Freddie Mac Reports Net Income of $1.4 Billion and

Comprehensive Income of $1.7 Billion for First Quarter 2019

The Company's Transformed Business Model Continues to Produce Solid Financial and Business Results

First Quarter 2019 Financial Results

• Solid business revenues, strong credit quality, lower market-related volatility, and continued

guarantee portfolio growth delivered $1.7 billion of comprehensive income, up 13% from the prior

quarter.

Market-related impact was near zero, compared to a $0.6 billion loss in the prior quarter. 

• Expected $1.7 billion dividend to the U.S. Treasury by June 2019; cumulative payments to date

total $118.0 billion.

• Return on conservatorship capital (ROCC)(1) improved to 12.7% on higher earnings and lower

conservatorship capital compared to the prior quarter.

"Freddie Mac produced a healthy quarter, generating comprehensive income of $1.7 billion, up 13 

percent from the fourth quarter. Our guarantee book of business over the prior year grew 5 percent, 

demonstrating our heightened competitiveness, and credit quality remains strong. We also delivered 

on our mission, making home possible for nearly 450,000 families. These results demonstrate how the 

transformed Freddie Mac today is a well-run financial institution that produces solid earnings, serves its 

customers, protects taxpayers and fulfills its mission."

Donald H. Layton Chief Executive Officer

Business Highlights

Producing Solid Results through Strong Business Fundamentals 

• Robust 5% total guarantee book growth, year over year — Single-Family grew 4% and Multifamily

grew 14%.

• Credit quality remains strong — Single-Family serious delinquency rate declined to 0.67%, while

Multifamily delinquency rate continues near zero at 0.03%.

Reducing Taxpayer Exposure to the Company's Risks(1)(2)

• Conservatorship capital declined by $6.1 billion, or 10%, from the prior year, due to credit risk

transfer activity, home price appreciation, and legacy asset dispositions.

• Reduced credit risk on new business through credit risk transfer activity, a key component of the

company's business model.

Reduced conservatorship capital needed for credit risk by 65% for Single-Family and 90% for 

Multifamily on new business activity in the twelve months ended March 31, 2018.

Expanding Opportunities for U.S. Homebuyers, Renters and Lenders of All Sizes

• Helped 448,000 families to own or rent a home; provided $86 billion in liquidity to the mortgage

market.

• Served 900 single-family lenders acquiring 45% of purchase volume from regional and community

lenders.

• Remained a vital source of affordable housing — First-time homebuyers represented 47% of new

single-family purchase loans, and 92% of the eligible multifamily rental units financed were

affordable to families earning at or below 120% of area median incomes.

(1) See page 5 for additional information on the Return on Conservatorship Capital.

(2) See pages 6-7 for information related to the reduction in conservatorship capital needed for credit risk.
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 2

McLean, VA — Freddie Mac (OTCQB: FMCC) today reported net income of $1.4 billion for the first quarter of 2019, 

compared to net income of $1.1 billion for the fourth quarter of 2018. The company also reported comprehensive 

income of $1.7 billion for the first quarter of 2019, compared to comprehensive income of $1.5 billion for the fourth 

quarter of 2018.

Summary of Consolidated Statements of Comprehensive Income (Loss)

(Dollars in millions) 1Q 2019 4Q 2018 Change 1Q 2018 Change

Net interest income $3,153 $2,743 $410 $3,018 $135

Guarantee fee income 217 208 9 194 23

Other income (loss) 34 66 (32) 131 (97)

Net revenues 3,404 3,017 387 3,343 61

Other non-interest income (loss):

Mortgage loans gains (losses) 931 491 440 (215) 1,146

Investment securities gains (losses) 174 329 (155) (232) 406

Debt gains (losses) 15 275 (260) 121 (106)

Derivative gains (losses) (1,606) (1,704) 98 1,830 (3,436)

Total other non-interest income (loss) (486) (609) 123 1,504 (1,990)

Benefit (provision) for credit losses 135 359 (224) (63) 198

Non-interest expense (1,288) (1,374) 86 (1,110) (178)

Income (loss) before income tax (expense) benefit 1,765 1,393 372 3,674 (1,909)

Income tax (expense) benefit (358) (293) (65) (748) 390

Net income (loss) 1,407 1,100 307 2,926 (1,519)

Total other comprehensive income (loss), net of

taxes and reclassification adjustments 258 378 (120) (776) 1,034

Comprehensive income (loss) $1,665 $1,478 $187 $2,150 $(485)

• Net revenues of $3.4 billion, up $0.4 billion, or 13%, from the prior quarter, driven by an increase in net 

interest income. 

