“Freddie Mac’s first quarter 

business results continued to be 

strong, reflecting our 

transformation to be a more 

competitive company. We’re 

serving our customers better and 

also more effectively executing on 

our mission to responsibly support 

homeowners and renters 

nationwide. The percentage of our 

purchases of loans to first-time 

homebuyers hit a 10-year high and 

we continue to finance record 

levels of rental housing. Also, the 

transfer of mortgage credit risk 

away from taxpayers, which we 

pioneered, proved its resiliency 

through the quarter’s significant 

financial market distress. While the 

resulting flight-to-quality decrease 

in interest rates reduced our GAAP 

results this quarter, an impact 

which is non-economic in nature, 

the fundamentals of our business 

are very solid and continue to 

improve.”

Donald H. Layton

Chief Executive Officer

News Release For Immediate Release // May 03, 2016

Freddie Mac Reports First Quarter 2016 Financial Results

$354 Million Net Loss and $200 Million Comprehensive Loss; No Draw Needed from U.S. Treasury;

$98.2 Billion Returned to Taxpayers To Date

First Quarter 2016 Results

Results Dominated by Negative Market-Related Items of $2.0 Billion,

Offsetting Positive Business Results

• $1.4 billion (after-tax) estimated fair value loss driven by measurement differences 

between the company’s derivatives, which are measured at fair value, and certain 

hedged assets and liabilities, which are not.

• $0.6 billion (after-tax) estimated fair value loss due to the impact of spread widening on 

certain mortgage loans and mortgage-related securities measured at fair value.

• $3.4 billion of net interest income of which approximately 45 percent was derived from 

management and guarantee fees, up from 37 percent in the first quarter of 2015, as the 

mortgage-related investments portfolio continued to decline.

First Quarter 2016 Business Highlights

Business Fundamentals Remain Strong

Single-family Guarantee Business

• Core (post-2008) book, which excludes HARP and other relief refinance loans, grew to 

68 percent of credit guarantee portfolio, while management and guarantee fee income 

has increased significantly over the past two years

• Purchase volume of $69 billion, down $7 billion from the fourth quarter of 2015 driven 

by a seasonal slowdown in home purchase activity 

Multifamily Business

• Record purchase volume of $18 billion, up from $13 billion in the fourth quarter of 2015

Reduced Taxpayer Exposure Through Innovative Credit Risk Transfer Programs

Single-family Guarantee Business

• Transferred a portion of the credit risk on $54 billion of loans, and have now 

transferred a portion of the credit risk on $440 billion since 2013

Multifamily Business

• Transferred credit risk associated with $10.8 billion of loans 

Continued Reduction of Legacy Assets

Single-family Guarantee Business

• Legacy book declined to 15 percent of the credit guarantee portfolio from 16 percent in 

the fourth quarter of 2015

• Serious delinquency rate of 1.20 percent, down from 1.32 percent at the end of 2015

• Sold $0.8 billion of seriously delinquent loans, and $4.3 billion since 2013 

Investments Business

• Sold $0.8 billion of non-agency securities, and $29 billion since 2013

Strong Housing Market Support – Helping Families Buy, Rent or Keep 

Their Homes

• Provided approximately $87 billion in liquidity to the mortgage market – funding more 

than 313,000 single-family homes and approximately 209,000 multifamily rental units

• Helped approximately 19,000 borrowers avoid foreclosure 

Net Worth of $1.0 Billion; No Draw Request or Dividend Obligation 

• Returned $98.2 billion to taxpayers through dividend payments to date

• Available funding under the Purchase Agreement remains $140.5 billion

Net Loss

1Q16 = $(354) Million

Comprehensive Loss

1Q16 = $(200) Million

Available PSPA Funding

1Q16 = $140.5 Billion
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 2

McLean, VA — Freddie Mac (OTCQB: FMCC) today reported a net loss of $354 million for the first quarter of 2016, 

compared to net income of $2.2 billion for the fourth quarter of 2015. The company also reported a comprehensive 

loss of $200 million for the first quarter of 2016, compared to comprehensive income of $1.6 billion for the fourth 

quarter of 2015. 

Summary Consolidated Statements of Comprehensive Income (Loss)

Financial Results Discussion

Freddie Mac’s first quarter 2016 net loss of $354 million and comprehensive loss of $200 million were a decrease of 

$2.5 billion and $1.8 billion, respectively, from the fourth quarter of 2015. The decline in the company’s first quarter 

2016 results was primarily driven by two market-related items: 

• Net Interest Rate Effect: $1.4 billion (after-tax) estimated fair value loss for the first quarter of 2016 as interest 

rates decreased, compared to a $0.3 billion (after-tax) estimated fair value gain for the fourth quarter of 2015

as interest rates increased. (See Net Interest Rate Effect table for additional details.)

 Through its use of derivatives, the company continues to manage its interest-rate risk on an economic 

basis to a low level as measured by its models. However, significant GAAP earnings volatility can occur 

as the derivative instruments are measured at fair value each period while certain hedged assets and 

liabilities are not.

• Spread Change Effect: $0.6 billion (after-tax) estimated loss for the first quarter of 2016, compared to a $0.3

billion (after-tax) estimated loss for the fourth quarter of 2015, as spreads on certain mortgage loans and 

mortgage-related securities measured at fair value widened more in the first quarter than in the fourth quarter.

