    [Appendix]
    [Estimates for Government-Sponsored Enterprises]
    [From the U.S. Government Printing Office, www.gpo.gov]

    [[Page 1155]]

                        GOVERNMENT-SPONSORED ENTERPRISES

        This chapter contains descriptions of and data on the Government-
    sponsored enterprises listed below. These enterprises were established
    and chartered by the Federal Government. They are not included in the
    Federal budget because they are classified as being private. However,
    because of their relationship to the Government, detailed statements of
    financial operations and condition are presented, to the extent such
    information is available, on a basis that is as consistent as
    practicable with the basis for the budget data of Government agencies.
    These statements are not reviewed by the President; they are presented
    as submitted by the enterprises.

        --The Student Loan Marketing Association is a for-profit financial
            corporation chartered by Congress in 1972 under the Higher
            Education Act (HEA) to help increase the availability of student
            loans. Sallie Mae carries out secondary market and other
            functions.

        --The College Construction Loan Insurance Association is organized
            as a private, for-profit insurance corporation to guarantee and
            insure bonds and loans made for construction and renovation of
            college and university facilities. The Corporation was
            established by, but was not chartered by, the Federal
            Government.

        --The Federal National Mortgage Association provides supplementary
            assistance to the secondary market for home mortgages. The
            Federal Home Loan Mortgage Corporation provides a secondary
            market for mortgage lenders. Both are supervised by the
            Department of Housing and Urban Development for their roles in
            helping to finance low- and moderate-income housing; both are
            regulated for financial safety and soundness by the Office of
            Federal Housing Enterprise Oversight.

        --The Banks for Cooperatives, Agricultural Credit Bank, and Farm
            Credit Banks provide financial assistance to agriculture. They
            are supervised by the Farm Credit Administration.

        --The Federal Agricultural Mortgage Corporation, under the
            supervision of the Farm Credit Administration, provides a
            secondary mortgage market for agricultural real estate and
            certain rural housing loans as well as for farm and business
            loans guaranteed by the U.S. Department of Agriculture.

        --The Federal Home Loan Banks assist thrift institutions, banks,
            insurance companies, and credit unions in providing financing
            for housing and community development and are supervised by the
            Federal Housing Finance Board.

        --The Financing Corporation functions as a financing vehicle for the
            FSLIC Resolution Fund. It operates under the supervision and
            control of the Federal Housing Finance Board.

        --The Resolution Funding Corporation provides financing for the
            Resolution Trust Corporation (RTC) and is subject to the general
            oversight and direction of the Thrift Depositor Protection
            Oversight Board.

        The Board of Governors of the Federal Reserve System is not a
    Government-sponsored enterprise, but its transactions also are not
    included in the budget because of its unique status in the conduct of
    monetary policy. The Board provides data on its administrative budget on
    a calendar year basis, which is included here for information. Its
    budget schedules and statements are not subject to review by the
    President.

                             DEPARTMENT OF EDUCATION

                       Student Loan Marketing Association

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-1500-0-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Interest expense................       2,690       2,555       2,683
    00.02   Administrative expenses and
              taxes.........................         510         466         489
                                               ---------   ---------  ----------
    00.91     Total operating expenses......       3,200       3,021       3,172
          Capital investment:

    01.01   Loans, etc......................       9,984       9,845       9,190
    01.02   Investments, dividends, and
              other assets..................         845         700         650
                                               ---------   ---------  ----------
    01.91     Total capital investment......      10,829      10,545       9,840
                                               ---------   ---------  ----------
    10.00   Total obligations...............      14,029      13,566      13,012
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......      14,029      13,566      13,012
    23.95 New obligations...................     -14,029     -13,566     -13,012
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    67.15 Authority to borrow (indefinite)..      -6,707      -1,434      -1,488
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............      20,736      15,000      14,500
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      14,029      13,566      13,012
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.91 Unpaid obligations, start of year:
            Obligated balance: U.S.
            Securities: Par value...........       1,201       1,291       1,253
    73.10 New obligations...................      14,029      13,566      13,012
    73.20 Total outlays (gross).............     -13,940     -13,604     -12,950
    74.91 Unpaid obligations, end of year:
            Obligated balance: U.S.
            Securities: Par value...........       1,291       1,253       1,315
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................      13,940      13,604      12,950
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....     -20,736     -15,000     -14,500
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      -6,707      -1,434      -1,488
    90.00 Outlays...........................      -6,796      -1,396      -1,550
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-1500-0-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................       9,984       9,845       9,190
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       9,984       9,845       9,190
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      41,636      37,391      35,572
    1231  Disbursements: Direct loan
            disbursements...................       9,984       9,845       9,190
          Repayments:

    1251    Repayments and prepayments......      -9,713      -5,670      -5,237
    1252    Proceeds from loan asset sales
              to the public or discounted...      -4,522      -6,000      -6,000
    1264  Write-offs for default: Other
            adjustments, net................           6           6           7
                                               ---------   ---------  ----------

    [[Page 1156]]

    1290    Outstanding, end of year........      37,391      35,572      33,532
    ---------------------------------------------------------------------------

        The Student Loan Marketing Association (Sallie Mae), a shareholder-
    owned corporation, was created by the Education Amendments of 1972 to
    expand funds available for student loans by providing liquidity to
    lenders engaged in the Federal Family Education Loan Program (FFELP),
    formerly the guaranteed student loan program (GSLP).
        Sallie Mae provides liquidity through direct purchase of insured
    student loans from eligible lenders and through warehousing advances,
    which are loans to lenders secured by insured student loans, Government
    or agency securities, or other acceptable collateral. In capital
    shortage areas, Sallie Mae is authorized, at the request of Federal
    officials, to make insured loans directly to students. Sallie Mae is
    authorized to advance funds to State agencies that will provide loans to
    students. Sallie Mae is also authorized to provide a secondary market
    for noninsured loans; to serve as a guarantee agency in support of loan
    availability at the request of the Secretary of Education; to purchase
    and underwrite student loan revenue bonds; to provide certain additional
    services as determined by its board of directors to be supportive of the
    credit needs of students generally; and to provide financing for
    academic facilities and equipment.
        Sallie Mae is authorized by the Health Professions Educational
    Assistance Act of 1976 to provide a secondary market for federally
    insured loans to graduate health professions students.
        Operations.--The forecast data with respect to operations are based
    on certain general economic and specific FFELP loan volume assumptions
    and should not be relied upon as an official forecast of the
    corporation's future business.

                              ANNUAL LOAN ACTIVITY

                            [In millions of dollars]

                                         1996 actual  1997 est.   1998 est.
    Guaranteed student loans:
      Stafford (formerly ``regular''):
        Purchased.......................       5,956       6,620       6,124
        Warehoused......................       1,721       1,000       1,000
      PLUS/SLS: Purchased...............         682         758         701
                                        ------------------------------------
          Subtotal, Guaranteed student
            loans.......................       8,359       8,378       7,825
    Health professions loans: Purchased.         366         407         376
    Other...............................       1,259       1,060         989
                                        ------------------------------------
          Total.........................       9,984       9,845       9,190
                                        ====================================

        Financing.--Between 1974 and early 1982, Sallie Mae borrowed through
    the Federal Financing Bank. The Secretary of Education was authorized by
    the Education Amendments of 1980 to guarantee principal and interest on
    such obligations issued prior to October 1, 1985. Under an agreement
    with the Department of the Treasury reached in early 1981, Sallie Mae
    began borrowing directly in the private capital markets. Its last
    borrowing through the FFB and its last issuance of federally guaranteed
    obligations occurred in January 1982. During the first quarter of 1994,
    Sallie Mae prepaid all of the outstanding FFB debt. Its obligations
    today have certain characteristics, provided by charter, which give them
    ``agency'' status, but they are not federally insured or guaranteed.
        Management.--At its annual meeting in May 1996, the shareholders of
    Sallie Mae elected 14 members to its board of directors to serve until
    the next annual meeting. Sallie Mae is entitled to elect 14 members to
    the board. Pursuant to the Education Amendments of 1972, seven public
    directors are appointed by the President, who also names the chairman
    from among the 21 members.
        Restructuring.--On September 30, 1996, the President signed
    legislation that authorizes Sallie Mae to restructure as a fully
    private, state chartered corporation. The legislation calls for Sallie
    Mae's shareholders to vote on restructuring within 18 months of
    enactment of this authorizing legislation. Under the restructuring,
    currently outstanding Sallie Mae debt will retain the characteristics of
    government sponsored enterprise (GSE) debt, as will debt issued by the
    GSE subsidiary of the new private company during a wind down period that
    ends in 2008. New business activities conducted outside of the GSE will
    not be financed by GSE debt.
        If the shareholders vote not to authorize the restructuring, Sallie
    Mae is required to submit a plan by July 1, 2007, for winding up its GSE
    activities by July 1, 2013, on which day Sallie Mae would cease to
    exist.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-1500-0-3-502    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................       3,959
    0102  Expense...........................      -3,481
                                            ------------ --------------  ------------  -------------
    0109  Net income........................         478
    -----------------------------------------------------------------------------------------------
        Note.--The Sallie Mae Board of Directors does not consider it
    appropriate to forecast corporate revenue in a public document since
    such forecasts could be used for speculative purposes.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-1500-0-3-502    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

            Investments in US securities:
    1102      Treasury securities, par......       1,173          1,281         1,243          1,305
    1104      Agency securities, par........          29             10            10             10
    1106      Receivables, net..............         855            852           894            939
          Non-Federal assets:

    1201    Investments in non-Federal
              securities, net...............       9,907          6,971         7,345          7,682
    1206    Receivables, net................         326            483           507            532
    1207    Advances and prepayments........          13             15            15             16
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Direct loans, gross.............      41,739         37,538        35,712         33,664
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................        -103           -147          -140           -132
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................      41,636         37,391        35,572         33,532
          Other Federal assets:

    1801    Cash and other monetary assets..          37             35            37             39
    1803    Property, plant and equipment,
              net...........................         179            246           259            272
    1901    Other assets....................         144            100           105            110
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      54,299         47,384        45,987         44,437
        LIABILITIES:
          Non-Federal liabilities:

    2202    Interest payable................         582            472           495            520
    2203    Debt............................      51,672         44,964        43,448         41,771
    2206    Pension and other actuarial
              liabilities...................          14             15            15             16
    2207    Other...........................         746            916           961          1,009
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      53,014         46,367        44,919         43,316
        NET POSITION:
    3200  Invested capital..................       1,284          1,017         1,068          1,121
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       1,284          1,017         1,068          1,121
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      54,298         47,384        45,987         44,437
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-1500-0-3-502      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................          53          45          47
    12.1  Civilian personnel benefits.......          14          11          12
    21.0  Travel and transportation of
            persons.........................           5           4           4
    23.3  Communications, utilities, and
            miscellaneous charges...........           4           4           4

    [[Page 1157]]

    25.1  Advisory and assistance services..          15          13          13
    25.2  Other services....................         234         197         207
    31.0  Equipment.........................           8           6           7
    33.0  Loans.............................       9,984       9,845       9,190
    43.0  Interest, dividends, and taxes....       3,712       3,441       3,528
                                               ---------   ---------  ----------
    99.9    Total obligations...............      14,029      13,566      13,012
    ---------------------------------------------------------------------------

                 College Construction Loan Insurance Association

        The College Construction Loan Insurance Association (Connie Lee) was
    authorized by Public Law 99-498 on October 17, 1986. The Corporation was
    created to insure and reinsure bonds and loans of educational
    institutions which borrow funds to finance the acquisition,
    construction, or renovation of their facilities. The Association was
    incorporated in February 1987, under the District of Columbia Business
    Corporation Act.
        Connie Lee's authorizing statute stated that ``no obligation which
    is insured, guaranteed, or otherwise backed by the corporation, shall be
    deemed to be an obligation which is guaranteed by the full faith and
    credit of the United States.''
        Operations.--Connie Lee is structured to operate as a private
    corporation, subject to the same state laws and regulations as any other
    insurance company. Accordingly, Connie Lee secures insurance licenses in
    each of the various states in which it expects to conduct its insurance
    activities.
        The Board of Directors authorized management to begin activities as
    a reinsuror of educational facilities bonds in 1988. Connie Lee
    reinsured its first bonds in December 1988. In fiscal year 1996, Connie
    Lee insured $2,041 million of debt service on bonds benefitting
    colleges, universities and teaching hospitals. Connie Lee also provided
    reinsurance on bonds representing $5 million of debt service.

