News Release For Immediate Release // August 2, 2016

Freddie Mac Reports Net Income of $1.0 Billion for Second Quarter 2016;

Comprehensive Income of $1.1 Billion 

Company Will Return an Additional $933 Million to Taxpayers

Second Quarter 2016 Results 

Solid Business Results Partially Offset by Market-Related Losses Driven by Interest Rates 

• $3.4 billion of net interest income, unchanged from the first quarter of 2016.

 Single-family guarantee fee income increased; however, was offset by

 Decline in revenue from the investments portfolio. 

• $0.4 billion (after-tax) estimated fair value loss as interest rates declined late in the 

second quarter of 2016.

• $0.8 billion benefit for credit losses driven by the reclassification of seriously 

delinquent loans from held-for-investment to held-for-sale. 

(See Financial Results Discussion, Selected Financial Measures and Non-GAAP Financial Measure Highlights on pages 2-7 for additional details.) 

Second 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 

69 percent of the credit guarantee portfolio, from 68 percent in the first quarter.

• Purchase volume of $91 billion, up $22 billion from the first quarter primarily driven by 

lower mortgage interest rates.

• Serious delinquency rate of 1.08 percent, down from 1.20 percent at March 31, 2016 

and the lowest since August 2008. 

Multifamily Business 

• Purchase volume of $9 billion, bringing half-year volume to a record $27 billion. 

Reducing Taxpayer Exposure Through Credit Risk Transfer Programs

Single-Family Guarantee Business 

• Transferred a significant portion of the credit risk on over $85 billion of loans, and 

have now transferred a significant portion of the credit risk on over $500 billion 

since the program’s inception in 2013.

Multifamily Business 

• Transferred a large majority of the credit risk on a quarterly record $15 billion of loans, 

and have now transferred a large majority of the credit risk on over $150 billion of 

loans since the program’s inception in 2009. 

Actively Reducing Legacy Assets

• Sold $1.0 billion of seriously delinquent loans, and $5.3 billion since 2013. 

• Sold $3.6 billion of non-agency securities, and $32.4 billion since 2013.

Delivering on Our Mission

• Provided approximately $103 billion in liquidity to the mortgage market – funding nearly 

392,000 single-family homes and more than 148,000 multifamily rental units.

• Helped approximately 17,000 borrowers avoid foreclosure. 

$99.1 Billion in Cumulative Dividends Returned to Taxpayers Following Third Quarter 

Payment

• Senior preferred stock held by Treasury remains at $72.3 billion.

 

“We had both solid business and 

financial results this quarter, 

reflecting further improvement in 

our competitiveness and 

capabilities, highlighted by strong 

new guarantee business 

volumes. We also further 

reduced taxpayer risk through both 

the efficient disposition of legacy 

assets and our credit risk transfer 

transactions, which achieved a 

major milestone in having now 

cumulatively transferred a 

significant portion of credit risk on 

over $650 billion of single-family 

and multifamily loans. 

 

“We continue to work together with 

our customers to make the housing 

finance system better for America’s 

homebuyers and renters. This 

includes improved accessible and 

affordable products and the 

delivery of robust tools and 

expanded offerings to our SellerServicer customers.” 

Donald H. Layton 

Chief Executive Officer 

Net Income

2Q16 = $1.0 Billion

Comprehensive Income

2Q16 = $1.1 Billion 

Available PSPA Funding

2Q16 = $140.5 Billion
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 2 

McLean, VA — Freddie Mac (OTCQB: FMCC) today reported net income of $993 million for the second quarter of 

2016, compared to a net loss of $354 million for the first quarter of 2016. The company also reported comprehensive 

income of $1.1 billion for the second quarter of 2016, compared to a comprehensive loss of $200 million for the first 

quarter of 2016. 

Summary Consolidated Statements of Comprehensive Income (Loss) 

 (1) Guarantee fee income on a GAAP basis is primarily from the company’s multifamily business and is included in Other income (loss) on Freddie Mac’s 

consolidated statements of comprehensive income. 

