FOR IMMEDIATE RELEASE

November 6, 2014

MEDIA CONTACT: Lisa Gagnon

703-903-3385

 INVESTOR CONTACT: Robin Phillips

571-382-4732

FREDDIE MAC REPORTS NET INCOME OF $2.1 BILLION,

COMPREHENSIVE INCOME OF $2.8 BILLION FOR THIRD QUARTER 2014

Company to Return Additional $2.8 Billion to Taxpayers in Fourth Quarter

Single-family Seriously Delinquent Rate Hits Five Year Low

Third Quarter 2014 Financial Results

 Net income was $2.1 billion – the company’s twelfth consecutive quarter of positive earnings, compared to $1.4

billion in second quarter of 2014

 Comprehensive income was $2.8 billion, compared to $1.9 billion in second quarter of 2014

 Third quarter financial results were primarily driven by the following significant items:

 Higher net interest income of $3.7 billion versus $3.5 billion in second quarter

 Lower derivative losses of $0.6 billion versus $1.9 billion in second quarter

 Higher income from legal settlements on private-label securities of $1.2 billion versus $0.4 billion in 

second quarter

 A shift to credit provision of $0.6 billion from $0.6 billion credit benefit in second quarter



Treasury Draws and Dividend Payments at September 30, 2014

 Based on September 30, 2014 net worth of $5.2 billion, the company’s December 2014 dividend obligation will be 

$2.8 billion, bringing total cash dividends paid to Treasury to $91.0 billion

 Senior preferred stock held by Treasury remains $72.3 billion, as dividend payments do not reduce prior Treasury 

draws

Housing Market Support Since January 1, 2009

 Provided $2.4 trillion of liquidity to the mortgage market, including $201 billion in the first nine months of 2014

 8.1 million refinancings (nearly 439,000 in the first nine months of 2014)

 2.5 million home purchases (over 445,000 in the first nine months of 2014)

 1.8 million units of multifamily rental housing (nearly 214,000 in the first nine months of 2014)

 Helped 1.0 million borrowers to avoid foreclosure (nearly 94,000 in the first nine months of 2014)

Credit Quality at September 30, 2014

 Post-2008 book of business continued to grow and represented 58 percent of single-family credit guarantee 

portfolio; HARP and other relief refinance loans represented an additional 20 percent of that portfolio

 Delinquency rates remained below industry benchmarks:

 Single-family serious delinquency rate declined to 1.96 percent

 Multifamily delinquency rate was 0.03 percent

 Continued to shift mortgage credit risk to private capital markets through innovative STACR®, ACISSM and K-deal 

offerings, transferring a significant portion of credit risk on $266.1 billion of mortgages since the start of these 

efforts through September 30, 2014
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 2

McLean, VA — Freddie Mac (OTCQB: FMCC) today reported net income of $2.1 billion for the third quarter of 

2014, compared to $1.4 billion for the second quarter of 2014. The company also reported comprehensive 

income of $2.8 billion for the third quarter of 2014, compared to $1.9 billion for the second quarter of 2014. 

“It was another solid quarter for Freddie Mac, our twelfth straight of profitability,” said Freddie Mac CEO Donald 

H. Layton. “The fundamentals of our business continued to improve, and the quarter ended with the lowest singlefamily seriously delinquent rate in more than five years. Our work to become a more competitive company is 

bearing fruit in increased customer satisfaction and market share between the GSEs. We also strongly delivered 

on our mission to be one of the leading sources of liquidity in the market, funding approximately one in four 

home loans and nearly 214,000 units of rental housing in the first nine months of 2014. 

“At the same time, we are working with FHFA and the industry to strengthen and modernize the housing finance 

system,” Layton added. “We’re doing this by upgrading critical infrastructure, providing our customers with 

greater certainty through, as one example, refined representation and warranty terms, and also reducing taxpayer 

exposure through credit risk sharing transactions and the efficient liquidation of several types of legacy assets. 

These innovations will benefit millions of homebuyers and renters as well as taxpayers today and in the future.”

