
credit portfolio as opposed to risks related to specific obligors.
The Bank has the following concentration risks:
Industry: The risk that events could negatively impact not
only one company but many companies simultaneously
in the same industry. The Bank’s credit exposure is highly
concentrated by industry: 77.6 percent of the Bank’s
credit portfolio is in three industries (air transportation,
manufacturing, and oil and gas), with air transportation
representing 45.2 percent of the Bank’s total exposure.
Events impacting these industries are frequently
international in nature and may not be confined to a
specific country or geographic area.
Geographic Region Concentration: The risk that
events could negatively impact not only one country but
many countries simultaneously in an entire region. The
Bank’s credit exposure is concentrated by geographic
region, with 59.1 percent of the portfolio contained in two
geographic regions: Asia (41.1 percent) and Latin America
and Caribbean (18.0 percent).
Obligor Concentration: The risk stemming from portfolio
concentration with one or a few obligors such that a
default by one or more of those borrowers will have a
disproportionate impact. The Bank’s 10 largest public-
sector obligors make up 17.1 percent of its portfolio,
and the 10 largest private-sector obligors make up
23.5 percent.
Foreign‑Currency Risk: Risk stemming from an appreciation
or depreciation in the value of a foreign currency in relation
to the U.S. dollar in Ex-Im Bank transactions denominated in
that foreign currency. At the time of authorization, Ex-Im Bank
does not hedge its foreign-currency exposure; however, when
the Bank pays claims under foreign-currency guarantees, the
notes are converted from a foreign-currency obligation to a U.S.
dollar obligation. The obligor must then repay to Ex-Im Bank the
balance in U.S. dollars. This converts the foreign-currency loan to
a dollar loan at that point, thereby eliminating any further foreign-
exchange risks.
Ex-Im Bank provides support for guarantees and insurance
denominated in certain foreign currencies. The foreign currencies
approved for Ex-Im Bank transactions as of September 30, 2013
are: Australian dollar, Brazilian real, British pound, Canadian dollar,
CFA franc, Chinese yuan, Colombian peso, Egyptian pound, euro,
Hong Kong dollar, Indian rupee, Indonesian rupiah, Japanese yen,
Korean won, Malaysian ringgit, Mexican peso, Moroccan dirham,
New Zealand dollar, Norwegian krone, Pakistani rupee, Philippine
peso, Polish zloty, Russian ruble, Singapore dollar, South African
rand, Swedish krona, Swiss franc, Taiwanese dollar, Thai baht,
UAE dirham. At the time of authorization, Ex-Im Bank records the
authorization amount as the U.S.-dollar equivalent of the foreign-
currency obligation based on the exchange rate at that time.
Interest Rate Risk:
Ex-Im Bank makes fixed-rate loan
commitments prior to borrowing to fund loans and takes the risk
that it will have to borrow the funds at an interest rate greater
than the rate charged on the credit. To mitigate the interest rate
risk, Ex-Im charges at least 100 basis points over borrowing costs
and generally fixed the interest rates at the time of disbursement.
Operational Risk: Operational risk is the risk of material
losses resulting from human error, system deficiencies and
control weaknesses. To mitigate the risk of loss stemming from
operational dysfunctions, Ex-Im Bank has established a strong
internal control environment that is reviewed by an independent
internal auditor and has included process documentation, proper
supervisory monitoring and technology access/edit controls.
Ex-Im Bank also has an Office of Inspector General that conducts
audits, inspections and investigations relating to the Bank’s
program and support operations.
IX. OTHER MANAGEMENT INFORMATION
Statutory Limitations
Ex-Im Bank has several significant financial limitations that are
contained in its charter and in various appropriation acts. The
following exhibits (Exhibit 17 and Exhibit 18) summarize the
status of those limitations as of September 30, 2014 as well as
the utilization of available funding.
70 I
EXPORT-IMPORT BANK of the UNITED STATES
EXHIBIT 17: FINANCIAL STATUTORY LIMITATIONS
Spending Authority
Program
Budget
No-Year Funds
(including
Tied-Aid)
Administrative
Expense
(including OIG)
Carry-Over from prior year $85.8 $214.5 $1.9
Rescission of Carry-Over Funds (23.0) – –
Cancellations During FY 2014 8.5 0.3 –
Osetting Collections 10.0 36.8 105.6
Inspector General N/A N/A 5.1
Total $81.3 $251.6 $112.6
Obligated $8.7 $21.40 $110.5
Unobligated Balance Lapsed 0.7 – 0.3
Unobligated Balance Available $71.9 $230.2 $1.8
Available Obligated Balance
Statutory Lending Authority $140,000.0 $112,007.8 $2 7,9 9 2 .2
Tied-aid is government-to-government concessional financing
of public-sector capital projects in developing countries. Tied-aid
terms usually involve total maturities longer than 20 years, lower-
than-market interest rates and/or direct grants.
EXHIBIT 18: PROGRAM BUDGET (EXCLUDING TIED AID)
AVAILABLE AND UTILIZED
(in millions)
0
$200
$400
$600
$800
$1,000
2010
$541.6
$44.0
2011
$838.7
$68.1
2012
$487.9
$72.1
2013
$197.9
$34.1
2014
$303.9
$8.7
Available
Utilized
X. LIMITATIONS OF THE FINANCIAL STATEMENTS
The financial statements have been prepared to report the
financial position and results of operations of Ex-Im Bank,
pursuant to the requirements of 31 U.S.C. 3515 (b). While the
statements have been prepared from the books and records
of Ex-Im Bank in accordance with government GAAP 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 understanding that
they are prepared for a component of the U.S. government,
a sovereign entity.
XI. REQUIRED SUPPLEMENTARY INFORMATION
Exhibit 19 presents the Statement of Budgetary Resources by
Ex-Im Bank’s major budget accounts.
Improper Payments Elimination and Recovery Act
The Improper Payments Elimination and Recovery Act (IPERA)
of 2010 (P.L. No. 111-204) requires agencies to review their
programs and activities to identify those susceptible to significant
improper payments. In accordance with the Improper Payments
Information Act of 2002 (IPIA), Ex-Im Bank assessed its risk of a
significant erroneous payment (defined for this purpose as annual
erroneous payments in a program exceeding both 2.5 percent of
the program payments and $10 million or $100 million, regardless
of the improper payment percentage of total program outlays). The
scope of this assessment included all program payments. For this
purpose the term “payment” is defined as any payment that is:
• A payment or transfer of funds (including a commitment
for future payment, such as cash, securities, loans, loan
guarantees, and insurance subsidies) to any non-federal person
or entity.
• Made by a federal agency, a federal contractor, federal grantee,
or a governmental or other organization administering a federal
program or activity.
Ex-Im Bank identified three areas of payments which qualify
under the above definition and therefore, warranted a risk
assessment: administrative payments, claim payments, and
loan disbursements. Ex-Im Bank assessed the risk of improper
payments associated with these programs to be low due to its
internal controls in place, the nature of these disbursements, and
the results of an internal risk assessment questionnaire.
The questionnaire includes questions categorized per the
Committee of Sponsoring Organizations of the Treadway
Commission (COSO) Internal Control Framework (control
environment, risk assessment, control activities, information and
communication, and monitoring). Inclusion of the questionnaire
incorporates additional quantitative components into the risk
assessment and incorporates qualitative feedback from senior
management.
The Bank has a strong system of internal controls in place,
along with improved due diligence procedures and increased
oversight by the Bank’s Inspector General, to help prevent
improper payments and to detect them should they occur. Ex-Im’s
preventive and detective controls are part of the routine payment
process. Because this year’s assessment resulted in a low-risk of
improper payments and the amount of known improper payments
70 I 2014 ANNUAL REPORT I 71
EXHIBIT 19: DISAGGREGATED STATEMENT OF BUDGETARY RESOURCES
For the Year Ended September 30, 2014
(in millions)
Program
Account
Direct Loan
Financing
Account
Guaranteed
Loan Financing
Account
Pre-Credit
Refrom Financing
Account Other Total
BUDGETARY RESOURCES
Unobligated Balance, Brought Forward October 1 $541.0 $ — $2,053.5 $0.1 $11.7 $2,606.3
Recoveries of Prior-Year Unpaid Obligations 9.6 715.5 — — 0.1 725.2
Other changes in unobligated balance (1.6) (741.5) — — (0.1) (743.2)
Unobligated Balance From Prior Year Budget Authority, Net 549.0 (26.0) 2,053.5 0.1 11.7 2,588.3
Appropriations 1,413.0 — — — 5.1 1,418.1
Borrowing authority — — — — — —
Borrowing authority Withdrawn — (306.2) — — — (306.2)
Spending Authority from Osetting Collections 151.7 3,333.1 860.9 10.6 (10.1) 4,346.2
Total Budgetary Resources $2,113.7 $3,000.9 $2,914.4 $10.7 $6.7 $8,046.4
STATUS OF BUDGETARY RESOURCES
Obligations incurred $1,580.8 $3,000.9 $1,044.6 $10.7 $5.0 $5,642.0
Unobligated balance, end of year:
Apportioned 271.4 — 1,869.8 — 1.8 2,143.0
Unapportioned 261.4 — — — 261.4
Total Unobligated Balance, End of Year 532.8 — 1,869.8 — 1.8 2,404.4
Total Status of Budgetary Resources $2,113.6 $3,000.9 $2,914.4 $10.7 $6.8 $8,046.4
CHANGE IN OBLIGATED BALANCE
Unpaid obligations, brought forward, October 1 (gross) $115.7 $15,740.3 $12.9 $— $1.4 $15,870.3
Obligations Incurred 1,580.8 3,000.9 1,044.6 10.7 5.0 5,642.0
Outlays (gross) (-) (1,558.7) (5,970.8) (1,054.7)
(10.7) (4.0) (8,598.9)
Recoveries of Prior-Year Unpaid Obligations (9.6) (715.5) — — (0.1) (725.2)
Obligated Balance, End of Year
Unpaid Obligations, End of Year, Gross 128.2 12,054.9 2.8 — 2.3 12,188.2
Uncollected Customer Payments From Federal
Sources, End of Year
$0.0 ($12.9) ($90.2) $0.1 ($103.0)
Total, Unpaid Obligated Balance, Net, End of Period 128.2 12,042.0 (87.4) 0.0 2.4 12,085.2
Budget Authority and Outlays, Net:
Budget Authority, Gross 1,564.7 3,333.1 860.9 10.6 (5.0) 5,764.3
Actual Osetting Collections (151.7) (3,3 47.8) (887. 9) (65.7) (20.5) (4,473.6)
Change in Uncollected Customer Payments From Federal
Sources
— 0.1 22.3 — 0.2 22.6
Budget Authority, Net $1,413.0 $(14.6) $(4.7) $(55.1) $(25.3) $1,313.3
Outlays, Gross $1,558.7 $5,970.8 $1,054.7 $10.7 $4.0 $8,598.9
Actual Osetting Collections (151.7) (3, 347.8) (887.9) (65.7) (20.5) (4,473.6)
Outlays, Net $1,407.0 $2,623.0 $166.8 ($55.0) ($16.5) $4,125.3
was small, the Bank did not establish a formal recapture audit
plan in FY14. However, the Bank actively pursues recovery of
any payment that has been identified as being made improperly.
According to IPIA, as amended by IPERA, Ex-Im Bank will
conduct a risk assessment each year. If the risk assessment
shows an increase in the risk of improper payments in any of the
Bank’s programs, if there is a substantial increase in the amount
of improper payments, and/or if the recovery rate decreases
significantly, the Bank will reevaluate its payment processes
and procedures and determine if it is beneficial for it to pursue
improper payment recoveries and to establish a formal recapture
audit plan, per A-136 Government Accounting Manual guidance.
72 I
EXPORT-IMPORT BANK of the UNITED STATES
MANAGEMENT REPORT ON
Financial Statement and
Internal Accounting Controls
Ex-Im Bank’s management is responsible for the content and integrity of the financial data included in the Bank’s annual report and for
ascertaining that this data fairly presents the financial position, results of operations and cash flows of the Bank.
The Bank’s operations fall under the provisions of the Federal Credit Reform Act of 1990. This law provides that subsidy calculations
must be performed (on a present-value basis) for all new loan, guarantee and insurance commitments, and the resulting cost, if any,
must be covered by budget authority provided by Congress. Credits may not be approved if sufficient budget authority is not available.
The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America
for federal agencies (government GAAP). As explained in more detail in the notes, the financial statements recognize the impact of
credit-reform legislation on the Bank’s commitments. Other financial information related to the Bank included elsewhere in the report
is presented on a basis consistent with the financial statements.
The Bank maintains a system of internal accounting controls that is designed to provide reasonable assurance at reasonable cost that
assets are safeguarded and that transactions are processed and properly recorded in accordance with management’s authorization,
and that the financial statements are accurately prepared. The Bank believes that its system of internal accounting controls
appropriately balances the cost/benefit relationship.
Ex-Im Bank’s Board of Directors pursues its responsibility for the Bank’s financial statements through its Audit Committee. The Audit
Committee meets regularly with management and the independent accountants. The independent accountants have direct access to
the audit committee to discuss the scope and results of their audit work and their comments on the adequacy of internal accounting
controls and the quality of financial reporting.
The Bank believes that its policies and procedures, including its system of internal accounting controls, provide reasonable assurance
that the financial statements are prepared in accordance with provision of applicable laws and regulations .