Financial Results Discussion 

Freddie Mac’s second quarter 2016 net income of $993 million and comprehensive income of $1.1 billion both 

increased $1.3 billion from the first quarter of 2016. The company’s second quarter 2016 results were significantly 

less affected by market-related items than results for the first quarter of 2016: 

 Net Interest Rate Effect: $0.4 billion (after-tax) estimated fair value loss for the second quarter of 2016 

compared to a $1.4 billion (after-tax) estimated fair value loss for the first quarter of 2016, as interest rates 

decreased less in the second quarter than in the first quarter. (See Net Interest Rate Effect table for additional 

details.) 

 Spread Change Effect: Minimal effect for the second quarter of 2016, compared to $0.6 billion (after-tax) 

estimated loss as spreads widened during the first quarter of 2016. 

 

($ Millions) 6/30/16 3/31/16 Change

1 Net interest income $ 3,405 3,443 $ 38 $ 

2 Benefit for credit losses 467 775 308 

3 Derivative gains (losses) (4,561) (2,058) 2,503 

4 Other non-interest income (loss)(1) 1,138 234 (904) 

5 Non-interest income (loss) (3,423) (1,824) 1,599 

6 Administrative expense (448) (475) (27) 

7 Other non-interest expense (509) (460) 49 

8 Non-interest expense (957) (935) 22 

9 Pre-tax income (loss) (508) 1,459 1,967 

10 Income tax (expense) benefit 154 (466) (620) 

11 Net income (loss) $ (354) 993 $ 1,347 $ 

12 Total other comprehensive income (loss) 154 140 (14) 

13 Comprehensive income (loss) $ (200) 1,133 $ 1,333 $ 

Memo Item

14 Guarantee fee income(1) $ 110 124 $ 14 $ 

Three Months Ended
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 3 

Net Interest Rate Effect 

Selected Financial Measures 

 Net interest income was $3.4 billion for the second quarter of 2016, an increase of $38 million from the first 

quarter of 2016. 

 The quarterly increase in net interest income primarily reflects an increase in guarantee fee income for 

the single-family business due to higher amortization of upfront fees resulting from higher loan 

liquidations, mostly offset by a decline in the balance of the company’s investments portfolio.

 

($ Billions) 6/30/16 3/31/16 Change

Components of Derivative Gains (Losses)

1 Derivative Gains (Losses) (2.0) $ (4.6) $ 2.6 $ 

2 Less: Accrual of Periodic Cash Settlements (0.4) (0.5) 0.1 

3 Derivative Fair Value Changes (1.6) $ (4.1) $ 2.5 $ 

Estimated Net Interest Rate Effect

4 Interest Rate Effect on Derivative Fair Values (1.7) $ (4.0) $ 2.3 $ 

5 Estimate of Offsetting Interest Rate Effect Related to Financial 

Instruments Measured at Fair Value 1.9 1.0 (0.9) 

6 Income Tax Benefit - @ 35% 0.7 0.3 (0.4) 

7 Estimated Net Effect on Comprehensive Income (4+5+6) (0.4) $ (1.4) $ 1.0 $ 

Three Months Ended

$4.0 $3.7 $3.6 $3.4 $3.4

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

Net Interest Income 

$ Billions
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 4 

 Guarantee fee income, primarily from the company’s multifamily business, was $124 million for the second 

quarter of 2016, $14 million higher than in the first quarter of 2016.

 The quarterly increase in guarantee fee income primarily reflects higher average multifamily guarantee 

portfolio balances as a result of ongoing issuances of K-Deals.

 Benefit for credit losses was $775 million for the second quarter of 2016, an increase of $308 million from the 

first quarter of 2016. 

 The quarterly increase in benefit for credit losses primarily reflects the reclassification of certain seriously 

delinquent single-family loans from held-for-investment to held-for-sale to support the sale of such loans, 

as the company continues to focus on reducing the balance of less liquid assets in its mortgage-related 

investments portfolio. 

o Freddie Mac reclassified $3.1 billion in unpaid principal balance (UPB) of such loans in the 

second quarter of 2016, while an insignificant amount was reclassified in the first quarter of 2016.