Summary Financial Results (1)

(1) Columns and rows may not add due to rounding. See “Appendix - Financial Results Discussion” section for additional information about the company’s financial results 

for the third quarter of 2014.

Net Income – Freddie Mac’s net income was $2.1 billion for the third quarter of 2014, up $0.7 billion from the 

second quarter of 2014. The increase primarily reflects lower derivative losses, as most long-term interest rates 

increased during the third quarter, and higher income from legal settlements related to private-label securities 

(PLS). These improvements were partially offset by a shift to provision for credit losses in the third quarter

driven by a slight worsening in loss severity, while the second quarter benefited from severity improvement and 

mortgage insurance recoveries.

($ Billions) 6/30/14 9/30/14 Change

1 Net interest income $ 3.5 $ 3.7 $ 0.2

2 (Provision) benefit for credit losses 0.6 (0.6) (1.2)

3 Derivative losses (1.9) (0.6) 1.3

4 Other non-interest income 0.5 1.4 0.9

5 Non-interest expense (0.7) (0.8) (0.1)

6 Pre-tax income $ 2.0 $ 3.0 $ 1.0

7 Income tax expense (0.7) (1.0) (0.3)

8 Net income $ 1.4 $ 2.1 $ 0.7

9 Total other comprehensive income 0.5 0.7 0.2

10 Comprehensive income $ 1.9 $ 2.8 $ 0.9

Three Months Ended
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 3

Comprehensive Income – Freddie Mac’s comprehensive income was $2.8 billion for the third quarter of 2014, 

up $0.9 billion from the second quarter of 2014. The increase was driven by higher quarterly net income and 

improved fair values on non-agency available-for-sale (AFS) securities.

Freddie Mac’s reported earnings may be volatile. The fair value of the company’s derivative portfolio, which is 

used to reduce Freddie Mac’s exposure to interest-rate risk, can change as interest rates change. Fair value 

changes on derivatives are included in earnings, while fair value changes associated with several of the types of 

assets and liabilities being economically hedged are not. Therefore, there can be timing mismatches affecting a 

given period’s earnings, which may not be reflective of the economics of the company’s business. In addition, 

Freddie Mac’s earnings can vary significantly from quarter to quarter due to changes in the fair value of mortgage 

securities held by the company, which may fluctuate based on interest rate and mortgage spread movements.

Legal Settlements – Freddie Mac and the Federal Housing Finance Agency (FHFA) reached agreements with 

several institutions to settle litigation related to Freddie Mac’s investment in certain PLS. These settlements 

contributed $1.2 billion to Freddie Mac’s pre-tax income in the third quarter of 2014, compared to $0.4 billion in 

the second quarter of 2014. Freddie Mac’s settlements of representation and warranty claims with seller/servicers 

had minimal impact on the company’s pre-tax income in both the second and third quarter of 2014.

Sustainability and Variability of Earnings – As Freddie Mac has noted in the past, the company’s earnings in 

2013 and 2014 have included a number of items that are not sustainable over the long term. For example, Freddie 

Mac’s 2013 financial results included a significant benefit related to the release of the deferred tax asset valuation 

allowance. As a result, the company no longer maintains a valuation allowance against its net deferred tax asset. 

Additionally, the company’s 2013 and 2014 financial results included legal settlements of both PLS litigation and 

representation and warranty claims. Freddie Mac’s financial results in these periods, particularly the level of loan 

loss provisioning, also benefited significantly from strong home price appreciation, which is moderating. In 

addition, declines in the size of the company’s mortgage-related investments portfolio, as required by FHFA and 

the Purchase Agreement with Treasury, will reduce earnings over the long term. The company’s financial results 

will also continue to be affected by changes in interest rates, the yield curve, implied volatility, and mortgage 

spreads (which impact both derivatives and mortgage securities held by Freddie Mac) and therefore are subject to

significant earnings and net worth variability from period to period.