As required by the Federal Information Security Management Act (FISMA), the Bank develops documents and implements an agency-
wide program to provide information privacy and security (management, operational and technical security controls) for the information
and information systems that support the operations and assets of the agency, including those provided or managed by another
agency, contractor, or other source.
The Bank’s financial statements were audited by independent accountants. Their opinion is printed in this annual report immediately
following the notes to the financial statements.
Fred P. Hochberg
Chairman and President
David M. Sena
Chief Financial Officer
November 14, 2014
72 I 2014 ANNUAL REPORT I 73
Financial Statements
$800.2m
Ex‑Im Bank had $800.2 million
in offsetting collections after
setting funds aside for credit loss
reserves in FY 2014.
FY 2014 Financial Statements:
Balance Sheets 74
Statements of Net Costs 75
Statements of Changes in Net Position 76
Combined Statements of Budgetary Resources 77
Notes to the Financial Statements 78
Independent Auditors’ Report 95
Independent Auditors’ Report on Internal Control 97
74 I
EXPORT-IMPORT BANK of the UNITED STATES
BALANCE SHEETS
(in millions)
As of
September 30, 2014
As of
September 30, 2013
ASSETS
Intragovernmental
Fund Balance with the U.S. Treasury (Note 2) $4,058.6 $3,387.0
Public
Cash (Note 3) — 0.1
Loans Receivable, Net (Note 4A) 19,284.4 16,447. 5
Receivables from Subrogated Claims, Net (Note 4E) 207. 3 247.0
Other Assets (Note 8) 28.6 33.7
Total Assets—Public 19,520.3 16,728.3
Total Assets $23,578.9 $20,115.3
LIABILITIES
Intragovernmental
Borrowings from the U.S. Treasury (Note 10) $21,633.6 $18,101.8
Accounts Payable to the U.S. Treasury 1,115.3 1,201.2
Total Liabilities—Intragovernmental 22,748.9 19,303.0
Public
Payment Certificates (Note 10) 21.4 33.1
Claims Payable 2.2 12.5
Guaranteed Loan Liability (Note 4G) 1,620.7 1,620.8
Other Liabilities (Note 9, 11) 216.2 263.6
Total Liabilities—Public 1,860.5 1,930.0
Total Liabilities $24,609.4 $21,233.0
NET POSITION
Capital Stock $1,000.0 $1,000.0
Unexpended Appropriations 214.4 213.2
Cumulative Results of Operations (2,244.9) (2,330.9)
Total Net Position (1,030.5) (1,117.7)
Total Liabilities and Net Postion $23,578.9 $20,115.3
The accompanying notes are an integral part of the financial statements.
74 I 2014 ANNUAL REPORT I 75
STATEMENTS OF NET COSTS
(in millions) Loans Guarantees Insurance Total
FOR THE YEAR ENDED SEPTEMBER 30, 2014
Costs
Interest Expense $713.1 $— $ — $713.1
Claim Expenses — 3.1 3.2 6.3
Provision for Credit Losses 748.8 270.3 (35.4) 983.7
Broker Commissions — — 5.9 5.9
Total Costs 1,461.9 273.4 (26.3) 1,709.0
Earned Revenue
Interest Income (615.3) (79.4) — (694.7)
Fee and Other Income (72.8) (493.8) — (566.6)
Insurance Premium and Other Income — — (36.4) (36.4)
Total Earned Revenue (688.1) (573.2) (36.4) (1,297.7)
Net Excess of Program Costs over (Revenue) 773.8 (299.8) (62.7) 411.3
Administrative Costs (Note 4K, 14) 114.8
Total Net Excess Program Costs Over (Revenue) $526.1
(in millions) Loans Guarantees Insurance Total
FOR THE YEAR ENDED SEPTEMBER 30, 2013
Costs
Interest Expense $666.9 $ — $— $666.9
Claim Expenses — 4.1 3.5 7.6
Provision for Credit Losses 1,037.4 (76.9) 35.6 996.1
Broker Commissions — — 6.8 6.8
Total Costs 1,704.3 (72.8) 45.9 1,67 7.4
Earned Revenue
Interest Income (633.2) (94.8) — (728.0)
Fee and Other Income (68.0) (409.0) — (47 7.0)
Insurance Premium and Other Income — — (48.0) (48.0)
Total Earned Revenue (701.2) (503.8) (48.0) (1,253.0)
Total Net Excess Program Costs Over (Revenue) 1,003.1 (576.6) (2.1) 424.4
Administrative Costs (Note 4K, 14) 115.5
Total Net Excess Program Costs Over (Revenue) $539.9
The accompanying notes are an integral part of the financial statements.
76 I
EXPORT-IMPORT BANK of the UNITED STATES
STATEMENTS OF CHANGES IN NET POSITION
(in millions) Capital Stock
Unexpended
Appropriations
Cumultative Results
of Operations Total
FOR THE YEAR ENDED SEPTEMBER 30, 2014
Beginning Net Position $1,000.0 $213.2 ($2,330.9) ($1,117.7)
Budgetary Financing Sources (Uses)
Appropriations Received - Inspector General - 5.1 - 5.1
Appropriations Received - Reestimate - 1,436.0 - 1,436.0
Cancelled Authority - (0.9) - (0.9)
Transfer Out Without Reimbursement - - (958.3) (958.3)
Other Adjustments - 0.7 (1.7) (1.0)
Appropriations Used - (1,439.7) 1,439.7 -
Osetting Collections - - 128.6 128.6
Other Financing Sources
Imputed Financing - - 3.8 3.8
Total Financing Sources (Uses) - 1.2 612.1 613.3
Adjusted Net Position 1,000.0 214.4 (1,718.8) (504.4)
Less: Excess of Program Costs Over Revenue - - 526.1 526.1
Ending Net Position $1,000.0 $214.4 ($2,244.9) ($1,030.5)
(in millions) Capital Stock
Unexpended
Appropriations
Cumultative Results
of Operations Total
FOR THE YEAR ENDED SEPTEMBER 30, 2013
Beginning Net Position $1,000.0 $212.9 ($1,975.9) ($763.0)
Budgetary Financing Sources (Uses)
Appropriations Received - Inspector General 4.0 - 4.0
Appropriations Received - Reestimate - 1,024.5 - 1,024.5
Cancelled Authority - (2.3) - (2.3)
Transfer In - Debt Reduction Financing - - - -
Transfer Out Without Reimbursement - - (1,001.3) (1,001.3)
Other Adjustments - 3.2 4.3 7. 5
Appropriations Used - (1,029.1) 1,029.1 -
Osetting Collections - - 149.3 149.3
Other Financing Sources
Imputed Financing - - 3.5
3.5
Total Financing Sources (Uses) - 0.3 184.9 185.2
Adjusted Net Position 1,000.0 213.2 (1,791.0) (577.8)
Less: Excess of Program Costs Over Revenue - - 539.9 539.9
Ending Net Position $1,000.0 $213.2 ($2,330.9) ($1,117.7)
The accompanying notes are an integral part of the financial statements.
76 I 2014 ANNUAL REPORT I 77
COMBINED STATEMENTS OF BUDGETARY RESOURCES
For the Year Ended September 30, 2014 For the Year Ended September 30,2013
Non-Budgetary
Credit Reform
Financing
Non-Budgetary
Credit Reform
Financing
(in millions) Budgetary Account Total Budgetary Account Total
Budgetary Resources:
Unobligated Balance Brought Forward, October 1 $542.8 $2,063.5 $2,606.3 $857. 7 $1,409.3 $2,267.0
Recoveries of Prior Year Unpaid Obligations 9.7 715.5 725.2 12.8 1,419.5 1,432.3
Other Changes in Unobligated Balance (1.6) (741.6) (743.2) (2.4) (959.1) (961.5)
Unobligated Balance From Prior Year Budget Authority, Net 550.9 2 ,037.4 2,588.3 868.1 1,869.7 2,737.8
Appropriations (discretionary and mandatory) 1,418.1 — 1,418.1 628.3 — 628.3
Borrowing Authority (discretionary and mandatory) (Note 16) — — — — 5,746.9 5,746.9
Borrowing Authority Withdrawn — (306.2) (306.2) — — —
Spending Authority From Osetting Collections (discretionary
and mandatory)
162.2 4,184.0 4,346.2 242.9 3,495.2 3,738.1
Total Budgetary Resources (Note 16) $2,131.2 $5,915.2 $8,046.4 $1,739.3 $11,111.8 $12,851.1
Status of Budgetary Resources:
Obligations Incurred (Note 16) $1,596.5 $4,045.5 $5,642.0 $1,196.5 $9,048.3 $10,244.8
Unobligated Balance, End of Year:
Apportioned 273.3 1,869.7 2,143.0 283.8 2,063.5 2,347.3
Unapportioned 261.4 — 261.4 259.0 — 259.0
Total Unobligated Balance, End of Year (Note 16) 534.7 1,869.7 2,404.4 542.8 2,063.5 2,606.3
Total Status of Budgetary Resources $2,131.2 $5,915.2 $8,046.4 $1,739.3 $11,111.8 $12,851.1
Change in Obligated Balance:
Unpaid Obligations, Brought Forward, October 1 $117.1 $15,753.2 $15,870.3 $119.3 $17,231.6 $17,350.9
Obligations Incurred 1,596.5 4,045.5 5,642.0 1,196.5 9,048.3 10,244.8
Outlays (Gross) (1,573.3) (7,025.6) (8,598.9) (1,185.9) (9,107. 2) (10,293.1)
Recoveries of Prior Year Unpaid Obligations (9.7) (715.5) (725.2) (12.8) (1,419.5) (1,432.3)
Unpaid Obligations, End of Year 130.6 12 ,057.6 12,188.2 117.1 15,753.2 15,870.3
Uncollected Payments:
Uncollected payments, Federal sources brought forward, Oct 1 — (125.6) (125.6) — (141.7) (141.7)
Change in uncollected payments, Federal sources — 22.6 22.6 — —
Actual transfers, uncollected payments, Federal sources (net) — — — — 16.1 16.1
Uncollected Customer Payments From Federal Sources, End
of Year
— (103.0) (103.0) — (125.6) (125.6)
Memorandum (non-add) entries
Obligated balance, start of year $117.1 $15,627.6 $15,744.7 $119.3 $17,089.9 $17,209.2
Obligated Balance, End of Year, Net $130.6 $11,954.6 $12,085.2 $ 117.1 $15,627.6 $15,870.3
Budget Authority and Outlays, Net:
Budget Authority, Gross (discretionary and mandatory) $1,580.3 $4,184.0 $5,764.3 $871.1 $9,241.9 $10,113.0
Actual Osetting Collections (discretionary and mandatory) (2 17. 3) (4,256.3) (4,473.6) (263.3) (3,550.0) (3,813.3)
Change in Uncollected Customer Payments From Federal
Sources (discretionary and mandatory)
— 22.6 22.6 — 16.1 16.1
Anticipated osetting collections (discretionary and mandatory) — — — — — —
Budget Authority, Net (discretionary and mandatory) $1,363.0 ($49.7) $1,313.3 $607. 8 $5,708.0 $6,315.8
Outlays, Gross (discretionary and mandatory) $1,573.3 $7,025.6 $8,598.9 $1,185.9 $9,107. 2 $10,293.1
Actual Osetting Collections (discretionary and mandatory) (2 17. 3) (4,256.3) (4,473.6) (263.3) (3,550.0) (3,813.3)
Outlays, Net (discretionary and mandatory) $1,356.0 $2,769.3 $4,125.3 $922.6 $ 5, 557. 2 $6,479.8
The accompanying notes are an integral part of the financial statements.
78 I
EXPORT-IMPORT BANK of the UNITED STATES
EXPORT-IMPORT BANK OF THE UNITED STATES
Notes to the
Financial Statements
For the Years Ended September30, 2014 and September30, 2013
1. SUMMARY OF SIGNIFICANT ACCOUNTING AND
REPORTING POLICIES
Enabling Legislation and Mission
The Export-Import Bank of the United States (Ex-Im Bank or the
Bank) is an independent executive agency and a wholly owned
U.S. government corporation that was first organized as a District
of Columbia banking corporation in 1934. Ex-Im Bank is the
official export-credit agency of the United States. Ex-Im Bank’s
operations subsequent to September 30, 1991, are subject
to the provisions of the Federal Credit Reform Act (FCRA) of
1990 (P.L. 101-508), which became effective October 1, 1991.
The Export-Import Bank Reauthorization Act of 2012 extended
the Bank’s charter until September 30, 2014. In accordance
with its enabling legislation, continuation of Ex-Im Bank as an
independent corporate agency of the United States is subject to
periodic extensions granted by Congress. The Administration has
requested a five-year extension of the Bank’s charter through
FY 2019. Congressional authorization has been temporarily
extended through June 30, 2015. Management believes that
Ex-Im Bank’s authorization will be further extended until a final
authorization is passed by Congress. If the charter is temporarily
not extended, the Bank will not be able to authorize new credits;
however, under the terms of its charter the Bank will continue to
service existing loans, guarantees, and insurance policies. Ex-Im
is currently appropriated through a continuing resolution through
December 11, 2014 and management expects Ex-Im Bank will
receive a full year appropriation when Congress approves an
Omnibus Appropriations Bill funding the entire U.S Government
Ex-Im Bank’s mission is to support U.S. jobs by facilitating the
export of U.S. goods and services, by providing competitive
export financing, and ensuring a level playing field for U.S. goods
and services in the global marketplace. Ex-Im Bank supports U.S.
exports by providing export financing through its loan, guarantee
and insurance programs in cases where the private sector is
unable or unwilling to provide financing or when such support is
necessary to level the playing field due to financing provided by
foreign governments to their exporters that compete with U.S.
exporters. The Bank’s charter requires reasonable assurance
of repayment for the transactions it authorizes, and the Bank
closely monitors credit and other risks in its portfolio. In pursuit
of its mission of supporting U.S. exports, Ex-Im Bank offers
four financial products: direct loans, loan guarantees, working
capital guarantees and export credit insurance. All Ex-Im Bank
obligations carry the full faith and credit of the U.S. government.