$92 $90 $100 $110 $124

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

Guarantee Fee Income

$ Millions

$857

$528

$781

$467

$775

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

Benefit (Provision) for Credit Losses

$ Millions
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 5 

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 June 30, 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 – The volatility of spreads (i.e., credit spreads, liquidity spreads, risk premiums, etc.), or 

option-adjusted 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 measured at fair value, the company generally recognizes 

fair value losses when spreads widen. Conversely, for financial liabilities measured at fair value, the company 

generally recognizes fair value gains 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 Freddie Mac having a negative net worth and thus being 

required to draw from Treasury. The company 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. In an effort to reduce 

the probability of a draw due to changes in interest rates, the company entered into certain structured transactions 

that have resulted in additional financial assets being recognized and measured at fair value. In addition, the company 

continues to explore other strategies and activities that may reduce the probability of a draw. 

Non-GAAP Financial Measure Highlights 

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

an “adjusted”, or non-GAAP basis. The adjusted, or non-GAAP, 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. Management believes the non-GAAP financial 

measures are useful because they more clearly explain the sources of revenue to the company. 

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

guarantee fees earned by its single-family business. GAAP guarantee fees are primarily those generated by 

its multifamily business. 

 The adjusted guarantee fees are designed to show the revenues 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 Act. 

 The adjusted net interest income is the net spread earned on the company’s investments 

activities, including the cost of funds associated with using derivatives. 

 In addition, the adjusted benefit (provision) for credit losses reflects the company’s credit-related expenses 

after removing the effect of accounting-related reclassifications associated with the transfer of certain 

seriously delinquent single-family loans from held-for-investment to held-for-sale to support the sale of such 

loans. 

The company does not present adjusted measures for net income or comprehensive income. For a reconciliation of 

these measures to the comparable amounts under GAAP, see page 16 of this press release. 
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 6 

The graphs that follow show the company’s three non-GAAP financial measures – adjusted net interest income, 

adjusted guarantee fee income and adjusted benefit (provision) for credit losses. 

(1) Non-GAAP financial measure. For reconciliations to the comparable amounts under GAAP, see page 16 of this press release. 

 Adjusted net interest income was $671 million for the second quarter of 2016, a decrease of $211 million from 

the first quarter of 2016. 

 The quarterly decrease in adjusted net interest income reflects a decline in the balance of the company’s 

investments portfolio, as well as a decline in the net interest yield.

 Adjusted net interest income is expected to decline over the long term, primarily as a result of the 

company’s ongoing reduction of its mortgage-related investments portfolio in accordance with the 

requirements of the Purchase Agreement and FHFA. 

o The company is particularly focused on reducing the balance of less liquid assets in this portfolio.

 

$1.4

$1.1 $1.0 $0.9

$0.7

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

Adjusted Net Interest Income(1)

$ Billions
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 7 

(1) Non-GAAP financial measure. For reconciliations to the comparable amounts under GAAP, see page 16 of this press release. 

 Adjusted guarantee fee income was $1.6 billion for the second quarter of 2016, an increase of $232 million 

from the first quarter of 2016. 

 The quarterly increase in adjusted guarantee fee income primarily reflects higher amortization of upfront 

fees resulting from higher loan liquidations due to a decline in interest rates.

 Adjusted guarantee fee income is expected to increase over the long term as guarantee fees on new 

business are higher than the fees received on older vintages that continue to run off.

(1) Non-GAAP financial measure. For reconciliations to the comparable amounts under GAAP, see page 16 of this press release. 

 Adjusted benefit for credit losses was $127 million for the second quarter of 2016, a decrease of $167 million 

from the first quarter of 2016. 

 The quarterly decrease in adjusted benefit for credit losses was primarily due to a decline in the benefits 

related to interest rate concessions on the company’s modified loan population.