About Freddie Mac’s Conservatorship

Purchase Agreement with Treasury – Freddie Mac has been operating under conservatorship, with FHFA as 

Conservator, since September 6, 2008. The support provided by Treasury pursuant to the Purchase Agreement 

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

business operations. Based on Freddie Mac’s net worth of $5.2 billion at September 30, 2014, less the 2014 

capital reserve amount of $2.4 billion, the company’s dividend obligation to Treasury in December 2014 will be 

$2.8 billion. Including the December 2014 dividend obligation, Freddie Mac’s aggregate cash dividends paid to 

Treasury will total $91.0 billion, $19.6 billion more than cumulative cash draws of $71.3 billion received from 

Treasury through September 30, 2014. Under the Purchase Agreement, the payment of dividends does not

reduce the outstanding liquidation preference. Accordingly, Treasury still maintains a liquidation preference of 

$72.3 billion on the company’s senior preferred stock as of September 30, 2014.
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 4

Treasury Draws and Dividend Payments

(1) The initial $1 billion liquidation preference of senior preferred stock was 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.

(2) Amount does not include the December 2014 dividend obligation of $2.8 billion.

In August 2012, the terms governing the company’s dividend obligations on the senior preferred stock were 

amended. The amended Purchase Agreement does not allow the company to build capital over the long term. 

Beginning in 2013, the required senior preferred stock dividends each quarter equal the amount, if any, by which 

the company’s net worth as of the end of the preceding quarter exceeds an applicable capital reserve amount. 

The applicable capital reserve amount is $2.4 billion for 2014, and will be reduced by $600 million each year 

thereafter until it reaches zero on January 1, 2018.

The amount of remaining funding available to Freddie Mac under the Purchase Agreement with Treasury is 

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

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

commitment under the Purchase Agreement. The limited circumstances under which Treasury’s funding 

commitment will terminate are described in “BUSINESS — Conservatorship and Related Matters — Treasury 

Agreements” in the company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Remittance of Guarantee Fees to Treasury – In September 2012, Freddie Mac began remitting proceeds to 

Treasury from the 10 basis point guarantee fee increase required by the Temporary Payroll Tax Cut Continuation 

Act of 2011. The cumulative expense related to this increase totals $1.2 billion, including $198 million in the third

quarter of 2014.

Housing Market Support

Freddie Mac supports the U.S. housing market by ensuring credit availability for new and refinanced mortgages

as well as rental housing. The company also helps struggling homeowners avoid foreclosure and stabilizes 

communities nationwide. Since the beginning of 2009, Freddie Mac has helped 12.4 million American families

own or rent a home and another one million families avoid foreclosure. At the same time, the company is

working with FHFA, its customers and the industry to build a stronger housing finance system for the nation.

$44.6 

$6.1 

$13.0 

$7.6 

$0.02 $0.0 $0.0 

2008 2009 2010 2011 2012 2013 YTD

2014

Draws from Treasury

$ Billions

$0.2 

$4.1 $5.7 $6.5 $7.2 

$47.6 

$16.8 (2) 

2008 2009 2010 2011 2012 2013 YTD

2014

Dividend Payments to Treasury

$ Billions ($ Billions) Cumulative

 Total

Total Senior Preferred Stock 

Outstanding $ 72.3 

Less: Initial Liquidation Preference(1) 1.0 

 Treasury Draws $ 71.3 

($ Billions) Cumulative 

Total

Dividend Payments as of 9/30/14 $ 88.2 

4Q14 Dividend Obligation 2.8 

 Total Dividend Payments $ 91.0 
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 5

Number of Families Helped

(1) For the periods presented, a borrower may be counted more than once if the company purchased more than one loan (purchase or refinance mortgage) relating to the same 

borrower.

(2) Represents single-family loan workouts. These categories are not mutually exclusive and a borrower in one category may also be included within another category in the 

same period. For the periods presented, a borrower may subsequently go into foreclosure.