Loans and guarantees extended under the medium-term loan
program typically have repayment terms of one to seven years,
while loans and guarantees extended under the long-term loan
program usually have repayment terms in excess of seven
years. Generally, both the medium-term and long-term loan and
guarantee programs cover up to 85 percent of the U.S. contract
value of shipped goods.
Under the Working Capital Guarantee Program, Ex-Im Bank
provides repayment guarantees to lenders on secured, short-
term working capital loans made to qualified exporters. The
working capital guarantee may be approved for a single loan or a
revolving line of credit. Ex-Im Bank’s working capital guarantee
protects the lender from default by the exporter for 90 percent
of the loan principal and interest. Ex-Im Bank’s Supply Chain
Finance Guarantee Program (SCF Program) is designed to
support U.S. exporters and their U.S. based suppliers many of
whom are small and medium sized companies. Under the SCF
Program, lenders will purchase accounts receivable owned by the
suppliers and due from the exporter. Ex-Im Bank provides a 90
percent guarantee on the repayment obligation of the exporter.
The purchase of accounts receivable allows suppliers to receive
immediate payment of their outstanding invoices, decreases their
cost of financing, and enables them to better fulfill new orders
and maintain and/or add jobs. The exporters benefit by having
the option to extend payment terms without imposing undue
financial hardship on their suppliers.
78 I 2014 ANNUAL REPORT I 79
Ex-Im Bank’s export-credit insurance policies help U.S. exporters
sell their goods overseas by protecting them against the risk
of foreign-buyer or other foreign-debtor default for political
or commercial reasons, allowing them to extend credit to
their international customers. Insurance policies may apply to
shipments to one buyer or many buyers, insure comprehensive
(commercial and political) credit risks or only political risks, and
cover short-term or medium-term sales.
Basis of Accounting
The format of the financial statements and footnotes is in
accordance with form and content guidance provided in Office
of Management and Budget (OMB) Circular A-136, Financial
Reporting Requirements
, revised as of September 18, 2014.
Use of Estimates
The preparation of financial statements requires management
to make estimates and assumptions that affect the reported
amounts of assets, liabilities, and net position and disclosure
of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and costs
during the reporting period. The most significant of these
estimates are the allowances for losses on loans receivable,
subrogated claims receivable, and guarantees and insurance.
Ex-Im Bank uses its historical default and recovery experience
to calculate loss estimates. Actual results may differ from those
estimates.
Loans Receivables, Net
Loan obligations are carried at principal and interest receivable
amounts less an allowance for credit losses.
From time to time, Ex-Im Bank extends the repayment date and
may modify the interest rate of some or all principal installments
of a loan because the obligor or country has encountered financial
difficulty and Ex-Im Bank has determined that providing relief in
this manner will enhance the ability to collect the loan.
Receivables from Subrogated Claims, Net
Receivables from subrogated claims represent the outstanding
balance of payments that were made on claims that were
submitted to Ex-Im Bank in its capacity as guarantor or insurer
under Ex-Im Bank’s export guarantee or insurance programs.
Receivables from subrogated claims are carried at principal and
interest receivable amounts less an allowance for claim losses.
Under the subrogation clauses in its guarantee and insurance
contracts, Ex-Im Bank receives all rights, title and interest in
all amounts relating to claims paid under insurance policies
and guarantees and therefore establishes an asset to reflect
such rights.
Accrued Interest
Interest is accrued on loans and claims as it is earned. Generally,
loans and subrogated claims receivable delinquent 90 days or
more are placed on a nonaccrual status unless they are well-
secured and significant collections have been received. At the
time that a loan or claim is placed on nonaccrual status, any
accrued but unpaid interest previously recorded is reversed
against current-period interest income. The interest on these
loans is accounted for on a cash basis until qualifying for return
to accrual status. Loans are returned to accrual status when all
principal and interest amounts contractually due are brought
current and future payments are reasonably assured.
Accounting for Capitalized Interest on Rescheduled
Loans and Subrogated Claims
Rescheduling agreements frequently allow for Ex-Im Bank to add
uncollected interest to the principal balance of rescheduled loans
and subrogated claims receivable (i.e., capitalized interest). When
capitalized, any accrued interest receivable is reversed against
current period’s interest income. The amount of interest that was
capitalized and included in the principal balance is recorded as
income when cash collections occur and only after all principal
not related to the capitalized interest is paid. An allowance is
established for all uncollected capitalized interest.
Allowance for Losses on Loans, Guarantees, Insurance
and Subrogated Claims
The allowance for losses provides for estimated losses
inherent in the loan, claim, guarantee and insurance portfolios.
The allowance is established through a provision charged to
earnings. Write-offs are charged against the allowance when
management believes the uncollectibility of a loan or claim
balance is confirmed. Subsequent recoveries, if any, are credited
to the allowance.
The allowance is evaluated on a regular basis by management
and is based upon management’s periodic review of the
collectability of the credits in light of historical and market
experience, the nature and volume of the credit portfolio,
adverse situations that may affect the borrower’s ability to
repay, estimated value of any underlying collateral, and prevailing
worldwide economic and political conditions. This evaluation is
inherently subjective as it requires estimates that are susceptible
to significant revision as more information becomes available.
The allowance for Ex-Im Bank credit-reform credits represents
the amount of estimated credit loss associated with the
applicable credit. The credit loss is defined as the net present
value of estimated loan, guarantee and insurance defaults less
subsequent estimated recoveries. Ex-Im Bank has established
cash-flow models for expected defaults, fees and recoveries
80 I
EXPORT-IMPORT BANK of the UNITED STATES
to estimate the credit loss for each approved credit. For new
authorizations, the models incorporate Ex-Im Bank’s actual
historical loss and recovery experience.
The net credit loss of credit-reform loans, guarantees and
insurance is re-estimated annually in accordance with OMB
guidelines and Statement of Federal Financial Accounting
Standards (SFFAS) 18, “Amendments to Accounting Standards
for Direct Loans and Loan Guarantees.” The re-estimates adjust
the allowance for credit losses to account for actual activity and
changes in the financial and economic factors that affect the
repayment prospects over time.
Accounting for Guarantees in a Foreign Currency
Ex-Im Bank provides guarantees and insurance denominated in
certain foreign currencies. The foreign currencies approved for
Ex-Im Bank guarantees as of September 30, 2014, are: Australian
dollar, Brazilian real, British pound, Canadian dollar, CFA franc,
Chinese yuan, Colombian peso, Egyptian pound, euro, Hong
Kong dollar, Indian rupee, Indonesian rupiah, Japanese yen,
Korean won, Malaysian ringgit, Mexican peso, Moroccan dirham,
New Zealand dollar, Norwegian krone, Pakistani rupee, Philippine
peso, Polish zloty, Russian ruble, Singapore dollar, South African
rand, Swedish krona, Swiss franc, Taiwanese dollar, Thai baht,
UAE dirham. At the time of authorization, Ex-Im Bank records the
authorization amount as the U.S.-dollar equivalent of the foreign-
currency obligation based on the exchange rate at that time. At
the end of each fiscal year, Ex-Im Bank determines the dollar
equivalent of the outstanding balance for each foreign-currency
guarantee based on the exchange rate at the end of the year and
adjusts the guarantee loan liability accordingly.
Borrowings from the U.S. Treasury
The main source of Ex-Im Bank’s outstanding debt is borrowings
from the U.S. Treasury. Borrowings from the U.S. Treasury
are used to finance medium-term and long-term loans. These
borrowings carry a fixed rate of interest. They are further
discussed in Note 10.
Payment Certificates
Payment certificates represent Ex-Im Bank’s outstanding
borrowings related to specific claims for which Ex-Im Bank is
paying the guaranteed lender as the guaranteed installments
become due. Payment certificates are issued by Ex-Im Bank in
exchange for the foreign importer’s defaulted note which was
guaranteed by Ex-Im Bank and the payment certificates carry
the same repayment terms and interest rate as the guaranteed
foreign importer’s note. Payment certificates are backed by the
full faith and credit of the government and are freely transferable.
Claims Payable
Liabilities for claims arising from Ex-Im Bank’s guarantee and
insurance activities and the related estimated losses and claim
recovery expenses are accrued upon approval of a claim.
Accounts Payable to the U.S. Treasury
Accounts payable to the U.S. Treasury include the results of the
credit-loss re-estimate required under the FCRA. The payable
represents funds that are held in credit-reform financing accounts
that are determined to be in excess of amounts needed to
cover future defaults. The payable also includes expired budget
authority no longer available for obligation that will be returned to
the U.S. Treasury.
Fees and Premia
Ex-Im Bank charges a risk-related exposure fee under both the
loan and guarantee programs that is collected on each loan
disbursement or shipment of goods under the guarantee policy.
This fee is amortized over the life of the credit using the effective
yield method.
On working capital guarantees, Ex-Im Bank charges an up-front
facility fee, which, due to the short-term nature of the contracts,
is credited to income as collected. Premia charged under
insurance policies are recognized as income using a method that
generally reflects the exposure over the term of the policy.
Appropriated Capital
Appropriations received by Ex-Im Bank pursuant to the FCRA are
recorded as paid-in-capital. Beginning in FY 2008, fees collected
in excess of expected credit losses are used to reimburse
the U.S. Treasury for appropriations provided for program and
administrative costs, resulting in a net appropriation of zero.
Appropriations received prior to FY 2008 and not required to
finance credit activities are returned to the U.S. Treasury when
the period of availability ends.
Congress has appropriated certain sums specifically for Ex-Im
Bank’s tied-aid activities. Tied-aid is government-to-government
concessional financing of public-sector capital projects in
developing countries. Tied-aid terms usually involve total
maturities longer than 20 years, lower than market interest rates
and/or direct grants.
Imputed Financing
A financing source is imputed by Ex-Im Bank to provide for
pension and other retirement benefit expenses recognized
by Ex-Im Bank but financed by the Office of Personnel
Management (OPM). .
80 I 2014 ANNUAL REPORT I 81
Liquidating Account Distribution of Income
Ex-Im Bank maintains a liquidating account which accumulates
the repayment on loans and claims issued prior to the FCRA. At
the end of each fiscal year, Ex-Im Bank transfers the cash balance
in this account to the U.S. Treasury.
2. FUND BALANCE WITH THE U.S. TREASURY
Fund balances as of September 30, 2014 and September 30,
2013 were as follows:
(in millions) FY 2014 FY 2013
Revolving Funds $3,365.6 $2,652.1
General Funds—Unexpended Appropriations 459.7 461.2
General Funds—Osetting Collections 2 07.6 200.9
Other Funds—Unallocated Cash 25.7 72.8
Total $4,058.6 $3,387.0
STATUS OF FUND BALANCE WITH THE U.S. TREASURY
Unobligated Balance
Available $2,143.0 $ 2,3 4 7. 3
Expired 261.4 259.0
Canceled and Unavailable 1.6 2.5
Obligated Balance Not Yet Disbursed 1,626.9 705.4
Funds Pending Application 25.7 72.8
Total $4,058.6 $3,387.0
Revolving funds are credit-reform financing accounts. Included in
the credit-reform financing accounts are disbursed appropriations,
exposure fees collected, and interest paid by the U.S. Treasury
to Ex-Im Bank on the balances in the account. These funds
are available to cover losses in Ex-Im Bank’s credit programs.
Unexpended appropriated funds and unexpended offsetting
collections are deposited in a noninterest-bearing account at the
U.S. Treasury. These funds are available to Ex-Im Bank when
the credit activity to which they relate takes place or to finance
administrative expenses. Upon disbursement of the related loans
or shipment of goods under guarantee or insurance policies,
the funds become available to either subsidize the related loan
disbursement or to be invested in the credit-reform financing
accounts to fund the credit costs of the guarantee and insurance
policies. Unallocated cash represents collections pending final
application to the applicable loan or guarantee.
Unobligated available funds represent unexpired appropriations
and offsetting collections and funds held in credit-reform
financing accounts for payment of future guaranteed loan
defaults. Unobligated expired funds represent appropriations
and offsetting collections that are no longer available for
new obligations.
Unobligated canceled funds represent appropriations that
are no longer available and are returned to the U.S. Treasury
in subsequent years. Obligated balance not yet disbursed
represents appropriations, offsetting collections, and funds held
in the loan financing account awaiting disbursement.
As of September 30, 2014 and September 30, 2013, there were
no unreconciled differences between U.S. Treasury records and
balances reported on Ex-Im Bank’s general ledger.
3. CASH
As of September 30, 2014 and September 30, 2013 there was no
cash and $0.1 million, respectively, in cash balances held outside
the U.S. Treasury. The amount represents receipts for collection
of insurance premia that are transferred to one of Ex-Im Bank’s
U.S. Treasury accounts upon application to the appropriate credit.