$1.40 $1.37 $1.39 $1.39

$1.63

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

Adjusted Guarantee Fee Income(1)

$ Billions

($120) ($126)

$365 

$294 

$127

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

Adjusted Benefit (Provision) for Credit Losses(1)

$ Millions
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 8 

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 Investments. The company presents Segment Earnings for 

each segment by reclassifying certain credit guarantee-related and investment-related activities between various line 

items on its 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. For more information about Segment Earnings, see Note 12 to the financial statements included in the 

company’s Annual Report on Form 10-K for the year ended December 31, 2015 and Note 11 to the financial 

statements included in its Quarterly Report on Form 10-Q for the three months ended March 31, 2016.

Segment Earnings and Comprehensive Income

 

($ Millions) 6/30/16 3/31/16 Change

Single-Family Guarantee Segment

1 Guarantee fee income 1,501 $ 1,285 $ 216 $ 

2 Benefit for credit losses 121 289 (168)

3 Administrative expense (314) (295) (19)

4 Other (398) (115) (283) 

5 Income tax (expense) benefit (326) (354) 28

6 Segment Earnings, net of taxes 584 810 (226)

7 Total other comprehensive income (loss), 

net of tax 1 (1) (2)

8 Total comprehensive income 583 $ 811 $ (228) $ 

Multifamily Segment

9 Net interest income 216 $ 252 $ (36) $ 

10 Guarantee fee income 124 108 16

11 Gains (losses) on loans and other noninterest income 737 445 (292)

12 Derivative gains (losses) (296) (787) 491

13 Administrative expense (86) (80) (6)

14 Other (3) (19) 16

15 Income tax (expense) benefit (136) (64) (72)

16 Segment Earnings, net of taxes 264 147 117

17 Total other comprehensive income (loss), 

net of tax 3 7 4

18 Total comprehensive income 271 $ 150 $ 121 $ 

Investments Segment

19 Net interest income 606 $ 748 $ (142) $ 

20 Derivative gains (losses) (1,003) (2,995) 1,992 

21 Other non-interest income 622 439 183 

22 Administrative expense (75) (73) (2) 

23 Other (1) (2) 1 

24 Income tax (expense) benefit (4) 572 (576) 

25 Segment Earnings, net of taxes 145 (1,311) 1,456 

26 Total other comprehensive income (loss), 

net of tax 150 134 (16)

27 Total comprehensive income (loss) 279 $ (1,161) $ 1,440 $ 

Three Months Ended
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 9 

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 $584 million for the second quarter of 2016, a decrease of 

$226 million from the first quarter of 2016. 

 The decrease in segment earnings was primarily driven by losses due to an increase in the amount of 

seriously delinquent single-family loans reclassified from held-for-investment to held-for-sale in the 

second quarter of 2016 and fair value losses on STACR debt notes as spreads between STACR yields 

and LIBOR tightened. 

 However, guarantee fee income increased primarily due to higher amortization of upfront fees resulting 

from higher loan liquidations due to a decline in interest rates. 

Business Highlights 

 Core book continued to grow and was 69 percent of the single-family credit guarantee portfolio at June 30, 

2016. 

 HARP and other relief refinance loans represented 17 percent. 

 Legacy book declined to 14 percent. 

 Average guarantee fees charged on new acquisitions were 46 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 second quarter of 2016, relatively unchanged from the first quarter of 2016. 

 Average guarantee fees on the single-family guarantee portfolio were 35 basis points, an increase of 

five basis points from the first quarter of 2016 primarily due to higher amortization of upfront fees 

resulting from higher loan liquidations. 

 Sold $1.0 billion in UPB of seriously delinquent single-family loans during the second quarter of 2016, and 

$5.3 billion since 2013. 

 Transferred a portion of expected credit losses and transferred a significant portion of stress credit losses 

on over $85 billion in UPB of mortgage loans in the Core book during the second quarter of 2016. 

