15.11.2002: Meldung: Freddie Mac Releases 3rd Quarter 2002 Information Statement (engl.)
Mclean, Va., 14.11.2002. Freddie Mac (NYSE: FRE) today released its third quarter 2002 Information Statement Supplement, which includes new disclosure about the accounting treatment of the loan loss reserve reduction first announced in July 2002. The adjustment to reduce Freddie Mac"s loan loss reserve increased the corporation"s previously reported net income and retained earnings for third quarter 2002.
As disclosed in the corporation"s second quarter 2002 earnings press release dated July 23, 2002, Freddie Mac conducted a review of its loan loss reserves and concluded that its loan loss reserve balance has been approximately $250 million more than the level required. Accordingly, Freddie Mac has reduced its loan loss reserve balance as of September 30, 2002 by $246 million on a pre-tax basis. This adjustment resulted in an increase in both GAAP net income and Operating earnings of $160 million after-tax, or $0.23 per diluted common share, for third quarter 2002.
Freddie Mac has updated its third quarter 2002 results in its Information Statement Supplement dated November 14, 2002 to reflect this reserve reduction. Freddie Mac"s results for periods prior to third quarter 2002 were not affected by the reserve reduction. Additional detail about the effects of this loan loss reserve reduction is available in the supplemental schedule that accompanies this press release.
With this announcement, Freddie Mac is also reiterating its expectation of operating earnings per share growth of about 20 percent in 2002. This expectation excludes the effects of the loan loss reserve reduction described above.
Freddie Mac"s press releases sometimes contain forward-looking statements pertaining to management"s current expectations as to Freddie Mac"s future business plans, results of operations and/or financial condition. Management"s expectations for the corporation"s future necessarily involve a number of assumptions and estimates, and various factors could cause actual results to differ materially from these expectations. These assumptions and factors are discussed in the corporation"s Annual Report to Shareholders and its Information Statement and quarterly Information Statement Supplements.
Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage passthrough securities and debt instruments in the capital markets. Over the years, Freddie Mac has opened doors for one in six homebuyers and more than two million renters in America.
Freddie Mac"s earnings releases and other financial disclosures are available on the Investors" page of its website at http://www.freddiemac.com .
SUMMARY OF REVISED REPORTING FOR LOAN LOSS RESERVES
EFFECTIVE THIRD QUARTER 2002
(dollars in millions, except share-related amounts)
As disclosed in the corporation"s second quarter 2002 earnings press release dated July 23, 2002, Freddie Mac conducted a review of its loan loss reserves and concluded that its loan loss reserve balance has been approximately $250 million more than the level required. Freddie Mac has updated its third quarter 2002 results to include the effects of this loan loss reserve reduction. This reduction resulted in an increase in third quarter 2002 net income of $160 million after-tax, or $0.23 per diluted common share. Freddie Mac"s results for periods prior to third quarter 2002 were not affected by the reserve reduction. Additional information is included in Freddie Mac"s Information Statement Supplement dated November 14, 2002.
The following table highlights the effects of this adjustment on third quarter 2002 results.
GAAP Results Operating Results
Line: 3Q02 Line: 3Q02
GAAP Net Income Operating Earnings
1 GAAP Net Income, As 16 Operating Earnings, As
Reported $1,378 Reported $987
2 Loan Loss Reserves 17 Loan Loss Reserves
Adjustment (After-Tax) 160 Adjustment (After-Tax) 160
3 Adjusted GAAP Net Income $1,538 18 Adjusted Operating
Diluted GAAP Earnings Per
Common Share Diluted Operating
4 Diluted GAAP Earnings Per Earnings Per
Common Share, As Reported $1.90 Common Share
5 Loan Loss Reserves 19 Diluted Operating
Adjustment (After-Tax) $0.23 Earnings Per Common
6 Adjusted GAAP Diluted Share, As Reported $1.34
Earnings Per Common Share $2.13 20 Loan Loss Reserves
Adjustment (After-Tax) $0.23
Loan Loss Reserves Balance 21 Adjusted Diluted
7 Loan Loss Reserves Balance, Operating Earnings Per
As Reported $708 Common Share $1.57
8 Loan Loss Reserves
Adjustment (Pre-Tax) (246)
9 Adjusted Loan Loss Reserves
10 Other Liabilities, As
11 Tax effect of Loan Loss
Reserves Adjustment (1) 86
12 Adjusted Other Liabilities $7,591
13 Total Stockholders" Equity,
As Reported $22,406
14 Loan Loss Reserves
Adjustment (After-Tax) (2) 160
15 Adjusted Stockholders"
(1) Represents the effect on the corporation"s deferred tax position.
(2) This adjustment increases GAAP net income and therefore, the retained earnings component of Stockholders" Equity.
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