Freddie Mac 2004 Annual Report Download - page 148

QUARTERLY SELECTED FINANCIAL DATA
2004
1Q 2Q 3Q 4Q Full-Year
(dollars in millions)
Net interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,126 $2,625 $ 2,321 $2,065 $ 9,137
Non-interest income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (26) 1,532 (3,691) (854) (3,039)
Non-interest expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (503) (548) (603) (717) (2,371)
Income tax (expense) beneÑt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (285) (855) 467 (117) (790)
Net income (loss)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,312 $2,754 $(1,506) $ 377 $ 2,937
Basic earnings (loss) per common share(1) ÏÏÏÏÏÏÏÏÏÏ $ 1.83 $ 3.92 $ (2.26) $ 0.47 $ 3.96
Diluted earnings (loss) per common share(1) ÏÏÏÏÏÏÏÏ $ 1.82 $ 3.91 $ (2.26) $ 0.47 $ 3.94
2003
1Q 2Q 3Q 4Q Full-Year
(dollars in millions)
Net interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,421 $2,185 $2,442 $2,450 $ 9,498
Non-interest income (loss)(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,247 1,830 (2,294) (1,027) (244)
Non-interest expense(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (410) (613) (562) (651) (2,236)
Income tax (expense) beneÑt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (991) (1,096) 126 (241) (2,202)
Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,267 $2,306 $ (288) $ 531 $ 4,816
Basic earnings (loss) per common share(1) ÏÏÏÏÏÏÏÏÏÏÏ $ 3.22 $ 3.28 $(0.49) $ 0.70 $ 6.69
Diluted earnings (loss) per common share(1) ÏÏÏÏÏÏÏÏÏ $ 3.21 $ 3.27 $(0.49) $ 0.69 $ 6.68
(1) Earnings per share is computed independently for each of the quarters presented. Due to the use of weighted-average common shares
outstanding when calculating earnings per share, the sum of the four quarters may not equal the full-year amount. Earnings per share
amounts may not recalculate using the amounts in this table due to rounding.
(2) Certain expenses related to uncollectible interest on PCs held by third parties were reclassiÑed to (Provision) beneÑt for credit losses
from Management and guarantee income to conform with the 2004 presentation. This resulted in a reclassiÑcation of $4 million,
$3 million, $5 million and $3 million for 1Q 2003, 2Q 2003, 3Q 2003 and 4Q 2003, respectively, totaling a $15 million reduction in
the loss reported in Non-interest income (loss) with a corresponding increase in expenses reported in Non-interest expense
during 2003.
SUBSEQUENT ACCOUNTING REVISIONS
As we announced on May 12, 2005, we entered into a closing agreement with the IRS that resolves issues
relating to the tax treatment of dividends paid on step-down preferred stock that our two REIT subsidiaries
previously issued. The closing agreement resulted in changes to our 2004 Ñnancial results previously released
in our Information Statement Supplement dated March 31, 2005. SpeciÑcally, we recorded a reduction in tax
reserves, which are a component of Other assets, and a corresponding reduction in Income tax expense,
totaling $110 million. Of that amount, Income tax expense was reduced by $94 million, which was the balance
of the tax reserve related to this issue at January 1, 2004, and by a reversal of $16 million of additional tax
reserve recorded in 2004. The impact by quarter was an increase (reduction) to Net income of $101 million,
$16 million, ($9) million, and $2 million, aÅecting the Ñrst, second, third and fourth quarters of 2004,
respectively. In 2005 and thereafter, we will record tax beneÑts related to REIT preferred stock dividend
payments in the consolidated Ñnancial statements consistent with the closing agreement. See
""NOTE 14: INCOME TAXES'' to the consolidated Ñnancial statements for additional information.
Freddie Mac
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