• Market-related losses were near zero, as a $0.1 billion loss from market spread impacts was partially offset 

by a $0.1 billion gain from net interest rate impacts(1), both after-tax, compared to market-related losses of 

$0.6 billion, after-tax, in the fourth quarter of 2018.

(1) Net of hedge accounting amortization.

Selected Financial Measures

Net Interest Income and Net Interest Yield

(Dollars in billions) 

• Net interest income increased from the prior quarter, driven primarily by a positive impact from hedge 

accounting in the first quarter of 2019. 
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 3

Guarantee Fee Income(1), Guarantee Fee Rate and 

Multifamily Guarantee Portfolio 

(1) Guarantee fee income on a GAAP basis is primarily from the company’s multifamily business.

• Guarantee fee income increased from the prior quarter, primarily due to continued growth in the Multifamily 

guarantee portfolio.

Non-GAAP Financial Measure Highlights

In addition to analyzing the company’s results on a GAAP basis, management reviews net interest income and 

guarantee fee income on an “adjusted,” or non-GAAP, basis. These adjusted financial measures are calculated 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. The company also presents two 

additional non-GAAP financial measures, adjusted net interest yield and adjusted guarantee fee rate, that are 

calculated based on adjusted net interest income and adjusted guarantee fee income, respectively. Management 

believes that these non-GAAP financial measures are useful because they more clearly reflect the company’s 

sources of revenue and return.

For additional information about the company's non-GAAP financial measures and reconciliations to the 

comparable amounts under GAAP, see pages 14 - 15 of this press release.
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 4

Adjusted Net Interest Income(1), Adjusted Net Interest Yield(1), and 

Investments Portfolio

(Dollars in billions)

(1) Non-GAAP financial measure. For reconciliations to the comparable amounts under GAAP, see page 14 of this press release.

Amounts may not add due to rounding.

• Adjusted net interest income decreased from the prior quarter, primarily driven by a decrease in the 

average balance of mortgage-related investments.

• The mortgage-related investments portfolio was $219 billion, a $22 billion, or 9%, decrease from the prior 

year. This balance remained below the limit directed by FHFA, which was $260 billion during 2018 and 

decreased to $225 billion as of December 31, 2018.

Adjusted Guarantee Fee Income(1), Adjusted Guarantee Fee Rate(1), and 

Total Guarantee Portfolio

(Dollars in billions)

 

(1) Non-GAAP financial measure. For reconciliations to the comparable amounts under GAAP, see page 14 of this press release.

Amounts may not add due to rounding.

• Adjusted guarantee fee income was substantially unchanged from the prior quarter. 

• The total guarantee portfolio grew $24 billion, or 1%, from the prior quarter, driven by modest increases in 

the Single-Family and Multifamily guarantee portfolios, and $108 billion, or 5%, from the prior year.
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 5

Return on Conservatorship Capital

The table below provides the ROCC, calculated as (1) annualized comprehensive income for the period divided by 

(2) average conservatorship capital during the period. All conservatorship capital figures presented below are 

based on the Conservatorship Capital Framework (CCF) in effect as of March 31, 2019.

ROCC is not based on the company's total equity and does not reflect actual returns on total equity. The company 

does not believe that returns on total equity are meaningful because of the current $3.0 billion limit on the amount 

of total equity that it is able to retain under the Purchase Agreement. In addition, the company believes that returns 

post-conservatorship would most likely be lower than the levels calculated below, assuming the same portfolio of 

risk assets, as it expects that it would hold capital above the minimum required regulatory capital levels and that it 

may be required to pay fees for federal government support, thereby reducing its total comprehensive income.

Return on Conservatorship Capital

(Dollars in billions) 1Q 2019 4Q 2018 Change 1Q 2018 Change

Comprehensive income $1.7 $1.5 $0.2 $2.2 $(0.5)

Conservatorship capital (average during the period)(1) 52.4 54.4 (2.0) 58.5 (6.1)

ROCC, based on comprehensive income 12.7% 10.9% 1.8% 14.7% (2.0)%

(1) Prior period conservatorship capital results have been revised to include capital for deferred tax assets.