                      INSURANCE AND REINSURANCE ACTIVITY

                                                        [In thousands of
                                                            dollars]
                                                          1996 actual
    Debt service insured:
     Direct insurance.................................           2,041,502
     Reinsurance......................................               5,210
                                                      --------------------

       Total..........................................           2,046,712

        Financing.--In order to provide capitalization, the Secretary of
    Education, the Student Loan Marketing Association (Sallie Mae), and
    other investors were authorized to purchase stock in the corporation.
    Sallie Mae made an initial investment of $2 million in Connie Lee stock
    in fiscal year 1987. The Secretary of Education purchased $19.1 million
    in Connie Lee stock with funds appropriated for this purpose in fiscal
    year 1988. Subsequently, the corporation sold an additional $50.9
    million of equity securities to Sallie Mae, increasing total capital of
    the corporation to $72.0 million. At the end of 1991, Connie Lee placed
    equity securities with private investors, providing sufficient
    incremental capital to obtain a triple-A credit rating necessary to
    engage in the financial guaranty business as a direct writer of
    insurance.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-9931-0-3-502    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................          22             22
    0102  Expense...........................         -12            -11
                                            ------------ --------------  ------------  -------------
    0109  Net income........................          10             11
    -----------------------------------------------------------------------------------------------

        Management.--Connie Lee is governed by an eleven-member board of
    directors comprised of two directors appointed by the Secretary of the
    Treasury; two directors appointed by the Secretary of Education; three
    directors appointed by the Student Loan Marketing Association; and four
    directors elected by the corporation's shareholders, one of whom must be
    an administrator of a college or university.
        Privatization.--Legislation was enacted in 1996 that privatizes
    Connie Lee by repealing its enabling legislation and requiring the
    Federal Government to sell, and Connie Lee to purchase, the
    corporation's federally owned stock. This sale will occur during fiscal
    year 1997, and proceeds will be used to finance public elementary and
    secondary school facility construction and repair within the District of
    Columbia. Data on the corporation's financial position at the time of
    the stock sale will be published in the President's Budget for FY 1999.
        The corporation will continue to insure debt of educational
    institutions, including Historically Black Colleges and Universities and
    academic institutions that have lower investment-grade credit ratings.
    Without the Federal restrictions previously imposed by legislation, the
    corporation will be able to guarantee bonds in other market sectors and
    diversify into new products and services.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-9931-0-3-502    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

            Investments in US securities:
    1102      Treasury securities, par......          25             42
    1104      Agency securities, par........          30             21
          Non-Federal assets:

    1201    Investments in non-Federal
              securities, net...............         142            155
    1206    Receivables, net................           8              9
    1207    Advances and prepayments........          30             37
          Other Federal assets:

    1801    Cash and other monetary assets..           6              3
    1803    Property, plant and equipment,
              net...........................           1              1
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................         242            268
        LIABILITIES:
    2104  Federal liabilities: Resources
            payable to Treasury.............           7              9
    2201  Non-Federal liabilities: Accounts
            payable.........................          80             94
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          87            103
        NET POSITION:
    3200  Invested capital..................         155            165
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............         155            165
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position         242            268
    -----------------------------------------------------------------------------------------------

                   DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                      Federal National Mortgage Association

                                 portfolio programs

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-2500-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Interest on borrowings from the
              public........................      19,659      22,126      25,444
    00.02   Other costs.....................       3,120       2,855       3,011
                                               ---------   ---------  ----------
    00.91     Total operating expenses......      22,779      24,981      28,455
          Capital investment:

    01.01   Mortgage purchases and loans....      71,234      67,488      77,724
    01.02   Lease-Purchase Discounts........        -129
                                               ---------   ---------  ----------
    01.91     Total capital investment......      71,105      67,488      77,724
                                               ---------   ---------  ----------
    10.00   Total obligations...............      93,884      92,469     106,179
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.47 Unobligated balance available,
            start of year: Authority to
            borrow..........................     406,165     464,639     484,339
    22.00 New budget authority (gross)......     152,358     112,169     146,721
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......     558,523     576,808     631,060
    23.95 New obligations...................     -93,884     -92,469    -106,179

    [[Page 1158]]

    24.47 Unobligated balance available, end
            of year: Authority to borrow....     464,639     484,339     524,881
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    67.10 Authority to borrow...............      99,682      81,253     115,011
    67.15 Net increase or decrease in
            unlimited borrowing authorities.          -3          -3          -3
                                               ---------   ---------  ----------
    67.90   Authority to borrow (total).....      99,679      81,250     115,008
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............      52,679      30,919      31,713
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................     152,358     112,169     146,721
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

            Obligated balance:
    72.47     Corporate borrowing authority.     -39,959     -47,738     -57,179
    72.90     Fund balance..................      48,071      54,604      63,193
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............       8,112       6,866       6,014
    73.10 New obligations...................      93,884      92,469     106,179
    73.20 Total outlays (gross).............     -95,130     -93,322    -105,909
          Unpaid obligations, end of year:

            Obligated balance:
    74.47     Corporate borrowing authority.     -47,738     -57,179     -64,601
    74.90     Fund balance..................      54,604      63,193      70,885
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................       6,866       6,014       6,284
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................      52,674      30,919      31,710
    86.98 Outlays from permanent balances...      42,456      62,403      74,199
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      95,130      93,322     105,909
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............        -130        -130        -130
    88.40     Non-Federal sources...........     -52,549     -30,789     -31,583
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........     -52,679     -30,919     -31,713
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      99,679      81,250     115,008
    90.00 Outlays...........................      42,451      62,403      74,196
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-2500-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................      63,858      68,312      78,229
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...      63,858      68,312      78,229
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........     250,374     293,037     330,600
          Disbursements:

    1231    Direct loan disbursements.......      66,802      67,301      77,506
    1232    Purchase of loans assets from
              the public....................       4,432         188         219
    1251  Repayments: Repayments and
            prepayments.....................     -26,596     -29,926     -37,726
    1264  Write-offs for default: Other
            adjustments, net................      -1,975
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........     293,037     330,600     370,599
    ---------------------------------------------------------------------------

        The Federal National Mortgage Association, (Fannie Mae) is a
    federally-chartered, privately-owned company with a public mission to
    play a leadership role in mortgage finance, to improve the liquidity of
    the residential mortgage market and increase the availability of
    mortgage credit to low-and moderate income families and areas
    underserved by private lending institutions. In carrying out its
    mission, Fannie Mae engages primarily in two forms of business:
    investing in portfolios of residential mortgages and guaranteeing
    residential mortgage securities. As of September 30, 1996, Fannie Mae
    held a net mortgage portfolio totaling $277 billion and had outstanding
    guaranteed mortgage-backed securities of over $636 billion. Fannie Mae's
    portfolio purchases and MBS finance about one of every five mortgages in
    the country.
        Through a federal charter, Congress has equipped Fannie Mae with
    certain attributes to help it carry out its public mission and help
    lower the cost of homeownership for low- and moderate-income homebuyers.
    These include an exemption from state and local taxes (except real
    property taxes), an exemption of its debt and mortgage securities from
    Securities and Exchange Commission registration requirements, and
    potential access to U.S. Treasury funds. Fannie Mae's charter also
    prohibits the imposition of user fees. Fannie Mae pays federal income
    tax; its earnings as of third quarter suggest the company will pay over
    $1 billion for 1996. Securities guaranteed by Fannie Mae and debt issued
    by the company are solely the corporation's obligations and are not
    backed by the full faith and credit of the U.S. Government. The common
    stock of the corporation is owned by the public, if fully transferable,
    and trades on the New York, Midwest, and Pacific stock exchanges.
        Fannie Mae was established in 1938 to assist private markets in
    providing a steady supply of funds for housing. Fannie Mae was
    originally a subsidiary of the Reconstruction Finance Corporation and
    was permitted to purchase only loans insured by the Federal Housing
    Administration (FHA). In 1954, Fannie Mae was restructured as a mixed
    ownership (part government, part private) corporation. Congress sold the
    government's remaining interest in Fannie Mae in 1968 and completed the
    transformation to private shareholder ownership in 1970. Using the
    proceeds from the sale of subordinated debentures, Fannie Mae paid the
    Treasury $216 million for the government's preferred stock, which was
    retired, and for the Treasury's interest in the corporation's earned
    surplus. As a result, the corporation was taken off the federal budget.
        In 1992, Congress reaffirmed and clarified Fannie Mae's role in the
    housing finance system through charter act amendments included in the
    Federal Housing Enterprises Financial Safety and Soundness Act of 1992
    (``The Act''). Fannie Mae's charter purposes, as amended by the Act,
    are: ``to provide stability in the secondary market for residential
    mortgages; respond appropriately to the private capital market; provide
    ongoing assistance to the secondary market for residential mortgages
    (including activities relating to mortgages on housing for low- and
    moderate-income families involving a reasonable economic return that may
    be less than the return earned on other activities); and promote access
    to mortgage credit throughout the Nation (including central cities,
    rural areas, and underserved areas) by increasing the liquidity of
    mortgage investments and improving the distribution of investment
    capital for residential mortgage financing.''
        Fannie Mae's primary customers are low-, moderate-, and middle-
    income families. In March of 1994, the company established its ``$1
    Trillion Initiative'' to provide mortgage financing for low- and
    moderate-income families in underserved markets. At year-end 1996, the
    company had provided $269 billion in financing for $3.6 million targeted
    households, including 660,000 minority families, 1.5 million residents
    in central cities, and 723,000 first-time homebuyers. In addition, the
    company opened 25 new Partnership Offices in communities around the
    country; these offices work with local governments, lenders, nonprofit
    organizations, and neighborhood leaders to tailor affordable housing
    programs to each community's needs.
        On December 1, 1995, the U.S. Department of Housing and Urban
    Development issued a final rule that sets the levels of the affordable
    housing goals for 1996-1999 and es-

    [[Page 1159]]

    tablishes the requirements for counting mortgage purchases to low- and
    moderate-income families and families living in underserved areas with
    specific census tract and minority concentration requirements. Under the
    new regulations, the low- and moderate-income target for 1996 is 40
    percent, increasing to 42 percent for years 1997-1999; the underserved
    area goal for 1996 is 21 percent, increasing to 24 percent for the 1997-
    1999 period. In addition, the special affordable housing goal requires
    the corporation to target 12 percent of its conventional mortgage
    business in 1996 and 14 percent in 1997-1999 to very low-income families
    or low-income families in low-income areas; those amounts must include
    qualifying special affordable purchases on multifamily units totaling
    not less than $1.29 billion for each year. Fannie Mae exceeded its
    housing goals for 1994 and 1995, and expects to meet or exceed all of
    its goals for 1996.
        The Act also established the Office of Federal Housing Enterprise
    Oversight (OFHEO), an independent office within HUD, headed by a
    Director who reports directly to the Congress. OFHEO has statutory
    responsibility for ensuring that Fannie Mae is adequately capitalized
    and operating in a safe and sound manner. Included among the express
    statutory authorities of the Director is the authority to conduct
    examinations of the financial health of the company and to issue minimum
    and risk-based capital standards. The minimum capital requirements are
    computed from statutorily established ratios that are applied to the
    assets and off-balance sheet risks of Fannie Mae. The risk-based capital
    standard determines the amount of capital that Fannie Mae must hold to
    withstand the impact of simultaneous adverse credit and interest rate
    stresses over a 10-year period, plus an additional amount to cover
    management and operations risk. Total capital (shareholder's equity plus
    allowance for loan losses) at the end of September 1996 was $13.0
    billion. The company has continued to remain in compliance with
    applicable capital standards and has been deemed adequately capitalized
    by OFHEO since its first classification in June 1993.
        Fannie Mae has pursued its housing mission vigorously and
    productively while continuing to maintain its financial strength. It
    provides liquidity and stability to the mortgage market. It also passes
    on reduced mortgage interest rates to homebuyers--according to some
    studies between 25 and 50 basis points. Meanwhile, Fannie Mae has
    remained profitable. Through the third quarter of 1996, it earned $2.01
    billion in net income. The company also completed the financial
    restructuring plan it announced at the end of 1995, which included stock
    repurchase plans totaling $1 billion and a $350 million contribution to
    the Fannie Mae foundation for expanding homeownership.
        The forecast data contained in this material has been developed
    based on certain general economic assumptions prevalent in the third
    quarter of 1996 and should not be construed as an official forecast for
    Fannie Mae.
        Income and retained earnings for the years ended September 30, 1995
    and 1996 follow (in thousands of dollars):

