Freddie Mac 2014 Annual Report Download - page 197

192 Freddie Mac
We had cash and cash equivalents pledged to us related to OTC derivative instruments of $2.1 billion and $1.9 billion at
December 31, 2014 and 2013, respectively. At December 31, 2014 and 2013, we had $453 million and $432 million,
respectively, of collateral in the form of securities pledged to and held by us related to OTC derivative instruments. Although it
is our practice not to repledge assets held as collateral, a portion of the collateral may be repledged based on master netting
agreements related to our derivative instruments. In addition, we had $0 million and $646 million of cash pledged to us related
to cleared derivatives at December 31, 2014 and 2013, respectively.
Also, at December 31, 2014 and 2013, we had $0 billion and $5 billion, respectively, of securities pledged to us for
transactions involving securities purchased under agreements to resell that we had the right to repledge. From time to time we
may obtain pledges of collateral from certain seller/servicers as additional security for certain of their obligations to us,
including their obligations to repurchase mortgages sold to us in breach of representations and warranties. This collateral may,
at our discretion, take the form of cash, cash equivalents, or agency securities.
We did not hold any federal funds sold at December 31, 2014 and 2013.
Collateral Pledged by Freddie Mac
We are required to pledge collateral for margin requirements with third-party custodians in connection with secured
financings and derivative transactions with some counterparties. The amount of collateral pledged related to our derivative
instruments is determined after giving consideration to our credit rating.
The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability
position on December 31, 2014, was $3.0 billion for which we posted cash and non-cash collateral of $3.0 billion in the normal
course of business. Since we were fully collateralized as of December 31, 2014, we would not have been required to post
additional collateral on that day if the credit-risk-related contingent features underlying these agreements were triggered.
The table below summarizes all securities pledged as collateral by us, including assets that the secured party may
repledge.
Table 10.2 — Collateral in the Form of Securities Pledged
December 31, 2014 December 31, 2013
(in millions)
Securities pledged with the ability for the secured party to repledge:
Debt securities of consolidated trusts held by third parties(1) $ 2,539 $ 10,654
Available-for-sale securities 9 70
Trading securities 1,884 365
Total securities pledged $ 4,432 $ 11,089
(1) Represents PCs held by us in our Investments segment mortgage investments portfolio and pledged as collateral which are recorded as a reduction to
debt securities of consolidated trusts held by third parties on our consolidated balance sheets.
Securities Pledged with the Ability of the Secured Party to Repledge
At December 31, 2014, we pledged securities with the ability of the secured party to repledge of $4.4 billion in
connection with derivatives and securities transactions.
At December 31, 2013, we pledged securities with the ability of the secured party to repledge of $11.1 billion, of which
$10.5 billion was collateral posted in connection with our secured uncommitted intraday line of credit with a third party. This
line of credit expired in July 2014. Of the remainder at December 31, 2013, we pledged $0.6 billion in connection with
derivative transactions.
Cash Pledged
At December 31, 2014, we pledged $5.4 billion of collateral in the form of cash and cash equivalents, of which $1.2
billion related to our OTC derivative agreements as we had $3.0 billion of such derivatives in a net loss position. The remaining
$4.2 billion was posted at clearing members or clearinghouses in connection with derivatives and securities transactions at
December 31, 2014.
At December 31, 2013, we pledged $3.4 billion of collateral in the form of cash and cash equivalents, of which $3.2
billion related to our OTC derivative agreements as we had $3.2 billion of such derivatives in a net loss position. The remaining
$275 million was posted at clearing members or clearinghouses in connection with derivatives and securities transactions at
December 31, 2013.
NOTE 11: STOCKHOLDERS’ EQUITY
Accumulated Other Comprehensive Income
The table below presents changes in AOCI after the effects of our 35% federal statutory tax rate related to available-for-
sale securities, closed cash flow hedges, and our defined benefit plans.
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