Freddie Mac 2008 Annual Report Download - page 61

ITEM 6. SELECTED FINANCIAL DATA
(1)
2008 2007 2006 2005 2004
At or for the Year Ended December 31,
(dollars in millions, except share-related amounts)
Statement of Operations Data
Net interest income ................................................ $ 6,796 $ 3,099 $ 3,412 $ 4,627 $ 8,313
Non-interest income (loss) ............................................ (29,175) (275) 1,679 683 (3,005)
Non-interest expense ............................................... (22,190) (8,801) (2,809) (2,780) (2,096)
Net income (loss) before cumulative effect of change in accounting principle ............ (50,119) (3,094) 2,327 2,172 2,603
Cumulative effect of change in accounting principle, net of taxes.................... — — — (59) —
Net income (loss) ................................................. (50,119) (3,094) 2,327 2,113 2,603
Net income (loss) available to common stockholders ........................... (50,795) (3,503) 2,051 1,890 2,392
Per common share data:
Earnings (loss) before cumulative effect of change in accounting principle:
Basic .................................................... (34.60) (5.37) 3.01 2.82 3.47
Diluted ................................................... (34.60) (5.37) 3.00 2.81 3.46
Earnings (loss) after cumulative effect of change in accounting principle:
Basic .................................................... (34.60) (5.37) 3.01 2.73 3.47
Diluted ................................................... (34.60) (5.37) 3.00 2.73 3.46
Cash common dividends............................................ 0.50 1.75 1.91 1.52 1.20
Weighted average common shares outstanding (in thousands)
(2)
:
Basic .................................................... 1,468,062 651,881 680,856 691,582 689,282
Diluted ................................................... 1,468,062 651,881 682,664 693,511 691,521
Balance Sheet Data
Total assets ..................................................... $ 850,963 $ 794,368 $ 804,910 $ 798,609 $ 779,572
Short-term debt ................................................... 435,114 295,921 285,264 279,764 266,024
Long-term senior debt .............................................. 403,402 438,147 452,677 454,627 443,772
Long-term subordinated debt .......................................... 4,505 4,489 6,400 5,633 5,622
All other liabilities ................................................. 38,579 28,911 33,139 31,945 32,720
Minority interests in consolidated subsidiaries ................................ 94 176 516 949 1,509
Stockholders’ equity (deficit) .......................................... (30,731) 26,724 26,914 25,691 29,925
Portfolio Balances
(3)
Mortgage-related investments portfolio
(4)
................................... $ 804,762 $ 720,813 $ 703,959 $ 710,346 $ 653,261
Total PCs and Structured Securities issued
(5)
................................ 1,827,238 1,738,833 1,477,023 1,335,524 1,208,968
Total mortgage portfolio ............................................. 2,207,476 2,102,676 1,826,720 1,684,546 1,505,531
Non-performing assets .............................................. 48,385 18,446 9,546 9,673 9,383
Ratios
Return on average assets
(6)
............................................ (6.1)% (0.4)% 0.3% 0.3% 0.3%
Non-performing assets ratio
(7)
.......................................... 2.6 1.1 0.6 0.7 0.8
Return on common equity
(8)
........................................... N/A (21.0) 9.8 8.1 9.4
Return on total equity
(9)
............................................. N/A (11.5) 8.8 7.6 8.6
Dividend payout ratio on common stock
(10)
................................. N/A N/A 63.9 56.9 34.9
Equity to assets ratio
(11)
............................................. (0.2) 3.4 3.3 3.5 3.8
Preferred stock to core capital ratio
(12)
.................................... N/A 37.3 17.3 13.2 13.5
(1) See “NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Recently Adopted Accounting Standards — Other Changes in
Accounting Principles” to our consolidated financial statements for more information regarding our accounting policies and adjustments made to
previously reported results due to changes in accounting principles. Effective January 1, 2006, we changed our method of estimating prepayments for
the purpose of amortizing premiums, discounts and deferred fees related to certain mortgage-related securities. Effective January 1, 2005, we changed
the effective interest method of accounting for interest expense related to callable debt.
(2) Includes the weighted average number of shares during the 2008 periods that are associated with the warrant for our common stock issued to Treasury
as part of the Purchase Agreement. This warrant is included in basic earnings per share, because it is unconditionally exercisable by the holder at a
cost of $.00001 per share.
(3) Represents the unpaid principal balance and excludes mortgage loans and mortgage-related securities traded, but not yet settled. Effective in December
2007, we established a trust for the administration of cash remittances received related to the underlying assets of our PCs and Structured Securities
issued. As a result, for December 2007 and each period in 2008, we report the balance of our mortgage portfolios to reflect the publicly-available
security balances of our PCs and Structured Securities. For periods prior to December 2007, we report these balances based on the unpaid principal
balance of the underlying mortgage loans. We reflected this change as an increase in the unpaid principal balance of our mortgage-related investments
portfolio by $2.8 billion at December 31, 2007.
(4) The mortgage-related investments portfolio presented on our consolidated balance sheets differs from the mortgage-related investments portfolio in this
table because the consolidated balance sheet caption includes valuation adjustments and deferred balances. See “MD&A — CONSOLIDATED
BALANCE SHEETS ANALYSIS — Table 24 — Characteristics of Mortgage Loans and Mortgage-Related Securities in our Mortgage-Related
Investments Portfolio” for more information.
(5) Includes PCs and Structured Securities that are held in our mortgage-related investments portfolio. See “MD&A — OUR PORTFOLIOS — Table 50 —
Total Mortgage Portfolio and Segment Portfolio Composition” for the composition of our total mortgage portfolio. Excludes Structured Securities for
which we have resecuritized our PCs and Structured Securities. These resecuritized securities do not increase our credit-related exposure and consist of
single-class Structured Securities backed by PCs, REMICs, and principal-only strips. The notional balances of interest-only strips are excluded because
this line item is based on unpaid principal balance. Includes other guarantees issued that are not in the form of a PC, such as long-term standby
commitments and credit enhancements for multifamily housing revenue bonds.
(6) Ratio computed as annualized net income (loss) divided by the simple average of the beginning and ending balances of total assets.
(7) Ratio computed as non-performing assets divided by the simple average of the beginning and ending unpaid principal balances of mortgage loans held
by us and those underlying our total PCs and Structured Securities issued.
(8) Ratio computed as annualized net income (loss) available to common stockholders divided by the simple average of the beginning and ending balances
of stockholders’ equity (deficit), net of preferred stock (at redemption value). Ratio is not computed for periods in which stockholders’ equity (deficit)
is less than zero.
(9) Ratio computed as annualized net income (loss) divided by the simple average of the beginning and ending balances of stockholders’ equity (deficit).
Ratio is not computed for periods in which stockholders’ equity (deficit) is less than zero.
(10) Ratio computed as common stock dividends declared divided by net income available to common stockholders. Ratio is not computed for periods in
which net income (loss) available to common stockholders was a loss.
(11) Ratio computed as the simple average of the beginning and ending balances of stockholders’ equity (deficit) divided by the simple average of the
beginning and ending balances of total assets.
(12) Ratio computed as preferred stock (excluding senior preferred stock), at redemption value divided by core capital. Senior preferred stock does not meet
the statutory definition of core capital. Ratio is not computed for periods in which core capital is less than zero. See “NOTE 10: REGULATORY
CAPITAL” to our consolidated financial statements for more information regarding core capital.
58 Freddie Mac