Financial Statements Consolidated Statements of Comprehensive Income

Freddie Mac 2015 Form 10-K

FREDDIE MAC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE 

INCOME

Year Ended December 31,

(in millions, except share-related amounts) 2015 2014 2013

Interest income

Mortgage loans $ 62,226 $ 63,605 $ 64,883

Investments in securities 4,794 5,843 7,768

Other 70 32 51

Total interest income 67,090 69,480 72,702

Interest expense (51,916) (54,916) (55,779)

Expense related to derivatives (228) (301) (455)

Net interest income 14,946 14,263 16,468

Benefit (provision) for credit losses 2,665 (58) 2,465

Net interest income after benefit (provision) for credit losses 17,611 14,205 18,933

Non-interest income (loss)

Gains (losses) on extinguishment of debt (240) (422) 446

Derivative gains (losses) (2,696) (8,291) 2,632

Impairment of available-for-sale securities:

Total other-than-temporary impairment of available-for-sale securities (241) (860) (763)

Portion of other-than-temporary impairment recognized in AOCI (51) (78) (747)

Net impairment of available-for-sale securities recognized in earnings (292) (938) (1,510)

Other gains (losses) on investment securities recognized in earnings 508 1,494 301

Other income (loss) (879) 8,044 6,650

Non-interest income (loss) (3,599) (113) 8,519

Non-interest expense

Salaries and employee benefits (975) (914) (833)

Professional services (497) (527) (543)

Occupancy expense (56) (58) (54)

Other administrative expense (399) (382) (375)

Total administrative expense (1,927) (1,881) (1,805)

Real estate owned operations (expense) income (338) (196) 140

Temporary Payroll Tax Cut Continuation Act of 2011 expense (967) (775) (533)

Other (expense) income (1,506) (238) 109

Non-interest expense (4,738) (3,090) (2,089)

Income before income tax (expense) benefit 9,274 11,002 25,363

Income tax (expense) benefit (2,898) (3,312) 23,305

Net income 6,376 7,690 48,668

Other comprehensive income (loss), net of taxes and reclassification adjustments:

Changes in unrealized gains (losses) related to available-for-sale securities (806) 1,584 2,406

Changes in unrealized gains (losses) related to cash flow hedge relationships 182 197 316

Changes in defined benefit plans 47 (45) 210

Total other comprehensive income (loss), net of taxes and reclassification

adjustments (577) 1,736 2,932

Comprehensive income $ 5,799 $ 9,426 $ 51,600

Net income $ 6,376 $ 7,690 $ 48,668

Undistributed net worth sweep and senior preferred stock dividends (6,399) (10,026) (52,199)

Net income (loss) attributable to common stockholders $ (23) $ (2,336) $ (3,531)

Net income (loss) per common share — basic and diluted $ (0.01) $ (0.72) $ (1.09)

Weighted average common shares outstanding (in millions) — basic and diluted 3,235 3,236 3,238

The accompanying notes are an integral part of these consolidated financial statements.
Financial Statements Consolidated Balance Sheets

Freddie Mac 2015 Form 10-K

FREDDIE MAC

CONSOLIDATED BALANCE SHEETS

At December 31,

(in millions, except share-related amounts) 2015 2014

Assets

Cash and cash equivalents (Notes 3, 13) $ 5,595 $ 10,928

Restricted cash and cash equivalents (Notes 3, 13) 14,533 8,535

Securities purchased under agreements to resell (Notes 3, 9) 63,644 51,903

Investments in securities, at fair value (Note 6) 114,215 136,987

Mortgage loans held-for-sale (Notes 3, 4) (includes $17,660 and $12,130 at fair value) 24,992 12,368

Mortgage loans held-for-investment (Notes 3, 4) (net of allowance for loan losses of

$15,331 and $21,761) 1,729,201 1,688,212

Accrued interest receivable (Note 3) 6,074 6,034

Derivative assets, net (Notes 8, 9) 395 822

Real estate owned, net (Notes 3, 5) 1,725 2,558

Deferred tax assets, net (Note 11) 18,205 19,498

Other assets (Notes 3, 17) 7,471 7,694

Total assets $ 1,986,050 $ 1,945,539

Liabilities and equity

Liabilities

Accrued interest payable (Note 3) $ 6,183 $ 6,325

Debt, net (Notes 3, 7) (includes $7,184 and $5,862 at fair value) 1,970,427 1,929,542

Derivative liabilities, net (Notes 8, 9) 1,254 1,963

Other liabilities (Notes 3, 17) 5,246 5,058

Total liabilities 1,983,110 1,942,888

Commitments and contingencies (Notes 3, 8, and 15)

