Freddie Mac 2008 Annual Report Download - page 185

FREDDIE MAC
CONSOLIDATED STATEMENTS OF OPERATIONS
2008 2007 2006
Year Ended December 31,
(dollars in millions, except share-related
amounts)
Interest income
Investments in securities ......................................................... $ 35,067 $ 36,587 $ 36,021
Mortgage loans ............................................................... 5,369 4,449 4,152
Other:
Cash and cash equivalents ...................................................... 618 594 622
Federal funds sold and securities purchased under agreements to resell ........................ 423 1,280 1,469
Total other ................................................................ 1,041 1,874 2,091
Total interest income ........................................................ 41,477 42,910 42,264
Interest expense
Short-term debt ............................................................... (6,800) (8,916) (8,665)
Long-term debt ............................................................... (26,532) (29,148) (28,218)
Total interest expense on debt ................................................... (33,332) (38,064) (36,883)
Due to Participation Certificate investors . ............................................. — (418) (387)
Total interest expense ......................................................... (33,332) (38,482) (37,270)
Expense related to derivatives ..................................................... (1,349) (1,329) (1,582)
Net interest income .............................................................. 6,796 3,099 3,412
Non-interest income (loss)
Management and guarantee income (includes interest on guarantee asset of $1,121, $549 and $580,
respectively) ............................................................... 3,370 2,635 2,393
Gains (losses) on guarantee asset ................................................... (7,091) (1,484) (978)
Income on guarantee obligation .................................................... 4,826 1,905 1,519
Derivative gains (losses) ......................................................... (14,954) (1,904) (1,173)
Gains (losses) on investment activity . . . ............................................. (16,108) 294 (473)
Gains (losses) on foreign-currency denominated debt recorded at fair value ....................... 406 — —
Gains (losses) on debt retirement ................................................... 209 345 466
Recoveries on loans impaired upon purchase ........................................... 495 505 —
Foreign-currency gains (losses), net ................................................. — (2,348) 96
Low-income housing tax credit partnerships............................................ (453) (469) (407)
Other income ................................................................ 125 246 236
Non-interest income (loss) ......................................................... (29,175) (275) 1,679
Non-interest expense
Salaries and employee benefits .................................................... (828) (828) (784)
Professional services ........................................................... (262) (392) (399)
Occupancy expense ............................................................ (67) (64) (61)
Other administrative expenses ..................................................... (348) (390) (397)
Total administrative expenses .................................................... (1,505) (1,674) (1,641)
Provision for credit losses ........................................................ (16,432) (2,854) (296)
Real estate owned operations expense . . . ............................................. (1,097) (206) (60)
Losses on certain credit guarantees .................................................. (17) (1,988) (406)
Losses on loans purchased ....................................................... (1,634) (1,865) (148)
Securities administrator loss on investment activity ....................................... (1,082) — —
Minority interests in earnings (loss) of consolidated subsidiaries .............................. (8) 8 (58)
Other expenses ............................................................... (415) (222) (200)
Non-interest expense ............................................................. (22,190) (8,801) (2,809)
Income (loss) before income tax (expense) benefit ......................................... (44,569) (5,977) 2,282
Income tax (expense) benefit ....................................................... (5,550) 2,883 45
Net income (loss) ............................................................... $ (50,119) $ (3,094) $ 2,327
Preferred stock dividends and issuance costs on redeemed preferred stock (including $—, $6 and $— of
issuance costs on redeemed preferred stock, respectively) ................................. (675) (404) (270)
Amount allocated to participating security option holders ................................... (1) (5) (6)
Net income (loss) available to common stockholders ........................................ $ (50,795) $ (3,503) $ 2,051
Earnings (loss) per common share:
Basic ..................................................................... $ (34.60) $ (5.37) $ 3.01
Diluted .................................................................... $ (34.60) $ (5.37) $ 3.00
Weighted average common shares outstanding (in thousands)
Basic ..................................................................... 1,468,062 651,881 680,856
Diluted .................................................................... 1,468,062 651,881 682,664
Dividends per common share ....................................................... $ 0.50 $ 1.75 $ 1.91
The accompanying notes are an integral part of these financial statements.
182 Freddie Mac