($ Millions) 3/31/16 12/31/15 Change

1 Net interest income $ 3,405 $ 3,587 $ (182)

2 Benefit for credit losses 467 781 (314)

3 Derivative gains (losses) (4,561) 744 (5,305)

4 Other non-interest income (loss) 1,138 (896) 2,034

5 Non-interest income (loss) (3,423) (152) (3,271)

6 Administrative expense (448) (510) 62

7 Other non-interest expense (509) (629) 120

8 Non-interest expense (957) (1,139) 182

9 Pre-tax (loss) income (508) 3,077 (3,585)

10 Income tax benefit (expense) 154 (919) 1,073

11 Net (loss) income $ (354) $ 2,158 $ (2,512)

12 Total other comprehensive income (loss) 154 (517) 671

13 Comprehensive (loss) income $ (200) $ 1,641 $ (1,841)

Three Months Ended
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 3

Net Interest Rate Effect 

Net Interest Income

• Net interest income was $3.4 billion for the first quarter of 2016, a decrease of $182 million from the fourth 

quarter of 2015. 

 The decrease in net interest income primarily reflects lower amortization income due to lower 

prepayments.

 Approximately 45 percent of net interest income for the first quarter of 2016 was derived from 

management and guarantee fees, up from 37 percent in the first quarter of 2015.

($ Billions) 3/31/16 12/31/15 Change

Components of Derivative Gains (Losses)

1 Derivative Gains (Losses) $ (4.6) $ 0.7 $ (5.3)

2 Less: Accrual of Periodic Cash Settlements (0.5) (0.6) 0.1

3 Derivative Fair Value Changes $ (4.1) $ 1.3 $ (5.4)

Estimated Net Interest Rate Effect

4 Interest Rate Effect on Derivative Fair Values $ (4.0) $ 1.3 $ (5.3)

5 Estimate of Offsetting Interest Rate Effect Related to Financial 

Instruments Measured at Fair Value 1.9 (0.9) 2.8

6 Income Tax Benefit (Expense) - @ 35% 0.7 (0.1) 0.8

7 Estimated Net Effect on Comprehensive Income (4+5+6) $ (1.4) $ 0.3 $ (1.7)

Three Months Ended

$3.6 $4.0 $3.7 $3.6 $3.4

1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016

Net Interest Income 

$ Billions
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 4

Variability of Earnings

Freddie Mac’s financial results are subject to significant earnings variability from period to period. This variability is 

primarily driven by:

• Interest-Rate Volatility – Freddie Mac holds assets and liabilities that expose it to interest-rate risk. Through 

its use of derivatives, the company manages its exposure to interest-rate risk on an economic basis to a low 

level as measured by the company’s models. However, the way the company accounts for its financial assets 

and liabilities (i.e., some are measured at amortized cost, while others are measured at fair value), including 

derivatives, creates volatility in the company’s GAAP earnings when interest rates fluctuate. Based upon the 

composition of its financial assets and liabilities, including derivatives, at March 31, 2016, the company 

generally recognizes fair value losses in earnings when interest rates decline. This volatility generally is not 

indicative of the underlying economics of its business. 

• Spread Volatility – Spread volatility (i.e., credit spreads, liquidity spreads, risk premiums, etc.), or optionadjusted spreads, is the risk associated with changes in the excess of interest rates over benchmark rates. 

Freddie Mac holds assets and liabilities that expose it to spread volatility, which may contribute to significant 

earnings volatility. For financial assets and liabilities measured at fair value, the company generally 

recognizes fair value losses when spreads widen. 

The variability of earnings and the declining capital reserve required under the terms of the Purchase Agreement 

(ultimately reaching zero in 2018) increase the risk of the company having a negative net worth and being required to 

draw from Treasury. Freddie Mac currently faces a risk of a draw for a variety of reasons, including if it were to 

experience a large decrease in interest rates coupled with a large widening of spreads. The company continues to 

assess certain transactions and activities that may reduce or limit its exposure to this variability.

Total Segment Earnings (Loss)

Freddie Mac has three reportable segments – Single-family Guarantee, Multifamily, and Investments. The company 

presents Segment Earnings for its individual segments by reclassifying certain credit guarantee-related activities and 

investment-related activities between various line items on the company’s GAAP consolidated statements of 

comprehensive income and allocating certain revenue and expenses, including certain returns on assets and funding 

costs, and all administrative expenses to its three reportable segments.

 

In addition to analyzing the company’s results on a GAAP basis, management reviews the company’s business 

results on a Total Segment Earnings basis. Because of the reclassifications and allocations the company makes to 

present its segment results, certain operating measures presented on a Total Segment Earnings basis differ from the 

amounts for the comparable measures on a GAAP basis. Each measure of operating results presented on a Total 

Segment Earnings basis that differs from the comparable amount on a GAAP basis is a non-GAAP measure.

Management believes these non-GAAP measures are meaningful to the company, as well as investors, because they

help to better understand how the company generates revenue and better reflect how management assesses 

segment and overall company performance.
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 5

Total Segment Earnings (Loss) (1) 

(1) The Total Segment Earnings measures presented on lines 1 through 6 and Line 8 differ from the comparable amounts on a GAAP basis and are non-GAAP 

measures. For reconciliations to comparable amounts under GAAP, see page 17 of this press release.

Selected Total Segment Earnings Financial Highlights

(1) Non-GAAP measure. For reconciliations to the comparable amounts under GAAP, see page 18 of this press release. 

• Total segment net interest income was $882 million for the first quarter of 2016, a decrease of $99 million 

from the fourth quarter of 2015. 