Multifamily Segment

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

Financial Results 

 Multifamily segment comprehensive income was $271 million for the second quarter of 2016, an increase of 

$121 million from the first quarter of 2016. 

 The increase in comprehensive income was primarily driven by fair value gains due to spread tightening 

on held-for-sale mortgage loans in the second quarter compared to spread widening in the first quarter. 

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

the loans and investment securities being economically hedged. As a result, there is minimal net 

impact on total comprehensive income for the Multifamily segment from fair value changes 

related to interest-rate related derivatives. 

Business Highlights 

 New purchase volume of $9.4 billion in the second quarter of 2016, a decrease of $8.1 billion from record 

volume in the first quarter of 2016. 

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

activity at or below a production cap of $35.0 billion. Business activity associated with certain targeted 

loan types is excluded from the production cap. 

 Approximately two-thirds of the $9.4 billion in new business activity for the second quarter of 2016 

counted towards the 2016 production cap. 
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 10 

 Executed a record 14 K-Deal transactions that transferred a large majority of expected and stress credit 

losses associated with $14.4 billion in UPB of loans during the second quarter of 2016.

 In addition, transferred a large majority of expected and stress credit losses associated with $1.0 billion 

of additional loans through other securitization products, such as small balance loan securitizations.

 Provided financing for more than 148,000 rental units in the second quarter of 2016. 

 Approximately 90 percent of the eligible units financed are affordable to families earning at or below 

area median 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 income was $279 million for the second quarter of 2016, a shift from a 

comprehensive loss of $1.2 billion in the first quarter of 2016. 

 The shift to comprehensive income was primarily driven by lower derivative losses, as interest rates 

declined less in the second quarter of 2016 than in the first quarter of 2016.

 However, the $142 million decrease in net interest income reflects a decline in the balance of the 

company’s investments portfolio, as well as a decline in the net interest yield.

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 $90.0 

billion at June 30, 2016, down $4.8 billion, or 5 percent, from March 31, 2016, due to sales of $3.6 billion of 

non-agency mortgage-related securities and ongoing portfolio liquidations. 

 The Investments segment securitization pipeline assets, which represent performing single-family loans 

purchased for cash and held until securitized, were $14.5 billion at June 30, 2016, up $3.9 billion from 

March 31, 2016. 

 Continued to maintain a presence in the agency mortgage-related securities market. 

 Liquid assets held by the Investments segment were $143.8 billion at June 30, 2016, or 58 percent 

of the portfolio. 

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 $103 billion in liquidity to the market in the second quarter 

of 2016, funding: 

 Nearly 392,000 single-family homes, more than 210,000 of which were refinance loans. 

 More than 148,000 multifamily rental units. 
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 11 

 

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

avoid foreclosure in the second quarter. 

 

 The company completed approximately 17,000 single-family loan workouts. 

 The declining trend over the past year in the company’s single-family workouts generally 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 two-thirds of its purchasers in the second 

quarter. 

 

170 166 174 209 148

172 208 169 138 182 

277 224 

182 176 210 

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

Number of Families Helped to Own or Rent a Home

Thousands

 Multifamily rental units Purchase borrowers Refinance borrowers

598

525 522 540

620

16 13 11 11 11 

5 

5 4 4 3 

2 

1 

1 1 1 

3

3 3 3 2

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

Number of Families Helped to Avoid Foreclosure

Thousands

 Short sales & deed in lieu of foreclosure transactions Forbearance agreements

 Repayment plans Loan modifications

22

19 19

26

17
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 12 

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. 

(2) Includes the September 2016 dividend obligation of $933 million. 

 Dividend obligation to Treasury in September 2016 will be $933 million, based on Freddie Mac’s net worth of 

$2.1 billion at June 30, 2016, less the 2016 capital reserve amount of $1.2 billion. 

 The applicable capital reserve amount is $1.2 billion for 2016, and will be $600 million for 2017 and zero 

beginning on January 1, 2018. 

