The Housing Financing Fund's audited statements for the period 01.01. 2006 to 31.12.2006 were approved and signed by its Board of Directors today on February 22, 2007. The statements were prepared in accordance with the Annual Accounts Act and the Rules on the Financial Statements of Credit Institutions. They are prepared in accordance with the same accounting principles as for the previous year. Following are the major facts of the statements 2006 and a comparison with previous years: Operations: 2006 ISK million 2005 ISK million 2004 ISK million 2003 ISK million Net interest earnings 3.223 1.558 1.856 2.519 Other operating income 640 891 915 880 Other operating expenses 886 902 900 784 Provision for loan losses 498 394 755 937 Profit for the period 2.480 1.154 1.116 1.678 Balance Sheet: 31.12.2006 ISK million 31. 12. 2005 ISK million 31. 12. 2004 ISK million 31. 12. 2003 ISK million Claims on credit institutions 99.030 94.757 47.078 8.863 Outstanding lending 406.115 376.956 431.163 445.280 Market securities 36.411 22.695 19.095 5.367 Other assets 231 180 477 322 Total assets 541.787 494.587 497.813 459.832 Borrowed funds 525.291 480.384 484.884 448.126 Other liabilities 122 309 188 81 Equity 16.374 13.894 12.741 11.625 Total liabilities and equity 541.787 494.587 497.813 459.832 Cash flows: 2006 ISK million 2005 ISK million 2004 ISK million 2003 ISK million Net cash provided by operating activities 4.016 2.255 2.007 2.120 Net cash used in investing activities -14.596 8.471 -14.308 -45.045 Net cash provided by financing activities 9.969 -24.137 18.499 45.479 Decrease in cash and cash equivalents -611 -13.411 6.198 2.554 Cash and cash equivalents at the beginning of the period 1.435 14.845 8.648 6.093 Cash and cash equivalents at the end of the period 824 1.435 14.845 8.647 According to the Profit and Loss Account, the Fund's net profit for the period amounted to ISK 2,480 million compared to ISK 1.154 million for the previous year. The Fund's equity amounted to ISK 16,375 million at the end of the period, or 3.00% of the Fund's total assets. The capital ratio of the Fund, calculated according to stipulations in the Rules on The Housing Financing Fund no. 544/2004, was 6.3%. The calculation of the ratio is equivalent to the calculation of the capital ratio of financial institutions. The long-term goal of the Fund is to keep the ratio above 5.0%. The net interest earnings was ISK 3.223 million compared with 1.558 million for the previous year. The outstanding lending amounted to ISK 406.115 million in the end of the year and increased by ISK 29.159 million from the previous year. The total borrowning amounted to ISK 525.291 million and increased by ISK 44.907 million during the year. For further information please phone Guðmundur Bjarnason, Jóhann G. Jóhannsson or Ásta H. Bragadóttir and the number is +354 569 6900.