 The decrease in total segment net interest income primarily reflects lower amortization income as 

liquidations declined in the first quarter.

($ Millions) 3/31/16 12/31/15 Change

1 Net interest income $ 882 $ 981 $ (99)

2 Management and guarantee fee income 1,393 1,388 5

3 Benefit for credit losses 294 365 (71)

4 Net interest income and management and guarantee 

income after benefit for credit losses 2,569 2,734 (165)

5 Derivative gains (losses) (3,790) 1,516 (5,306)

6 Other non-interest income (loss) 1,371 (453) 1,824

7 Administrative expenses (448) (510) 62

8 Other non-interest expense (210) (210) -

9 Income tax benefit (expense) 154 (919) 1,073

10 Net (loss) income (354) 2,158 (2,512)

11 Total other comprehensive income (loss), net of tax 154 (517) 671

12 Comprehensive (loss) income $ (200) $ 1,641 $ (1,841)

Three Months Ended

$1.3 $1.4

$1.1 $1.0 $0.9

1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016

Total Segment Earnings 

Net Interest Income(1)

$ Billions
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 6

 Total segment net interest income continues to decline as the company reduces the mortgage-related 

investments portfolio in accordance with the requirements of the Purchase Agreement and FHFA.

(1) Non-GAAP measure. For reconciliations to the comparable amounts under GAAP, see page 18 of this press release. 

• Total segment management and guarantee fee income was $1.4 billion for the first quarter of 2016, a slight

increase of $5 million from the fourth quarter of 2015. 

$1.33 $1.40 $1.37 $1.39 $1.39

1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016

Total Segment Earnings

Management and Guarantee Fee Income(1)

$ Billions
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 7

Segment Financial Results and Business Highlights

Segment Earnings and Comprehensive Income (1)

(1) During the three months ended March 31, 2016, Freddie Mac changed how it calculates certain components of the company’s Segment Earnings for the Singlefamily Gurantee and Investments segments. The purpose of these changes is to simplify Segment Earnings results relative to GAAP results, as well as to 

reduce operational complexity. Prior period results have been revised to conform to the current period presentation. See Note 11 of the company’s Quarterly 

Report on Form 10-Q for the quarter ended March 31, 2016 for additional information.

($ Millions) 3/31/16 12/31/15 Change

Single-family Guarantee Segment

1 Management and guarantee fee income $ 1,285 $ 1,288 $ (3)

2 Benefit for credit losses 289 359 (70)

3 Administrative expenses (295) (347) 52

4 Other (115) (392) 277

5 Income tax (expense) benefit (354) (272) (82)

6 Segment Earnings, net of taxes 810 636 174

7 Total other comprehensive income (loss), 

net of tax 1 13 (12)

8 Total comprehensive income $ 811 $ 649 $ 162

Multifamily Segment

9 Net interest income $ 252 $ 257 $ (5)

10 Management and guarantee fee income 108 100 8

11 Gains (losses) on loans and other noninterest income 737 (377) 1,114

12 Derivative gains (losses) (787) 366 (1,153)

13 Administrative expenses (80) (85) 5

14 Other (19) (17) (2)

15 Income tax (expense) benefit (64) (69) 5

16 Segment Earnings, net of taxes 147 175 (28)

17 Total other comprehensive income (loss), 

net of tax 3 (153) 156

18 Total comprehensive income $ 150 $ 22 $ 128

Investments Segment

19 Net interest income $ 748 $ 776 $ (28)

20 Derivative gains (losses) (2,995) 1,151 (4,146)

21 Other non-interest income 439 78 361

22 Administrative expenses (73) (78) 5

23 Other (2) (2) -

24 Income tax (expense) benefit 572 (578) 1,150

25 Segment Earnings, net of taxes (1,311) 1,347 (2,658)

26 Total other comprehensive income (loss), 

net of tax 150 (378) 528

27 Total comprehensive income $ (1,161) $ 969 $ (2,130)

Three Months Ended
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 8

Single-family Guarantee Segment

Providing liquidity to the U.S. housing market while continuing to transfer credit risk to the private market 

Financial Results

• Single-family Guarantee segment earnings were $810 million for the first quarter of 2016, an increase of $174

million from the fourth quarter of 2015. 

 Management and guarantee fee income remained steady, while the increase in segment earnings was 

primarily driven by fewer seriously delinquent single-family loans being reclassified from held-forinvestment to held-for-sale in the first quarter of 2016.

Business Highlights

• Core book continued to grow and was 68 percent of the single-family credit guarantee portfolio at March 

31, 2016.

 HARP and other relief refinance loans were an additional 17 percent.

 Legacy book declined to 15 percent.

• Average management and guarantee fees charged on new acquisitions were 46.4 basis points (net of the 

legislated 10 basis point guarantee fee remitted to Treasury as part of the Temporary Payroll Tax Cut 

Continuation Act of 2011) for the first quarter of 2016, up from 43.7 basis points in the fourth quarter of 

2015.

• Sold $0.8 billion in UPB of seriously delinquent single-family loans during the first quarter of 2016, and 

$4.3 billion since 2013. 

• Completed credit risk transfer transactions during the first quarter of 2016 that, upon initial execution,

covered $53.8 billion in principal of the mortgage loans in the Core book.

Multifamily Segment

Providing financing for workforce housing while continuing to transfer credit risk to the private market

Financial Results

• Multifamily segment comprehensive income was $150 million for the first quarter of 2016, an increase of $128 

million from the fourth quarter of 2015.

