Freddie Mac 2009 Annual Report Download - page 76

single-family PCs and certain of our Structured Transactions on our consolidated balance sheets on a prospective basis. The
consolidation of these entities will significantly reduce the amount of our off-balance sheet arrangements.
CONSOLIDATED RESULTS OF OPERATIONS
The following discussion of our consolidated results of operations 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 the most significant accounting policies and estimates applied in determining
our reported financial position and results of operations.
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 results of
operations for the three months ended March 31, 2010 will reflect the consolidation of our single-family PC trusts and
certain of our Structured Transactions.
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.
Table 10 — Summary Consolidated Statements of Operations — GAAP Results
2009 2008 2007
Year Ended December 31,
(in millions)
Net interest income . . ............................................................. $17,073 $ 6,796 $ 3,099
Non-interest income (loss):
Management and guarantee income . . ................................................ 3,033 3,370 2,635
Gains (losses) on guarantee asset .................................................... 3,299 (7,091) (1,484)
Income on guarantee obligation ..................................................... 3,479 4,826 1,905
Derivative gains (losses) . . . ....................................................... (1,900) (14,954) (1,904)
Gains (losses) on investments:
Impairment-related
(1)
:
Total other-than-temporary impairment of available-for-sale securities . ....................... (23,125) (17,682) (365)
Portion of other-than-temporary impairment recognized in AOCI ........................... 11,928 — —
Net impairment of available-for-sale securities recognized in earnings ...................... (11,197) (17,682) (365)
Other gains (losses) on investments . ................................................ 5,841 1,574 659
Total gains (losses) on investments................................................ (5,356) (16,108) 294
Gains (losses) on debt recorded at fair value . . .......................................... (404) 406 —
Gains (losses) on debt retirement .................................................... (568) 209 345
Recoveries on loans impaired upon purchase . . .......................................... 379 495 505
Foreign-currency gains (losses), net . . ................................................ — — (2,348)
Low-income housing tax credit partnerships . . . .......................................... (4,155) (453) (469)
Trust management income (expense) . . ................................................ (761) (70) 18
Other income ................................................................. 222 195 228
Non-interest income (loss) ..................................................... (2,732) (29,175) (275)
Non-interest expense:
Administrative expense ........................................................... (1,651) (1,505) (1,674)
Provision for credit losses . . ....................................................... (29,530) (16,432) (2,854)
REO operations expense . . . ....................................................... (307) (1,097) (206)
Losses on certain credit guarantees . . . ................................................ — (17) (1,988)
Losses on loans purchased . . ....................................................... (4,754) (1,634) (1,865)
Securities administrator loss on investment activity ........................................ — (1,082) —
Other expenses . . . ............................................................. (483) (418) (226)
Non-interest expense . . ....................................................... (36,725) (22,185) (8,813)
Loss before income tax benefit (expense) ................................................ (22,384) (44,564) (5,989)
Income tax benefit (expense). . ....................................................... 830 (5,552) 2,887
Net loss ....................................................................... (21,554) (50,116) (3,102)
Less: Net (income) loss attributable to noncontrolling interest................................. 1 (3) 8
Net loss attributable to Freddie Mac ................................................... $(21,553) $(50,119) $(3,094)
(1) We adopted an amendment to the accounting standards for investments in debt and equity securities effective April 1, 2009. See “NOTE 1: SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES — Recently Adopted Accounting Standards” to our consolidated financial statements for further
information.
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