Equity (Note 10)

Senior preferred stock, at redemption value 72,336 72,336

Preferred stock, at redemption value 14,109 14,109

Common stock, $0.00 par value, 4,000,000,000 shares authorized, 725,863,886

shares issued and 650,045,962 shares and 650,043,899 shares outstanding — —

Additional paid-in capital — —

Retained earnings (accumulated deficit) (80,773) (81,639)

AOCI, net of taxes, related to:

Available-for-sale securities (includes $778 and $839, related to net unrealized gains

on securities for which other-than-temporary impairment has been recognized in

earnings) 1,740 2,546

Cash flow hedge relationships (621) (803)

Defined benefit plans 34 (13)

Total AOCI, net of taxes 1,153 1,730

Treasury stock, at cost, 75,817,924 shares and 75,819,987 shares (3,885) (3,885)

Total equity (See Note 10 for information on our dividend obligation to Treasury) 2,940 2,651

Total liabilities and equity $ 1,986,050 $ 1,945,539

The table below represents the carrying value and classification of the assets and liabilities of consolidated VIEs on 

our consolidated balance sheets.

At December 31,

(in millions) 2015 2014

Consolidated Balance Sheet Line Item

Assets: (Note 3)

Mortgage loans held-for-sale $ 1,403 $ —

Mortgage loans held-for-investment 1,625,184 1,558,094

All other assets 37,305 29,798

Total assets of consolidated VIEs $ 1,663,892 $ 1,587,892

Liabilities: (Note 3)

Debt, net $ 1,556,121 $ 1,479,473

All other liabilities 4,769 4,703

Total liabilities of consolidated VIEs $ 1,560,890 $ 1,484,176

The accompanying notes are an integral part of these consolidated financial statements.
Financial Statements Consolidated Statements of Equity

Freddie Mac 2015 Form 10-K

FREDDIE MAC

CONSOLIDATED STATEMENTS OF EQUITY

Shares Outstanding

Senior

Preferred

Stock, at

Redemption

Value

Preferred

Stock, at

Redemption

Value

Common

Stock, at

Par Value

Additional

Paid-In

Capital

Retained

Earnings

(Accumulated

Deficit)

AOCI,

Net of

Tax

Treasury

Stock, at

Cost

Total

(in millions) Equity 

Senior

Preferred

Stock

Preferred

Stock

Common

Stock

Balance at

December 31,

2012 1 464 650 $ 72,336 $ 14,109 $ — $ 1 $ (70,796) $ (2,938) $ (3,885) $ 8,827

Comprehensive

income:

Net income — — — — — — — 48,668 — — 48,668

Other

comprehensive

income, net of

taxes — — — — — — — — 2,932 — 2,932

Comprehensive

income — — — — — — — 48,668 2,932 — 51,600

Common stock

issuances — — — — — — (1) — — — (1)

Senior preferred

stock dividends

declared — — — — — — — (47,591) — — (47,591)

Ending balance at

December 31,

2013 1 464 650 $ 72,336 $ 14,109 $ — $ — $ (69,719) $ (6) $ (3,885) $ 12,835

Balance at

December 31,

2013 1 464 650 $ 72,336 $ 14,109 $ — $ — $ (69,719) $ (6) $ (3,885) $ 12,835

Comprehensive

income:

Net income — — — — — — — 7,690 — — 7,690

Other

comprehensive

income, net of

taxes — — — — — — — — 1,736 — 1,736

Comprehensive

income — — — — — — — 7,690 1,736 — 9,426

Senior preferred

stock dividends

declared — — — — — — — (19,610) — — (19,610)

Ending balance at

December 31,

2014 1 464 650 $ 72,336 $ 14,109 $ — $ — $ (81,639) $ 1,730 $ (3,885) $ 2,651

Balance at

December 31,

2014 1 464 650 $ 72,336 $ 14,109 $ — $ — $ (81,639) $ 1,730 $ (3,885) $ 2,651

Comprehensive

income:

Net income — — — — — — — 6,376 — — 6,376

Other

comprehensive

income, net of

taxes — — — — — — — — (577) — (577)

Comprehensive

income — — — — — — — 6,376 (577) — 5,799

Senior preferred

stock dividends

declared — — — — — — — (5,510) — — (5,510)

Ending balance at

December 31,

2015 1 464 650 $ 72,336 $ 14,109 $ — $ — $ (80,773) $ 1,153 $ (3,885) $ 2,940

The accompanying notes are an integral part of these consolidated financial statements.