Amounts may not add due to rounding.

ROCC increased compared to the prior quarter, driven by higher comprehensive income combined with the lower 

level of conservatorship capital needed in the first quarter of 2019, resulting from the increasing CRT activity in 

both the Single-Family Guarantee and Multifamily segments, home price appreciation, and the efficient disposition 

of legacy assets. 

For additional information on the CCF and ROCC, see the company’s Quarterly Report on Form 10-Q for the 

quarter ended March 31, 2019. 
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 6

Segment Financial Results and Business Highlights

Freddie Mac’s operations consist of three reportable segments, which are based on the types of business activities 

they perform – Single-Family Guarantee, Multifamily, and Capital Markets. The company presents Segment 

Earnings for each reportable segment by reclassifying certain credit guarantee-related activities and investmentrelated activities between various line items on its GAAP consolidated statements of comprehensive income and 

allocating certain revenues and expenses, including funding costs and administrative expenses, to its three 

reportable segments.

For more information about Segment Earnings, see Note 13 to the financial statements included in the company’s 

Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.

Single-Family Guarantee Segment

Providing liquidity to the market while transforming U.S. housing finance

First Quarter 2019 Financial Results (1)

(Dollars in millions) 1Q 2019 4Q 2018 Change 1Q 2018 Change

Guarantee fee income $1,633 $1,637 $(4) $1,590 $43

Benefit (provision) for credit losses 8 156 (148) 41 (33)

Financial instruments gains (losses)(2) (62) 132 (194) 28 (90)

Other non-interest income (loss) 249 312 (63) 81 168

Administrative expense (374) (420) 46 (336) (38)

REO operations income (expense) (38) (88) 50 (39) 1

Other non-interest expense (488) (447) (41) (379) (109)

Segment Earnings before income tax expense 928 1,282 (354) 986 (58)

Income tax (expense) benefit (188) (258) 70 (200) 12

Segment Earnings, net of taxes 740 1,024 (284) 786 (46)

Total other comprehensive income (loss), net of tax (4) 6 (10) (4) —

Total comprehensive income (loss) $736 $1,030 $(294) $782 $(46)

(1) The financial performance of the company’s Single-family Guarantee segment is measured based on its contribution to GAAP net income (loss).

(2) Consists of fair value gains and losses on debt for which the company has elected the fair value option and derivatives.

• Segment earnings decreased from the prior quarter, due to higher fair value losses on STACR financial 

instruments, resulting from market spread movements, combined with a lower benefit for credit losses. 

First Quarter 2019 Business Highlights

• New business activity was $70 billion, a decrease of $7 billion, or 9%, from the fourth quarter of 2018. 

Home purchase volume decreased 16%, while refinance volume increased 9%. 

• Single-Family credit guarantee portfolio increased to $1,914 billion.

Core loan portfolio grew to 83%.

• Average guarantee fees charged on new acquisitions were substantially unchanged at 40 basis points.

Average guarantee fees on the single-family credit guarantee portfolio were 34 basis points, down 

from 35 basis points for the prior quarter.

• As of March 31, 2019, the company had cumulatively transferred a portion of credit risk on nearly $1.3 

trillion of single-family mortgages, based upon the UPB at issuance of the CRT transactions.

Conservatorship capital needed for credit risk was reduced by approximately 65%(1) through CRT 

transactions on new business activity in the twelve months ended March 31, 2018.

• Provided funding for 300,000 single-family homes, more than 192,000 of which were home purchase 

loans.

(1) The reduction in the amount of conservatorship capital needed for credit risk on new business activity is calculated as conservatorship credit capital released from the CRT 

transactions (primarily through STACR and ACIS) divided by total conservatorship credit capital on new business activity at the time of purchase.
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 7

Multifamily Segment

Leading through innovation

First Quarter 2019 Financial Results (1)

(Dollars in millions) 1Q 2019 4Q 2018 Change 1Q 2018 Change

Net interest income $247 $250 $(3) $271 $(24)

Guarantee fee income 216 209 7 195 21

Benefit (provision) for credit losses (1) 3 (4) 16 (17)

Financial instrument gains (losses)(2) (29) (691) 662 161 (190)

Administrative expense (112) (123) 11 (100) (12)

Other non-interest income (expense) 93 43 50 51 42

Segment Earnings before income tax expense 414 (309) 723 594 (180)

Income tax (expense) benefit (84) 56 (140) (121) 37

Segment Earnings, net of taxes 330 (253) 583 473 (143)

Total other comprehensive income (loss), net of tax 65 54 11 (68) 133

Total comprehensive income (loss) $395 $(199) $594 $405 $(10)

(1) The financial performance of the company’s Multifamily segment is measured based on its contribution to GAAP comprehensive income (loss).