                                              1995 actual     1996 actual
    Gross revenue...........................    21,408,700      24,404,500
    Gross expenses..........................    18,190,200      21,008,700
                                             -------------  --------------

      Income before Federal income tax......     3,218,500       3,395,800
    Federal income tax......................       930,100       1,000,300
                                             -------------  --------------

      Net income............................     2,288,400       2,395,500
    Retained earnings, beginning of year....     7,545,000       9,123,000
    Dividends on common stock...............      -710,400        -800,200
                                             -------------  --------------

      Retained earnings, end of year........     9,123,000      10,718,300
                                             -------------  --------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-2500-0-3-371    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Federal assets:

    1101    Fund balances with Treasury.....         221            650
            Investments in US securities:
    1102      Treasury securities, par......          22             21
    1104      Other.........................      47,828         53,933        63,209         70,904
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Public: direct loans (net of
              discount).....................     231,960        267,105       307,739        347,980
    1602    Federal Agencies................       8,545         10,164         3,709          3,406
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................        -287           -253          -233           -227
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................     240,218        277,016       311,215        351,159
          Other Federal assets:

    1801    Cash and other monetary assets..       5,763          6,725         7,472          8,455
    1803    Property, plant and equipment,
              net...........................         177            190
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................     294,229        338,535       381,896        430,518
        LIABILITIES:
          Federal liabilities:

    2101    Accounts payable................         349            550
    2102    Accrued interest payable........       3,712          4,429         5,499          6,242
    2105    Other...........................           5              6
          Non-Federal liabilities:

    2203    Debt............................     277,192        319,153       359,996        406,260
    2204    Estimated Federal liability for
              loan guarantees, credit reform       2,028          1,936         3,411          3,694
    2206    Pension and other actuarial
              liabilities...................         157            178
    2207    Subtotal, Federal taxes payable.          65             15
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............     283,508        326,267       368,906        416,196
        NET POSITION:
    3300  Cumulative results of operations..      10,721         12,267        12,990         14,322
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............      10,721         12,267        12,990         14,322
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position     294,229        338,534       381,896        430,518
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-2500-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    21.0  Travel and transportation of
            persons.........................          14          14          15
    23.3  Communications, utilities, and
            miscellaneous charges...........          11          11          12
    24.0  Printing and reproduction.........           5
    25.1  Advisory and assistance services..          95          89          97
          Other services:

    25.2    Other services--Non-Federal
              employment compensation.......         310         354         388
    25.2    Other services..................       1,785       1,454       1,462
    26.0  Supplies and materials............           4
    31.0  Equipment.........................          71          71          77
    33.0  Investments and loans.............      71,105      67,487      77,724
    43.0  Interest and dividends............      20,484      22,989      26,404
                                               ---------   ---------  ----------
    99.9    Total obligations...............      93,884      92,469     106,179
    ---------------------------------------------------------------------------

                             mortgage-backed securities

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-2501-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Capital investment: Commitments to
            issue MBS.......................     200,735     128,618     141,293
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              33.0).........................     200,735     128,618     141,293
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......     200,735     128,618     141,293
    23.95 New obligations...................    -200,735    -128,618    -141,293
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    67.15 Corporate borrowing authority.....     117,682      59,205      66,453
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............      83,053      69,413      74,840
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................     200,735     128,618     141,293
    ----------------------------------------------------------------------------

    [[Page 1160]]

        Change in unpaid obligations:
    72.47 Unpaid obligations, start of year:
            Obligated balance: Corporate
            borrowing authority.............     114,618     155,523     155,523
    73.10 New obligations...................     200,735     128,618     141,293
    73.20 Total outlays (gross).............    -159,830    -128,618    -141,293
    74.47 Unpaid obligations, end of year:
            Obligated balance: Corporate
            borrowing authority.............     155,523     155,523     155,523
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................      83,053      69,413      74,840
    86.98 Outlays from permanent balances...      76,777      59,205      66,453
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........     159,830     128,618     141,293
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....     -83,053     -69,413     -74,840
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................     117,682      59,205      66,453
    90.00 Outlays...........................      76,777      59,205      66,453
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-2501-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................     200,735     128,618     141,293
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...     200,735     128,618     141,293
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........     559,585     636,362     695,567
    1231  Disbursements: Direct loan
            disbursements...................     159,830     128,618     141,293
    1251  Repayments: Repayments and
            prepayments.....................     -83,053     -69,413     -74,840
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........     636,362     695,567     762,020
    ---------------------------------------------------------------------------

        According to accounting practices for private corporations, the
    mortgages in the pools of loans supporting the mortgage-backed
    securities are considered to be owned by the holders of these
    securities. Consequently, on the books of the Federal National Mortgage
    Association (Fannie Mae), these mortgages are not considered assets and
    the securities outstanding are not considered liabilities. However, the
    concepts of the budget of the U.S. Government consider these mortgages
    and mortgage-backed securities to be assets and liabilities,
    respectively, of Fannie Mae. For the purposes of this document,
    therefore, they are presented as assets and liabilities in the
    accompanying schedules. On the schedule of Status of direct loans for
    mortgage-backed securities, the items labeled ``New loans'' and
    ``Recoveries: Repayments and prepayments'' are budgetary terms. However,
    from the Corporation's perspective, these items are ``Amounts issued''
    and ``Amounts passed through to the holders of securities'',
    respectively.
        The forecast data contained in this material has been developed
    based on certain general economic assumptions prevalent in the third
    quarter of 1996 and should not be construed as an official forecast of
    the Corporation's position.

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-2501-0-3-371    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Direct loans, gross.............     560,107        636,883       696,097        762,582
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................        -522           -521          -541           -563
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................     559,585        636,362       695,556        762,019
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................     559,585        636,362       695,556        762,019
        LIABILITIES:
    2104  Federal liabilities: Resources
            payable to Treasury.............     559,585        636,362       695,557        762,019
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............     559,585        636,362       695,557        762,019
    -----------------------------------------------------------------------------------------------

                     Federal Home Loan Mortgage Corporation

                                 portfolio programs

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4420-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Interest expense and provision
              for loan loss.................       8,960      11,979      16,015
    00.02   Administration..................         425         463         504
                                               ---------   ---------  ----------
    00.91     Total operating expenses......       9,385      12,442      16,519
    01.01 Capital investment: Mortgage
            purchases for portfolio.........      46,267      57,253      70,848
                                               ---------   ---------  ----------
    10.00   Total obligations...............      55,652      69,695      87,367
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.47 Unobligated balance available,
            start of year: Authority to
            borrow..........................      21,989      23,815      25,793
    22.00 New budget authority (gross)......      66,427      91,234     132,266
    22.60 Redemption of debt................      -8,949     -19,561     -42,757
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      79,467      95,488     115,302
    23.95 New obligations...................     -55,652     -69,695     -87,367
    24.47 Unobligated balance available, end
            of year: Authority to borrow....      23,815      25,793      27,935
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    67.15 Net change in borrowing
            authorities.....................      43,200      61,039      93,013
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............      23,227      30,195      39,253
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      66,427      91,234     132,266
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.47 Unpaid obligations, start of year:
            Obligated balance: Authority to
            borrow..........................       7,993         548       1,140
    73.10 New obligations...................      55,652      69,695      87,367
    73.20 Total outlays (gross).............     -63,097     -69,103     -87,415
    74.47 Unpaid obligations, end of year:
            Obligated balance: Authority to
            borrow..........................         548       1,140       1,092
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................      33,115      44,740      79,123
    86.98 Outlays from permanent balances...      29,982      24,363       8,292
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      63,097      69,103      87,415
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....     -23,227     -30,195     -39,253
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      43,200      61,039      93,013
    90.00 Outlays...........................      39,870      38,908      48,162
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4420-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................      46,267      57,253      70,848
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...      46,267      57,253      70,848
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      94,989     129,427     176,350

    [[Page 1161]]

    1231  Disbursements: Direct loan
            disbursements...................      46,267      57,253      70,848
    1251  Repayments: Repayments and
            prepayments.....................     -11,829     -10,330      -6,913
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........     129,427     176,350     240,285
    ---------------------------------------------------------------------------