Providing Liquidity – Freddie Mac provides access to financing for new and refinanced mortgages and rental 

housing. Since the beginning of 2009, the company has provided $2.4 trillion in liquidity to the market through 

its purchases of loans and issuances of mortgage-related securities, including $201 billion during the first nine 

months of 2014. 

Market Liquidity Provided (1)

(1) Based on unpaid principal balance (UPB) and includes other guarantee commitments. 

(2) Includes Ginnie Mae Certificates, HFA initiative-related guarantees, and Other Guarantee Transactions.

(3) Excludes Multifamily issuances of K-deals. 

(4) Consists of non-Freddie Mac mortgage-related securities purchased for the company’s mortgage-related investments portfolio.

Enabling Refinance Activity – Freddie Mac helped nearly 439,000 borrowers lower their payments and/or 

improve their mortgage terms by purchasing refinance mortgages in the first nine months of 2014 – nearly 

(Thousands)

2009 2010 2011 2012 2013 YTD 

9/30/14

Cumulative

Total

1 Number of families helped to own or rent a home 2,480 2,089 1,830 2,472 2,458 1,098 12,427

2 Relief refinance borrowers (includes HARP) (1)  169 533 453 687 611 141 2,594

3 Other refinance borrowers(1) 1,595 947 740 996 944 298 5,520

4 Purchase borrowers(1) 460 378 326 353 515 445 2,477

5 Multifamily rental units 256 231 311 436 388 214 1,836

6 Number of families helped to avoid foreclosure(2) 133 275 208 169 168 9 4 1,047

7 Loan modifications 6 5 170 109 7 0 8 3 5 2 549

8 Repayment plans 3 4 3 1 3 3 3 3 2 9 2 0 180

9 Forbearance agreements 1 5 3 5 2 0 1 3 1 2 7 102

10 Short sales & deed-in-lieu of foreclosure transactions 1 9 3 9 4 6 5 3 4 4 1 5 216

11 Total (lines 1+6) 2,613 2,364 2,038 2,641 2,626 1,192 13,474

($ Billions)

2009 2010 2011 2012 2013 YTD

9/30/14

Cumulative

Total

1 Single-family purchases or issuances(1) $ 483 $ 390 $ 321 $ 427 $ 423 $ 184 $ 2,228

2 Relief refinance mortgages (includes HARP) 3 5 106 8 2 123 9 9 2 2 467

3 Other refinance mortgages 345 200 168 228 210 6 3 1,214

4 Purchase mortgages 9 4 7 8 7 1 7 6 114 9 9 532

5 Other(2) 9 6 - - - - 1 5

6 Multifamily loan purchases or guarantees(1)(3) $ 1 7 $ 1 6 $ 2 0 $ 2 9 $ 2 6 $ 1 4 $ 122

7 Other(4) $ 4 6 $ - $ 8 $ - $ 4 $ 3 $ 6 1

8 Total (lines 1+6+7) $ 546 $ 406 $ 349 $ 456 $ 453 $ 201 $ 2,411
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 6

141,000 of these were purchased through Freddie Mac’s relief refinance initiative, which includes HARP. The 

company estimates that the homeowners who refinanced during the third quarter will reduce their mortgage 

interest payments by an average of $2,800 ($2,900 for HARP) during the first 12 months. Since the beginning of 

2009, the company has helped 8.1 million homeowners refinance their homes. 

Refinance purchases of $85 billion accounted for 46 percent of the company’s single-family mortgage purchase 

volume during the first nine months of 2014, compared to 76 percent during the first nine months of 2013. The 

company expects refinancing volume to constitute a smaller portion of its mortgage purchases in the coming 

quarters.

Preventing Foreclosures – Freddie Mac helps struggling borrowers retain their homes or otherwise avoid 

foreclosure. During the first nine months of 2014, the company completed nearly 94,000 single-family loan 

workouts – 84 percent of which enabled families to stay in their homes. This brings the total number of 

homeowners the company has helped to avoid foreclosure to one million since the beginning of 2009. 

