Freddie to Revise Financials in Resolving Tax Issue

Freddie Mac said it will add about $110 million to its 2004 net income after resolving a tax dispute with Internal Revenue Service over the deductibility of dividend payments the company paid on two real estate investment trusts."Freddie Mac will increase its previously reported net income for 2004 by approximately $110 million to $2.9 billion," Freddie Mac said. Freddie formed the two REITS in 1997 to issue $4 billion in preferred stock. The $110 million will come out of current tax reserves and be included in the 2004 annual report that Freddie plans to issue in mid-June. Freddie is still behind in filing timely financial reports as a result of massive accounting problems discovered in 2003. Freddie also disclosed on Thursday that chief investment officer Patricia Cook will receive a $1 million cash bonus for her performance in 2004. Her annual salary is $600,000. Freddie also revealed that Ms. Cook received a $2 million signing bonus when she joined the company in August 2004.