(2) Consists of fair value gains and losses on loan purchase commitments, mortgage loans and debt for which the company has elected the fair value option, certain 

investment securities, and derivatives.

• Comprehensive income increased from the prior quarter, driven by spread tightening in the first quarter of 

2019, compared to spread widening in the fourth quarter of 2018, resulting in fair value gains on mortgage 

loans and commitments.

First Quarter 2019 Business Highlights

• New business activity was $13 billion, a decrease of 57% from the prior quarter's record volume, but on 

par with the prior year, while outstanding purchase commitments increased 11% to $21 billion, primarily 

reflecting continued strong demand for multifamily loan products.

• Multifamily guarantee portfolio increased to $243 billion, driven by strong new business activity. 

Average guarantee fees on the Multifamily guarantee portfolio were 36 basis points, substantially 

unchanged from the prior quarter.

• As of March 31, 2019, the company had cumulatively transferred a large majority of credit risk on the 

Multifamily guarantee portfolio. 

Conservatorship capital needed for credit risk was reduced by approximately 90%(1) through CRT 

transactions on new business activity in the twelve months ended March 31, 2018; the company plans 

similar risk reduction transactions for this year's new business activity.

The company executed CRT transactions, primarily via K Certificates and SB Certificates, on $15 

billion in UPB for the first quarter of 2019 and $333 billion in UPB since 2009.

• The company provided financing for 148,000 rental units.

92% of the eligible units financed were affordable to families earning at or below 120% of area median 

incomes.

(1) The reduction in the amount of conservatorship capital needed for credit risk on new business activity is calculated as conservatorship credit capital released from the CRT 

transactions (primarily through K Certificates and SB Certificates) divided by total conservatorship credit capital on new business activity.
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 8

Capital Markets Segment

Innovating to enhance the liquidity of the mortgage market and actively reduce risk for taxpayers

First Quarter 2019 Financial Results (1)

(Dollars in millions) 1Q 2019 4Q 2018 Change 1Q 2018 Change

Net interest income $758 $807 $(49) $771 $(13)

Investment securities gains (losses) 195 422 (227) 37 158

Debt gains (losses) (7) 164 (171) 105 (112)

Derivative gains (losses) (667) (725) 58 1,302 (1,969)

Other non-interest income (expense) 236 (145) 381 (37) 273

Administrative expense (92) (103) 11 (84) (8)

Segment Earnings before income tax expense 423 420 3 2,094 (1,671)

Income tax (expense) benefit (86) (91) 5 (427) 341

Segment Earnings, net of taxes 337 329 8 1,667 (1,330)

Total other comprehensive income (loss), net of tax 197 319 (122) (704) 901

Total comprehensive income (loss) $534 $648 $(114) $963 $(429)

(1) The financial performance of the company’s Capital Markets segment is measured based on its contribution to GAAP comprehensive income (loss).

• Comprehensive income decreased from the prior quarter, primarily driven by lower gains from PC debt 

extinguished as a decline in interest rates resulted in higher purchase prices.

First Quarter 2019 Business Highlights

• The company continued to maintain a presence in the agency mortgage-related securities market to 

strategically support the guarantee business.

The overall liquidity of the mortgage investments portfolio continued to improve as less liquid assets 

decreased while liquid assets increased. 
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 9

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.

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

avoid foreclosure, completing approximately 15,000 single-family loan workouts in the first quarter of 2019. 

Mortgage Funding – Freddie Mac provided approximately $86 billion in liquidity to the market in the first quarter of 

2019, funding: 

• More than 300,000 single-family homes, approximately 192,000 of which were home purchase loans; and

• Approximately 148,000 multifamily rental units.

Number of Families Helped to Own or Rent a Home

In Thousands

(1) As of March 31.

Amounts may not add due to rounding.
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 10

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 Purchase Agreement enables the company to maintain access to the 

debt markets and have adequate liquidity to conduct its normal business operations.