 Net interest income was relatively stable, while the increase in comprehensive income was primarily 

driven by lower fair value losses due to less spread widening on held-for-sale mortgage loans in the first 

quarter of 2016 compared to the fourth quarter of 2015.

− Derivative gains (losses) for the Multifamily segment are offset by fair value changes of the loans 

and investment securities being economically hedged. As a result, there is no net impact on total 

comprehensive income for the Multifamily segment from fair value changes related to interest-rate 

related derivatives.

Business Highlights

• Record new purchase volume of $17.5 billion in the first quarter of 2016, an increase of $4.3 billion from the 

fourth quarter of 2015. 

 The 2016 Conservatorship Scorecard goal is to maintain the dollar volume of multifamily new business 

activity at or below a production cap of $31.0 billion. Business activity associated with certain targeted 

loan types is excluded from the production cap.

 Approximately 69 percent of the $17.5 billion in new business activity for the first quarter of 2016

counted towards the 2016 production cap, while the remaining 31 percent was not subject to the cap.

• Held-for-sale loans totaled $23.6 billion at March 31, 2016, up from $19.6 billion at December 31, 2015.

 This balance is expected to decline during the year as the company continues to securitize loans into KDeals and other securitization products.

• Executed nine K-Deal transactions that transferred credit risk associated with $9.8 billion in UPB of loans

during the first quarter of 2016.
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 9

 In addition, transferred credit risk associated with $1.0 billion of additional loans through other

securitization products, such as small balance loan securitizations.

• Provided financing for approximately 209,000 rental units in the first quarter of 2016. Nearly 85 percent of the 

eligible units financed are affordable to families earning low to median area incomes.

Investments Segment

Enhancing the liquidity of the company’s securities in the secondary mortgage market while reducing less liquid 

assets using an economically sensible approach

Financial Results

• Investments segment comprehensive loss was $1.2 billion for the first quarter of 2016, a shift from 

comprehensive income of $969 million in the fourth quarter of 2015.

 Net interest income was relatively unchanged, while the shift to a comprehensive loss was primarily 

driven by derivative losses of $3.0 billion as interest rates declined in the first quarter of 2016, 

compared to derivative gains of $1.2 billion in the fourth quarter of 2015.

Business Highlights

• Continued to actively reduce the balance of the company’s mortgage-related investments portfolio, focusing 

on reducing the balance of less liquid assets. Investments segment less liquid assets were $94.8 billion at 

March 31, 2016, down $6.0 billion, or 6 percent, from December 31, 2015, due to ongoing portfolio 

liquidations and: 

 Sales of $0.8 billion of non-agency mortgage-related securities.

 Securitization of $3.5 billion of single-family reperforming loans and performing modified loans.

• The Investments segment securitization pipeline assets, which represent the company’s performing singlefamily loans purchased for cash and held until securitized, were $10.6 billion at March 31, 2016, up $532 

million from December 31, 2015.

• Continued to maintain a presence in the agency mortgage-related securities market. Liquid assets held by 

the Investments segment were $149.8 billion at March 31, 2016, up $923 million from December 31, 2015.

Housing Market Support

Freddie Mac supports the U.S. housing market by executing its charter mission to ensure credit availability for new 

and refinanced mortgages as well as rental housing and helping struggling homeowners avoid foreclosure. A 

significant company-wide focus in 2016 is to responsibly make housing more accessible for borrowers and renters, 

especially for low- and moderate-income households and those in underserved markets. 

Mortgage Funding - Freddie Mac provided approximately $87 billion in liquidity to the market in the first quarter of 

2016, funding: 

• More than 313,000 single-family homes, nearly 176,000 of which were refinance loans. 

• Approximately 209,000 multifamily rental units. 
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 10

Preventing Foreclosures – Freddie Mac continued to help struggling borrowers retain their homes or otherwise 

avoid foreclosure in the first quarter.

• The company completed approximately 19,000 single-family loan workouts. 

• The declining trend over the past year in the company’s single-family workouts reflects rising house prices

and improving economic conditions.

• When foreclosure is unavoidable, Freddie Mac has helped to further stabilize communities by focusing its real 

estate owned home sales on owner-occupants, who made up nearly two–thirds of its purchasers in the first 

quarter. 

140 170 166 174 209

127 

172 208 169 138 

227 

277 224 

182 176 

1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016

Number of Families Helped to Own or Rent a Home

Thousands

 Multifamily rental units Purchase borrowers Refinance borrowers

620 598

494 525 522

15 16 13 11 11 

6 5 

5 4 4 

2 2 

1 

1 1 

4 3

3

3 3

1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016

Number of Families Helped to Avoid Foreclosure

Thousands

 Short sales & deed in lieu of foreclosure transactions Forbearance agreements

 Repayment plans Loan modifications

26

22

19

27

19
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 11

About Freddie Mac’s Conservatorship

Since September 2008, Freddie Mac has been operating under conservatorship, with FHFA as Conservator. The 

support provided by Treasury pursuant to the Senior Preferred Stock Purchase Agreement (Purchase Agreement) 

enables the company to maintain access to the debt markets and have adequate liquidity to conduct its normal 

business operations. 

Treasury Draw Requests and Dividend Payments

(1) Excludes the initial $1 billion liquidation preference of senior preferred stock issued to Treasury in September 2008 as consideration for Treasury’s funding 

commitment. The company received no cash proceeds as a result of issuing this initial $1 billion liquidation preference of senior preferred stock.