        Federal Home Loan Mortgage Corporation (Freddie Mac), is a
    federally-charted, private shareholder-owned company with a public
    mission to provide stability and increase the liquidity of the
    residential mortgage market, and to help increase the availability of
    mortgage credit to low- and moderate-income families and in underserved
    areas. In carrying out its mission, Freddie Mac engages primarily in two
    forms of business: investing in portfolios of residential mortgages and
    guaranteeing residential mortgage securities. At the end of 1995,
    Freddie Mac held a net mortgage portfolio totaling over $107 billion and
    had outstanding guaranteed mortgage-backed securities of just under $460
    billion.
        Through a federal charter, Congress has equipped Freddie Mac with
    certain advantages over wholly private firms in carrying out these
    activities. These advantages include an exemption from state and local
    taxes (except real property taxes), an exemption for their debt and
    mortgage securities from SEC filing registration requirements, and a
    potential access to U.S. Treasury funds. Freddie Mac does pay federal
    income tax, however, and securities guaranteed by Freddie Mac and debt
    issued by the company are not explicitly backed by the full faith and
    credit of the U.S. Government. The common stock of the corporation is
    owned by the public, is fully transferable, and trades on the New York
    and Pacific stock exchanges.
        Freddie Mac was established in 1970 under the Emergency Home Finance
    Act. Congress chartered Freddie Mac to provide mortgage lenders with an
    organized national secondary market enabling them to manage their
    conventional mortgage portfolio more effectively and gain indirect
    access to a ready source of additional funds to meet new demands for
    mortgages. Freddie Mac served as a conduit facilitating the flow of
    investment dollars from the capital markets to mortgage lenders, and
    ultimately, to homebuyers, increasing the amount of mortgage credit
    available and making it more affordable.
        The Financial Institutions Reform, Recovery, and Enforcement Act of
    1989 (FIRREA) significantly changed the corporate governance of Freddie
    Mac. The company's three member Board of Directors, which had
    corresponded with the Federal Home Loan Bank Board, was replaced with an
    eighteen member Board of Directors. Thirteen board members are elected
    annually by shareholders and five are annually appointed by the
    President of the United States. In addition, FIRREA converted Freddie
    Mac's 60 million shares of non-voting, senior participating preferred
    stock into voting common stock. As a result, the corporation was taken
    off the federal budget.
        FIRREA also clarified Freddie Mac's role in the housing finance
    delivery system through amendments to its charter act. Specifically,
    FIRREA established Freddie Mac's public mission: ``to provide stability
    in the secondary market for residential mortgages; respond appropriately
    to the private capital market; provide ongoing assistance to the
    secondary market for residential mortgages (including activities
    relating to mortgages on housing for low- and moderate-income families
    involving a reasonable economic return that may be less than the return
    earned on other activities); and promote access to mortgage credit
    throughout the Nation (including central cities, rural areas, and
    underserved areas) by increasing the liquidity of mortgage investments
    and improving the distribution of investment capital for residential
    mortgage financing.''
        The Federal Housing Enterprises Financial Safety and Soundness Act
    of 1992 (``The Act'') added to Freddie Mac's public mission by
    introducing new affordable housing goals that are designed to improve
    the flow of mortgage funds to low- and moderate-income families in
    central cities, rural areas, and other underserved areas. On December 1,
    1995, the U.S. Department of Housing and Urban Development (HUD) issued
    a final rule that sets the levels of the goals for 1996-1999 and
    establishes the requirements for counting mortgage purchases for meeting
    these goals. During the transition period prior to the issuance of the
    final regulation, Freddie Mac was subject to interim affordable housing
    goals. These interim goals required Freddie Mac to have 30 percent of
    the units it finances serve low- and moderate-income families and 30
    percent of the units it finances in central cities. In 1995, Freddie Mac
    purchased about 39 percent of its financings from low- and moderate-
    income families and 23 percent of its business was located in central
    cities. Under the interim goals, Freddie Mae also was required to
    dedicate $3.357 billion in financings for households with very low
    incomes or with low incomes living in low-income areas. Freddie Mac
    achieved this goal with $5.426 billion of such loans in 1995.
        The Act also enhanced the regulatory oversight of Freddie Mac by
    establishing the Office of Federal Housing Enterprise Oversight (OFHEO),
    an independent office within HUD, headed by a Director who reports
    directly to the Congress. OFHEO is responsible for ensuring that Freddie
    Mac is adequately capitalized and operating in a safe and sound manner.
    Included among the express statutory authorities of the Director is the
    authority to conduct examinations of the financial health of the company
    and to issue minimum and risk-based capital standards. The minimum
    capital requirements are computed from statutorily established ratios
    that are applied to the assets and off-balance sheet risks of Freddie
    Mac. The risk-based capital standard determines the amount of capital
    that Freddie Mac must hold to withstand the impact of simultaneous
    adverse credit and interest rate stresses over a 10-year period, plus an
    additional amount to cover management and operations risk.
        Meanwhile, Freddie Mac has remained profitable. Freddie Mac recorded
    net income of $1.09 billion in 1995, an 11 percent increase over 1994
    earnings of $983 million. Most of Freddie's increased earnings in 1995
    came from a $284 million increase in net interest income as Freddie's
    retained portfolio surged by almost 50 percent during the year to pass
    the $100 billion mark in the fourth quarter. While accepting and
    managing higher interest rate risk, Freddie Mac has expanded its
    investments in retained mortgages from only $34 billion in 1992 to $107
    billion at the end of 1995 in an effort to generate higher overall
    returns.
        The financial data contained in this material relating to future
    periods represent estimates that have been prepared specifically for
    inclusion in the President's budget. These data should not be viewed as
    an official forecast of the corporation's future position, nor should
    they be used as a basis for making financial or investment decisions
    relating to the corporation. The data have been developed on the basis
    of certain economic assumptions that are subject to periodic review and
    revision. Consequently, the estimates are subject to forecast error and
    actual results from future business operations are likely to differ from
    these data.
        According to generally accepted accounting principles utilized by
    private corporations, the mortgages in the pools of loans supporting PCs
    are considered to be owned by the holder of these securities. Therefore,
    Freddie Mac does not show these mortgages as assets. However, the budget
    philosophy of the United States Government includes these mortgages and
    mortgages pass-through securities as assets and liabilities,
    respectively, of Freddie Mac. For the purpose of this document,
    therefore, they are presented as assets and liabilities in the
    accompanying schedules. On the Status of Direct Loans schedule for
    mortgage pass-through securities, the

    [[Page 1162]]

    items labeled ``Disbursements'' and ``Repayments'' are budgetary terms.
    However, from Freddie Mac's perspective, these amounts represent ``Sales
    of PCs'' and ``Amounts passed through to PC holders,'' respectively.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4420-0-3-371    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................       8,623         11,139
    0102  Expense...........................      -7,571         -9,926
                                            ------------ --------------  ------------  -------------
    0109  Net income........................       1,052          1,213
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4420-0-3-371    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       2,820          2,689         2,564          2,445
          Non-Federal assets:

    1201    Investments in non-Federal
              securities, net...............       2,150          3,158         4,639          6,815
    1206    Receivables, net................       3,680          8,801        12,193         12,497
    1207    Advances and prepayments........                        583           528            478
          Other Federal assets:

    1801    Cash and other monetary assets..      23,916         17,420        12,688          9,241
    1802    Inventories and related
              properties....................      94,989        129,427       176,350        240,285
    1803    Property, plant and equipment,
              net...........................       1,098            906           725            539
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................     128,653        162,984       209,687        272,300
        LIABILITIES:
    2101  Federal liabilities: Accounts
            payable.........................          73              1
          Non-Federal liabilities:

    2201    Accounts payable................         452            764         1,291          2,182
    2202    Interest payable................       1,090          1,492         2,042          2,795
    2203    Debt............................     111,610        146,954       193,491        254,765
    2206    Pension and other actuarial
              liabilities...................                      7,233         5,395          4,024
            Other:
    2207      Accrued payroll and benefits..       9,725             38            58             89
    2207      Accrued annual leave (funded
                or unfunded)................                          2             2              2
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............     122,950        156,484       202,279        263,857
        NET POSITION:
    3200  Invested capital..................       5,703          6,500         7,408          8,443
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       5,703          6,500         7,408          8,443
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position     128,653        162,984       209,687        272,300
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4420-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    21.0  Travel and transportation of
            persons.........................           9           9           9
    23.3  Communications, utilities, and
            other rent......................          32          32          32
    24.0  Printing and reproduction.........           3           3           3
          Other services:

    25.2    Other services--Non-Federal
              employment compensation.......         257         270         281
    25.2    Other services..................         112         137         167
    26.0  Supplies and materials............          12          12          12
    33.0  Mortgage purchases for portfolio..      46,267      57,253      70,848
    43.0  Interest and provision for loan
            losses..........................       8,960      11,979      16,015
                                               ---------   ---------  ----------
    99.9    Total obligations...............      55,652      69,695      87,367
    ---------------------------------------------------------------------------

                             mortgage-backed securities

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4440-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Capital investment: Issue (sales)
            of participation certification..     123,808     127,522     131,348
                                               ---------   ---------  ----------
    10.00   Total obligations (object class
              33.0).........................     123,808     127,522     131,348
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......     123,808     127,522     131,348
    23.95 New obligations...................    -123,808    -127,522    -131,348
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    67.15 Corporate borrowing authority (net
            PC pool change).................      14,264      14,709      15,168
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............     109,544     112,813     116,180
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................     123,808     127,522     131,348
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................     123,808     127,522     131,348
    73.20 Total outlays (gross).............    -123,808    -127,522    -131,348
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................     123,808     127,522     131,348
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....    -109,544    -112,813    -116,180
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      14,264      14,709      15,168
    90.00 Outlays...........................      14,264      14,709      15,168
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4440-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................     123,808     127,522     131,348
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...     123,808     127,522     131,348
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........     457,046     471,310     486,019
    1231  Disbursements: Direct loan
            disbursements...................     123,808     127,522     131,348
    1251  Repayments: Repayments and
            prepayments.....................    -109,544    -112,813    -116,180
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........     471,310     486,019     501,187
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4440-0-3-371    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1901  Other Federal assets: Underlying
            Mortgages.......................     457,046        471,310       486,019        501,187
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................     457,046        471,310       486,019        501,187
        LIABILITIES:
    2104  Federal liabilities: Resources
            payable to Treasury.............     457,046        471,310       486,019        501,187
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............     457,046        471,310       486,019        501,187
    -----------------------------------------------------------------------------------------------

                               FARM CREDIT SYSTEM

        The Farm Credit System is a government sponsored enterprise that
    provides privately financed credit to agricultural and rural
    communities. The major functional entities of the system are: (1) Banks
    for Cooperatives (BC), (2) Agricultural Credit Bank (ACB), (3) Farm
    Credit Banks (FCB), and (4) direct lender associations. The history and
    specific functions of the bank entities are discussed after the
    presentation of financial schedules for each bank entity. As part of the
    Farm Credit System (FCS), these entities are regulated and examined by
    the Farm Credit Administration (FCA), an independent Federal agency. The
    administrative costs of FCA are currently financed by assessments of
    system institutions. System banks finance loans primarily from sales of
    bonds to the public and their own capital funds. The system bonds issued
    by the banks are not guaranteed by the U.S. Government either as to
    principal or interest. The bonds are backed by an insurance fund,
    administered by the Farm Credit System

    [[Page 1163]]

    Insurance Corporation (FCSIC), an independent Federal agency that
    collects insurance premiums from member banks to pay its administrative
    expenses and fund insurance reserves. All of the banks' current
    operating expenses are paid from their own income and do not require
    budgetary resources from the Federal Government. Limited Federal
    assistance is provided to support interest payments on special FCS
    Financial Assistance Corporation (FAC) debt obligations (see discussion
    of FAC elsewhere in this document).

                             Banks for Cooperatives

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4120-0-3-351      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Administrative expenses.........           6           6           7
    00.02   Interest on borrowings..........         137         137         141
    00.03   Insurance premiums..............           3           3           3
    00.04   Provision for loan losses.......           9           7           5
    00.06   Income tax expense..............           5           5           7
    00.07   Other expenses..................           9          10           9
                                               ---------   ---------  ----------
    00.91     Total operating expenses......         169         168         172
    01.01 Capital investment: Direct loans..      12,992      11,838      11,683
                                               ---------   ---------  ----------
    10.00   Total obligations...............      13,161      12,006      11,855
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.47 Unobligated balance available,
            start of year: Authority to
            borrow..........................       2,309       2,281       2,278
    22.00 New budget authority (gross)......      13,257      12,303      11,874
    22.60 Redemption of debt................        -124        -300
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      15,442      14,284      14,152
    23.95 New obligations...................     -13,161     -12,006     -11,855
    24.47 Unobligated balance available, end
            of year: Authority to borrow....       2,281       2,278       2,297
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    67.15 Net borrowing.....................                                  58
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............      13,257      12,303      11,816
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      13,257      12,303      11,874
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................      13,161      12,006      11,855
    73.20 Total outlays (gross).............     -13,161     -12,006     -11,855
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................      13,161      12,006      11,816
    86.98 Outlays from permanent balances...                                  39
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      13,161      12,006      11,855
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....     -13,257     -12,303     -11,816
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                  58
    90.00 Outlays...........................         -96        -297          39
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4120-0-3-351      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................      12,993      11,837      11,682
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...      12,993      11,837      11,682
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........       2,273       2,222       1,964
    1231  Disbursements: Direct loan
            disbursements...................      12,992      11,837      11,683
    1251  Repayments: Repayments and
            prepayments.....................     -13,043     -12,091     -11,598
    1263  Write-offs for default: Direct
            loans...........................                      -4          -1
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........       2,222       1,964       2,048
    ---------------------------------------------------------------------------
        Note.--Direct loan balances exclude nonaccrual loans and sales
    contracts.

