Freddie Mac 2005 Annual Report Download - page 140

NOTE 9: STOCKHOLDERS' EQUITY
Preferred Stock
During 2005 and 2004, we completed no preferred stock oÅerings. All 17 classes of preferred stock outstanding at
December 31, 2005 have a par value of $1 per share. We have the option to redeem these shares, on speciÑed dates, at their
redemption price plus dividends accrued through the redemption date. In addition, all 17 classes of preferred stock are
perpetual and non-cumulative, and carry no signiÑcant voting rights or rights to purchase additional Freddie Mac stock or
securities. Costs incurred in connection with the issuance of preferred stock are charged to Additional paid-in capital.
Table 9.1 provides a summary of our preferred stock outstanding at December 31, 2005.
Table 9.1 Ì Preferred Stock
Redemption Total
Shares Shares Total Par Price per Outstanding Redeemable NYSE
Issue Date Authorized Outstanding Value Share Balance(1) On or After(2) Symbol(3)
(in millions, except redemption price per share)
1996 Variable-rate(4) ÏÏÏ April 26, 1996 5.00 5.00 $ 5.00 $50.00 $ 250 June 30, 2001 FRE.prB
6.14% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ June 3, 1997 12.00 12.00 12.00 50.00 600 June 30, 2002 FRE.prD
5.81% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ October 27, 1997 3.00 3.00 3.00 50.00 150 October 27, 1998 (5)
5% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ March 23, 1998 8.00 8.00 8.00 50.00 400 March 31, 2003 FRE.prF
1998 Variable-rate(6) ÏÏÏ September 23 and 29, 1998 4.40 4.40 4.40 50.00 220 September 30, 2003 FRE.prG
5.1% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ September 23, 1998 8.00 8.00 8.00 50.00 400 September 30, 2003 FRE.prH
5.3% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ October 28, 1998 4.00 4.00 4.00 50.00 200 October 30, 2000 (5)
5.1% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ March 19, 1999 3.00 3.00 3.00 50.00 150 March 31, 2004 (5)
5.79% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ July 21, 1999 5.00 5.00 5.00 50.00 250 June 30, 2009 FRE.prK
1999 Variable-rate(7) ÏÏÏ November 5, 1999 5.75 5.75 5.75 50.00 287 December 31, 2004 FRE.prL
2001 Variable-rate(8) ÏÏÏ January 26, 2001 6.50 6.50 6.50 50.00 325 March 31, 2003 FRE.prM
2001 Variable-rate(9) ÏÏÏ March 23, 2001 4.60 4.60 4.60 50.00 230 March 31, 2003 FRE.prN
5.81% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ March 23, 2001 3.45 3.45 3.45 50.00 173 March 31, 2011 FRE.prO
6% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ May 30, 2001 3.45 3.45 3.45 50.00 173 June 30, 2006 FRE.prP
2001 Variable-rate(10)ÏÏÏ May 30, 2001 4.02 4.02 4.02 50.00 201 June 30, 2003 FRE.prQ
5.7% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ October 30, 2001 6.00 6.00 6.00 50.00 300 December 31, 2006 FRE.prR
5.81% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ January 29, 2002 6.00 6.00 6.00 50.00 300 March 31, 2007 (5)
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 92.17 92.17 $92.17 $4,609
(1) Amounts stated at redemption value.
(2) As long as the capital monitoring framework established by the OÇce of Federal Housing Enterprise Oversight, or OFHEO, in January 2004 remains
in eÅect, any preferred stock redemption will require prior approval by OFHEO. See ""NOTE 10: REGULATORY CAPITAL'' for more
information.
(3) Preferred stock is listed on the New York Stock Exchange, or NYSE, unless otherwise noted.
(4) Dividend rate resets quarterly and is equal to the sum of three-month LIBOR plus 1 percent divided by 1.377, and is capped at 9.00 percent.
(5) Not listed on any exchange.
(6) Dividend rate resets quarterly and is equal to the sum of three-month LIBOR plus 1 percent divided by 1.377, and is capped at 7.50 percent.
(7) Dividend rate resets on January 1 every Ñve years after January 1, 2005 based on a Ñve-year Constant Maturity Treasury, or CMT, rate, and is capped
at 11.00 percent. Optional redemption on December 31, 2004 and on December 31 every Ñve years thereafter.
(8) Dividend rate resets on April 1 every two years after April 1, 2003 based on the two-year CMT rate plus 0.10 percent, and is capped at 11.00 percent.
Optional redemption on March 31, 2003 and on March 31 every two years thereafter.
(9) Dividend rate resets on April 1 every year based on 12-month LIBOR minus 0.20 percent, and is capped at 11.00 percent. Optional redemption on
March 31, 2003 and on March 31 every year thereafter.
(10) Dividend rate resets on July 1 every two years after July 1, 2003 based on the two-year CMT rate plus 0.20 percent, and is capped at 11.00 percent.
Optional redemption on June 30, 2003 and on June 30 every two years thereafter.
Stock Repurchase and Issuance Programs
On October 5, 2005, our board of directors authorized us to repurchase up to $2 billion of outstanding shares of our
common stock, all of which remained available for repurchase at December 31, 2005, and to issue up to $2 billion of non-
cumulative, perpetual preferred stock, in each case, from time to time depending on market conditions and other factors.
Completion of the authorized capital transactions will have no material impact on our regulatory minimum capital surplus,
including the 30 percent mandatory target set in January 2004 by OFHEO. In accordance with the existing capital
monitoring framework established by OFHEO in January 2004, we obtained OFHEO's approval for this common stock
repurchase. The repurchase authorization replaces all unused repurchase authority remaining under the common stock
repurchase plan approved by our board of directors in September 1997.
NOTE 10: REGULATORY CAPITAL
Regulatory Capital Standards
The Federal Housing Enterprises Financial Safety and Soundness Act of 1992, or GSE Act, established minimum,
critical and risk-based capital standards for us.
Those standards determine the amounts of Core capital and Total capital that we must maintain to meet regulatory
capital requirements. Core capital consists of the par value of outstanding common stock (common stock issued less
124 Freddie Mac