Treasury Draws(1) and Dividend Payments

$ Billions

(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 and the $3 

billion increase in the aggregate liquidation preference of the senior preferred stock pursuant to the December 21, 2017 Letter Agreement. The company received no cash proceeds as 

a result of issuing the initial $1 billion liquidation preference of senior preferred stock or the $3 billion increase on December 31, 2017.

(2) As of March 31, 2019.

Amounts may not add due to rounding.

• Expected $1.7 billion dividend to Treasury in June 2019 based on the company's Net Worth Amount of 

$4.7 billion at March 31, 2019 less the applicable Capital Reserve Amount of $3.0 billion.

Through March 31, 2019, aggregate cash dividends paid to Treasury were$46.4 billion more than 

cumulative cash draws received from Treasury.

The amount of funding available to Freddie Mac under the Purchase Agreement remained $140.2 

billion at March 31, 2019.

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

Agreement, which was $75.6 billion at March 31, 2019.
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 11

Additional Information

For more information, including information 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, 2019 and the 

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

company’s website at www.FreddieMac.com/investors.

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

SEC, which are available on the Investor Relations page of the company’s website at www.FreddieMac.com/

investors and the SEC’s website 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 1, 2019 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://edge.media-server.com/m6/p/75pfd7ns. The replay will be available on the company’s 

website 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 website at www.FreddieMac.com/investors.

Media Contact: Frederick Solomon (703) 903-3861 Investor Contact: Laurie Garthune (571) 382-4732 

* * * *

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 Capital Markets segments, its efforts to assist the housing market, liquidity and 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, the costs and benefits of 

the company’s credit risk transfer transactions, and results of operations and financial condition on a GAAP, 

Segment Earnings, non-GAAP, 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 Quarterly Report on Form 10-Q 

for the quarter ended March 31, 2019, which is available on the Investor Relations page of the company’s website 

at www.FreddieMac.com/investors and the SEC’s website 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 makes home possible for millions of families and individuals by providing mortgage capital to lenders. 

Since its creation by Congress in 1970, the company has made housing more accessible and affordable for 

homebuyers and renters in communities nationwide. The company is building a better housing finance system for 

homebuyers, renters, lenders, and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie 

Mac’s blog FreddieMac.com/blog.
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 12

FREDDIE MAC

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(In millions, except share-related amounts) 1Q 2019 4Q 2018 1Q 2018

Interest income

Mortgage loans $17,946 $16,955 $15,951

Investments in securities 689 740 810

Other 351 279 214

Total interest income 18,986 17,974 16,975

Interest expense (15,833) (15,231) (13,957)

Net interest income 3,153 2,743 3,018

Benefit (provision) for credit losses 135 359 (63)

Net interest income after benefit (provision) for credit losses 3,288 3,102 2,955

Non-interest income (loss)

Guarantee fee income 217 208 194

Mortgage loans gains (losses) 931 491 (215)

Investment securities gains (losses) 174 329 (232)

Debt gains (losses) 15 275 121

Derivative gains (losses) (1,606) (1,704) 1,830

Other income (loss) 34 66 131

Non-interest income (loss) (235) (335) 1,829

Non-interest expense

Salaries and employee benefits (322) (337) (286)

Professional services (105) (151) (102)

Other administrative expense (151) (158) (132)

Total administrative expense (578) (646) (520)

Real estate owned operations expense (33) (82) (34)

Temporary Payroll Tax Cut Continuation Act of 2011 expense (390) (384) (359)

Other expense (287) (262) (197)

Non-interest expense (1,288) (1,374) (1,110)

Income (loss) before income tax (expense) benefit 1,765 1,393 3,674

Income tax (expense) benefit (358) (293) (748)

Net income (loss) 1,407 1,100 2,926

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

 Changes in unrealized gains (losses) related to available-for-sale securities 246 343 (800)

Changes in unrealized gains (losses) related to cash flow hedge relationships 18 27 30

Changes in defined benefit plans (6) 8 (6)

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

adjustments 258 378 (776)

Comprehensive income (loss) $1,665 $1,478 $2,150

Net income (loss) $1,407 $1,100 $2,926

Undistributed net worth sweep and senior preferred stock dividends (1,665) (1,479) —

