While quarterly losses at the Federal Home Loan Mortgage Corp. remained in the billions of dollars, annual losses dropped by half.
The government-controlled company reported today a fourth-quarter loss of $6.0 billion before taxes, worsening from $5.6 billion during the prior quarter. But earnings have dramatically improved from the $24.8 billion loss suffered a year earlier.
After taxes and a $1.3 billion dividend payment to the U.S. Department of the Treasury on its senior preferred stock, the fourth-quarter 2009 net loss attributable to Freddie Mac’s common stockholders was $7.8 billion.
Full-year 2009 losses were $22.4 billion before taxes, tumbling from the $44.6 billion loss reported for 2008. Factoring in taxes and a $4.1 billion preferred dividend payment, the McLean, Va.-based company reported a net loss attributable to common stockholders of $25.7 billion for 2009.
“Fourth quarter and full-year 2009 results were negatively impacted by $7.1 billion and $29.8 billion in credit-related expenses, respectively, reflecting the challenging economic conditions during 2009,” Freddie explained in the report. “In addition, fourth quarter and full-year 2009 results were affected by $3.4 billion and $4.2 billion in low-income housing tax credit partnerships expense, respectively, primarily due to the write-down of the carrying value of the company’s low-income housing tax credit partnership investments to zero as of Dec. 31, 2009.”
The secondary lender noted that no additional funding was required from the Treasury because its net worth as of Dec. 31, 2009, was a positive $4.4 billion. Still, Freddie’s net worth declined from $9.4 billion on Sept. 30.