4. DIRECT LOAN, LOAN GUARANTEES AND EXPORT-
CREDIT INSURANCE PROGRAMS, NONFEDERAL
BORROWERS
Ex-Im Bank offers fixed-rate loans directly to foreign buyers of
U.S. goods and services. Ex-Im Bank extends to a company’s
foreign customer a fixed-rate loan covering up to 85 percent of
the U.S. contract value. The buyer must make a cash payment
to the U.S. exporter of at least 15 percent of the U.S. contract
value. Ex-Im Bank’s direct loans generally carry the fixed-interest
rate permitted for the importing country and term under the
“Arrangement on Guidelines for Officially Supported Export
Credits” negotiated among members of the OECD (Organisation
for Economic Co-operation and Development).
Ex-Im Bank loan guarantees cover the repayment risks on
the foreign buyer’s debt obligations incurred to purchase U.S.
exports. Ex-Im Bank guarantees to a lender that, in the event
of a payment default by the borrower, it will pay to the lender
the outstanding principal and interest on the loan. Ex-Im Bank’s
comprehensive guarantee covers all of the commercial and
political risks for 85 percent of the U.S. contract value.
Ex-Im Bank’s export-credit insurance helps U.S. exporters
sell their goods overseas by protecting them against the risk
of foreign-buyer or other foreign-debtor default for political
or commercial reasons, allowing them to extend credit to
their international customers. Insurance policies may apply to
shipments to one buyer or many buyers, insure comprehensive
(commercial and political) credit risks or only political risks, and
cover short-term or medium-term sales.
Credit Reform
The primary purpose of the FCRA is to measure more
accurately the cost of federal credit programs and to place the
cost of such credit programs on a basis equivalent with other
federal spending.
82 I
EXPORT-IMPORT BANK of the UNITED STATES
OMB established the Interagency Country Risk Assessment
System (ICRAS) to provide a framework for uniformly measuring
country risk for the U.S. government’s international credit
programs across the various agencies that administer them. The
ICRAS methodology determines the risk levels for lending to both
sovereign governments and non-sovereign borrowers.
ICRAS rates every country to which U.S. government agencies
have outstanding loans or loan guarantees or are anticipating
making new credits available. ICRAS rates countries on the basis
of economic and political/social variables. There are 11 sovereign
and 9 non-sovereign risk categories and each country receives
two ratings: a sovereign-risk rating and a private-risk rating.
ICRAS currently has risk ratings for 201 sovereign and 203 non-
sovereign markets.
FY2014 and FY2013 Activity
Ex-Im Bank received a $5.1 million appropriation in FY 2014 and
$4.0 million in FY 2013 for the Inspector General administrative
costs.
Beginning in FY 2008, fees collected in excess of expected credit
losses (offsetting collections) are used to cover the Bank’s credit
program needs for providing new direct loans, guarantees and
insurance and for administrative costs.
The following table summarizes offsetting collections and
appropriations received and used in FY 2014 and in FY 2013:
(in millions) FY 2014 FY 2013
RECEIVED AND AVAILABLE
Appropriation for Inspector General
Administrative Costs
$5.1 $4.0
Osetting Collections 152.4 242.7
Total Received 15 7. 5 246.7
Unobligated Balance Carried Over from Prior Year 302.2 595.9
Recission of Unobligated Balances (23.0) (400.0)
Cancellations of Prior-Year Obligations 8.8 4.2
Total Available 445.5 446.8
OBLIGATED
For Credit Program Costs Excluding Tied Aid 8.7 34.1
For Credit-Related Administrative Costs 131.9 102.2
Total Obligated 140.6 136.3
UNOBLIGATED BALANCE
Unobligated Balance 304.9 310.5
Unobligated Balance Lapsed (1.0) (8.3)
Remaining Balance $303.9 $302.2
Of the remaining balance of $303.9 million at September 30,
2014, $6.2 million is available until September 30, 2015; $57.5
million is available until September 30, 2016; $10.0 million is
available until September 30, 2017, and $230.2 million is available
until expended and may be used for tied-aid programs or
Congressionally mandated administrative costs.
New loans, guarantees and insurance result in a program cost
(or subsidy cost) when the net present value of expected cash
disbursements exceeds expected cash receipts. Cash receipts
typically include fees or premia, loan principal and interest, and
cash disbursements typically include claim payments and loan
disbursements. For new authorizations, Ex-Im uses both its own
historical default and recovery rates in its cash flow models to
calculate program cost.
When the present value of expected cash receipts exceeds the
present value of expected cash disbursements, a “negative”
credit subsidy (or program revenue) arises.
Starting in FY 2008, Ex-Im Bank has operated on a self-sustaining
basis using program revenue to fund current year administrative
expenses and program costs. During FY 2014, Ex-Im Bank
collected $800.2 million of receipts in excess of estimated
credit losses. Of these offsetting collections, $105.0 million
was used to fund administrative expenses, $10.5 was retained
and is available until expended for the renovation of Ex-Im Bank
headquarters, $674.7 million was returned to the U.S Treasury
and $10.0 million was retained and is available for obligation until
September 30, 2016. During FY 2013, Ex-Im Bank collected
$1,254.8 million of receipts in excess of estimated credit losses.
Of these offsetting collections, $89.9 million was used to fund
administrative expenses, $1,056.9 million was sent to the U.S.
Treasury, and $108.0 million was retained and is available for
obligation until September 30, 2015.
Administrative costs are the costs to administer and service
Ex-Im Bank’s entire credit portfolio. The program costs,
when fees are insufficient to fully cover expected losses, are
obligated to cover the estimated subsidy costs at the time
loans, guarantees and insurance are committed. As the loans
are disbursed, or when the insured or guaranteed event has
taken place (generally when the related goods are shipped), the
obligated amounts are used to cover the estimated subsidy costs
related to the disbursements and shipments. The portion of the
obligated amounts related to Ex-Im Bank’s lending programs is
used to partially fund the loan disbursements, while the portions
related to Ex-Im Bank’s guarantee and insurance programs are
invested in an interest-bearing account with the U.S. Treasury.
Prior to loan disbursement or the insured or guaranteed event, all
of the appropriated funds and offsetting collections are held in a
non-interest-bearing U.S. Treasury account.
82 I 2014 ANNUAL REPORT I 83
Allowances for Losses
The process by which Ex-Im Bank determines its allowances
for losses for each fiscal year involves assessing the repayment
risk of the credit, which includes both commercial and political
risk factors, then calculating the loss reserve based on the
percentage of loss associated with the risk level assigned to the
credit.
Sovereign risk is associated with an obligor that conveys the full
faith and credit of its country. To rate sovereign obligors, Ex-Im
Bank relies on the risk levels assigned to sovereign countries by
ICRAS.
Non sovereign obligors are divided into four categories for risk
assessment purpose: (1) obligors in workout status; (2) obligors
rated by third-party rating agencies, such as, Standard & Poor’s
and Moody’s; (3) obligors not rated but publicly traded on local
exchanges; and (4) obligors neither rated nor publicly traded on
local exchanges.
After the political and commercial risks of the transaction are
assessed, the transaction is assigned a risk rating based on the
standard ICRAS classification. A major determinant of the risk
rating is the sovereign-risk rating of the country in which the
obligor is located. Credit enhancements such as the availability of
liens and off-shore escrow accounts are taken into account.
For pre-credit-reform and nonimpaired loans receivable, Ex-Im
Bank determines the allowance using historical default and
recovery rates. The allowance for losses on this exposure is
calculated using the credit loss estimate method. This is an
estimate of the loss expected due to credit risk and does not
include non-credit factors that are included in the fair value
method.
Loss reserves on pre-credit-reform impaired credits are
determined using the fair value method. Impaired credits are
defined as those transactions risk rated from 9 to 11, or on the
verge of impairment due to political, commercial, operational and/
or technical events or situations, and/or Acts of God that have
affected the Borrower’s ability to service repayment of Ex-Im
Bank credits.
The allowance for losses for credit-reform loans, guarantees
and insurance are determined by the credit loss calculated at
authorization and subsequent adjustments made to the allowance
as a result of the annual re-estimate.
Credit Loss Re-Estimate
The estimated credit loss of the outstanding balance of loans,
guarantees and insurance is re-estimated annually in accordance
with OMB guidelines and SFFAS 18, “Amendments to
Accounting Standards for Direct Loans and Loan Guarantees.”
This re-estimate indicates the appropriate balance necessary in
the financing accounts to ensure sufficient funds to pay future
estimated claims.
Ex-Im Bank uses its actual historical default and recovery rates to
calculate the re-estimated future credit losses. In the event that
the balance in the financing accounts exceeds the re-estimate
level, the difference will not be needed to cover future estimated
claims and will be returned to the U.S. Treasury. In the event that
the balance in the financing accounts is less than the re-estimate
level, the FCRA provides that the difference will be transferred to
Ex-Im Bank from a general appropriation account authorized for
this purpose.
Every year, Ex-Im Bank re-evaluates the methods used for
calculating the reserves needed to cover expected losses. The
Bank uses historical experience to estimate the probability of
default as well as the loss given default. The probability of default
(PD) is the likelihood that a transaction would go into default
where the loss given default (LGD) gives the estimated loss, net
of recoveries and expenses, if a default occurred. Multiplying
PD times LGD provides expected loss factors across programs
and budget cost level (BCL) categories. Ex-Im Bank uses recent
historical loss experience and other factors in developing the
predictor interval for the probablility of default.
Prior to FY 2012, Ex-Im Bank relied primarily on quantitative
factors to calculate loss reserves. Because the portfolio grew
significantly and the composition of the portfolio became more
complex, the Bank analyzed and developed credit loss factors
that incorporated both a quantitative and an enhanced qualitative
framework. The additional qualitative factors are based on
the risk profile of the Bank’s portfolio and were added to the
quantitative factors to better and more accurately measure risk
through the reserve process. The Bank continues to improve
both its quantitative and qualitative framework. In FY 2013,
the Bank incorporated thirteen qualitative adjustments into
its loss model, of which seven were built into the quantitative
framework. These adjustments fall into two broad categories:
1) model enhancements and 2) portfolio concentration risk.
Model enhancements include factors such as loss curves for
sovereign guaranteed transactions and asset backed aircraft.
Portfolio concentration risk incorporates the Bank’s stress testing
Monte-Carlo simulations that assess correlation risk among the
largest concentrations within the portfolio. These simulations,
to assess the correlation impact on portfolio, were run for the
Bank’s largest concentrations, which were in aircraft, oil & gas,
manufacturing, Asia, Latin America / Caribbean, and Europe.
84 I
EXPORT-IMPORT BANK of the UNITED STATES
As of September 30, 2014, the credit loss re-estimate of FY 1992
through FY 2014 commitments outstanding balances indicated
that a net of $479.8 million of additional funds were needed in the
financing accounts, mostly to cover funding costs on direct loans,
which had exceeded original budgeted estimates. This upward
re-estimate will be received from the U.S. Treasury in FY 2015.
As of September 30, 2013, the credit loss re-estimate of FY 1992
through FY 2013 commitments outstanding balances indicated
that a net of $492.5 million of additional funds were needed in
the financing accounts, mostly to cover funding costs on direct
loans, which had exceeded original budgeted estimates.
A. Direct Loans
Ex-Im Bank’s loans receivable, as shown on the Balance Sheets,
are net of an allowance for loan losses.
To calculate the allowance for loan losses for direct loans
obligated prior to FY1992, each of the 11 risk levels is identified
with a loss percentage to determine the overall allowance for
credit losses as described above. In addition, certain credits and
capitalized interest included in gross loans receivable are reserved
at 100 percent. At September 30, 2014, and September 30, 2013,
capitalized interest on credits obligated prior to FY 1992 was
$83.0 million and $87.6 million, respectively. The total allowance
for direct loans obligated prior to FY 1992, including capitalized
interest, equaled 71.4 percent and 68.7 percent, respectively, of
gross loans and interest receivable.
The allowance for loss calculated for direct loans obligated since
the commencement of FY 1992 equals the amount of credit
loss incurred to support the loan obligation. The credit loss is the
amount of loss estimated to be incurred on the transaction, as
previously described. At September 30, 2014, and September 30,
2013, the allowance for loan losses on credit-reform credits
equaled 10.2 percent and 9.8 percent, respectively, of the
outstanding loans and interest receivable balance.
At September 30, 2014, and September 30, 2013, the allowance
for both pre-credit-reform and credit-reform loans equaled 11.1
percent and 11.0 percent, respectively, of the total loans and
interest receivable.
The outstanding balances related to rescheduled installments
included in loans receivable at September 30, 2014 and
September 30, 2013, were $434.6 million and $503.9 million,
respectively. No loan principal installments were rescheduled in
FY 2014 and FY 2013.
The net balance of loans receivable at September 30, 2014, and
September 30, 2013, consists of the following:
FY 2014 (in millions)
Loans
Receivable,
Gross
Interest
Receivable
Allowance
for Loan
Losses
Loans
Receivable,
Net
Loans Obligated Prior to
FY 1992
$338.2 $0.2 ($241.6) $96.8
Loans Obligated After
FY 1991
21,222.2 133.7 (2,168.3) 19,187.6
Total $21,560.4 $133.9 ($2,409.9) $19,284.4
FY 2013 (in millions)
Loans
Receivable,
Gross
Interest
Receivable
Allowance
for Loan
Losses
Loans
Receivable,
Net
Loans Obligated Prior to
FY 1992
$376.3 $0.4 ($258.6) $118.1
Loans Obligated After
FY 1991
17,871.8 126.2 (1,668.6) 16,329.4
Total $18,248.1 $126.6 ($1,927.2) $16,447.5
(in millions) FY 2014 FY 2013
Direct Loans Disbursed During Year (Post-1991) $4,513.5 $6,663.8
B. Program Cost and Re-Estimate Expense for Direct
Loans by Component
The table below discloses the interest, defaults, fees and re-
estimate amounts associated with program cost disbursed in the
current fiscal year on loan authorizations made in the current and
prior fiscal years and the current year loss re-estimate.
