Freddie Mac 2009 Annual Report Download - page 103

quarter of 2009 in our GAAP results. We recognized $17 million and $13 million during 2009 and 2008, respectively, of
LIHTC related impairments in Segment Earnings. See “NOTE 5: VARIABLE INTEREST ENTITIES” to our consolidated
financial statements for additional information on our 2009 impairment determination.
CONSOLIDATED BALANCE SHEETS ANALYSIS
The following discussion of our consolidated balance sheets should be read in conjunction with our consolidated
financial statements, including the accompanying notes. Also see “CRITICAL ACCOUNTING POLICIES AND
ESTIMATES” for more information concerning our significant accounting policies and estimates applied in determining our
reported financial position.
2010 Significant Changes in Accounting Standards — Accounting for Transfers of Financial Assets and Consolidation
of VIEs
Effective January 1, 2010, we adopted amendments to the accounting standards for transfers of financial assets and
consolidation of VIEs. The adoption of these amendments will have a significant impact on our consolidated financial
statements and other financial disclosures beginning in the first quarter of 2010. As a result of adoption, our consolidated
balance sheet results for the three months ended March 31, 2010 will reflect the consolidation of our single-family PC trusts
and certain of our Structured Transactions.
The cumulative effect of these changes in accounting principles as of January 1, 2010 is a net decrease of approximately
$11.7 billion to total equity (deficit), which includes the changes to the opening balances of AOCI and retained earnings
(accumulated deficit).
See “NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Recently Issued Accounting Standards,
Not Yet Adopted Within These Consolidated Financial Statements — Accounting for Transfers of Financial Assets and
Consolidation of VIEs” to our consolidated financial statements for additional information on the impacts of adoption.
Cash and Cash Equivalents
Cash and cash equivalents, along with other liquid assets discussed in “Federal Funds Sold and Securities Purchased
Under Agreements to Resell” and “Investments in Securities — Non-Mortgage-Related Securities,” are important to our cash
flow and asset and liability management and our ability to provide liquidity and stability to the mortgage market. We use
these assets to help manage recurring cash flows and meet our other cash management needs. We also use these assets to
manage our liquidity until we have favorable credit guarantee or mortgage-related investment opportunities.
We held $64.7 billion and $45.3 billion of cash and cash equivalents as of December 31, 2009 and December 31, 2008,
respectively. The increase in cash and cash equivalents from December 31, 2008 to December 31, 2009 is, in part, due to a
relative lack of favorable investment opportunities over the last three quarters of 2009 for mortgage-related investments.
Federal Funds Sold and Securities Purchased Under Agreements to Resell
Federal funds sold and securities purchased under agreements to resell is an important aspect to our cash flow and asset
and liability management and our ability to provide liquidity and stability to the mortgage market. We consider federal funds
sold to be overnight unsecured trades executed with commercial banks that are members of the Federal Reserve System. We
consider other unsecured lending to be unsecured trades with these commercial banks with a term longer than overnight.
We held no federal funds or other unsecured lending at both December 31, 2009 and 2008. Securities purchased under
agreements to resell decreased $3.2 billion to $7.0 billion at December 31, 2009, compared to $10.2 billion at December 31,
2008. The decrease in these assets was offset by the increases in our cash and cash equivalents and our non-mortgage-related
securities as our liquid assets increased on an overall basis.
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