Freddie Mac

8200 Jones Branch Dr.

Year founded: 1970

Industry: Financial services

Post 200 Category: Top 125 Companies

Revenue: $36.97 Billion

Net Income/Loss: $2.83 Billion

Earnings per share: $3.78

Dividend: $0.30

Stockholder equity: $31.31 Billion

Auditor: PricewaterhouseCoopers LLP

Stock: FRE

Assets: $795.17 Billion

Market capitalization: $43.32 Billion

52-week high: 74.2 12/31/2004

52-week low: 56.45 5/10/2004

Chairman and CEO: Richard F. Syron

President and COO: Eugene M. McQuade

Employees: 5280

Local employees: 4864

Description: Chartered by the federal government, Federal Home Loan Mortgage Corp., known as Freddie Mac, has a mandate to promote affordable housing and the availability of funds for home mortgages. Like its rival Fannie Mae, it serves as an intermediary between the financial markets and institutions that issue home mortgages. The company borrows money from investors to buy mortgages from banks and savings and loans. It also packages mortgages into securities for sale to investors.

Developments: Under new leadership, Freddie Mac remained on a slow road to recovery from an accounting scandal that erupted in January 2003 and toppled two chief executives before that year had ended. The crisis exposed problems so deep that Freddie Mac did not resume issuing financial reports on a timely basis, one of the basic requirements of any public company, until last month. It made a start on March 31 by issuing its 2004 results, bringing its financial reporting current two years after the scandal broke. Freddie's earnings fell 41 percent in 2004, mostly because the market value of key parts of its portfolio dropped $4.48 billion. Large fees paid to accountants and consultants during the year also dragged down earnings. Freddie earned $2.83 billion ($3.78 a share) in 2004, compared with $4.82 billion ($6.68) in 2003. Freddie is expected to begin reporting regular quarterly results in August, when it plans to report first- and second-quarter 2005 numbers. An overhaul of Freddie's internal controls and accounting systems will not be complete until the end of this year, chief executive Richard F. Syron said. The company has employed an army of consultants and has been spending heavily to rebuild its flawed accounting and financial reporting systems. For example, Freddie reported last fall that its audit expenses had ballooned to $46.1 million in 2003 from $4.3 million in 2002, and it reported that it had already been billed an additional $41.2 million in audit fees in 2004 for the completion of the 2003 audit. The process has delayed Freddie's plans to voluntarily submit to regulation by the Securities and Exchange Commission, from which it is exempt. Freddie plans to register with the SEC in the second quarter of 2006. The company issued its 2003 results last June. "We really wanted to slow down and get it right," spokesman Michael Cosgrove said. Syron, who joined Freddie from Thermo Electron Corp., recruited new top executives. Although Fannie Mae and Freddie Mac are separate companies, their reputations seem tightly bound. Just over a year after Fannie Mae's then-chief executive complained that Fannie Mae was being tarred unfairly by the accounting problems at Freddie Mac, the recovering Freddie was suffering some collateral damage from a similar scandal at Fannie. Freddie Mac's outlook was clouded by lawmakers' renewed vows to tighten regulation of the two companies and by new regulations from the Department of Housing and Urban Development requiring Freddie Mac and Fannie Mae to devote more of their funding to affordable housing for low-income home buyers and other targeted groups.

Executive Compensation
Chairman and CEO: Richard F. Syron
Total Cash: $3,600,000.00
Total Compensation: $15,621,157.00

President and COO: Eugene M. McQuade
Total Cash: $2,865,000.00
Total Compensation: $9,274,065.00

Executive Vice President: Patricia L. Cook
Total Cash: $3,250,000.00
Total Compensation: $5,983,569.00

CFO: Martin F. Baumann
Total Cash: $1,818,750.00
Total Compensation: $3,917,451.00

Senior Vice President, Risk Management and Capital Strategy: Nazir G. Dossani
Total Cash: $884,583.00
Total Compensation: $3,124,913.00

Former COO: Paul Peterson
Total Cash: $2,158,000.00
Total Compensation: $3,013,960.00