In addition, when foreclosure is unavoidable, Freddie Mac has further helped to stabilize communities by

focusing its real estate owned home sales on owner-occupants, who have made up two–thirds of its purchasers 

since the beginning of 2009, and by promoting industry-leading standards for property preservation.

Building a Stronger Mortgage Market – Working with FHFA and the industry, Freddie Mac is building a 

stronger, more efficient mortgage market that benefits the nation’s homebuyers, renters and taxpayers. These 

efforts include shifting risk to the private market through innovative capital market offerings like Structured 

Agency Credit Risk (STACR) debt notes, Agency Credit Insurance StructureSM (ACIS) transactions and 

multifamily K-deal securities, strengthening the mortgage market’s infrastructure through the Uniform Mortgage 

Data Program and the Common Securitization Platform and building a more efficient, customer-focused 

company. 

Credit Quality

New Single-Family Book – At September 30, 2014, the company’s new single-family book (loans acquired after 

2008, excluding HARP and other relief refinance mortgages) accounted for 58 percent of the UPB of Freddie 

Mac’s single-family credit guarantee portfolio. Since 2008, Freddie Mac has enhanced its credit and underwriting 

standards, mortgage lenders have delivered fewer loans with higher-risk characteristics, and overall the company 

has seen positive changes in the underwriting practices of lenders and mortgage insurers. These factors have 

contributed to the improved credit quality of the company’s new single-family book, including low delinquency 

rates and credit losses. 
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 7

Single-Family Credit Guarantee Portfolio – Concentration of Credit Risk 

(1) Loans acquired after 2008. Excludes HARP and other relief refinance loans.

HARP and Other Relief Refinance Loans – HARP and other relief refinance loans represented 20 percent of 

the UPB of Freddie Mac’s single-family credit guarantee portfolio at September 30, 2014. HARP loans generally 

reflect many of the credit risk attributes of the original loans, particularly LTV ratios, and thus generally present 

higher risk to the company than other refinance loans the company has purchased since 2009. However, in many 

cases, the borrowers’ payments are reduced through HARP refinancing, thereby strengthening the borrowers’ 

potential to make their mortgage payments.

 

2005-2008 Legacy Single-Family Book – Freddie Mac’s 2005-2008 legacy single-family book continues to 

represent a declining portion of the company’s single-family credit guarantee portfolio. At September 30, 2014,

the 2005-2008 legacy single-family book represented 14 percent of the UPB of the company’s single-family 

credit guarantee portfolio, but accounted for 83 percent of the company’s single-family credit losses during the 

first nine months of 2014. The gradual reduction of Freddie Mac’s 2005-2008 legacy single-family book has 

positively impacted the payment performance of its overall single-family credit guarantee portfolio.

Single-Family Credit Guarantee Portfolio Purchases – LTV Ratios and Credit Scores

(1) Based on FICO score at the time of loan origination or Freddie Mac’s purchase and may not be indicative of the borrowers’ current creditworthiness.

YTD

9/30/14

% of Portfolio Serious Delinquency 

Rate % of Credit Losses

New single-family book (1) 58% 0.23% 2 %

HARP and other relief refinance loans 20 0.70% 7

2005-2008 legacy single-family book 14 7.66% 83

Pre-2005 legacy single-family book 8 3.12% 8

Total 100% 1.96% 100%

As of 9/30/14 2009 2010 2011 2012 2013 YTD

9/30/14

Weighted average original LTV ratio:

Relief refinance (includes HARP) 80% 77% 77% 97% 91% 83%

All other 66% 67% 67% 68% 71% 76%

 Total purchases 67% 70% 70% 76% 75% 77%

Weighted average credit score (1):

Relief refinance (includes HARP) 738 747 744 740 727 712

All other 757 758 759 762 756 748

 Total purchases 756 755 755 756 749 744
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 8

Total single-family loans (including relief refinance loans) purchased by Freddie Mac in the first nine months of 

2014 had a weighted average original LTV ratio of 77 percent and a weighted average FICO score of 744. Recent 

trends in LTV ratios and credit scores reflect, in part, a higher proportion of home purchase loans in the

company’s loan acquisition volume and continued purchases of HARP loans.