        Pursuant to the Agricultural Credit Act of 1987, stockholders in 11
    of 13 Banks for Cooperatives voted in 1988 to merge into a single
    National Bank for Cooperatives. On January 1, 1995, the Springfield Bank
    for Cooperatives also merged with other entities, as discussed below, to
    form the first Agricultural Credit Bank. The remaining Cooperative
    entity, the St. Paul Bank for Cooperatives, is independently chartered
    to provide credit and related services, nationwide, to eligible
    cooperatives primarily engaged in farm supply, grain, marketing and
    processing (including sugar and dairy.) Loans are also made to rural
    utilities, including telecommunications companies. The financial
    schedules below reflect the operations of the St. Paul Bank for
    Cooperatives. Loans are made for both seasonal and long-term needs.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4120-0-3-351    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Total interest income.............         177            200           198            205
    0102  Total interest expense............        -127           -137          -137           -141
                                            ------------ --------------  ------------  -------------
    0109  Net interest income...............          50             63            61             64
    0111  Other income......................          10             13            13             13
    0112  Other expenses....................         -21            -32           -32            -31
                                            ------------ --------------  ------------  -------------
    0119  Net income........................         -11            -19           -19            -18
                                            ------------ --------------  ------------  -------------
    0191  Total revenues....................         187            213           211            218
                                            ------------ --------------  ------------  -------------
    0192  Total expenses....................        -148           -169          -169           -172
                                            ------------ --------------  ------------  -------------
    0199  Net income or loss................          39             44            42             46
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4120-0-3-351    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Non-Federal assets:

    1201    Cash and investment securities..         394            356           357            368
    1206    Accrued interest receivable on
              loans.........................          40             41            41             41
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Direct loans, gross.............       2,273          2,222         1,964          2,048
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................         -24            -34           -37            -41
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................       2,249          2,188         1,927          2,007
    1803  Other Federal assets: Property,
            plant and equipment, net........         104            119           114            117
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       2,787          2,704         2,439          2,533
        LIABILITIES:
    2104  Federal liabilities: Resources
            payable to Treasury.............          29             34            34             34
          Non-Federal liabilities:

            Accounts payable:
    2201      Consolidated systemwide and
                other bank bonds............       1,329          1,534         1,346          1,384
    2201      Consolidated systemwide notes.       1,166            837           725            745
    2201      Notes payable and other
                interest-bearing liabilities
    2202    Accrued interest payable........          17             20            27             30
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       2,541          2,425         2,132          2,193
        NET POSITION:
    3300  Cumulative results of operations..         246            279           307            340
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............         246            279           307            340
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       2,787          2,704         2,439          2,533
    -----------------------------------------------------------------------------------------------
        Note.--Loans to cooperatives include nonaccrual loans and sales
    contracts.

    [[Page 1164]]

                       Statement of Changes in Net Worth (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code    99-4120-0-3-351   1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    Beginning balance of net worth..........         224            246           279            307
                                            ============ ==============  ============  =============

      Capital stock and participations
        issued..............................           4             11             3              5
      Capital stock and participations
        retired.............................         -11             -8            -7             -6
      Surplus retired.......................
      Net income............................          39             44            43             46
      Cash/Dividends/Patronage Distributions         -10            -14           -11            -12
      Other, net............................
                                            ------------ --------------  ------------  -------------
    Ending balance of net worth.............         246            279           307            340
    -----------------------------------------------------------------------------------------------

                  Financing Activities (in millions of dollars)

        --------------------------------------------------------------------
    Identification code 99-4120-0-3-351         1995 actual     1996 actual      1997 est.      1998 est.
        --------------------------------------------------------------------
    Beginning balance of outstanding system
      obligation............................            1,699 2,459                    2,339           2,031
                                               ==============  ==============  =============  ==============

      Consolidated systemwide and other bank
        bonds issued........................            1,524           2,331          2,025           2,125
      Consolidated systemwide and other bank
        bonds retired.......................           -1,287          -2,788         -2,475          -2,350
      Consolidated systemwide notes, net....              523             337            142             283
                                               --------------  --------------  -------------  --------------

    Ending balance of outstanding system
      obligations...........................            2,459 2,339                    2,031           2,089
    -------------------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4120-0-3-351      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Personnel
            compensation and benefits.......           5           6           6
    23.2  Cost of space occupied and
            equipment.......................           1           1           1
    25.2  Other services....................           3           3           3
    33.0  Investments and loans.............      12,992      11,837      11,682
    43.0  Interest and dividends............         137         137         141
    92.0  Undistributed expenses............          23          22          22
                                               ---------   ---------  ----------
    99.9    Total obligations...............      13,161      12,006      11,855
    ---------------------------------------------------------------------------

                            Agricultural Credit Banks

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4130-0-3-351      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Administrative expenses.........          41          37          39
    00.02   Interest on borrowings..........       1,007       1,109       1,198
    00.03   Insurance premiums..............          18          16          17
    00.04   Provision for loan losses.......          48          20          15
    00.06   Income tax expense..............          29          30          38
    00.07   Other expenses..................          62          69          69
                                               ---------   ---------  ----------
    00.91     Total operating expenses......       1,205       1,281       1,376
    01.01 Capital investment: direct loans..      48,117      46,000      47,000
                                               ---------   ---------  ----------
    10.00   Total obligations...............      49,322      47,281      48,376
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.47 Unobligated balance available,
            start of year: Authority to
            borrow..........................       2,548       2,796       2,416
    22.00 New budget authority (gross)......      49,570      46,901      48,460
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      52,118      49,697      50,876
    23.95 New obligations...................     -49,322     -47,281     -48,376
    24.47 Unobligated balance available, end
            of year: Authority to borrow....       2,796       2,416       2,500
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    67.15 Authority to borrow (indefinite)..         806         152         572
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............      48,764      46,749      47,888
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      49,570      46,901      48,460
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.         712         712         712
    73.10 New obligations...................      49,322      47,281      48,376
    73.20 Total outlays (gross).............     -49,322     -47,281     -48,376
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.         712         712         712
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from current balances.....                     380
    86.97 Outlays from new permanent
            authority.......................      49,322      46,901      48,376
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      49,322      47,281      48,376
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....     -48,764     -46,749     -47,888
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         806         152         572
    90.00 Outlays...........................         558         532         488
    ---------------------------------------------------------------------------

        On January 1, 1995, the National Bank for Cooperatives, the
    Springfield Bank for Cooperatives, and the Farm Credit Bank of
    Springfield consolidated to form an Agricultural Credit Bank (ACB),
    known as CoBank ACB. This bank is headquartered in Denver, Colorado and
    serves eligible cooperatives nationwide, and provides funding to
    Agricultural Credit Associations (ACAs) in one of its regions. An ACB
    operates under statutory authority that combines the authorities of a
    FCB and a BC. In exercising its FCB authority, CoBank ACB's charter
    limits its lending to ACAs located in the region previously served by
    the Farm Credit Bank of Springfield. As an entity lending to
    Cooperatives, CoBank engages in the same business activities as the St.
    Paul Bank for Cooperatives and it provides international loans for the
    financing of agricultural exports.

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4130-0-3-351      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................      48,117      46,000      47,000
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...      48,117      46,000      47,000
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      14,231      14,914      15,583
    1231  Disbursements: Direct loan
            disbursements...................      48,117      46,000      47,000
    1251  Repayments: Repayments and
            prepayments.....................     -47,422     -45,328     -46,361
    1263  Write-offs for default: Direct
            loans...........................         -12          -3          -5
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      14,914      15,583      16,217
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4130-0-3-351    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Total interest income.............       1,171          1,317         1,406          1,511
    0102  Total interest expense............        -902         -1,008        -1,109         -1,198
                                            ------------ --------------  ------------  -------------
    0109  Net interest income...............         269            309           297            313
    0111  Other income......................          23             26            15             16
    0112  Other expense.....................        -175           -198          -172           -178
                                            ------------ --------------  ------------  -------------
    0119  Net income........................        -152           -172          -157           -162
                                            ------------ --------------  ------------  -------------
    0191  Total revenues....................       1,194          1,343         1,421          1,527
                                            ------------ --------------  ------------  -------------
    0192  Total expenses....................      -1,077         -1,206        -1,281         -1,376
                                            ------------ --------------  ------------  -------------
    0199  Net income or loss................         117            137           140            151
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4130-0-3-351    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Non-Federal assets:

    1201    Cash and investment securities..       2,652          2,915         2,488          2,504

    [[Page 1165]]

    1206    Accrued interest receivable on
              loans.........................         165            167           157            172
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Direct loans, gross.............      14,237         14,914        15,583         16,217
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................        -170           -208          -225           -235
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................      14,067         14,706        15,358         15,982
    1803  Other Federal assets: Property,
            plant and equipment, net........         131            138           153            153
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      17,015         17,926        18,156         18,811
        LIABILITIES:
    2104  Federal liabilities: Resources
            payable to Treasury.............         142            129           140            145
          Non-Federal liabilities:

            Accounts payable:
    2201      Consolidated systemwide and
                other bank bonds............      10,805         14,510        14,580         15,052
    2201      Consolidated systemwide notes.       4,717          1,818         1,900          2,000
    2201      Notes payable and other
                interest-bearing liabilities          12              9            10             10
    2202    Accrued interest payable........         126            180           181            188
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      15,802         16,646        16,811         17,395
        NET POSITION:
    3200  Invested capital..................       1,213          1,280         1,345          1,416
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       1,213          1,280         1,345          1,416
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      17,015         17,926        18,156         18,811
    -----------------------------------------------------------------------------------------------

                       Statement of Changes in Net Worth (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4130-0-3-351    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    Beginning balance of net worth..........       1,210          1,213         1,281          1,345
                                            ============ ==============  ============  =============

      Capital stock and participations
        issued..............................           6                            4              4
      Capital stock and participations
        retired.............................         -52            -38           -46            -46
      Net income............................         117            138           140            151
      Cash/Dividends/Patronage Distributions         -32            -32           -34            -38
      Other, net............................         -36
                                            ------------ --------------  ------------  -------------
    Ending balance of net worth.............       1,213          1,281         1,345          1,416
    -----------------------------------------------------------------------------------------------

                  Financing Activities (in millions of dollars)

        --------------------------------------------------------------------
    Identification code 99-4130-0-3-351         1995 actual     1996 actual      1997 est.      1998 est.
        --------------------------------------------------------------------
    Beginning balance of outstanding system
      obligations...........................           13,736 15,320
                                                                                      15,964          16,116
                                               ==============  ==============  =============  ==============

      Consolidated systemwide and other bank
        bonds issued........................            7,768          10,663          7,200           7,500
      Consolidated systemwide and other bank
        bonds retired.......................           -5,505          -7,079         -7,130          -7,030
      Consolidated systemwide notes, net....             -679          -2,940             82             100
                                               --------------  --------------  -------------  --------------

    Ending balance of outstanding system
      obligations...........................           15,320 15,964
                                                                                      16,116          16,686
    -------------------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4130-0-3-351      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    12.1  Personnel compensation and
            benefits........................          35          32          34
    23.2  Cost of space occupied and
            equipment.......................           6           5           5
    25.2  Other services....................          19          16          17
    33.0  Investments and loans.............      48,117      46,000      47,000
    43.0  Interest and dividends............       1,007       1,109       1,198
    92.0  Undistributed expenses............         138         119         122
                                               ---------   ---------  ----------
    99.9    Total obligations...............      49,322      47,281      48,376
    ---------------------------------------------------------------------------

                                Farm Credit Banks

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4160-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Administrative expenses.........         100         103         104
    00.02   Interest on borrowings..........       2,356       2,586       2,774
    00.03   Insurance premiums..............          13          13          12
    00.04   Provision for loan losses.......           9           6           3
    00.05   Losses/gains on property........          -4          -2
    00.06   Other expenses..................         252         169         149
                                               ---------   ---------  ----------
    00.91     Total operating expenses......       2,726       2,875       3,042
    01.01 Capital investment: Direct loans..      29,160      28,789      30,083
                                               ---------   ---------  ----------
    10.00   Total obligations...............      31,886      31,664      33,125
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.47 Unobligated balance available,
            start of year: Authority to
            borrow..........................       6,083       7,125       7,333
    22.00 New budget authority (gross)......      32,928      31,872      33,176
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      39,011      38,997      40,509
    23.95 New obligations...................     -31,886     -31,664     -33,125
    24.47 Unobligated balance available, end
            of year: Authority to borrow....       7,125       7,333       7,384
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    67.15 Authority to borrow (indefinite)..       3,354       1,598       1,040
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............      29,574      30,274      32,136
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      32,928      31,872      33,176
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.90 Unpaid obligations, start of year:
            Obligated balance: Fund balance.         771         854         676
    73.10 New obligations...................      31,886      31,664      33,125
    73.20 Total outlays (gross).............     -31,803     -31,842     -33,243
    74.90 Unpaid obligations, end of year:
            Obligated balance: Fund balance.         854         676         558
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................      31,803      31,842      33,176
    86.98 Outlays from permanent balances...                                  67
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      31,803      31,842      33,243
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....     -29,574     -30,274     -32,136
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       3,354       1,598       1,040
    90.00 Outlays...........................       2,229       1,568       1,107
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4160-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................      29,160      28,789      30,083
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...      29,160      28,789      30,083
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      36,536      39,197      41,156
    1231  Disbursements: Direct loan
            disbursements...................      29,077      28,967      30,201
    1251  Repayments: Repayments and
            prepayments.....................     -26,417     -27,005     -28,684
    1263  Write-offs for default: Direct
            loans...........................           1          -3          -2
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      39,197      41,156      42,671
    ---------------------------------------------------------------------------
        Note.--Loans outstanding at end of year do not include nonaccrual
    loans and sales contracts.