(in millions) FY 2014 FY 2013
Interest ($462.1) ($668.1)
Defaults 136.2 176.0
Fees and Other Collections (201.4) (385.7)
Total Program Cost (527.3) (8 7 7. 8)
Net Re-estimate – Principal 757.4 1 , 0 37.1
Net Re-estimate – Interest 87.1 56.3
Total Net Re-estimate 844.5 1,093.4
Total Direct Loan Program Cost and Re-Estimate Expense $317.2 $215.6
C. Program Cost Rates for Direct Loans by Program
and Component
The program cost rates disclosed below relate to the percentage
of program costs on loan authorizations made in the reporting
fiscal year. Because these rates only pertain to authorizations
from the reporting fiscal year, these rates cannot be applied
to loan disbursements in the reporting fiscal year to yield the
program cost, which could result from disbursements of loans
from both current and prior years.
84 I 2014 ANNUAL REPORT I 85
FY 2014 FY 2013
Interest (4.2)% (8.1)%
Defaults 5.2% 3.8 %
Fees and Other Collections (7. 3)% (4.3)%
Total (6.3)% (8.7)%
D. Schedule for Reconciling Direct Loan Allowance
Balances
The table below discloses the components of the direct-loan
allowance.
(in millions) FY 2014 FY 2013
POST- DIRECT LOANS
Beginning Balance of the Allowance Account $1,668.6 $1,205.8
Current-Year Program Cost (52 7.3) (87 7.8)
Subtotal Program Cost
(see Note 4B for Component Breakdown)
(52 7.3) (87 7.8)
Fees Received 224.3 393.3
Loans Written O (2.1) (2 7.9)
Program-Cost Allowance Amortization 314.1 26 7. 0
Miscellaneous Recoveries and Costs (353.8) (385.2)
Ending Balance Before Re-estimate 1,323.8 575.2
Re-estimate 844.5 1,093.4
Ending Balance of the Allowance Account $2,168.3 $1,668.6
Program-cost allowance amortization is calculated, as required
by SFFAS 18, “Amendments to Accounting Standards for Direct
Loans and Loan Guarantees,” as the difference between interest
revenue and interest expense.
E. Defaulted Guaranteed Loans
The allowance for defaulted guaranteed loans is calculated
using the fair-market value method as described above.
Capitalized interest included in gross defaulted guaranteed
loans receivable is reserved at 100 percent. At September 30,
2014 and September 30, 2013, capitalized interest on pre-credit
reform defaulted guaranteed loans was $24.4 million and $26.4
million, respectively. At September 30, 2014 and September 30,
2013, capitalized interest on credit reform defaulted guaranteed
loans was $99.7 million and $111.4 million, respectively. The
total allowance equaled 81.9 percent and 81.4 percent of
gross defaulted guaranteed loans and interest receivable at
September 30, 2014, and September 30, 2013, respectively.
FY 2014 (in millions)
Defaulted
Guaranteed
Loans
Receivable,
Gross
Interest
Receivable
Allowance
for Loan
Losses
Fair Value of
Assets
Related to
Defaulted
Guaranteed
Loans, Net
Defaulted Guaranteed
Loans Obligated Prior
to FY 1992
$53.6 $ - ($41.7) $11.9
Obligated After FY 1991 1,166.3 2.0 (972.9) $195.4
Total $1,219.9 $2.0 ($1,014.6) $2 0 7. 3
FY 2013 (in millions)
Defaulted
Guaranteed
Loans
Receivable,
Gross
Interest
Receivable
Allowance
for Loan
Losses
Fair Value of
Assets
Related to
Defaulted
Guaranteed
Loans, Net
Defaulted Guaranteed
Loans Obligated Prior
to FY 1992
$62.6 $- ($47.0) $15.6
Obligated After FY 1991 1,266.3 1.5 (1,036.4) 231.4
Total $1,328.9 $1.5 ($1,083.4) $24 7.0
F. Guaranteed Loans and Insurance
Ex-Im Bank is exposed to credit loss with respect to the amount
of outstanding guaranteed loans and insurance policies in the
event of nonpayment by obligors under the agreements. The
commitments shown below are agreements to lend monies and
issue guarantees and insurance as long as there is no violation of
the conditions established in the credit agreement.
(in millions) FY 2014 FY 2013
Gross Outstanding Principal of Guaranteed Loans and Insurance,
Face Value
$63,159.8 $62,062.7
Undisbursed Principal of Guaranteed Loans and Insurance,
Face Value
14,973.4 17,429.7
Total Principal of Guaranteed Loans and Insurance,
Face Value
$78,133.2 $79,492.4
Amount of Principal That is Guaranteed and Insured by Ex-Im
Bank
$78,133.2 $79,492.4
Gross Amount of Guaranteed Loans and Insurance Disbursed
During Year, Face Value
$18,376.8 $20,848.4
Amount of Guaranteed Loans and Insurance Disbursed During
Year that is Guaranteed and Insured by Ex-Im Bank
$18,376.8 $20,848.4
G. Liability for Loan Guarantees and Insurance
The liability for loan guarantees and insurance balances of
$1,620.7 million at September 30, 2014 and $1,620.8 million at
September 30, 2013 represent post FY 1991 guarantees and
insurance credits. Since FY 2011, Ex-Im no longer has pre-
FY 1992 liabilities for loan guarantees and insurance outstanding.
86 I
EXPORT-IMPORT BANK of the UNITED STATES
H. Program Cost and Re-Estimate Expense for Loan
Guarantees and Insurance by Component
The table below discloses defaults, fees and re-estimate
amounts associated with the program cost disbursed in the
current year on loan guarantee and insurance authorizations made
in the current and prior fiscal years and the current year loss
re-estimate. The total program cost also includes modifications
made on these authorizations.
(in millions) FY 2014 FY 2013
Defaults $693.5 $669.3
Fees and Other Collections (944.7) (1,003.8)
Total Program Costs (251.2) (334.5)
Net Re-estimate – Principal (285.3) (404.4)
Net Re-estimate – Interest (79.3) (196.6)
Total Net Re-estimate (364.6) (601.0)
Total Loan Guarantee and Insurance Program Cost and
Re-Estimate Expense
($615.8) ($935.5)
I. Program Cost Rates for Loan Guarantees and
Insurance by Component
The program cost rates disclosed below relate to the percent of
program costs on loan guarantee and insurance authorizations
made in the reporting fiscal year. Because these rates only
pertain to authorizations from the reporting fiscal year, these rates
cannot be applied to the guarantees of loans disbursed during the
reporting fiscal year to yield the program cost, which could result
from disbursements of loans from both current and prior years.
FY 2014 FY 2013
Defaults 3.8% 4.7%
Fees and Other Collections (5.5)% (6.2)%
Total (1.7)% (1.5)%
J. Schedule for Reconciling the Allowance for Loan
Guarantee Balances
The table below discloses the components of the allowance for
loan guarantees.
(in millions) FY 2014 FY 2013
POST- LOAN GUARANTEES
Beginning Balance of the Allowance Account $1,620.8 $1,814.0
Current Year Program Cost (251.2) (335.0)
Modifications — 0.5
Subtotal Program Cost
(See Note 4H for Component Breakdown)
(251.2) (334.5)
Fees Received 623.1 688.2
Claim Expenses and Write-Os (5.3) (6.1)
Interest Accumulation 46.4 65.7
Other (48.5) (5.5)
Ending Balance Before Re-estimate 1,985.3 2,221.8
Re-estimate (364.6) (601.0)
Ending Balance of the Allowance Account $1,620.7 $1,620.8
K. Administrative Costs
All of the Bank’s administrative expenses are attributed to the
support of the Bank’s loan, guarantee and insurance programs.
Administrative expenses are not allocated to individual programs.
(in millions) FY 2014 FY 2013
Total Administrative Expense $114.8 $115.5
L. Outstanding Exposure and Allowance by Program
(in millions) FY 2014 FY 2013
Outstanding Loans $21,560.4 $18,248.1
Allowance for Loan Losses 2,409.9 1,92 7. 2
Percent Allowance of Outstanding Balance 11.1% 10.6%
Outstanding Defaulted Guarantees and Insurance 1,219.9 1,328.9
Allowance for Defaulted Guarantees and Insurance 1,014.6 1,083.4
Percent Allowance of Outstanding Balance 83.2% 81.5%
Outstanding Guarantees & Insurance 63,159.8 62,062.7
Liability for Guarantees & Insurance 1,620.7 1,620.8
Percent Allowance of Outstanding Balance 2.6% 2.6%
The allowance for losses for Ex-Im Bank credits authorized
after the Federal Credit Reform Act of 1990 (FCRA) equates
to the amount of estimated credit loss associated with the
applicable loans, claims, guarantees, and insurance. According
to SFFAS 2, Accounting for Direct Loans and Guarantees, direct
loans disbursed and outstanding are recognized as assets at the
present value of their estimated net cash flows. The difference
between the outstanding principal of the loans and the present
value of their net cash inflows is recognized as the allowance
for credit losses. For guaranteed loans outstanding, the present
value of estimate net cash flows of the loan guarantee is
recognized as a guaranteed loan liability.
86 I 2014 ANNUAL REPORT I 87
Ex-Im Bank’s credit programs generally have fees and interest
rates higher than the expected default and funding costs,
resulting in the net present value of cash inflows to be greater
than the outstanding principal of the credit.
M. Allowance and Exposure Summary
(in millions) FY 2014 FY 2013
PRE-CREDIT-REFORM ALLOWANCE
Allowance for Loan Losses $241.6 $258.6
Allowance for Defaulted Guarantees 41.7 47.0
Total Pre-Credit-Reform Allowance 283.3 305.6
CREDIT-REFORM ALLOWANCE
Allowance for Loan Losses 2,168.3 1,668.6
Allowance for Defaulted Guarantees and Insurance 972.9 1,036.4
Liability for Loan Guarantees and Insurance 1,620.7 1,620.8
Total Credit-Reform Allowance 4,761.9 4,325.8
Total Allowance for Loan Losses 2,409.9 1,92 7.2
Total Allowance for Guarantees and Insurance 2,635.3 2,704.2
Total Allowance $5,045.2 $4,631.4
Total Outstanding Balance of Loans, Guarantees and Insurance $85,940.1 $81,639.7
Percent Allowance to Outstanding Balance 5.9% 5.7%
Total Exposure $112,007.8 $113,825.3
Percent Allowance to Exposure 4.5% 4.1%
5. ACCRUAL OF INTEREST
The weighted-average interest rate on Ex-Im Bank’s loan and
rescheduled claim portfolio at September 30, 2014, was 2.74
percent (2.79 percent on performing loans and rescheduled
claims). The weighted-average interest rate on Ex-Im Bank’s
loan and rescheduled claim portfolio at September 30, 2013, was
2.78 percent (2.85 percent on performing loans and rescheduled
claims). Interest income is recognized when collected on
nonrescheduled claims.
Generally, the accrual of interest on loans and rescheduled claims
is discontinued when the credit is delinquent for more than 90
days. Ex-Im Bank had a total of $350.3 million and $37.1 million
of loans and rescheduled claims, respectively, in nonaccrual
status at September 30, 2014. Ex-Im Bank had $382.4 million
and $47.9 million of loans and rescheduled claims, respectively,
in nonaccrual status at September 30, 2013. Had these credits
been in accrual status, interest income would have been $20.1
million higher as of September 30, 2014 (amount is net of interest
received of $0.1 million), and $21.7 million higher in FY 2013
(amount is net of interest received of $1.3 million).
6. STATUTORY LIMITATIONS ON LENDING AUTHORITY
Under provisions of the Export-Import Bank Act, as amended in
FY 2012, Ex-Im Bank’s statutory authority was $140.0 billion in
FY 2014 and $130.0 billion in FY 2013, of loans, guarantees and
insurance exposure at any one time. At September 30, 2014, and
September 30, 2013, Ex-Im Bank’s statutory authority used was
as follows:
(in millions) FY 2014 FY 2013
Outstanding Guarantees $60,905.9 $59,195.7
Outstanding Loans 21,560.4 18,248.1
Outstanding Insurance 2,253.9 2,867.0
Outstanding Claims 1,219.9 1,328.9
Total Outstanding 85,940.1 81,639.7
Undisbursed Loans 11,094.3 14,755.9
Undisbursed Guarantees 8,457.3 11,148.6
Undisbursed Insurance 6,516.1 6,281.1
Total Undisbursed 26,067.7 32,185.6
Total Exposure $112,007.8 $113,825.3
Transactions can be committed only to the extent that budget
authority is available to cover program costs. For FY 2014 and
FY 2013, Congress placed no limit on the total amount of loans,
guarantees and insurance that could be committed in those
years, provided that the statutory authority established by the
Export-Import Bank Act was not exceeded.
During FY 2014, Ex-Im Bank committed $1,927.6 million for direct
loans, $18,540.3 million for guarantees and insurance, using
$8.7 million of budget authority and no tied-aid funds. During
FY 2013, Ex-Im Bank committed $6,893.8 million for direct loans,
$20,453.8 million for guarantees and insurance, using $34.1
million of budget authority and no tied-aid funds.