Single-family serious delinquency rate declined to 1.96 percent at September 30, 2014, from 2.07 percent at 

June 30, 2014. Freddie Mac’s single-family serious delinquency rate at September 30, 2014 is the lowest since 

January 2009 and is substantially below the rate for the entire U.S. mortgage market. According to the Mortgage 

Bankers Association’s National Delinquency Survey, the serious delinquency rate on first-lien single-family loans 

in the U.S. mortgage market was 4.80 percent at June 30, 2014, which is the most recent date for which data is 

available. Beginning in 2010, Freddie Mac’s single-family serious delinquency rate has declined, primarily due 

to lower volumes of newly delinquent loans and continued loss mitigation and foreclosure activities for loans in 

the legacy single-family book. However, the delinquency rate has also been affected by delays, including those 

due to increases in foreclosure process timeframes, general constraints on servicer capacity and court backlogs (in 

states that require judicial foreclosure process). 

Multifamily delinquency rate (based on loans 60 days or more past due or in the process of foreclosure) was 

0.03 percent at September 30, 2014, compared to 0.02 percent at June 30, 2014. Freddie Mac’s multifamily 

delinquency rate continued to reflect strong multifamily portfolio performance.

 

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 September 30, 2014, 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.

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 Thursday, November 6, 2014 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: http://www.visualwebcaster.com/event.asp?id=100821. The replay will be 

available on the company’s Web site at www.FreddieMac.com/investors. 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, multifamily and 

investment businesses, its loan workout initiatives and other efforts to assist the U.S. residential mortgage market, 
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 9

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 and fair value basis. Forwardlooking 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, 2013, Quarterly Reports on Form 10-Q for the 

quarters ended March 31, 2014, June 30, 2014 and September 30, 2014 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 one in four home borrowers and is one of the largest 

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

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

# # #
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 10

Appendix - Financial Results Discussion

Summary Consolidated Statements of Comprehensive Income (1)

(1) Columns and rows may not add due to rounding. 

Net interest income was $3.7 billion for the third quarter of 2014, compared to $3.5 billion for the second quarter 

of 2014. Net interest yield was 77 basis points for the third quarter of 2014, compared to 73 basis points for the 

second quarter of 2014. The increases in both net interest income and net interest yield were primarily driven by

lower funding costs. 

($ Billions) 6/30/14 9/30/14 Change

1 Net interest income $ 3.5 $ 3.7 $ 0.2

2 (Provision) benefit for credit losses 0.6 (0.6) (1.2)

3 Derivative losses (1.9) (0.6) 1.3

4 Other non-interest income 0.5 1.4 0.9

5 Non-interest income (loss) (1.4) 0.8 2.2

6 Administrative expenses (0.5) (0.5) (0.0)

7 REO operations expense 0.1 (0.1) (0.2)

8 Other non-interest income (expense) (0.3) (0.2) 0.0

9 Non-interest expense (0.7) (0.8) (0.1)

10 Pre-tax income 2.0 3.0 1.0

11 Income tax expense (0.7) (1.0) (0.3)

12 Net income $ 1.4 $ 2.1 $ 0.7

13 Total other comprehensive income 0.5 0.7 0.2

14 Comprehensive income $ 1.9 $ 2.8 $ 0.9

Three Months Ended

$4.3

$3.8 $3.5 $3.5 $3.7

3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014

Net Interest Income

$ Billions
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 11

(Provision) benefit for credit losses was provision of $0.6 billion for the third quarter of 2014, compared to a 

benefit of $0.6 billion for the second quarter of 2014. The shift was primarily driven by a slight worsening in loss 

severity, while the second quarter benefited from severity improvement and mortgage insurance recoveries.

Freddie Mac’s loan loss reserves were $22.7 billion at September 30, 2014, compared to $22.8 billion at June 30, 

2014. The company’s loan loss reserve balance is increased by a provision for credit losses (and decreased by a 

benefit for credit losses) and reduced by charge-offs. 

