Freddie Mac 2014 Annual Report Download - page 138

133 Freddie Mac
In connection with the execution of the Purchase Agreement, we, through FHFA, in its capacity as Conservator, issued a
warrant to Treasury to purchase 79.9% of our common stock outstanding on a fully diluted basis on the date of exercise. See
“NOTE 11: STOCKHOLDERS’ EQUITY” for further information.
CONTRACTUAL OBLIGATIONS
Our contractual obligations affect our short- and long-term liquidity and capital resource needs. The table below provides
aggregated information about the listed categories of our contractual obligations as of December 31, 2014. The table includes
information about undiscounted future cash payments due under these contractual obligations, aggregated by type of
contractual obligation, including the contractual maturity profile of our debt securities (other than debt securities of
consolidated trusts held by third parties). The timing of actual future payments may differ from those presented due to a number
of factors, including discretionary debt repurchases.
The amounts of future interest payments on debt securities outstanding at December 31, 2014 are based on the
contractual terms of our debt securities at that date. These amounts were determined using certain assumptions including that:
(a) variable-rate debt continues to accrue interest at the contractual rates in effect at December 31, 2014 until maturity; and
(b) callable debt continues to accrue interest until its contractual maturity. The amounts of future interest payments on debt
securities do not reflect certain factors that will change the amounts of interest payments on our debt securities after
December 31, 2014, such as: (a) changes in interest rates; (b) the call or retirement of any debt securities; and (c) the issuance
of new debt securities. Accordingly, the amounts presented in the table do not represent a forecast of our future cash interest
payments or interest expense.
Our contractual obligations include other purchase obligations that are enforceable and legally binding, and exclude
contracts that we may cancel at will without penalty. We include our purchase obligations through the termination date
specified in the respective agreement, even if the contract is renewable.
The table excludes certain obligations that could significantly affect our short- and long-term liquidity and capital
resource needs. These items, which are listed below, have generally been excluded because the amount and timing of the
related future cash payments are uncertain:
• future payments related to debt securities of consolidated trusts held by third parties, because the amount and timing of
such payments are generally contingent upon the occurrence of future events and are therefore uncertain. These
payments generally include payments of principal and interest we make to the holders of our guaranteed mortgage-
related securities in the event a loan underlying a security becomes delinquent. We also remove mortgages from pools
underlying our PCs in certain circumstances, including when loans are 120 days or more delinquent, and retire the
associated PC debt;
• any future cash payments associated with the liquidation preference of the senior preferred stock, as well as the
quarterly commitment fee (which has been suspended) and the dividends on the senior preferred stock because the
timing and amount of any such future cash payments are uncertain. As of December 31, 2014, the aggregate
liquidation preference of the senior preferred stock was $72.3 billion. See “BUSINESS — Conservatorship and
Related Matters — Treasury Agreements and Senior Preferred Stock” for additional information;
• future cash settlements on derivative agreements not yet accrued, because the amount and timing of such payments are
dependent upon changes in the underlying financial instruments in response to items such as changes in interest rates
and are therefore uncertain;
• future dividends on the preferred stock we have issued (other than the senior preferred stock), because dividends on
these securities are non-cumulative and because we are currently prohibited from paying dividends on these securities;
• the guarantee arrangements pertaining to multifamily housing revenue bonds, where we provided commitments to
advance funds, commonly referred to as “liquidity guarantees,” because the amount and timing of such payments are
generally contingent upon the occurrence of future events and are therefore uncertain; and
• future cash contributions to our Pension Plan, as the plan is currently over-funded and benefit accruals ceased at the
end of 2013. See "EXECUTIVE COMPENSATION — Pension Plan" and "EXECUTIVE COMPENSATION —
Supplemental Executive Retirement Plan — Pension SERP Benefit" for additional information on our Pension Plan.
Table of Contents