 Aggregate cash dividends paid to Treasury will total $99.1 billion (including the September 2016 dividend 

obligation), $27.8 billion more than cumulative cash draws of $71.3 billion received from Treasury through June 

30, 2016. 

 The amount of 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 

June 30, 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 June 30, 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. 

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 

$71.3 

$0.0 $0.0 $0.0 $0.0 

$71.3 

2008 -

2012

2013 2014 2015 YTD

2016

Cumulative

Draw Requests from Treasury

$ Billions

$23.8

$47.6

$19.6

$5.5 $2.7

$99.1

2008 -

2012

2013 2014 2015 YTD

2016

Cumulative

Dividend Payments to Treasury

$ Billions

(2)

(1)

(2)
Freddie Mac Second Quarter 2016 Financial Results 

August 2, 2016 

Page 13 

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 August 2, 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: http://edge.media-server.com/m/p/bwmyws9z. 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, 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 Annual Report 

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

31, 2016 and June 30, 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 
(UNAUDITED)

June 30, 2016 March 31, 2016

Interest income

Mortgage loans $ 15,818 15,238 $ 

Investments in securities 978 969

Other 56 57

Total interest income 16,272 16,844

Interest expense (12,781) (13,388)

Expense related to derivatives (48) (51)

Net interest income 3,443 3,405

Benefit (provision) for credit losses 775 467

4,218 3,872

Non-interest income (loss)

Losses on extinguishment of debt (119) (55)

Derivative gains (losses) (2,058) (4,561)

Impairment of available-for-sale securities:

(10) (52)

(62) (5)

(72) (57)

450 303

Other income (loss) (25) 947

Non-interest income (loss) (1,824) (3,423)

Non-interest expense

Salaries and employee benefits (240) (239)

Professional services (117) (101)

Occupancy expense (15) (13)

Other administrative expense (103) (95)

Total administrative expense (475) (448)

(29) (84)

(280) (272)

Other expense (151) (153)

Non-interest expense (935) (957)

Income (loss) before income tax expense 1,459 (508)

Income tax (expense) benefit (466) 154

Net income (loss) 993 (354)

109 119

32 34

Changes in defined benefit plans (1) 1

140 154

Comprehensive income (loss) $ (200) 1,133 $ 

Net income (loss) $ (354) 993 $ 

 - (933) 

$ (354) 60 $ 

$ (0.11) 0.02 $ 

3,234 3,234

FREDDIE MAC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended

(in millions, except share-related amounts)

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

Temporary Payroll Tax Cut Continuation Act of 2011 

expense

Net income (loss) attributable to common stockholders

Net loss 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 on investment securities recognized in 

earnings

Other comprehensive income (loss), net of taxes and 

reclassification adjustments:

Changes in unrealized gains (losses) related to availablefor-sale securities

Changes in unrealized gains (losses) related to cash flow 

hedge relationships

Page 14
(UNAUDITED)

June 30, 2016 December 31, 2015

Assets

$ 5,595 8,140 $ 

 14,533 17,399 

 63,644 48,989 

Investments in securities, at fair value 112,269 114,215 

 24,992 19,545 

 1,729,201 1,742,040 

 6,074 6,060 

Derivative assets, net 1,479 395 

Real estate owned, net 1,381 1,725 

Deferred tax assets, net 18,671 18,205 

 7,313 10,464 

Total assets $ 1,985,892 1,986,437 $ 

Liabilities and equity

Liabilities

$ 6,183 6,057 $ 

Debt, net (includes $6,744 and $7,184 at fair value) 1,972,103 1,970,269 

Derivative liabilities, net 1,243 1,254 

Other liabilities 5,246 4,901 

Total liabilities 1,982,952 1,984,304 

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) (81,874) (80,773) 

AOCI, net of taxes, related to:

 1,740 1,968 

Cash flow hedge relationships (555) (621) 

Defined benefit plans 34 34 

Total AOCI, net of taxes 1,153 1,447 

 (3,885) (3,885)