• As a result of the company’s comprehensive loss in the first quarter of 2016, Freddie Mac’s total equity 

declined to $1.0 billion at March 31, 2016. Due to the positive total equity, the company will not request a draw 

from Treasury under the Purchase Agreement.

• Because the company’s net worth of $1.0 billion as of March 31, 2016 was less than the applicable capital 

reserve amount for 2016 of $1.2 billion, the company will not have a dividend obligation in June 2016.

 The applicable capital reserve amount will be reduced by $600 million each year until it reaches zero on 

January 1, 2018.

• Aggregate cash dividends paid to Treasury totaled $98.2 billion as of March 31, 2016, $26.9 billion more than 

cumulative cash draws of $71.3 billion received from Treasury through March 31, 2016.

• The amount of remaining funding available to Freddie Mac under the Purchase Agreement remains

unchanged at $140.5 billion, and will be reduced by any future draws.

• Treasury still maintains a liquidation preference of $72.3 billion on the company’s senior preferred stock as of 

March 31, 2016. 

 The payment of dividends does not reduce the outstanding liquidation preference under the Purchase 

Agreement.

 Freddie Mac is not permitted to redeem the senior preferred stock prior to the termination of Treasury’s 

funding commitment under the Purchase Agreement.

 

Additional Information

For more information, including that related to Freddie Mac’s financial results, conservatorship and related matters, 

see the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, and the company’s 

Financial Results Supplement. These documents are available on the Investor Relations page of the company’s Web 

site at www.FreddieMac.com/investors.

$71.3 

$0.0 $0.0 $0.0 $0.0 

$71.3 

2008 -

2012

2013 2014 2015 1Q

2016

Cumulative

Draw Requests from Treasury

$ Billions

$23.8

$47.6

$19.6

$5.5 $1.7

$98.2

2008 -

2012

2013 2014 2015 1Q

2016

Cumulative

Dividend Payments to Treasury

$ Billions

(1)
Freddie Mac First Quarter 2016 Financial Results 

May 3, 2016

Page 12

Additional information about Freddie Mac and its business is also set forth in the company’s filings with the SEC, 

which are available on the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors and 

the SEC’s Web site at www.sec.gov. Freddie Mac encourages all investors and interested members of the public to 

review these materials for a more complete understanding of the company’s financial results and related disclosures.

Webcast Announcement

Management will host a conference call at 9 a.m. Eastern Time on May 3, 2016 to discuss the company’s results with 

the media. The conference call will be concurrently webcast. To access the live audio webcast, use the following 

link: https://www.webcaster4.com/Webcast/Page/1315/14626. The replay will be available on the company’s Web

site at www.FreddieMac.com/investors for approximately 30 days. All materials related to the call will be available on 

the Investor Relations page of the company’s Web site at www.FreddieMac.com/investors.

* * * *

This press release contains forward-looking statements, which may include statements pertaining to the 

conservatorship, the company’s current expectations and objectives for its Single-family Guarantee, Multifamily and 

Investments segments, its efforts to assist the U.S. residential mortgage market, liquidity, capital management, 

economic and market conditions and trends, market share, the effect of legislative and regulatory developments and

new accounting guidance, credit quality of loans the company owns or guarantees, and results of operations and 

financial condition on a GAAP, Segment Earnings, Total Segment Earnings and fair value basis. Forward-looking 

statements involve known and unknown risks and uncertainties, some of which are beyond the company’s control. 

Management’s expectations for the company’s future necessarily involve a number of assumptions, judgments and 

estimates, and various factors, including changes in market conditions, liquidity, mortgage spreads, credit outlook, 

actions by the U.S. government (including FHFA, Treasury and Congress), and the impacts of legislation or 

regulations and new or amended accounting guidance, could cause actual results to differ materially from these 

expectations. These assumptions, judgments, estimates and factors are discussed in the company’s Annual Report 

on Form 10-K for the year ended December 31, 2015, Quarterly Report on Form 10-Q for the quarter ended March 

31, 2016 and Current Reports on Form 8-K, which are available on the Investor Relations page of the company’s Web 

site at www.FreddieMac.com/investors and the SEC’s Web site at www.sec.gov. The company undertakes no 

obligation to update forward-looking statements it makes to reflect events or circumstances occurring after the date of 

this press release.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's 

residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to 

lenders. Today Freddie Mac is making home possible for approximately one in four home borrowers and is the

largest source of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter 

@FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

Media Contact: Lisa Gagnon (703) 903-3385 Investor Contact: Robin Phillips (571) 382-4732
Page 13

(UNAUDITED)

March 31, 2016 December 31, 2015

Interest income

Mortgage loans $ 15,818 $ 15,793

Investments in securities 969 1,058

Other 57 25

Total interest income 16,844 16,876

Interest expense (13,388) (13,237)

Expense related to derivatives (51) (52)

Net interest income 3,405 3,587

Benefit (provision) for credit losses 467 781

3,872 4,368

Non-interest income (loss)

Gains (losses) on extinguishment of debt (55) (85)

Derivative gains (losses) (4,561) 744

Impairment of available-for-sale securities:

(52) (37)

(5) (10)

(57) (47)

303 (317)

Other income (loss) 947 (447)

Non-interest income (loss) (3,423) (152)

Non-interest expense

Salaries and employee benefits (239) (233)

Professional services (101) (136)

Occupancy expense (13) (16)

Other administrative expense (95) (125)

Total administrative expense (448) (510)

(84) (95)

(272) (262)

