Freddie Mac 2009 Annual Report Download - page 247

Table 5.1 below depicts the tax credits and operating losses expected to flow from the underlying partnerships as well
as our funding commitments to the partnerships over time. Generally LIHTC partnership tax credits have a one-year
carryback and 20-year carryforward period.
Table 5.1 — Schedule of Forecasted LIHTC Partnership Tax Credits, Forecasted Operating Losses and Funding
Requirements as of December 31, 2009
Year
Forecasted
Tax Credits
(1)
Forecasted
Operating Losses
(1)(2)
Funding
Requirements
(1)(3)
(in millions)
2010 ........................................................... $ 588 $ 396 $123
2011 ........................................................... 567 389 50
2012 ........................................................... 537 353 12
2013 ........................................................... 496 331 11
2014 ........................................................... 434 341 5
2015-2026 ....................................................... 780 2,041 16
Total ........................................................... $3,402 $3,851 $217
(1) Forecasted tax credits, forecasted operating losses and funding requirements are based on existing LIHTC investments and no additional investments or
sales in the future.
(2) Forecasted operating losses represent Freddie Mac’s forecasted share of operating losses generated by the related partnerships.
(3) Represents our gross funding requirements to the underlying partnerships. The payable amount recorded on our books is the present value of these
amounts.
At December 31, 2009 and 2008, we were the primary beneficiary of investments in six partnerships, and we
consolidated these investments. The investors in the obligations of the consolidated LIHTC partnerships have recourse only
to the assets of those VIEs and do not have recourse to us. In addition, the assets of each partnership can be used only to
settle obligations of that partnership.
Consolidated VIEs
Table 5.2 represents the carrying amounts and classification of the consolidated assets and liabilities of VIEs on our
consolidated balance sheets.
Table 5.2 — Assets and Liabilities of Consolidated VIEs
Consolidated Balance Sheets Line Item 2009 2008
December 31,
(in millions)
Cash and cash equivalents ........................................................................ $ 4 $ 12
Accounts and other receivables, net ................................................................. 16 137
Total assets of consolidated VIEs ................................................................. $20 $149
Other liabilities ............................................................................... $15 $ 34
Total liabilities of consolidated VIEs . . . . . .......................................................... $15 $ 34
VIEs Not Consolidated
LIHTC Partnerships
At December 31, 2009 and 2008, we had unconsolidated investments in 187 and 189 LIHTC partnerships, respectively,
in which we had a significant variable interest. The size of these partnerships at December 31, 2009 and 2008, as measured
in total assets, was $9.6 billion and $10.5 billion, respectively. These partnerships are accounted for using the equity method,
as described in “NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.” Our equity investments in these
partnerships in which we had a significant variable interest were $— billion and $3.3 billion as of December 31, 2009 and
2008, respectively, and are included in low-income housing tax credit partnership equity investments on our consolidated
balance sheets. As a limited partner, our maximum exposure to loss equals the undiscounted book value of our equity
investment. Our investments in unconsolidated LIHTC partnerships are funded through non-recourse non-interest bearing
notes payable recorded within other liabilities on our consolidated balance sheets. We had $154 million and $347 million of
these notes payable outstanding at December 31, 2009 and 2008.
Table 5.3 — Significant Variable Interests in LIHTC Partnerships
2009 2008
December 31,
(in millions)
Maximum exposure to loss . .................................................................... $ — $3,336
Non-recourse non-interest bearing notes payable, net . . . . . . .............................................. 154 347
244 Freddie Mac