        The Agricultural Credit Act of 1987 (1987 Act) required the Federal
    Land Banks (FLBs) and Federal Intermediate Credit Banks (FICBs) to merge
    into a Farm Credit Bank (FCB) in each of the 12 Farm Credit districts.
    The FCBs

    [[Page 1166]]

    operate under statutory authority that combines the prior authorities of
    the FLB and the FICB. No merger occurred in the Jackson district in 1988
    because the FLB was in receivership. Pursuant to section 410(e) of the
    1987 Act, as amended by the Farm Credit Banks Safety and Soundness Act
    of 1992, the FICB of Jackson merged with the FCB of Columbia on October
    1, 1993. Mergers and consolidations of FCBs across district lines, that
    began in 1992 continued through mid-1995. As a result of this
    restructuring activity, 6 FCBs headquartered in the following cities,
    remain: AgFirst FCB, Columbia, South Carolina; AgAmerica FCB, Spokane,
    Washington; AgriBank FCB, St. Paul, Minnesota; FCB of Wichita, Wichita,
    Kansas; FCB of Texas, Austin, Texas; and Western FCB, Sacramento,
    California.
        The FCBs serve as discount banks and as of October 1, 1996 provided
    funds to 32 Federal Land Credit Associations (FLCA), 66 Production
    Credit Associations (PCAs), and 60 Agricultural Credit Associations
    (ACAs). These direct lender associations, in turn, make short-term
    production loans (PCAs and ACAs) and long-term real estate loans (FLCAs
    and ACAs) to eligible farmers and ranchers. Also, as of January 1, 1996,
    69 Federal Land Bank Associations originated and serviced long-term real
    estate loans for 2 of the 6 FCBs that have no affiliated FLCAs. FCBs can
    also lend to local financing institutions, including commercial banks,
    as authorized by the Farm Credit Act of 1971, as amended.
        All the capital stock of the FICB's, from organization in 1923 to
    December 31, 1956, was held by the U.S. Government. The 1956 Act
    provided a long-range plan for the eventual ownership of the credit
    banks by the production credit associations and the gradual retirement
    of the Government's investment in the banks. This retirement was
    accomplished in full on December 31, 1968. The last of the Government
    capital that had been invested in the FLB's was repaid in 1947.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4160-0-3-371    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Total interest income.............       3,011          3,111         3,253          3,436
    0102  Total interest expense............      -2,302         -2,356        -2,586         -2,774
                                            ------------ --------------  ------------  -------------
    0109  Net interest income...............         709            755           667            662
    0111  Other income......................          44             47            17             16
    0112  Other expenses....................        -361           -370          -289           -268
                                            ------------ --------------  ------------  -------------
    0119  Net income........................        -317           -323          -272           -252
                                            ------------ --------------  ------------  -------------
    0191  Total revenues....................       3,055          3,158         3,270          3,452
                                            ------------ --------------  ------------  -------------
    0192  Total expenses....................      -2,663         -2,726        -2,875         -3,042
                                            ------------ --------------  ------------  -------------
    0199  Net income or loss................         392            432           395            410
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4160-0-3-371    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Non-Federal assets:

    1201    Cash and investment securities..       6,708          7,487         7,544          7,618
    1206    Accrued Interest Receivable.....         810            781           806            819
          Net value of assets related to
              direct loans receivable and
              acquired defaulted guaranteed
              loans receivable:

    1601    Direct loans, gross.............      36,536         39,198        40,848         41,967
    1603    Allowance for estimated
              uncollectible loans and
              interest (-)..................        -548           -494          -444           -435
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................      35,988         38,704        40,404         41,532
    1803  Other Federal assets: Property,
            plant and equipment, net........         525            653           545            545
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      44,031         47,625        49,299         50,514
        LIABILITIES:
    2104  Federal liabilities: Resources
            payable to Treasury.............         276            272           225            224
          Non-Federal liabilities:

            Accounts payable:
    2201      Consolidated systemwide and
                other bank bonds............      28,532         31,860        31,496         33,206
    2201      Consolidated systemwide notes.      10,060         10,086        12,048         11,378
    2201      Notes payable and other
                interest-bearing liabilities         597            662           719            829
    2202    Accrued interest payable........         437            455           479            457
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      39,902         43,335        44,967         46,094
        NET POSITION:
    3200  Invested capital..................       4,129          4,290         4,332          4,420
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............       4,129          4,290         4,332          4,420
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      44,031         47,625        49,299         50,514
    -----------------------------------------------------------------------------------------------

                       Statement of Changes in Net Worth (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4160-0-3-371    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    Beginning balance of net worth..........       3,964          4,129         4,290          4,332
                                            ============ ==============  ============  =============

      Capital stock and participations
        issued..............................          37             77            39             37
      Capital stock and participations
        retired.............................        -121            -99           -69            -55
      Net income............................         392            432           394            410
      Cash/Dividends/Patronage Distributions        -146           -251          -323           -304
      Other, net............................           3              2             1
                                            ------------ --------------  ------------  -------------
    Ending balance of net worth.............       4,129          4,290         4,332          4,420
    -----------------------------------------------------------------------------------------------

                  Financing Activities (in millions of dollars)

        --------------------------------------------------------------------
    Identification code 99-4160-0-3-371         1995 actual     1996 actual      1997 est.      1998 est.
        --------------------------------------------------------------------
    Beginning balance of outstanding system
      obligations...........................           38,119 38,651
                                                                                      41,994          43,956
                                               ==============  ==============  =============  ==============

      Consolidated systemwide and other bank
        bonds issued........................           30,137          40,404         41,803          42,594
      Consolidated systemwide and other bank
        bonds retired.......................          -29,891         -38,432        -41,069         -40,471
      Consolidated systemwide notes, net....              286           1,371          1,228            -682
                                               --------------  --------------  -------------  --------------

    Ending balance of outstanding system
      obligations...........................           38,651 41,994
                                                                                      43,956          45,397
    -------------------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4160-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................          80          82          83
    23.2  Cost of space occupied and
            equipment.......................          19          20          21
    25.2  Other services....................          13          13          12
    33.0  Investments and loans.............      29,160      28,789      30,083
    43.0  Interest and dividends............       2,356       2,585       2,774
    92.0  Undistributed expenses............         257         174         152
    99.5  Below reporting threshold.........           1           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............      31,886      31,664      33,125
    ---------------------------------------------------------------------------

                    Federal Agricultural Mortgage Corporation

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4180-0-3-351      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Administrative expenses and taxes.           5           6           8
                                               ---------   ---------  ----------
    10.00   Total obligations...............           5           6           8
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.47 Unobligated balance available,
            start of year: Authority to
            borrow..........................          11          12          15
    22.00 New budget authority (gross)......           6           9          13
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          17          21          28
    23.95 New obligations...................          -5          -6          -8
    24.47 Unobligated balance available, end
            of year: Authority to borrow....          12          15          20
    ----------------------------------------------------------------------------

    [[Page 1167]]

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............           6           9          13
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 New obligations...................           5           6           8
    73.20 Total outlays (gross).............          -5          -6          -8
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................           5           6           8
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....          -6          -9         -13
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          -1          -3          -5
    ---------------------------------------------------------------------------

        Farmer Mac is authorized under the Farm Credit Act of 1971 (the
    Act), as amended by the Agricultural Credit Act of 1987, to create a
    secondary market for agricultural real estate and rural home mortgages
    that meet minimum credit standards (qualified loans). The Farmer Mac
    title of the Act was amended by the 1990 farm bill to authorize Farmer
    Mac to purchase, pool, and securitize the guaranteed portions of farmer
    program, rural business and community development loans guaranteed by
    the USDA. The Farmer Mac title was further amended in 1991 to clarify
    Farmer Mac's authority to issue debt obligations, provide for the
    establishment of minimum capital standards, and establish the Office of
    Secondary Market Oversight at the Farm Credit Administration (FCA) and
    expand the agency's rulemaking authority. Most recently, the Farm Credit
    System Reform Act of 1996 amended the Farmer Mac title to allow Farmer
    Mac to purchase loans directly from lenders and to issue and guarantee
    mortgage-backed securities without requiring that a minimum cash reserve
    or subordinated (first loss) interest be maintained by the lenders,
    poolers or investors as had been required under its original authority.
    The 1996 Act also increased Farmer Mac's capital requirements over time
    and expanded the regulatory authorities of the FCA.
        Farmer Mac operates through two programs, ``Farmer Mac I,'' which
    involves qualified loans, and ``Farmer Mac II,'' which involves
    guaranteed portions of USDA guaranteed loans. Farmer Mac operates by:
    (i) purchasing newly originated or existing qualified loans or
    guaranteed portions from lenders; and (ii) exchanging qualified loans or
    guaranteed portions for guaranteed securities. Loans purchased by Farmer
    Mac are aggregated into pools that back Farmer Mac guaranteed securities
    which are held by Farmer Mac or sold into the capital markets. Farmer
    Mac is intended to attract new capital for financing qualified loans and
    guaranteed portions, foster increased long-term, fixed-rate lending, and
    provide greater liquidity to agricultural and rural lenders. Increased
    competition among agricultural lenders, stimulated by access to the
    secondary market, should result in more favorable rates and terms for
    agricultural borrowers.
        Farmer Mac is governed by a 15 member Board of Directors. Ten Board
    members are elected by stockholders, including five by the Farm Credit
    System and five by commercial lenders. Five are appointed by the
    President, subject to Senate confirmation.

                                    Financing

        Financial support and funding for Farmer Mac's operations comes from
    several sources: sale of common and preferred stock; issuance of debt
    obligations; gain on sale of guaranteed loan-backed securities;
    guarantee fees; and income from investments. Under procedures specified
    in the Act, Farmer Mac may issue obligations to the U.S. Treasury in a
    cumulative amount not to exceed $1.5 billion to fulfill its guarantee
    obligations.
        The Act provides for the actuarial soundness of the guarantee fee to
    be reviewed annually by the Comptroller General in a report to Congress.
    The soundness of the Farmer Mac I program is maintained through the
    application of multiple procedures. First, all loans are screened
    against Farmer Mac's credit underwriting and appraisal standards.
    Second, Farmer Mac assesses annual guarantee fees set at levels
    determined, with the assistance of computer modeling tools to evaluate
    Farmer Mac's portfolio under conditions of economic stress, to be
    adequate for potential risks undertaken. Third, Farmer Mac controls
    interest rate risk through matched funding and requirement of yield
    maintenance provisions for mortgages that prepay. Fourth, Farmer Mac's
    portfolio of loans and guaranteed securities must conform to geographic
    and commodity diversification standards set by the Board. Fifth, Farmer
    Mac maintains an allowance for loan losses determined to be adequate to
    cover anticipated losses. Lastly, Farmer Mac must maintain core and risk
    based capital as provided in the Act and FCA regulations. In the Farmer
    Mac II program, the risks are minimal because only the USDA guaranteed
    portions of loans are purchased and funding is matched to effectively
    eliminate interest rate risk.
        Available funds of Farmer Mac are invested in U.S. agency securities
    or other high-grade commercial investments. No stock dividends are
    allowed under the Act until the Board determines that an adequate loss
    reserve has been funded to back Farmer Mac guarantees.