Other (expense) income (153) (272)

Non-interest expense (957) (1,139)

(Loss) income before income tax benefit (expense) (508) 3,077

Income tax benefit (expense) 154 (919)

Net (loss) income (354) 2,158

119 (588)

34 50

Changes in defined benefit plans 1 21

154 (517)

Comprehensive (loss) income $ (200) $ 1,641

Net (loss) income $ (354) $ 2,158

 - (1,740)

$ (354) $ 418

$ (0.11) $ 0.13

3,234 3,234

Undistributed net worth sweep and senior preferred stock 

dividends

Weighted average common shares outstanding (in millions) — 

basic and diluted

Net interest income after benefit (provision) for credit losses

Real estate owned operations (expense) income

Temporary Payroll Tax Cut Continuation Act of 2011 

expense

Net (loss) income attributable to common stockholders

Net (loss) income per common share — basic and diluted

Total other comprehensive income (loss), net of taxes 

and reclassification adjustments

Total other-than-temporary impairment of available-forsale securities

Portion of other-than-temporary impairment recognized 

in AOCI

Net impairment of available-for-sale securities 

recognized in earnings

Other gains (losses) on investment securities recognized in 

earnings

Other comprehensive income (loss), net of taxes and 

reclassification adjustments:

Changes in unrealized gains (losses) related to available-forsale securities

Changes in unrealized gains (losses) related to cash flow 

hedge relationships

FREDDIE MAC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended

(in millions, except share-related amounts)
Page 14

(UNAUDITED)

March 31, 2016 December 31, 2015

Assets

$ 6,158 $ 5,595

 16,671 14,533

 40,098 63,644

Investments in securities, at fair value 107,595 114,215

 27,085 24,992

 1,735,548 1,729,201

 6,091 6,074

Derivative assets, net 814 395

Real estate owned, net 1,571 1,725

Deferred tax assets, net 18,123 18,205

 9,346 7,313

Total assets $ 1,969,100 $ 1,985,892

Liabilities and equity

Liabilities

$ 6,047 $ 6,183

Debt, net (includes $6,915 and $7,184 at fair value) 1,955,618 1,970,269

Derivative liabilities, net 1,632 1,254

Other liabilities 4,803 5,246

Total liabilities 1,968,100 1,982,952

Commitments and contingencies

Equity

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

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

 - -

Additional paid-in capital - -

Retained earnings (accumulated deficit) (82,867) (80,773)

AOCI, net of taxes, related to:

 1,859 1,740

Cash flow hedge relationships (587) (621)

Defined benefit plans 35 34

Total AOCI, net of taxes 1,307 1,153

 (3,885) (3,885)

Total equity 1,000 2,940

Total liabilities and equity $ 1,969,100 $ 1,985,892

Treasury stock, at cost, 75,817,058 shares and 75,817,924 shares

Mortgage loans held-for-investment (net of allowance for loan losses of 

$14,521 and $15,331)

Restricted cash and cash equivalents

FREDDIE MAC

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share-related amounts)

Cash and cash equivalents

Other assets

Accrued interest payable

Common stock, $0.00 par value, 4,000,000,000 shares authorized, 

725,863,886 shares issued and 650,046,828 shares and 650,045,962 

shares outstanding

Available-for-sale securities (includes $578 and $778, related to net 

unrealized gains on securities for which other-than-temporary 

impairment has been recognized in earnings)

Securities purchased under agreements to resell

Accrued interest receivable

Mortgage loans held-for-sale (includes $22,415 and $17,660 at fair 

value)
Freddie Mac

Segment Descriptions

First Quarter 2016 Financial Results

Page 15

Freddie Mac has three reportable segments, which are based on the type of business activities each performs –

Single-family Guarantee, Multifamily, and Investments. The chart below provides a summary of the company’s 

three reportable segments and the All Other category.

Segment Description Activities / Items Financial 

Performance 

Measurement 

Basis

Single-family

Guarantee

The Single-family Guarantee segment 

reflects results from the segment’s credit 

guarantee activities. This segment

purchases, securitizes, and guarantees 

single-family loans originated by its 

seller/servicers and manages its 

seriously delinquent loans. In most 

instances, the company securitizes the 

loan and guarantees the payment of 

principal and interest on the mortgagerelated securities in exchange for 

management and guarantee fees.

Segment Earnings for this segment 

consist primarily of management and 

guarantee fee income, less creditrelated expenses, administrative 

expenses, allocated funding costs, and 

amounts related to net float income or 

expenses.

• Management and guarantee fees 

on PCs, including those retained 

by the company, and certain 

single-family loans in the 

mortgage-related investments 

portfolio, inclusive of upfront credit 

delivery and buy-down fees

• Adjustments to management and 

guarantee fees for the price 

performance of the company’s PCs 

relative to comparable Fannie Mae 

securities

• Costs of recoveries of risk transfer 

transactions

• Credit losses on all single-family 

assets

• Net float income or expense on the 

single-family credit guarantee 

portfolio

• Settlements, including legal 

settlements related to 

representation and warranty claims

• Gains (losses) on sale of nonperforming loans

• Tax expense/benefit and changes 

in the deferred tax asset valuation 

allowance (if any)

• Allocated debt costs and 

administrative expenses

Contribution to 

GAAP net income 

(loss)

Multifamily The Multifamily segment reflects results 

from the segment’s investment, 

securitization, and guarantee activities in 

multifamily loans and securities. The 

segment’s primary business model is to 

purchase multifamily loans for 

aggregation and then securitization 

through issuance of multifamily K 

Certificates. In addition, it also issues 

• Multifamily loans held-for-sale and 

associated securitization activities

• Investments in CMBS and 

multifamily loans held-forinvestments

• Other mortgage-related guarantees

Contribution to 

GAAP 

comprehensive 

income (loss)
Freddie Mac

Segment Descriptions

First Quarter 2016 Financial Results

Page 16

Segment Description Activities / Items Financial 

Performance 

Measurement 

Basis

and guarantees other securitization 

products as well as provides other 

mortgage-related guarantees.