Ex-Im Bank has authorized guarantee transactions denominated
in a foreign currency during FY 2014 totaling $1,333.6 million, and
authorized $1,040.1 million during FY 2013, as calculated at the
exchange rate at the time of authorization. Ex-Im Bank adjusts
the allowance for all transactions denominated in a foreign
currency using the various foreign-currency exchange rates at the
end of the fiscal year.
For financial statement purposes, Ex-Im Bank defines exposure
as the authorized outstanding and undisbursed principal
balance of loans, guarantees, and insurance. It also includes the
unrecovered balance of payments made on claims that were
submitted to Ex-Im in its capacity as guarantor or insurer under
the export guarantee and insurance programs. Exposure does not
include accrued interest or transactions pending final approval.
This corresponds to the way activity is charged against the
88 I
EXPORT-IMPORT BANK of the UNITED STATES
Bank’s overall $140.0 billion lending limit imposed by Section 6(a)
(2) of Ex-Im Bank’s charter.
Working capital guarantees may be approved for a single loan
or a revolving line of credit, with an availability generally of one
year. Guaranteed lenders do not report activity to Ex-Im Bank, the
entire credit is assumed to be “disbursed” when the fee is paid
to the Bank. The credit is recorded as repaid in one installment
180 days after the expiry date of the credit unless the Controller’s
office is notified before that time that a claim has been paid.
Under the assumption that the exporter is using the credit up to
the end of the expiry period, six months provides sufficient time
for the guaranteed lender to report defaults to Ex-Im Bank in the
event that the exporter does not repay the credit. If a claim is
paid, the remaining outstanding balance of the credit associated
with the claim is reduced to zero. Exposure is then reflected as
an unrecovered claim.
Since there is typically a delay in reporting shipments under
the insurance program, undisbursed balances remain on the
books for 120 days after the expiry date to allow for the posting
of shipments that took place within the period covered by the
policy but were reported after the expiry date. These unreported
shipments pose some liability in the form of claims that have
been incurred but not yet reported (IBNR). Leaving the policy
open past the expiry date provides a reserve for IBNR.
7. CONCENTRATION OF RISK
Ex-Im Bank support is available to U.S. businesses exporting to
countries around the world. The Bank’s portfolio is concentrated
more heavily in some regions, industries and obligors than others.
In reviewing each transaction, Ex-Im Bank considers the option
of using various credit enhancements to support its standard for
a reasonable assurance of repayment. Various types of collateral,
including liens on commercial aircraft, may or may not be
appropriate or available in support of a credit.
The volatility in commodity prices, the fluctuation in currency
exchange rates, and the tightening of credit markets may have an
impact on a borrower’s ability to service their obligations. Ex-Im
Bank closely monitors the portfolio and makes appropriate rating
adjustments and loss reserve adjustments as necessary.
The following tables summarize total exposure by geographic
region as of September 30, 2014 and September 30, 2013:
2014 (in millions)
Region Amount Percentage
Asia $ 46, 0 0 7. 2 41.1%
Latin America & Caribbean 20,105.7 18.0%
Europe 15,924.2 14.2%
North America 8,638.1 7. 7%
Oceania 8,258.5 7. 4%
Africa 6,885.1 6.1%
All Other 6,189.0 5.5%
$112,007.8 100.0%
2013 (in millions)
Region Amount Percentage
Asia $46,463.2 40.8%
Latin America & Caribbean 21,454.2 18.8%
Europe 15,711.8 13.8%
North America 10,496.9 9.2%
Oceania 8,255.5 7. 3%
Africa 5,548.3 4.9%
All Other 5,895.4 5.2%
Total $113,825.3 100.0%
The following tables summarize total exposure by industry as of
September 30, 2014 and September 30, 2013:
2014 (in millions)
Industry Amount Percentage
Air Transportation $50,668.7 45.2%
Manufacturing 19,960.7 17.8%
Oil & Gas 16,381.2 14.6%
Power Projects 7,325. 3 6.5%
All Other 17,6 71.9 15.9%
$112,007.8 100.0%
2013 (in millions)
Industry Amount Percentage
Air Transportation $51,337.8 45.1%
Manufacturing 20,632.3 18.1%
Oil & Gas 16,718.9 14.7%
Power Projects 7,370.1 6.5%
All Other 17,766.2 15.6%
Total $113,825.3 100.0%
The following tables summarize the five largest public and private
obligors at September 30, 2014 and September 30, 2013:
2014 (in millions)
Obligor Amount Percentage
Pemex $5, 587. 5 5.0%
Sadara Chemical Company 4,630.0 4.1%
Papua New Guinea Lng Global Comp. 3,000.0 2.7%
Australia Pacific LNG Processing Pty Ltd 2,865.5 2.6%
Ryanair Ltd. 2,750.1 2.5%
All Other 93,174.7 83.1%
$112,007.8 100.0%
88 I 2014 ANNUAL REPORT I 89
2013 (in millions)
Obligor Amount Percentage
Pemex $6,215.9 5.5%
Sadara Chemical Co. 4,730.0 4.2%
Ryanair Ltd. 3,368.4 3.0%
Papua New Guinea LNG Global Comp. 3,000.0 2.6%
Australia Pacific LNG Processing Pty Ltd 2,865.5 2.5%
All Other 93,645.5 82.2%
Total $113,825.3 100.0%
The following tables summarize total exposure by country as of
September 30, 2014 and September 30, 2013:
2014 (in millions)
Country Amount Percentage
Mexico $9,253.6 8.3%
India 7,286.1 6.5%
Saudi Arabia 6,876.6 6.1%
United Arab Emirates 5,958.3 5.3%
Australia 4,770.4 4.3%
All Other 77,862.8 69.5%
$112,007.8 100.0%
2013 (in millions)
Country Amount Percentage
Mexico $9,425.1 8.3%
India 8,142.8 7. 2 %
Saudi Arabia 6,954.1 6.1%
United Arab Emirates 6,209.0 5.5%
Ireland 4,879.9 4.3%
All Other 78,214.4 68.6%
Total $113,825.3 100.0%
The following tables summarize the largest exposures
by program by country as of September 30, 2014 and
September 30, 2013:
Loans Outstanding and Undisbursed:
2014 (in millions)
Country Amount Percentage
Saudi Arabia $6,311.0 19.3%
Australia 3,801.0 11.6%
United Kingdom 3,187.1 9.8%
Colombia 2,614.2 8.0%
All Other 16,741.4 51.3%
Total $32,654.7 100.0%
2013 (in millions)
Country Amount Percentage
Saudi Arabia $6,328.8 19.3%
Australia 3,443.2 10.4%
United Kingdom 2,751.4 8.3%
Colombia 2,650.0 8.0%
All Other 17,830.6 54.0%
Total $33,004.0 100.0%
Subrogated Claims:
2014 (in millions)
Country Amount Percentage
Mexico $270.0 22.1%
Indonesia 152.0 12.5%
Kazakhstan 105.3 8.6%
Brazil 58.6 4.8%
All Other 634.0 52.0%
Total $1,219.9 100.0%
2013 (in millions)
Country Amount Percentage
Mexico $302.2 22.7%
Kazakhstan 106.7 8.0%
Philippines 57. 5 4.3%
Brazil 56.1 4.2%
All Other 806.4 60.8%
Total $1,328.9 100.0%
Guarantees and Insurance:
2014 (in millions)
Country Amount Percentage
Mexico $7,635.0 9.8%
India 4,667. 7 6.0%
United Arab Emirates 4,401.1 5.6%
Ireland 4,387.3 5.6%
All Other 57,042.1 73.0%
Total $78,133.2 100.0%
2013 (in millions)
Country Amount Percentage
Mexico $7,652.0 9.6%
India 5,503.5 6.9%
Ireland 4,704.4 5.9%
United Arab Emirates 4,593.1 5.8%
All Other 57,039.4 71.8%
Total $79,492.4 100.0%
8. OTHER ASSETS
(in millions) FY 2014 FY 2013
Commitment Fee Receivables $2 7. 7 $32.7
Other 0.9 1.0
Total Other Assets $28.6 $33.7
Commitment fees are charged on the undisbursed, unexpired
balance of loans and certain guarantees. The Other category
includes miscellaneous receivables, including assets acquired
through claims recovery.
90 I
EXPORT-IMPORT BANK of the UNITED STATES
9. LIABILITIES NOT COVERED BY BUDGETARY
RESOURCES
Liabilities not covered by budgetary resources are included in
Other Liabilities on the Balance Sheet as follows:
Ex-Im Bank’s liability to employees for accrued unfunded annual
leave, included in Other Liabilities on the Balance Sheets, was
$4.4 million as of September 30, 2014 and $4.4 million as
of September 30, 2013. The liability will be paid from future
administrative expense budget authority.
10. DEBT
Ex-Im Bank’s outstanding borrowings come from two sources:
direct borrowing from the U.S. Treasury, and the assumption
of repayment obligations of defaulted guarantees under Ex-Im
Bank’s guarantee program via payment certificates.
Ex-Im Bank’s total debt at September 30, 2014, and
September 30, 2013, is as follows:
(in millions) FY 2014 FY 2013
U.S. TREASURY DEBT
Beginning Balance $18,101.8 $11,301.3
New Borrowings 4,273.4 7,759. 5
Repayments (741.6) (959.0)
Ending Balance $21,633.6 $18,101.8
DEBT HELD BY THE PUBLIC
Beginning Balance $33.1 $ 47. 5
New Borrowings 0.2 0.5
Repayments (11.9) (14.9)
Ending Balance $21.4 $33.1
Total Debt $21,655.0 $18,134.9
Ex-Im Bank had $21,633.6 million of borrowings outstanding
with the U.S. Treasury at September 30, 2014, and $18,101.8
million at September 30, 2013, with a weighted-average interest
rate of 3.22 percent at September 30, 2014, and 3.44 percent at
September 30, 2013.
U.S. Treasury borrowings are repaid primarily with the
repayments of medium-term and long-term loans. To the extent
repayments on the underlying loans, combined with commitment
and exposure fees and interest earnings received on the loans,
are not sufficient to repay the borrowings, appropriated funds are
available to Ex-Im Bank through the re-estimation process for this
purpose. Accordingly, U.S. Treasury borrowings do not have a set
repayment schedule; however, the full amount of the borrowings
is expected to be repaid by FY 2042.
Payment certificates are issued by Ex-Im Bank in exchange for
the foreign obligor’s original note that was guaranteed by Ex-Im
Bank on which Ex-Im Bank has paid a claim and carries the same
repayment term and interest rate as the foreign obligor’s note.
Payment certificates are backed by the full faith and credit of the
U.S. government and are freely transferable.
Outstanding payment certificates at September 30, 2014, and
September 30, 2013, were $21.4 million, and $33.1 million,
respectively. Maturities of payment certificates at September 30,
2014, are as follows:
(in millions)
Fiscal Year Amount
2015 $0.3
2016 12.8
2017 8.3
Total $21.4
The weighted-average interest rate on Ex-Im Bank’s outstanding
payment certificates at September 30, 2014, and September 30,
2013, was 3.54 percent and 3.61 percent, respectively.
11. OTHER LIABILITIES
(in millions) FY 2014 FY 2013
CURRENT
Funds Held Pending Application $24.3 $91.5
Administrative Expenses Payable 9.7 11.5
Miscellaneous Accrued Payables 1.6 1.9
NON-CURRENT
Deferred Revenue 180.6 158.7
Total Other Liabilities $216.2 $263.6
As of September 30, 2014 and September 30, 2013, $180.6
million and $158.7 million respectively represent deferred
revenue in the form of offsetting collections which are available to
cover administrative expenses and program costs.
12. LEASES
Ex-Im Bank’s headquarters office space is leased from the
General Services Administration through the Public Buildings
Fund. Lease expenses, included in Administrative Costs on
the Statements of Net Costs, were $6.3 million in FY 2014 and
$6.3 million in FY 2013. Future payments under the lease are as
follows:
90 I 2014 ANNUAL REPORT I 91
(in millions)
Fiscal Year Amount
2015 $6.6
2016 6.9
2017 6.9
2018 6.9
Total $27.3
13. COMMITMENTS AND CONTINGENCIES
Pending Litigation
As of September 30, 2014, Ex-Im Bank was named in several
legal actions, virtually all of which involved claims under the
guarantee and insurance programs. It is not possible to predict
the eventual outcome of the various actions; however, it is
management’s opinion that these claims will not result in
liabilities to such an extent that they would materially affect the
financial position or results of operations of Ex-Im Bank.
Project Finance
In project-finance transactions, Ex-Im Bank’s support during the
construction period is generally in the form of a direct credit or
comprehensive guarantee to the commercial lender. At the end
of the construction period, the borrower in some cases has the
opportunity to convert the commercial guaranteed financing
to an Ex-Im Bank direct loan. As of September 30, 2014 and
September 30, 2013, Ex-Im Bank had $202.9 million and $234.8
million, respectively, of such contingent loan commitments
outstanding.
Take Out Option
In prior years, Ex-Im Bank offered a “take-out” option available
on all U.S. dollar, floating rate medium-term and long-term
guarantees. The option allowed banks to transfer the loan to
Ex-Im following origination for a set of predetermined fees.
While this program has been discontinued, as of September 30,
2014 and September 30, 2013, Ex-Im Bank still had $133.9
million and $377.1 million, respectively, of such contingent loan
commitments outstanding.