Total equity 2,940 2,133 

Total liabilities and equity $ 1,985,892 1,986,437 $ 

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 

$13,502 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 $585 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 $14,905 and $17,660 at fair 

value)

Page 15
2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016

1 GAAP Net Interest Income $ 3,743 3,969 $ 3,587 $ 3,405 $ 3,443 $ 

Reclassifications:

2 Guarantee fee income reclassified out of net interest income (1), (2) (1,529) (1,547) (1,550) (1,555) (1,781) 

3 Accrual of periodic cash settlements reclassified into net interest income (3) (536) (532) (559) (490) (420) 

4 Amortization of options reclassified into net interest income (4) (186) (197) (213) (281) (318) 

5 Other reclassifications (5) (368) (339) (284) (197) (253) 

6 Total reclassifications $ (2,619) (2,615) $ (2,606) $ (2,523) $ (2,772) $ 

7 Adjusted Net Interest Income $ 1,124 1,354 $ 981 $ 882 $ 671 $ 

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

8 GAAP Guarantee Fee Income* $ 90 92 $ 100 $ 110 $ 124 $ 

Reclassifications:

9 Guarantee fee income reclassified from net interest income (1), (2) 1,529 1,547 1,550 1,555 1,781 

10 Temporary Payroll Tax Cut Continuation Act of 2011 expense reclassified from other non-interest expense (6) (248) (235) (262) (272) (280) 

11 Total reclassifications 1,281 1,312 1,288 1,283 1,501 

12 Adjusted Guarantee Fee Income $ 1,371 1,404 $ 1,388 $ 1,393 $ 1,625 $ 

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

13 GAAP Benefit (Provision) for Credit Losses $ 528 857 $ 781 $ 467 $ 775 $ 

Reclassifications:

14 Mortgage loans reclassified from held-for-investment to held-for-sale (7) (485) (800) (336) (64) (509) 

15 Other reclassifications (8) (169) (177) (80) (109) (139) 

16 Total reclassifications (654) (977) (416) (173) (648) 

17 Adjusted Benefit (Provision) for Credit Losses $ (126) (120) $ 365 $ 294 $ 127 $ 

Note: Columns may not add due to rounding.

For notes on reclassifications, see page 17 of this press release.

Freddie Mac

Non-GAAP Reconciliations

Reconciliation of GAAP Guarantee Fee Income*

 to Adjusted Guarantee Fee Income

$ Millions, Pre-Tax

*

 Guarantee fee income on a GAAP basis is included in Other income (loss) on Freddie Mac’s consolidated statements of comprehensive income. 

Reconciliation of GAAP Benefit (Provision) for Credit Losses to Adjusted Benefit (Provision) for Credit Losses

Reconciliation of GAAP Net Interest Income to Adjusted Net Interest Income

Page 16
Freddie Mac 

Notes on Non-GAAP Financial Measures 

Second Quarter 2016 Financial Results 

Page 17 

Notes on Significant Reclassifications 

(1) Net guarantee fees are reclassified from GAAP net interest income to adjusted guarantee fee income. 

(2) Implied guarantee fee income related to unsecuritized loans held in the mortgage investments portfolio is 

reclassified from GAAP net interest income to adjusted guarantee fee income. 

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

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

provided by these contracts. 

(4) Up-front cash paid or received upon the purchase or writing of option contracts is reclassified prospectively 

from GAAP derivative gains (losses) into adjusted net interest income over the contractual life of the 

instrument. 

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

amortization of premiums and discounts associated with the company’s participation certificates (PCs) and 

the loans underlying those PCs, and the accretion of other-than-temporary impairments on available-for-sale 

securities. 

(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 impact from the reclassification of seriously delinquent single-family mortgage loans from held-forinvestment to held-for-sale is not included in adjusted benefit (provision) for credit losses. 

(8) Other reclassifications primarily reflect interest rate concession adjustments related to the company’s 

modified loan population, which are reclassified from GAAP benefit (provision) for credit losses to adjusted net 

interest income.