Segment Earnings for this segment 

consist primarily of returns on assets 

related to multifamily investment 

activities and management and 

guarantee fee income, less creditrelated expenses, administrative 

expenses, and allocated funding costs.

• Other securitization products

• Tax expense/benefit and changes 

in the deferred tax asset valuation 

allowance (if any)

• Allocated debt costs and 

administrative expenses

Investments The Investments segment reflects 

results from managing the company’s 

mortgage-related investments portfolio 

(excluding Multifamily segment 

investments and single-family seriously 

delinquent loans), Freddie Mac’s 

treasury function (including funding and 

liquidity) and interest rate risk.

Segment Earnings by this segment 

consist primarily of the returns on these 

investments, less the related funding, 

hedging and administrative expenses.

• Investments in mortgage-related 

securities and single-family 

performing loans

• All other traded instruments and 

securities, excluding CMBS and 

multifamily housing revenue bonds

• Debt issuance

• Interest rate risk management

• Guarantee buy-ups, net of 

execution gains/losses

• Cash and liquidity management

• Settlements, including legal 

settlements, relating to non-agency 

mortgage-related securities

• Tax expense/benefit and changes 

to the deferred tax asset valuation 

allowance (if any)

• Allocated administrative expenses

Contribution to 

GAAP 

comprehensive 

income (loss)

All Other The All Other category consists of 

material corporate-level activities that 

are infrequent in nature and based on 

decisions outside the control of the 

management of the company’s 

reportable segments.

• Tax settlements, as applicable

• Legal settlements, as applicable

• Tax expense/benefit and changes 

in the deferred tax asset valuation 

allowance (if any), including the 

release of the deferred tax asset 

valuation allowance

• FHFA-mandated termination of the 

company’s pension plan

N/A
Page 17

($ Millions)

Single-family

Guarantee Multifamily Investments All Other

Total 

Segment 

Earnings 

(Loss) Reclassifications

Total per 

Consolidated 

Statements of 

Comprehensive 

Income

 Net interest income (loss) (1), (2), (3), (4), (5) $ (118) $ 252 $ 748 $ - $ 882 $ 2,523 $ 3,405

 Management and guarantee fee income* (1), (2), (3), (6) 1,285 108 - - 1,393 (1,283) 110

 Benefit for credit losses (7) 289 5 - - 294 173 467

Net interest income and management and guarantee income 

after benefit (provision) for credit losses 1,456 365 748 - 2,569 1,413 3,982

Derivative gains (losses) (4), (5) (8) (787) (2,995) - (3,790) (771) (4,561)

Other non-interest income (loss) (7) 195 737 439 - 1,371 (343) 1,028

Administrative expenses (295) (80) (73) - (448) - (448)

Other non-interest expense (6), (7) (184) (24) (2) - (210) (299) (509)

Income tax (expense) benefit (354) (64) 572 - 154 - 154

Net income (loss) 810 147 (1,311) - (354) - (354)

Total other comprehensive income (loss), net of taxes 1 3 150 - 154 - 154

Comprehensive income (loss) $ 811 $ 150 $ (1,161) $ - $ (200) $ - $ (200)

($ Millions)

Single-family

Guarantee Multifamily Investments All Other

Total 

Segment 

Earnings 

(Loss) Reclassifications

Total per 

Consolidated 

Statements of 

Comprehensive 

Income

 Net interest income (loss) (1), (2), (3), (4), (5) $ (52) $ 257 $ 776 $ - $ 981 $ 2,606 $ 3,587

 Management and guarantee fee income* (1), (2), (3), (6) 1,288 100 - - 1,388 (1,288) 100

 Benefit for credit losses (7) 359 6 - - 365 416 781

Net interest income and management and guarantee income 

after benefit (provision) for credit losses 1,595 363 776 - 2,734 1,734 4,468

Derivative gains (losses) (4), (5) (1) 366 1,151 - 1,516 (772) 744

Other non-interest income (loss) (7) (154) (377) 78 - (453) (543) (996)

Administrative expenses (347) (85) (78) - (510) - (510)

Other non-interest expense (6), (7) (185) (23) (2) - (210) (419) (629)

Income tax (expense) benefit (272) (69) (578) - (919) - (919)

Net income (loss) 636 175 1,347 - 2,158 - 2,158

Total other comprehensive income (loss), net of taxes 13 (153) (378) 1 (517) - (517)

Comprehensive income (loss) $ 649 $ 22 $ 969 $ 1 $ 1,641 $ - $ 1,641

For notes on reclassifications, see pages 19 and 20.

* Management and guarantee fee income is included in Other income (loss) on Freddie Mac's GAAP consolidated statements of comprehensive income. As a result, on the Summary 

Consolidated Statements of Comprehensive Income (Loss) table on page 2 of this press release, management and guarantee fee income is included in line 4, Other non-interest income 

(loss).

