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V. Management’s Discussion and Analysis of Financial Position and Results of Operations Financial Highlights of 2001 Fiscal Year 2001 was another year of very favorable financial achievement marked by increases in both revenues and assets. Ginnie Mae achieved record net income of $805.3 million, a 5.6 percent increase from $762.8 million in Fiscal Year 2000.  Revenues increased by 5.6 percent, to $878.5 million from $832 million in Fiscal Year 2000, and total assets increased 10.1 percent, to $8.7 billion from $7.9 billion in Fiscal Year 2000. These growth rates reflect strengthened finan- cial management and the continued growth in Ginnie Mae’s MBS programs during Fiscal Year 2001. Ginnie Mae provided the market with impor- tant services and contributed to a stable envi- ronment.  The outstanding MBS portfolio increased, which generated increased guaranty and commitment fee revenues.  In Fiscal Year 2001, MBS program income rose to $438.7 million from $408.2 million in Fiscal Year 2000.  Due to Ginnie Mae’s strong program management, total expenses as a percentage of total revenues decreased from 5.7 percent in Fiscal Year 2000 to 5.6 percent in Fiscal Year 2001. Ginnie Mae issued $161.7 billion in commit- ment authority in Fiscal Year 2001, an 85 percent increase from Fiscal Year 2000.  The $153.8 billion of MBS issued in Fiscal Year 2001 represented a 45.8 percent increase in MBS issued from Fiscal Year 2000.  The out- standing MBS balance at the end of Fiscal Year 2001 was $604.3 billion, compared to $603.5 billion the previous year.  Fiscal Year 2001 production provided the capital to finance the purchase or refinance of homes for approximately 1.3 million American families. Ginnie Mae has continued its strong financial performance during Fiscal Year 2001 and pro- duced continued growth in revenue.  Excess revenues over expenses are invested in U.S. Government securities.  To date, Ginnie Mae’s earnings and fund balance have provided the capital to finance its operations and, as a result, Ginnie Mae has not needed to obtain funds through federal appropriations. The following chart illustrates Ginnie Mae’s revenue growth in the past five years: Revenue Fiscal Year Dollars in Millions 1997 $687 1998 $767 1999 $799 2000 $832 2001 $878 17 G i n n i e   M a e   A n n u a l   R e p o r t   2 0 0 1