Derivative losses were $0.6 billion for the third quarter of 2014, compared to $1.9 billion for the second quarter 

of 2014. The improvement was primarily due to lower losses on the net pay-fixed swap portfolio as most longterm interest rates increased.

$1.1 

$0.2 

($0.1)

$0.6 

($0.6)

3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014

(Provision) Benefit for Credit Losses

$ Billions

($0.1)

$1.0 

($2.4)

($1.9)

($0.6)

3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014

Derivative Gains (Losses) 

$ Billions
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 12

Other non-interest income was $1.4 billion for the third quarter of 2014, compared to $0.5 billion for the second 

quarter of 2014. The increase was mostly driven by a $0.8 billion increase in legal settlement proceeds related to 

PLS litigation.

Non-interest expense was $0.8 billion for the third quarter of 2014, up slightly from $0.7 billion for the second 

quarter of 2014. 

Total other comprehensive income was $0.7 billion for the third quarter of 2014, compared to $0.5 billion for 

the second quarter of 2014. The increase primarily reflects improved fair values on non-agency AFS securities.

$1.8 

$4.8 

$5.5 

$0.5 

$1.4 

3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014

Other Non-Interest Income 

$ Billions

($0.6)

($0.4)

($0.8)

($0.7)

($0.8)

3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014

Non-Interest Expense

$ Billions

($0.05)

$1.2

$0.5 $0.5 $0.7

3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014

Total Other Comprehensive Income (Loss)

$ Billions

Note: Quarterly amounts may not add to full-year amount due to rounding.
Freddie Mac Third Quarter 2014 Financial Results 

November 6, 2014

Page 13

Segment Financial Results – Freddie Mac’s operations consist of three reportable segments, which are based on 

the type of business activities each performs — Single-family Guarantee, Investments and Multifamily. Certain 

activities that are not part of a reportable segment are included in the All Other category. 

Summary of Segment Earnings and Comprehensive Income (1)

(1) Columns and rows may not add due to rounding.

Single-family Guarantee segment earnings were $0.2 billion for the third quarter of 2014, compared to $0.6 

billion for the second quarter of 2014. The decrease was primarily driven by the shift to a provision for credit 

losses in the third quarter of 2014 from a benefit for credit losses in the second quarter of 2014. Comprehensive

income for the Single-family Guarantee segment approximated segment earnings for both the second and third

quarter of 2014. 

Investments segment earnings were $1.4 billion for the third quarter of 2014, compared to $0.3 billion for the 

second quarter of 2014. The increase was primarily driven by lower derivative losses and higher settlement 

proceeds related to PLS litigation. Comprehensive income for the Investments segment was $2.3 billion for the 

third quarter of 2014, compared to $0.9 billion for the second quarter of 2014. The increase reflects higher

quarterly segment earnings and improved fair values on non-agency AFS securities.

Multifamily segment earnings were $0.4 billion for the third quarter of 2014, down slightly from $0.5 billion for 

the second quarter of 2014. Comprehensive income for the Multifamily segment was $0.3 billion for the third

quarter of 2014, down slightly from $0.4 billion for the second quarter of 2014.

($ Billions) 6/30/14 9/30/14 Change

Segment Earnings, net of taxes

1 Single-family Guarantee $ 0.6 $ 0.2 $ (0.4)

2 Investments 0.3 1.4 1.1

3 Multifamily 0.5 0.4 (0.0)

4 All Other - - -

5 Total Segment Earnings, net of taxes $ 1.4 $ 2.1 $ 0.7

Comprehensive income of segments

6 Single-family Guarantee $ 0.6 $ 0.2 $ (0.4)

7 Investments 0.9 2.3 1.3

8 Multifamily 0.4 0.3 (0.1)

9 All Other - - -

10 Comprehensive income of segments $ 1.9 $ 2.8 $ 0.9

Three Months Ended