Three Months Ended December 31, 2015

Freddie Mac

Segment Earnings, Total Segment Earnings and Reconciliation to GAAP Results

Three Months Ended March 31, 2016
Page 18

1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016

1 GAAP Net Interest Income $ 3,647 $ 3,969 $ 3,743 $ 3,587 $ 3,405

Reclassifications:

2 Management and guarantee fee income reclassified out of net interest income (1), (2), (3) (1,464) (1,546) (1,529) (1,550) (1,555)

3 Accrual of periodic cash settlements reclassified into net interest income (4) (571) (532) (536) (559) (490)

4 Other reclassifications (5) (352) (538) (554) (497) (478)

5 Total reclassifications $ (2,387) $ (2,616) $ (2,619) $ (2,606) $ (2,523)

6 Total Segment Earnings Net Interest Income $ 1,260 $ 1,353 $ 1,124 $ 981 $ 882

1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016

1 GAAP Management and Guarantee Fee Income $ 88 $ 92 $ 90 $ 100 $ 110

Reclassifications:

2 Management and guarantee fee income reclassified from net interest income (1), (2), (3) 1,464 1,546 1,529 1,550 1,555

3 Temporary Payroll Tax Cut Continuation Act of 2011 expense reclassified from other non-interest expense (6) (222) (235) (248) (262) (272)

4 Total reclassifications 1,242 1,311 1,281 1,288 1,283

5 Total Segment Earnings Management and Guarantee Fee Income $ 1,330 $ 1,403 $ 1,371 $ 1,388 $ 1,393

Note: Columns may not add due to rounding.

For notes on reclassifications, see pages 19 and 20.

Reconciliation of GAAP Net Interest Income to Total Segment Earnings Net Interest Income

Freddie Mac

Non-GAAP Reconciliations

Reconciliation of GAAP Management and Guarantee Fee Income to Total Segment Earnings Management and Guarantee Fee Income

$ Millions, Pre-Tax
Freddie Mac

Notes on Non-GAAP Financial Measures

First Quarter 2016 Financial Results

Page 19

During the three months ended March 31, 2016, Freddie Mac changed how it calculates certain 

components of the company’s Segment Earnings for the Single-family Guarantee and Investments 

segments. The purpose of these changes is to simplify Segment Earnings results relative to GAAP 

results, as well as to reduce operational complexity. Prior period results have been revised to conform 

to the current period presentation. Changes include:

• The discontinuation of adjustments to net interest income and management and guarantee fee 

income which reflected the amortization of cash premiums and discounts on the consolidated 

Freddie Mac mortgage-related securities the company purchased as investments, as well as the 

amortization of certain guarantee buy-up and buy-down fees and credit delivery fees on mortgage 

loans it purchased. The discontinuation of the adjustments resulted in an increase to net interest 

income for the Investments segment of $179 million and a decrease to management and guarantee 

fee income for the Single-family Guarantee segment of $52 million for the three months ended 

December 31, 2015 to align with the current presentation.

• When the company securitizes loans into PCs, the premiums and discounts on the loans were 

previously to be amortized in net interest income. This amortization will now be reflected in other 

non-interest income, consistent with the amortization of the premiums and discounts on the 

securitized PCs themselves. The company reclassified $342 million of expense from net interest 

income into other non-interest income for the Investments segment for the three months ended 

December 31, 2015 to align with the current presentation.

• Impacts from the reclassification of mortgage loans from held-for-investment to held-for-sale will be 

reflected in aggregate as other non-interest income. The company reclassified $336 million of 

benefit from (provision) benefit for credit losses and $157 million of expense from other non-interest 

expense into other non-interest income for the Single-family Guarantee segment for the three 

months ended December 31, 2015 to align with the current presentation.

Notes on Significant Reclassifications

(1) Net guarantee fees are reclassified in Segment Earnings from net interest income to management and 

guarantee fee income.

(2) Implied management and guarantee fee income related to unsecuritized loans held in the mortgage 

investments portfolio is reclassified in Segment Earnings from net interest income to management and 

guarantee fee income.

(3) The portion of the amount reversed for accrued but uncollected interest upon placing loans on a nonaccrual status that relates to management and guarantee fees is reclassified in Segment Earnings from net 

interest income to management and guarantee fee income. The remaining portion of the allowance for lost 

interest is reclassified in Segment Earnings from net interest income to provision for credit losses.

(4) The accrual of periodic cash settlements of all derivatives is reclassified in Segment Earnings from 

derivative gains (losses) into net interest income to fully reflect the periodic cost associated with the protection 

provided by these contracts.

(5) Up-front cash paid or received upon the purchase or writing of swaptions and other option contracts is 

reclassified in Segment Earnings prospectively on a straight-line basis from derivative gains (losses) into net 

interest income over the contractual life of the instrument to fully reflect the periodic cost associated with the 

protection provided by these contracts.
Freddie Mac

Notes on Non-GAAP Financial Measures

First Quarter 2016 Financial Results

Page 20

(6) The expense related to the Temporary Payroll Tax Cut Continuation Act of 2011 is reclassified in Segment 

Earnings from other non-interest expense to management and guarantee fee income. As a result of the 

reclassification, the revenue and expense related to the legislated 10 basis point increase are netted within 

management and guarantee fee income.

(7) Impacts from the reclassification of seriously delinquent single-family mortgage loans from held-forinvestment to held-for-sale and other subsequent activity is moved from benefit for credit losses and other 

non-interest expense and shown in aggregate in non-interest income.