Net income (loss) attributable to common stockholders $(258) $(379) $2,926

Net income (loss) per common share — basic and diluted $(0.08) $(0.12) $0.90

Weighted average common shares outstanding (in millions) — basic and diluted 3,234 3,234 3,234
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 13

FREDDIE MAC

Condensed Consolidated Balance Sheets (Unaudited)

March 31, December 31,

(In millions, except share-related amounts) 2019 2018

Assets

Cash and cash equivalents (includes $735 and $596 of restricted cash and cash equivalents) $6,239 $7,273

Securities purchased under agreements to resell 50,134 34,771

Investments in securities, at fair value 65,496 69,111

Mortgage loans held-for-sale (includes $20,576 and $23,106 at fair value) 39,818 41,622

Mortgage loans held-for-investment (net of allowance for loan losses of $5,546 and $6,139) 1,902,270 1,885,356

Accrued interest receivable 6,684 6,728

Derivative assets, net 1,146 335

Deferred tax assets, net 6,819 6,888

Other assets (includes $4,182 and $3,929 at fair value) 14,301 10,976

Total assets $2,092,907 $2,063,060

Liabilities and equity

Liabilities

Accrued interest payable $6,558 $6,652

Debt, net (includes $5,067 and $5,112 at fair value) 2,073,614 2,044,950

Derivative liabilities, net 432 583

Other liabilities 7,638 6,398

Total liabilities 2,088,242 2,058,583

Commitments and contingencies

Equity

Senior preferred stock (redemption value of $75,648 and $75,648) 72,648 72,648

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 650,059,033 shares and 650,058,775 shares outstanding — —

Additional paid-in capital — —

Retained earnings (accumulated deficit) (78,330) (78,260)

AOCI, net of taxes, related to:

Available-for-sale securities (includes $261 and $221, related to net unrealized gains on 

securities for which other-than-temporary impairment has been recognized in earnings) 329 83

Cash flow hedge relationships (297) (315)

Defined benefit plans 91 97

Total AOCI, net of taxes 123 (135)

Treasury stock, at cost, 75,804,853 shares and 75,805,111 shares (3,885) (3,885)

Total equity 4,665 4,477

Total liabilities and equity $2,092,907 $2,063,060

The table below presents the carrying value and classification of the assets and liabilities of consolidated variable interest entities (VIEs) on the

company's condensed consolidated balance sheets.

March 31, December 31,

(In millions) 2019 2018

Consolidated Balance Sheet Line Item

Assets:

Mortgage loans held-for-investment $1,858,079 $1,842,850

All other assets 22,508 20,237

Total assets of consolidated VIEs $1,880,587 $1,863,087

Liabilities:

Debt, net $1,803,707 $1,792,677

All other liabilities 5,386 5,335

Total liabilities of consolidated VIEs $1,809,093 $1,798,012
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 14

FREDDIE MAC

Non-GAAP Reconciliations

The company’s GAAP net interest income includes the spread earned on its investments activities plus the

guarantee fees earned by its single-family business. Adjusted net interest income is the net spread earned on the

company’s investment activities, including the cost of funds associated with using derivatives. Net interest yield,

GAAP and adjusted, is calculated as annualized quarterly GAAP or adjusted net interest income divided by the

average balance of the underlying assets and liabilities.

Reconciliation of GAAP Net Interest Income to Adjusted Net Interest Income (pre-tax)

(Dollars in millions) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019

GAAP net interest income $3,018 $3,003 $3,257 $2,743 $3,153

Reclassifications:

Guarantee fee income reclassified to adjusted guarantee fee 

income (1)(2)

(1,950) (2,037) (2,051) (2,022) (2,022)

Accrual of periodic cash settlements reclassified from 

derivative gain (loss) (3)

(145) (43) 27 20 (54)

Hedge accounting impact (4) 373 214 34 310 (267)

Other reclassifications (5) (254) (49) (141) 6 195

Total reclassifications (1,976) (1,915) (2,131) (1,686) (2,148)

Adjusted net interest income $1,042 $1,088 $1,126 $1,057 $1,005

Average balance of assets and liabilities, GAAP (in billions) $2,014 $2,009 $2,034 $2,042 $2,062

Average balance of assets and liabilities, adjusted (in billions) $320 $304 $314 $294 $293

GAAP guarantee fees are primarily those generated by the company's multifamily business. Adjusted guarantee

fee income consists of the revenues from guarantee fees from both the single-family and multifamily businesses,

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

Act of 2011. Guarantee fee rate, GAAP and adjusted, is calculated as annualized quarterly GAAP or adjusted

guarantee fee income divided by the average underlying guarantee portfolio.