                                   Guarantees

        Farmer Mac provides a guarantee of timely payment of principal and
    interest on securities backed by qualified loans or pools of qualified
    loans. These securities are not guaranteed by the United States, and are
    not ``government securities''. The 1996 Act removed requirements that
    loan originators or other third parties maintain cash reserves or
    subordinated securities in connection with the issuance of Farmer Mac's
    guaranteed securities.
        Farmer Mac is subject to reporting requirements under securities
    laws and its guaranteed mortgage-backed securities are subject to
    registration with the Securities and Exchange Commission under the 1933
    and 1934 Securities Acts.

                                   Regulation

        Farmer Mac is federally regulated by the FCA's Office of Secondary
    Market Oversight (OSMO). OSMO is responsible for examination of and
    rulemaking for Farmer Mac, including the determination of the stress
    test to evaluate the adequacy of Farmer Mac's capital and the
    establishment of risk-based capital requirements after February 1999.
    The 1996 amendments to the Farmer Mac title expanded FCA's regulatory
    authority to include provisions for establishing a conservatorship or
    receivership, if necessary, and provided for increased levels or core
    capital phased in over three years. Lastly, during the capital phase-in
    period the U.S. Treasury and FCA jointly monitor Farmer Mac's financial
    condition and report to Congress biannually, as requested by Congress in
    connection with the enactment of the 1996 Act.

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4180-0-3-351      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on commitments:
    2111  Limitation on guaranteed loans
            made by private lenders.........
    2131  Guaranteed loan commitments exempt
            from limitation.................         199         960       1,191
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................         199         960       1,191
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........         506         598       1,313
    2231  Disbursements of new guaranteed
            loans...........................         199         960       1,191
    2251  Repayments and prepayments........        -107        -245        -423
                                               ---------   ---------  ----------

    [[Page 1168]]

    2290    Outstanding, end of year........         598       1,313       2,081
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..         598       1,313       2,081
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4180-0-3-351    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0111  Net interest income...............           3              3             2              3
    0112  Allocated admin expense...........          -3             -3            -1             -2
                                            ------------ --------------  ------------  -------------
    0119  Net income or loss (-)............                                        1              1
    0121  Guarantee fee income..............                          2             4              7
    0122  Allocated admin expense...........                         -2            -3             -4
                                            ------------ --------------  ------------  -------------
    0129  Net income or loss (-)............                                        1              3
    0131  Gain on issuance of MBS...........                          1             3              3
    0132  Allocated admin expense...........                                       -2             -2
                                            ------------ --------------  ------------  -------------
    0139  Net income or loss (-)............                          1             1              1
                                            ------------ --------------  ------------  -------------
    0199  Net income or loss................                          1             3              5
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4180-0-3-351    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1201  Non-Federal assets: Investment in
            securities......................         619            553           650            696
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................         619            553           650            696
        LIABILITIES:
    2203  Non-Federal liabilities: Debt.....         607            538           598            639
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............         607            538           598            639
        NET POSITION:
    3200  Invested capital..................          12             15            52             57
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............          12             15            52             57
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position         619            553           650            696
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4180-0-3-351      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Personnel
            compensation and benefits.......           2           3           4
    25.2  Other services....................           2           3           4
    99.5  Below reporting threshold.........           1
                                               ---------   ---------  ----------
    99.9    Total obligations...............           5           6           8
    ---------------------------------------------------------------------------

                          FEDERAL HOME LOAN BANK SYSTEM

                             Federal Home Loan Banks

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4200-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Operating expenses:

    00.01   Administrative expenses
              including FHFB assessments....         240         223         223
    00.02   Affordable Housing program......         115         120         120
    00.03   Interest on consolidated
              obligations and loss on debt
              retirement....................      13,027      12,500      12,500
    00.04   Interest on members' deposits
              and other borrowings..........         982       1,000       1,000
    00.05   Payment to REFCORP..............         300         300         300
    00.06   Cash dividends on capital stock.         556         550         550
                                               ---------   ---------  ----------
    00.91     Total operating expenses......      15,220      14,693      14,693
          Capital investment:

    01.01   Investment in bank premises.....           9          15           9
    01.04   Net increase in advances........      31,174
    01.05   Net increase in investments.....                  13,304
    01.06   Repurchase of capital stock.....       1,204       1,250       1,250
                                               ---------   ---------  ----------
    01.91     Total capital investment......      32,387      14,569       1,259
                                               ---------   ---------  ----------
    10.00   Total obligations...............      47,607      29,262      15,952
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.47 Unobligated balance available,
            start of year: Authority to
            borrow..........................         148                      94
    22.00 New budget authority (gross)......      47,459      29,357      17,609
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      47,607      29,357      17,703
    23.95 New obligations...................     -47,607     -29,262     -15,952
    24.47 Unobligated balance available, end
            of year: Authority to borrow....                      94       1,751
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    67.15 Authority to borrow (indefinite)..      16,250      11,430
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............      31,209      17,927      17,609
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................      47,459      29,357      17,609
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

            Obligated balance:
    72.41     U.S. Securities: Par value....       2,630       1,695       1,700
    72.47     Authority to borrow (obligated
                balance net of U.S. Treasury
                and agency securities held).       2,231       3,648       3,437
    72.90     Fund balance..................         449         358         300
                                               ---------   ---------  ----------
    72.99     Total unpaid obligations,
                start of year...............       5,310       5,701       5,437
    73.10 New obligations...................      47,607      29,262      15,952
    73.20 Total outlays (gross).............     -47,216     -29,527     -17,609
          Unpaid obligations, end of year:

            Obligated balance:
    74.41     U.S. Securities: Par value....       1,695       1,700       1,700
    74.47     Authority to borrow...........       3,648       3,437       1,780
    74.90     Fund balance..................         358         300         300
                                               ---------   ---------  ----------
    74.99     Total unpaid obligations, end
                of year.....................       5,701       5,437       3,780
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................      47,216      29,357      17,609
    86.98 Outlays from permanent balances...                     170
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........      47,216      29,527      17,609
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Collections from non-Federal
                  sources...................     -18,215     -17,625     -17,609
    88.40       Net decrease in advances....                    -302
    88.40       Net decrease in investments.     -12,994
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........     -31,209     -17,927     -17,609
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      16,250      11,430
    90.00 Outlays...........................      16,007      11,600
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4200-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................     796,853     800,000     800,000
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...     796,853     800,000     800,000
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........     122,128     153,302     153,000
    1231  Disbursements: Direct loan
            disbursements...................     796,853     800,000     800,000
    1251  Repayments: Repayments and
            prepayments.....................    -765,679    -800,302    -800,000
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........     153,302     153,000     153,000
    ---------------------------------------------------------------------------

        The 12 Federal Home Loan Banks were chartered by the Federal Home
    Loan Bank Board under the authority of the Federal Home Loan Bank Act of
    1932 (the Act). The

    [[Page 1169]]

    FHLBanks are under the supervision of the Federal Housing Finance Board.
    The common mission of the FHLBanks is to facilitate the extension of
    credit through their members in order to provide access to housing for
    all Americans and to improve the quality of their communities. To
    accomplish this mission, the FHLBanks make loans, called advances, and
    provide other credit products and services to their nearly 6,000 member
    commercial banks, savings associations, insurance companies, and credit
    unions. Advances and letters of credit must be fully secured by eligible
    collateral and long-term advances may be made only for the purpose of
    providing funds for residential housing finance. Additionally,
    specialized advance programs provide funds for community reinvestment
    and affordable housing programs. All regulated financial depositories
    and insurance companies engaged in residential housing finance are
    eligible for membership. Each FHLBank operates in a geographic district
    designated by the Board and together the FHLBanks cover all of the
    United States as well as the District of Columbia, Puerto Rico, the
    Virgin Islands, and Guam.
        Advances outstanding on September 30, 1996 totaled approximately
    $153.3 billion, a net increase of approximately $31.2 billion from the
    September 30, 1995 level of $122.1 billion.
        The principal source of funds for the lending operation is the sale
    of consolidated obligations to the public. On September 30, 1996, $243.5
    billion of these obligations were outstanding. The consolidated
    obligations are not guaranteed by the U.S. Government as to principal or
    interest. Other sources of lendable funds include members' deposits and
    capital. Deposits totaled $15.4 billion and total capital amounted to
    $16.5 billion as of September 30, 1996. Funds not immediately needed for
    advances to members are invested.
        The capital stock of the Federal Home Loan Banks is owned entirely
    by the members. Initially the U.S. Government purchased stock of the
    banks in the amount of $125 million. The banks had repurchased the
    Government's investment in full by mid-1951.
        The operating expenses of the FHLBanks are paid from their own
    income and are not included in the budget of the United States. Included
    in these expenses are the assessments by the Finance Board to cover its
    administrative and other costs. The Finance Board's budget and
    expenditures, however, are included in the budget of the United States.
         The Act, as amended in 1989, requires each FHLBank to operate an
    Affordable Housing Program (AHP). Each FHLBank provides subsidies in the
    form of direct grants or below-market rate advances for members that use
    the funds for qualifying affordable housing projects. The FHLBank system
    sets aside for its AHPs a minimum of $100 million annually. The Act also
    requires that the FHLBanks contribute $300 million annually to assist in
    the payment of interest on bonds issued by the Resolution Funding
    Corportion.
        The forecast data for 1997 and 1998 contained in this material
    represents estimates and should not be construed as an official forecast
    of the FHLBanks System's future position.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4200-0-3-371    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................      14,568         15,712        15,100         15,100
    0102  Expense (excludes payments to
            REFCORP)........................     -13,370        -14,364       -13,843        -13,843
                                            ------------ --------------  ------------  -------------
    0109  Net income........................       1,198          1,348         1,257          1,257
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4200-0-3-371    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102    Federal assets: Treasury
              securities, net...............       2,630          1,695         1,700          1,700
          Non-Federal assets:

    1201    Investments in non-Federal
              securities, net...............     134,990        121,996       135,300        135,300
    1206    Accounts receivable.............       3,532          3,883         3,800          3,800
    1401  Net value of assets related to
            direct loans receivable: Direct
            loans receivable, gross.........     122,128        153,302       153,000        153,000
          Other Federal assets:

    1801    Cash and other monetary assets..         449            358           300            300
    1803    Property, plant and equipment,
              net...........................         157            156           160            160
    1901    Other assets....................         941            339           300            300
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................     264,828        281,728       294,560        294,560
        LIABILITIES:
    2101  Federal liabilities: REFCORP and
            AHP.............................         347            388           390            390
          Non-Federal liabilities:

    2201    Accounts payable................         185            234           200            200
    2202    Interest payable................       3,946          4,259         4,200          3,000
    2203    Debt............................     226,406        243,533       255,000        255,000
            Other:
    2207      Deposit funds and other
                borrowings..................      18,437         16,038        16,000         16,000
    2207      Other.........................         832            820           647            190
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............     250,154        265,272       276,437        274,780
        NET POSITION:
    3200  Invested capital..................      14,674         16,456        18,123         19,780
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............      14,674         16,456        18,123         19,780
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position     264,828        281,728       294,560        294,560
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4200-0-3-371      1996 actual   1997 est.   1998 est.
    ----------------------------------------------------------------------------
    11.1  Personnel compensation: Full-time
            permanent.......................          98          80          80
    12.1  Civilian personnel benefits.......          25          26          26
    21.0  Travel and transportation of
            persons.........................           6           6           6
    23.3  Communications, utilities, and
            other rent......................          21          22          22
    24.0  Printing and reproduction.........           7           7           7
    25.2  Other services....................          76          75          75
    31.0  Equipment.........................           7           7           7
    32.0  Land and structures...............           9          15           9
          Investments and loans:

    33.0    Net increase in advances........      31,174
    33.0    Net increase in investments.....                  13,304
    41.0  Subsidies (Affordable Housing
            Program)........................         115         120         120
          Interest and dividends:

    43.0    Interest and cash dividends.....      14,565      14,050      14,050
    43.0    REFCORP interest................         300         300         300
    92.0  Repurchase of capital stock
            (gross).........................       1,204       1,250       1,250
                                               ---------   ---------  ----------
    99.9    Total obligations...............      47,607      29,262      15,952
    ---------------------------------------------------------------------------

                              Financing Corporation

        The Financing Corporation (FICO) is a mixed-ownership government
    corporation, chartered by the Federal Home Loan Bank Board pursuant to
    the Federal Savings and Loan Insurance Corporation Recapitalization Act
    of 1987, as amended (the ``Act''). FICO's sole purpose was to function
    as a financing vehicle for the FSLIC Resolution Fund, formerly the
    Federal Savings and Loan Insurance Corporation (FSLIC). FICO operates
    under the supervision and control of the Federal Housing Finance Board
    (the ``Finance Board''). Pursuant to the Act, FICO was authorized to
    issue debentures, bonds and other obligations subject to limitations
    contained in the Act, the net proceeds of which were to be used solely
    to purchase capital certificates issued by the FSLIC Resolution Fund, or
    to refund any previously issued obligations. The Resolution Trust
    Corporation Refinancing, Restructuring, and Improvement Act of 1991
    terminated the FICO's borrowing authority.
        The Act provided formulas pursuant to which the Federal Home Loan
    Banks made capital contributions to FICO at

    [[Page 1170]]

    the direction of the Finance Board for the purchase of FICO capital
    stock. FICO used the proceeds received from the sales of such capital
    stock to purchase non-interest bearing securities for deposit in a
    segregated account as required by the Act. The non-interest bearing
    securities held in the segregated account will be the primary source of
    repayment of the principal of the FICO obligations. Securities in the
    segregated account are kept separate from other FICO accounts and funds
    but are not specifically pledged as collateral for the payment of
    obligations. The primary source of payment of interest on the
    obligations is the receipt of assessments imposed on and collected from
    institutions' accounts which are insured by the Bank Insurance Fund (the
    ``BIF'') and the Savings Association Insurance Fund (the ``SAIF'').

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4033-0-3-373    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................         897            906           915            926
    0102  Expense...........................        -795           -795          -795           -795
                                            ------------ --------------  ------------  -------------
    0109  Net income........................         102            111           120            131
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4033-0-3-373    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102    Federal assets: Segregated
              accounts investment, net......       1,244          1,355         1,475          1,606
          Other Federal assets:

    1801    Cash, cash equivalents, and
              interest receivable...........         279            281           281            281
    1901    Other assets....................          13             12            12             11
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       1,536          1,648         1,768          1,898
        LIABILITIES:
          Non-Federal liabilities:

    2202    Interest payable................         236            236           236            236
    2203    Debt............................       8,141          8,142         8,144          8,145
    2207    Other...........................          85             85            83             81
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............       8,462          8,463         8,463          8,462
        NET POSITION:
    3100  FICO capital stock purchased by
            FHLBanks........................         680            680           680            680
          Invested capital:

    3200    FSLIC capital certificates......      -7,568         -7,568        -7,568         -7,568
    3200    FSLIC nonvoting capital stock...        -603           -603          -603           -603
    3300  Cumulative results of operations..         565            675           796            927
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............      -6,926         -6,816        -6,695         -6,564
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       1,536          1,647         1,768          1,898
    -----------------------------------------------------------------------------------------------

                         Resolution Funding Corporation

        The Resolution Funding Corporation (the ``REFCORP'') is a mixed-
    ownership government corporation established by Title V of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). The
    sole purpose of REFCORP was to provide financing for the Resolution
    Trust Corporation (the ``RTC''). Pursuant to FIRREA, REFCORP was
    authorized to issue debentures, bonds, and other obligations, subject to
    limitations contained in the Act and regulations established by the
    Thrift Depositor Protection Oversight Board. The proceeds of the debt
    (less any discount, plus any premium, net of issuance cost) were used
    solely to purchase nonredeemable capital certificates of the RTC or to
    refund any previously issued obligations.
        REFCORP is subject to the general oversight and direction of the
    Thrift Depositor Protection Oversight Board. The day-to-day operations
    of REFCORP are under the management of a three-member Directorate
    comprised of the Director of the Office of Finance of the Federal Home
    Loan Banks and two members selected by the Oversight Board from among
    the presidents of the twelve Federal Home Loan Banks (``the FHLBanks'').
    Members of the Directorate serve without compensation, and REFCORP is
    not permitted to have any paid employees. REFCORP and its Directorate
    are subject to regulations, orders and directions of the Thrift
    Depositor Protection Oversight Board.
        FIRREA and the regulations adopted by the Thrift Depositor
    Protection Oversight Board provide formulas pursuant to which the
    Federal Home Loan Banks made capital contributions to REFCORP's
    Principal Fund and continue to make interest payments on outstanding
    REFCORP obligations. FIRREA also provides that the U.S. Treasury cover
    any interest shortfall. Funds designated for the Principal Funds were
    used to purchase zero-coupon bonds. The zero-coupon bonds will be held
    in the Principal Fund and are the primary source of repayment of the
    principal of the obligations at maturity.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4029-0-3-373    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................       2,895          2,925         2,942          2,967
    0102  Expense...........................      -2,626         -2,633        -2,626         -2,626
                                            ------------ --------------  ------------  -------------
    0109  Net income........................         269            292           316            341
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   99-4029-0-3-373    1995 actual    1996 actual     1997 est.      1998 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Investments in US securities:

    1102    Federal assets: Principal fund
              account investment, net.......       3,567          3,856         4,168          4,504
    1206  Non-Federal assets: Assessments
            receivable for interest expense.         881            888           881            881
    1901  Other Federal assets: Other assets           1              1
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................       4,449          4,745         5,049          5,385
        LIABILITIES:
          Non-Federal liabilities:

    2202    Accrued interest payable on
              long-term obligations.........         881            888           881            881
    2203    Debt............................      30,076         30,074        30,072         30,069
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      30,957         30,962        30,953         30,950
        NET POSITION:
    3100  Nonvoting capital stock issued to
            FHLBanks........................       2,513          2,513         2,513          2,513
          Invested capital:

    3200    RTC nonredeemable capital
              certificates..................     -31,286        -31,286       -31,286        -31,286
    3200    Contributed capital--principal
              fund assessments..............       1,057          1,057         1,057          1,057
    3300  Cumulative results of operations..       1,208          1,499         1,813          2,152
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............     -26,508        -26,217       -25,903        -25,564
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position       4,449          4,745         5,050          5,386
    -----------------------------------------------------------------------------------------------

                BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4450-0-3-803      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Board operating expenses:

    00.01   Monetary and economic policy....          72          73          76
    00.02   Services to financial
              institutions and the public...           3           3           4
    00.03   Supervision and regulation of
              financial institutions........          65          66          68
    00.04   System policy direction and
              oversight.....................          32          33          34
                                               ---------   ---------  ----------
    00.91     Subtotal: Board operating
                expenses....................         172         175         182
    01.01 Office of Inspector General
            operating expenses..............           3           3           3
                                               ---------   ---------  ----------
    10.00   Total obligations...............         175         178         185
    ----------------------------------------------------------------------------

    [[Page 1171]]

        Budgetary resources available for obligation:
    21.40 Unobligated balance available,
            start of year: Uninvested
            balance.........................          -3          -2          -8
    22.00 New budget authority (gross)......         176         172         185
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         173         170         177
    23.95 New obligations...................        -175        -178        -185
    24.40 Unobligated balance available, end
            of year: Uninvested balance.....          -2          -8          -8
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
    68.00 Spending authority from offsetting
            collections (gross): Offsetting
            collections (cash)..............         176         172         185
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    72.40 Unpaid obligations, start of year:
            Obligated balance: Appropriation          18          18          18
    73.10 New obligations...................         175         178         185
    73.20 Total outlays (gross).............        -175        -178        -185
    74.40 Unpaid obligations, end of year:
            Obligated balance: Appropriation          18          18          18
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new permanent
            authority.......................         160         162         175
    86.98 Outlays from permanent balances...          15          16          10
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         175         178         185
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....        -176        -172        -185
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................          -1           6
    ---------------------------------------------------------------------------
        The figures presented may differ from other Board financial material
    because they are prepared in accordance with OMB guidelines which vary
    from the Board's budget and accounting procedures.

        The Federal Reserve System operates under the provisions of the
    Federal Reserve Act of 1913, as amended, and other acts of Congress.
        Program.--To carry out its responsibilities under the Act, the Board
    determines general monetary, credit, and operating policies for the
    System as a whole and formulates the rules and regulations necessary to
    carry out the purposes of the Federal Reserve Act. The Board's principal
    duties consist of exerting an influence over credit conditions and
    supervising the Federal Reserve banks and member banks.
        Financing.--Under the provisions of section 10 of the Federal
    Reserve Act, the Board of Governors levies upon the Federal Reserve
    banks, in proportion to their capital and surplus, an assessment
    sufficient to pay its estimated expenses. The Board, under the Act,
    determines and prescribes the manner in which its obligations are
    incurred and its expenses paid. Funds derived from assessments are
    deposited in the Federal Reserve Bank of Richmond, and the Act provides
    that such funds ``shall not be construed to be Government funds or
    appropriated moneys.'' No Government appropriation is required to
    support operations of the Board.
        The information presented pertains to Board operations only.
    Expenditures made on behalf of the Federal Reserve banks for production,
    issuance, retirement, and shipment of Federal Reserve notes are not
    included, since they are reimbursed in full by the Federal Reserve
    banks.

                  Statement of Operations (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4450-0-3-803      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
    0101  Revenue...........................         171         176         172
    0102  Expense...........................        -174        -175        -178
                                               ---------   ---------  ----------
    0109  Net income or loss (-)............          -3           1          -6
    ---------------------------------------------------------------------------

                       Balance Sheet (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4450-0-3-803      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        ASSETS:
    1206  Non-Federal assets: Receivables,
            net.............................           3           3           3
          Other Federal assets:

    1801    Cash in bank....................          15          16          10
    1803    Property, plant and equipment,
              net...........................         125         119         129
                                               ---------   ---------  ----------
    1999    Total assets....................         143         138         142
        LIABILITIES:
    2201  Non-Federal liabilities: Accounts
            payable and accrued liabilities.          24          21          21
                                               ---------   ---------  ----------
    2999    Total liabilities...............          24          21          21
        NET POSITION:
    3100  Appropriated capital..............          -6          -2          -8
    3200  Invested capital..................         125         119         129
                                               ---------   ---------  ----------
    3999    Total net position..............         119         117         121
                                               ---------   ---------  ----------
    4999  Total liabilities and net position         143         138         142
    ---------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 99-4450-0-3-803      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------

          Reimbursable obligations:

            Personnel compensation:
    11.1      Full-time permanent...........          95         100         104
    11.3      Other than full-time permanent           1           1           1
    11.5      Other personnel compensation..           2           2           2
                                               ---------   ---------  ----------
    11.9        Total personnel compensation          98         103         107
    12.1    Civilian personnel benefits.....          16          17          17
    21.0    Travel and transportation of
              persons.......................           5           5           5
    23.3    Communications, utilities, and
              miscellaneous charges.........           9          10          10
    24.0    Printing and reproduction.......           3           3           3
    25.1    Advisory and assistance services           1           2           2
    25.2    Other services..................          18          17          18
    26.0    Supplies and materials..........           5           6           6
    31.0    Equipment.......................          17          12          14
    99.0  Subtotal, reimbursable obligations         172         175         182
    25.2  Allocation Account: Other services           3           3           3
                                               ---------   ---------  ----------
    99.9    Total obligations...............         175         178         185
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 99-4450-0-3-803      1995 actual   1996 est.   1997 est.
    ----------------------------------------------------------------------------
        Total compensable workyears:
    2005  Full-time equivalent of overtime
            and holiday hours...............          38          38          38
    2011  Exempt Full-time equivalent
            employment......................       1,661       1,683       1,733
    ---------------------------------------------------------------------------
        \1\ Includes 32, 32, and 32 positions respectively for the Office of
    Inspector General.