14. DISCLOSURES RELATED TO THE STATEMENTS OF
NET COSTS
Ex-Im Bank’s Statements of Net Costs list the costs and
revenues associated with each of the Bank’s lines of
business, namely the loan, guarantee and insurance programs.
The intragovernmental and public costs and revenues associated
with each program, and administrative expenses, are disclosed
below. Ex-Im Bank does not allocate administrative expenses
by program.
Intragovernmental costs include interest expense paid to the U.S.
Treasury related to borrowings associated with the funding of
credit-reform direct loans and administrative costs paid to other
government agencies. Intragovernmental revenues represent
interest from the U.S. Treasury on cash balances in the credit-
reform financing accounts.
Public Costs and Public Revenue
(in millions) Loans Guarantees Insurance
Administrative
Expenses Total
FOR THE YEAR ENDED SEPTEMBER , 14
Intragovernmental Costs $712.9 $ — $ — $6.8 $719.7
Public Costs 749.0 273.4 (26.3) 108.0 1,104.1
Total Costs 1,461.9 273.4 (26.3) 114.8 1,823.8
Intragovernmental Revenue (117. 2) (44.7) (1.8) — (163.7)
Public Revenue (570.9) (528.5) (34.6) — (1,134.0)
Total Revenue (688.1) (573.2) (36.4) — (1,297.7)
Net Excess of Program Costs Over (Revenue) $526.1
FOR THE YEAR ENDED SEPTEMBER ,
Intragovernmental Costs $666.9 $ — $ — $6.7 $673.6
Public Costs 1,037.4 (72.8) 45.9 108.8 1,119.3
Total Costs 1,704.3 (72.8) 45.9 115.5 1,792.9
Intragovernmental Revenue (159.3) (62.9) (2.2) — (224.4)
Public Revenue (541.9) (440.9) (45.8) — (1,028.6)
Total Revenue (701.2) (503.8) (48.0) — (1,253.0)
Net Excess of Program Costs Over (Revenue) $539.9
92 I
EXPORT-IMPORT BANK of the UNITED STATES
Public costs represent costs which the Bank incurs to support
the business programs. These costs are comprised primarily of
the provision for loss on the loan and guarantee portfolio, and
administrative costs paid to the public. Public revenue represents
income items which are generated as a result of operating the
loan, guarantee and insurance programs. This revenue primarily
relates to the fee and interest income on the outstanding credits.
15. DISCLOSURES RELATED TO THE COMBINED
STATEMENTS OF BUDGETARY RESOURCES
Combined Statements of Budgetary Resources disclose total
budgetary resources available to the Bank and the status of such
resources at September 30, 2014 and September 30, 2013.
Activity impacting budget totals of the overall U.S. government
budget is recorded in Ex-Im Bank’s Combined Statements of
Budgetary Resources budgetary accounts. Activity which does
not impact budget totals is recorded in Ex-Im Bank’s Combined
Statements of Budgetary Resources nonbudgetary accounts.
As of September 30, 2014 and September 30, 2013, the Bank’s
resources in budgetary accounts totaled $2,131.2 million and
$1,739.3 million respectively. As of September 30, 2014 and
September 30, 2013, the Bank’s resources in nonbudgetary
accounts totaled $5,915.2 million, and $11,111.8 million
respectively.
Adjustments to Beginning Balance of Budgetary
Resources
Ex-Im Bank made no adjustments to the beginning budgetary
resources during the years ended September 30, 2014, and
September 30, 2013.
Apportionment Categories of Obligations Incurred
Ex-Im Bank funds are apportioned in Category B, which
restricts the use of funds by program. The amount of Category
B apportionments that were obligated in FY 2014 and FY 2013
totaled $5,642.0 million and $10,244.8 million, respectively.
Permanent Indefinite Appropriations
The FCRA requires an annual re-estimate of the credit loss
allowance. In the event that there is an increase in estimated
defaults, there is permanent and indefinite budget authority
available for this purpose. The FY 2013 upward re-estimate
received from the U.S. Treasury in FY 2014 was $1,436.0 million;
while the downward re-estimate received from the U.S. Treasury
was $943.5 million. The FY 2012 upward re-estimate received
from the U.S. Treasury in FY 2013 was $1,024.5 million; while
the downward re-estimate received from the U.S. Treasury was
$447.2 million.
Available Borrowing Authority and Terms of Borrowing
Ex-Im Bank in part relies on borrowings from the U.S. Treasury
to help fund the Bank’s loan program. U.S. Treasury borrowings
are repaid primarily with the repayments of medium-term and
long-term loans. To the extent repayments on the underlying
loans, combined with commitment and exposure fees and
interest earnings received on the loans, are not sufficient to repay
the borrowings, permanent and indefinite appropriated funds are
available to Ex-Im Bank through the re-estimation process for this
purpose. Accordingly, U.S. Treasury borrowings do not have a set
repayment schedule; however, the full amount of the borrowings
is expected to be repaid by FY 2042.
For FY 2014 Ex-Im Bank had $306.2 million in borrowing
authority withdrawn while in FY 2013 Ex-Im Bank had $5,746.9
million in new borrowing authority with the U.S. Treasury.
Unobligated Balances
Unobligated balances at September 30, 2014 totaled $2,404.4
million. Of the $2,404.4 million, $303.9 million is available to
cover program costs for new credits, $1,869.7 million represents
the amount in the guarantee and insurance financing account
that is available to cover future defaults, and $261.4 million is
unavailable for new obligations.
Unobligated balances at September 30, 2013 totaled $2,606.3
million. Of the $2,606.3 million, $283.8 million was available to
cover program costs for new credits, $2,063.5 million represents
the amount in the guarantee and insurance financing account that
was available to cover future defaults, and $259.0 million was
unavailable for new obligations
Dierences between Combined Statements of
Budgetary Resources and Budget of U.S. Government
There are no differences between the budgetary resources
shown on the Combined Statements of Budgetary Resources
and the Budget of the U.S. Government.
16. RECONCILIATION OF NET COST OF OPERATIONS
TO BUDGET
The following schedule reconciles the Net Cost of Operations to
the Bank’s budgetary and financial accounting. The reconciliation
illustrates the relationship between net obligations derived from
Ex-Im Bank’s budgetary accounts and the net cost of operations
derived from Ex-Im Bank’s proprietary accounts by identifying
and explaining key differences between the two numbers.
92 I 2014 ANNUAL REPORT I 93
(in millions)
For the
Year Ended
September 30,
2014
For the
Year Ended
September 30,
2013
RESOURCES USED TO FINANCE ACTIVITIES
Budgetary Resources Obligated
Obligations Incurred $5,642.0 $10,244.8
Less: Spending Authority from Osetting
Collections and Recoveries
5,071.4 5,170.4
Net Obligations 570.6 5,074.4
Other Resources
Imputed Financing from Costs Absorbed by Others 3.8 3.5
Total Resources Used To Finance Activities $574.4 $5,077.9
RESOURCES USED TO FINANCE ITEMS NOT PART OF
NET COST OF OPERATIONS
Change in Budgetary Resources Obligated for
Goods, Services, and Benefits Ordered but Not Yet
Provided
$3,687.1 $1,480.6
Resources That Fund Expenses in Prior Periods (1,435.9) (1,024.4)
Budgetary Osetting Collections and Receipts That
Do Not Aect
Net Cost of Operations
—Credit-Program Collections 3,266.0 2,638.6
Resources That Finance the Acquisition of Assets (6,296.0) (8,452.6)
Total Resources That Do Not Finance Net Cost of
Operations
(778.8) (5, 357.8)
Total Resources Used To Finance the Net Cost of
Operations
($204.4) ($279.9)
COMPONENTS OF THE NET COST OF OPERATIONS
THAT WILL NOT REQUIRE OR GENERATE RESOURCES
IN THE CURRENT PERIOD
Components Requiring or Generating Resources in
Future Periods
Allowance Amortization $510.5 $548.2
Provision for Loss -- Pre-Credit-Reform Credits 21.3 (47. 0)
Downward Re-estimate of Credit-Losses (902.0) (970.9)
Upward Re-estimate of Credit-Losses 1,332.0 1,434.5
Change in Receivables (165.6) (264.1)
Change in Payables (13.5) 9.3
Total Components Requiring or Generating Resources in
Future Periods
$782.7 $710.0
Components Not Requiring or Generating Resources
Deferral Adjustments ($52.2) $109.8
Total Components Not Requiring or Generating Resources ($52.2) $109.8
Total Components of Net Cost of Operations That Will Not
Require or Generate Resources in the Current Period
$730.5 $819.8
Net Excess Program Costs Over (Revenue) $526.1 $539.9
17. RELATED-PARTY TRANSACTIONS
The financial statements reflect the results of contractual
agreements with the Private Export Funding Corporation
(PEFCO). PEFCO, which is owned by a consortium of private-
sector banks, industrial companies and financial services
institutions, makes medium-term and long-term fixed-rate and
variable-rate loans to foreign borrowers to purchase U.S. made
equipment when such loans are not available from traditional
private sector lenders on competitive terms. Ex-Im Bank’s
credit and guarantee agreement with PEFCO extends through
December 31, 2020. Through its contractual agreements with
PEFCO, Ex-Im Bank exercises a broad measure of supervision
over PEFCO’s major financial management decisions, including
approval of both the terms of individual loan commitments and
the terms of PEFCO’s long-term debt issues, and is entitled to
representation at all meetings of PEFCO’s board of directors,
advisory board and exporters’ council.
PEFCO has agreements with Ex-Im Bank which provide that
Ex-Im Bank will (1) guarantee the due and punctual payment
of principal and interest on export loans made by PEFCO and
(2) guarantee the due and punctual payment of interest on
PEFCO’s long-term secured debt obligations when requested
by PEFCO. Such guarantees, aggregating $10,027.1 million at
September 30, 2014 ($9,072.5 million related to export loans and
$954.7 million related to secured debt obligations) and $7,516.4
million at September 30, 2013 ($6,564.0 million related to export
loans and $952.4 million related to secured debt obligations),
are included by Ex-Im Bank in the total for guarantee, insurance
and undisbursed loans and the allowance related to these
transactions is included in the Guaranteed Loan Liability on the
Balance Sheets. Ex-Im Bank received fees totaling $39.1 million
in FY 2014 ($38.8 million related to export loans and $0.3 million
related to secured debt obligations) and $43.2 million in FY 2013
($43.1 million related to export loans and $0.1 million related to
secured debt obligations) for the agreements, which are included
in Fee and Other Revenue on the Statements of Net Costs.
Ex-Im Bank has significant transactions with the U.S. Treasury
such as borrowings, borrowings repayments, interest income
on financing accounts, and interest expense on borrowings. The
U.S. Treasury, although not exercising control over Ex-Im Bank,
holds the capital stock of Ex-Im Bank creating a related-party
relationship between Ex-Im Bank and the U.S. Treasury.
94 I
EXPORT-IMPORT BANK of the UNITED STATES
18. CONTRIBUTIONS TO EMPLOYEE RETIREMENT
SYSTEMS
All of Ex-Im Bank’s employees whose appointments have federal
status are covered by either the Civil Service Retirement System
(CSRS) or the Federal Employees Retirement System (FERS).
In FY 2014 and FY 2013, Ex-Im Bank withheld 7.0 percent of
CSRS employees’ gross earnings. Ex-Im Bank’s contribution
was 7.0 percent of employees’ gross earnings. This sum was
transferred to the CSRS fund from which this employee group
will receive retirement benefits.
For FERS, Ex-Im Bank withheld 0.8 percent of employees’
gross earnings. Ex-Im Bank’s contribution was 11.2 percent of
employees’ gross earnings in FY 2014 and FY 2013. This sum
was transferred to the FERS fund from which the employee
group will receive retirement benefits. An additional 6.2 percent
of gross earnings, after pre-tax deductions are withheld up to the
2014 and 2013 limit of $117,000 and $113,700, respectively; that
sum plus matching contributions by Ex-Im Bank are sent to the
Social Security System from which the FERS employee group
will receive Social Security benefits.
FERS and CSRS employees may elect to participate in the Thrift
Savings Plan (TSP). CSRS and FERS employees may contribute
up to $17,500 of gross earnings. In addition, FERS employees
receive an automatic 1 percent contribution from Ex-Im Bank.
Amounts withheld for FERS employees are matched by Ex-Im
Bank up to 4 percent for a maximum Ex-Im Bank contribution to
the TSP of 5 percent.
Total Ex-Im Bank (employer) matching contributions to the TSP,
CSRS and FERS for all employees, included in Administrative
Costs in the Statements of Net Costs, were approximately $6.6
million in FY 2014 and $6.7 million in FY 2013. Although Ex-Im
Bank funds a portion of pension benefits under the CSRS and
FERS relating to its employees and makes the necessary payroll
withholdings for them, it has no liability for future payments to
employees under these programs and does not account for the
assets of the CSRS and FERS, nor does it have actuarial data
with respect to accumulated plan benefits or the unfunded
pension liability relative to its employees. These amounts are
reported by the OPM for the Retirement Systems and are not
allocated to the individual employers. The excess of total pension
expense over the amount contributed by Ex-Im Bank and its
employees represents the amount of pension expense which
must be financed directly by OPM. Ex-Im Bank recognizes an
imputed cost and an imputed financing source, calculated using
cost factors supplied by OPM, equal to the excess amount.
OPM also accounts for the health and life insurance programs
for current and retired civilian federal employees. Similar to the
accounting treatment afforded the retirement programs, the
actuarial data related to the health and life insurance programs is
maintained by OPM and is not available on an individual-employer
basis. Ex-Im Bank recognizes an imputed cost and an imputed
financing source for the future cost of these other retirement
benefits (ORB) at the time the employee’s services are rendered.