Reconciliation of GAAP Guarantee Fee Income to Adjusted Guarantee Fee Income (pre-tax)

(Dollars in millions) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019

GAAP guarantee fee income $194 $200 $209 $208 $217

Reclassifications:

Guarantee fee income reclassified from net interest income (1)(2) 1,950 2,037 2,051 2,022 2,022

Temporary Payroll Tax Cut Continuation Act of 2011 expense 

reclassified from other non-interest expense (6)

(359) (366) (375) (384) (390)

Total reclassifications 1,591 1,671 1,676 1,638 1,632

Adjusted guarantee fee income $1,785 $1,871 $1,885 $1,846 $1,849

Average guarantee portfolio balance, GAAP (in billions) $208 $217 $223 $232 $240

Average guarantee portfolio balance, adjusted (in billions) $2,041 $2,062 $2,088 $2,117 $2,145

The company considers whether certain significant items were identified during the period that are not indicative

of ongoing operations. If so, the company presents a non-GAAP financial measure for comprehensive income

that is calculated by excluding these significant items from GAAP comprehensive income. Management believes

that this non-GAAP financial measure is useful because it allows users to better understand the drivers of the

company's on-going financial results.

Reconciliation of GAAP Comprehensive Income to Comprehensive Income, excluding Significant Items

(Dollars in millions) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019

GAAP comprehensive income $2,150 $2,435 $2,559 $1,478 $1,665

Exclusions:

Non-agency mortgage-related securities judgment (7) — (334) — — —

Tax effect related to judgment — 70 — — —

Total exclusions — (264) — — —

Comprehensive income, excluding significant items $2,150 $2,171 $2,559 $1,478 $1,665

Columns may not add due to rounding. 

For notes on reclassifications, see page 15 of this press release. 
Freddie Mac First Quarter 2019 Financial Results 

May 1, 2019

Page 15

Notes on Significant Reclassifications

(1) Net guarantee fees, including upfront fee amortization and implied guarantee fee income related to unsecuritized 

loans held in the mortgage-related investments portfolio, are reclassified from GAAP net interest income to 

adjusted guarantee fee income.

(2) Short-term returns on cash received related to certain upfront fees on single-family loans are reclassified from 

GAAP net interest income to adjusted guarantee fee income. 

(3) The accrual of periodic cash settlements of derivatives is reclassified from GAAP derivative gains (losses) to 

adjusted net interest income to fully reflect the periodic cost associated with the protection provided by these 

contracts.

(4) Hedge accounting impact consists of removing the effects of hedge accounting including deferred gains and 

losses on closed cash flow hedges related to forecasted debt issuances. 

(5) Other reclassifications primarily relate to items reclassified out of GAAP net interest income, including the 

amortization related to derivative commitment basis adjustments associated with mortgage-related and nonmortgage-related securities, amortization related to accretion of other-than-temporary impairments on availablefor-sale securities, amortization of discounts on loans purchased with deteriorated credit quality that are on 

accrual status, amortization related to premiums and discounts, including non-cash premiums and discounts, on 

single-family loans in trusts and on the associated consolidated PCs, amortization related to premiums and 

discounts associated with PCs issued by consolidated trusts that were previously held and subsequently 

transferred to third parties, costs associated with STACR debt note expenses, and internally allocated costs 

associated with the refinancing of debt related to Multifamily segment held-for-investment loans which were 

securitized.

(6) The expense related to the Temporary Payroll Tax Cut Continuation Act of 2011 is reclassified from GAAP other 

non-interest expense to adjusted guarantee fee income. As a result of the reclassification, the revenue and 

expense related to the legislated 10 basis point increase are netted within adjusted guarantee fee income.

(7) The second quarter 2018 GAAP results included a gain of $334 million (pre-tax) from a final judgment against 

Nomura Holding America, Inc. in litigation involving certain non-agency mortgage-related securities. The tax 

effect related to this judgment was $(70) million. Comprehensive income, excluding significant items, excludes 

from GAAP comprehensive income the benefit from the final judgment and the related tax effect in the second 

quarter of 2018 as the judgment related to non-agency mortgage-related securities in which the company no 

longer invests.