This ORB expense is calculated using cost factors supplied by
OPM and must be financed by OPM.
94 I 2014 ANNUAL REPORT I 95
Independent Auditors’ Report
INDEPENDENT AUDITORS’ REPORT
To the Audit Committee, the Board of Directors, and
the Inspector General of the
Export-Import Bank of the United States:
We have audited the accompanying financial statements of the Export-Import Bank of the United States
(“Ex-Im Bank” or the “Bank”), which comprise the balance sheets as of September 30, 2014 and 2013,
and the related statements of net costs and changes in net position and the combined statements of
budgetary resources for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
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.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States of
America, the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States, and Office of Management and Budget (OMB) Bulletin
No. 14-02, Audit Requirements for Federal Financial Statements. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit 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
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 Bank’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Ex-Im Bank as of September 30, 2014 and 2013, and its net costs of operations and
changes in net position, and combined budgetary resources for the years then ended in accordance with
accounting principles generally accepted in the United States of America.
96 I
EXPORT-IMPORT BANK of the UNITED STATES
- 2 -
Emphasis of Matter
As discussed in Footnote 1 to the financial statements, the Export-Import Bank Reauthorization Act of
2012 extended the Bank’s charter until September 30, 2014. In accordance with its enabling legislation,
continuation of Ex-Im Bank as an independent corporate agency of the United States is subject to periodic
extensions granted by Congress. The Administration has requested a five-year extension of the Bank’s
charter through FY 2019. Congressional authorization has been temporarily extended through June 30,
2015. Management believes that Ex-Im Bank’s authorization will be further extended until a final
authorization is passed by Congress. If the charter is temporarily not extended, the Bank will not be able
to authorize new credits; however, under the terms of its charter the Bank will continue to service existing
loans, guarantees, and insurance policies. Ex-Im is currently appropriated through a continuing resolution
through December 11, 2014 and the Bank expects to receive a full year appropriation when Congress
approves an Omnibus Appropriations Bill funding the entire U.S. Government. Our opinion is not
modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the information
included in the sections entitled “Management’s Discussion and Analysis” and “Required Supplementary
Information” be presented to supplement the basic financial statements. Such information, although not a
part of the basic financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures to
the required supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because
the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 14,
2014, on our consideration of Ex-Im Bank’s internal control over financial reporting and on our tests of
its compliance with certain provisions of laws and regulations and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering Ex-Im Bank’s internal control over financial reporting and compliance.
McLean, Virginia
November 14, 2014
96 I 2014 ANNUAL REPORT I 97
- 2 -
Emphasis of Matter
As discussed in Footnote 1 to the financial statements, the Export-Import Bank Reauthorization Act of
2012 extended the Bank’s charter until September 30, 2014. In accordance with its enabling legislation,
continuation of Ex-Im Bank as an independent corporate agency of the United States is subject to periodic
extensions granted by Congress. The Administration has requested a five-year extension of the Bank’s
charter through FY 2019. Congressional authorization has been temporarily extended through June 30,
2015. Management believes that Ex-Im Bank’s authorization will be further extended until a final
authorization is passed by Congress. If the charter is temporarily not extended, the Bank will not be able
to authorize new credits; however, under the terms of its charter the Bank will continue to service existing
loans, guarantees, and insurance policies. Ex-Im is currently appropriated through a continuing resolution
through December 11, 2014 and the Bank expects to receive a full year appropriation when Congress
approves an Omnibus Appropriations Bill funding the entire U.S. Government. Our opinion is not
modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the information
included in the sections entitled “Management’s Discussion and Analysis” and “Required Supplementary
Information” be presented to supplement the basic financial statements. Such information, although not a
part of the basic financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures to
the required supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because
the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 14,
2014, on our consideration of Ex-Im Bank’s internal control over financial reporting and on our tests of
its compliance with certain provisions of laws and regulations and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering Ex-Im Bank’s internal control over financial reporting and compliance.
McLean, Virginia
November 14, 2014
To the Audit Committee, the Board of Directors, and
the Inspector General of the Export-Import Bank of the United States
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, and Office of Management and Budget (OMB)
Bulletin No. 14-02, Audit Requirements for Federal Financial Statements, the financial statements of the
Export-Import Bank of the United States (“Ex-Im Bank” or the “Bank”) as of and for the year ended
September 30, 2014, and the related notes to the financial statements, and have issued our report thereon
dated November 14, 2014.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered Ex-Im Bank’s internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinion on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of Ex-Im Bank’s internal control. Accordingly, we
do not express an opinion on the effectiveness of Ex-Im Bank’s internal control.
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. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, 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
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.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may
exist that were not identified. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. We did identify certain
deficiencies in internal control that we consider to be, in aggregate, a significant deficiency.
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING
STANDARDS
Independent Auditors’ Report
On Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
98 I
EXPORT-IMPORT BANK of the UNITED STATES
Sig should have been used,
2. Due to a formula error, cash balances for short term and medium term insurance in the CSC2 input
form were incorrectly entered, and
3. The authorization dates of amended working capital guarantees (WC) were incorrectly entered.
Criteria: BCL Ratings, formulas in input forms, and authorization dates of transactions should be
correctly reected.
Cause: Causes of errors identied above are listed below, respectively:
1. An input error in the BCL rating for an ESS transaction occurred and was not detected by review of
the BCL ratings,
2. Incorrect formulas were entered in the CSC2 input form for short term and medium term insurance
which were not detected by review of the input form, and
3. The proper documents of amended WC were not received by the Ofce of the Chief Financial Ofcer
(OCFO) until January 2014, despite the fact that they were approved prior to September 30, 2013.
Effect or potential effect: The effect of CSC2 input error resulted in an understatement of $42 million in
guaranteed loan liabilities as of September 30, 2014. Ex-Im Bank reected the adjustment in the nancial
statements. Errors due to ESS BCL rating and authorization date errors were not corrected by Ex-Im Bank
as the monetary effects of the ESS BCL rating and authorization date error were approximately $350,000
and deemed to be immaterial by Ex-Im Bank.
Recommendation: We recommend that Ex-Im Bank enhances the effectiveness of the review processes
over the ESS risk rating and CSC2 input form to ensure that correct ratings are assigned and formulas in
the input form are accurate, respectively. For the amendment of WC transactions, we recommend that
management established a process to ensure that the OCFO is timely notied of amendments to documents.
Ex-Im Bank’s response to nding: As of the report date, Ex-Im Bank has not responded to the nding
identied above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Ex-Im Bank’s nancial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws and
regulations, noncompliance with which could have a direct and material effect on the determination of
nancial statement amounts. However, providing an opinion on compliance with those provisions was not
an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards and OMB Bulletin No. 14-02.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Ex-Im Bank’s
98 I 2014 ANNUAL REPORT I 99
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards and OMB Bulletin No. 14-02, in considering Ex-Im Bank’s internal
control and compliance. Accordingly, this communication is not suitable for any other purpose.
- 3 -
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Ex-Im Bank’s
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards and OMB Bulletin No. 14-02, in considering Ex-Im Bank’s internal
control and compliance. Accordingly, this communication is not suitable for any other purpose.
McLean, Virginia
November 14, 2014
McLean, Virginia
November 14, 2014
100 I
EXPORT-IMPORT BANK of the UNITED STATES
Directors and Officers
BOARD OF DIRECTORS
Fred P. Hochberg
Chairman and President
Wanda Felton
First Vice President
and Vice Chair
Patricia M. Loui
Board Member
Sean Mulvaney
Board Member
Penny Pritzker
U.S. Secretary of Commerce
Board Member, ex officio
Ambassador Michael Froman
U.S. Trade Representative
Board Member, ex officio
OFFICE OF THE INSPECTOR
GENERAL
Michael McCarthy
Inspector General (Acting)
SENIOR MANAGEMENT
Gaurab Bansal
Deputy Chief of Staff
James Burrows
Senior Vice President
Small Business
Bradley Carroll
Senior Vice President
Communications
James C. Cruse
Senior Vice President
Policy and Planning
Michael Cushing
Senior Vice President
Resource and Information Management
Angela Mariana Freyre
Senior Vice President
and General Counsel
Erin Gulick
Senior Vice President
Congressional Affairs
Charles J. Hall
Executive Vice President
and Chief Risk Officer
Robert A. Morin
Senior Vice President
Business & Product Development
Scott P. Schloegel
Senior Vice President
and Chief of Staff
David M. Sena
Senior Vice President
and Chief Financial Officer
Claudia Slacik
Senior Vice President
Export Finance and
Chief Banking Officer
Kenneth M. Tinsley
Senior Vice President
Credit and Risk Management
OTHER OFFICERS
Pamela S. Bowers
Vice President
Business Credit
William Boyd
Vice President
Chief Acquisition Officer
Catrell Brown
Vice President
Public Affairs
David W. Carter
Vice President
Credit Policy
Andrew Pack
Vice President
Transportation Portfolio Management
Raymond J. Ellis
Vice President
Global Business Development
Hala El‑Mohandes
Vice President (Acting)
Structured and Project Finance
Isabel Galdiz
Vice President
International Relations
Dolline Hatchett
Vice President
Communications
Nathalie Herman
Vice President
and Treasurer
Walter Hill, Jr.
Vice President
Credit Review and Compliance
Walter F. Keating, III
Vice President
Asset Management
Michele A. Kuester
Vice President
Business Processes
James A. Mahoney, Jr.
Vice President
Engineering and Environment
Annette B. Maresh
Vice President
Trade Finance
William A. Marsteller
Vice President
Country Risk and Economic Analysis
and Chief Economist
Natasha McCarthy
Vice President
and Chief Human Capital Officer
Robert F. X. Roy Jr.
Vice President
Transportation
Stephen Rubright
Vice President
Congressional Affairs
Howard Spira
Chief Information Officer
Stephanie Thum
Vice President
Customer Experience
Nicole M. B. Valtos
Vice President
Operations and Data Quality
Helene Walsh
Vice President
Policy Analysis
Patricia Alves Wolf
Vice President
and Controller
Directors and Officers as of December 15, 2014
100 I 2014 ANNUAL REPORT I 101
Directors and Officers
EX-IM BANK REGIONAL EXPORT FINANCE CENTERS
WA
OR
CA
ID
NV
AZ
UT
WY
MT
ND
SD
CO
NM
TX
OK
KS
MN
IA
MO
AR
LA
MS
TN
IL
WI
MI
IN
OH
PA
NY
VA
WV
NC
SC
GA
AL
FL
ME
KY
VT
NH
AK
NE
MA
MD
NJ
DE
CT
RI
PR
U.S. Virgin
Islands
HI
San Diego
Orange County
San Francisco
Seattle
Minneapolis
Chicago
New York City
Atlanta
Miami
Detroit
Houston
Dallas
SERVING SMALL BUSINESS EXPORTERS LOCALLY ACROSS THE UNITED STATES
WESTERN REGION
Orange County (main)
2302 Martin Court, Suite 315
Irvine, CA 92612
Tel: 949-660-1341
San Diego
9449 Balboa Avenue, Suite 111
San Diego, CA 92123
Tel: 858-467-7035
San Francisco
50 Fremont Street, Suite 2450
San Francisco, CA 94105
Tel: 415-705-2285
Seattle
2001 6th Avenue, Suite 2600
Seattle, WA 98121
Tel: 206-728-2264
CENTRAL REGION
Chicago (main)
200 West Adams Street, Suite 2450
Chicago, IL 60606
Tel: 312-353-8081
Detroit
211 W. Fort Street, Suite xxx
Detroit, MI 48226
Tel: 313-309-4158
Minneapolis
330 2nd Avenue, Suite 410
Minneapolis, MN 55401
Tel: 612-348-1213
Houston
1880 South Dairy Ashford II, Suite 405
Houston, TX 77077
Tel: 281-721-0467
Dallas (North Texas Branch)
McKinney Chamber of Commerce
2150 S. Central Expressway, Suite 150
McKinney, TX 75070
Tel: 214-551-4959
EASTERN REGION
Miami (main)
5835 Blue Lagoon Drive, Suite 203
Miami, FL 33126
Tel: 305-526-7436
Atlanta
75 Fifth Street, N.W., Suite 1060
Atlanta, GA 30308
Tel: 404-815-1497
New York
Ted Weiss Federal Building
290 Broadway, 13th Floor
New York, NY 10007
Tel: 212-809-2650
www.exim.gov
1.800.565.EXIM
SERVING SMALL BUSINESS EXPORTERS
LOCALLY ACROSS THE UNITED STATES
CENTRAL REGION
Chicago (main)
Tel: 312‑353‑8081
Detroit
Tel: 313‑309‑4158
Minneapolis
Tel: 612‑348‑1213
Houston
Tel: 281‑721‑0467
Dallas (North Texas Branch)
Tel: 214‑551‑4959
EASTERN REGION
Miami (main)
Tel: 305‑526‑7436
Atlanta
Tel: 404‑815‑1497
New York
Tel: 212‑809‑2650
WESTERN REGION
Orange County (main)
Tel: 949‑660‑1341
San Diego
Tel: 858‑467‑7035
San Francisco
Tel: 415‑705‑2285
Seattle
Tel: 206‑728‑2264
EXPORT‑IMPORT BANK of the UNITED STATES
811 Vermont Avenue, N.W.
Washington, DC 20571
@EximBankUS
