Freddie Mac 2014 Annual Report Download - page 210

205 Freddie Mac
Year Ended December 31, 2012
Total
Segment
Earnings
(Loss),
Net of Tax
Reconciliation to Consolidated Statements of
Comprehensive Income Total per
Consolidated
Statements of
Comprehensive
Income
Single-
family
Guarantee Investments Multifamily All
Other Reclassifications Segment Adjustments
Total
Reconciling
Items
(in millions)
Net interest income $ (147) $ 5,726 $ 1,291 $ — $ 6,870 $ 9,942 $ 799 $ 10,741 $ 17,611
Benefit (provision) for credit
losses (3,168) — 123 — (3,045) 1,155 — 1,155 (1,890)
Non-interest income (loss):
Management and guarantee
income(1) 4,389 — 151 — 4,540 (3,507)(832)(4,339) 201
Net impairment of available-
for-sale securities recognized
in earnings — (1,831) (123) — (1,954)(214) — (214)(2,168)
Derivative gains (losses) — 1,034 943 — 1,977 (4,425) — (4,425)(2,448)
Gains (losses) on trading
securities — (1,794) 120 — (1,674) — — — (1,674)
Gains (losses) on mortgage
loans — — 1,010 — 1,010 — — — 1,010
Other non-interest income 931 2,719 297 — 3,947 (2,951) — (2,951) 996
Non-interest expense:
Administrative expense (890) (430) (241) — (1,561) — — — (1,561)
REO operations income
(expense) (62) — 3 — (59) — — — (59)
Temporary Payroll Tax Cut
Continuation Act of 2011
expense (108) — — — (108) — — — (108)
Other non-interest expense (285) (1) (129) (50)(465) — — — (465)
Segment adjustments (832) 799 — — (33) — 33 33 —
Income tax (expense) benefit 8 1,145 (454) 838 1,537 — — — 1,537
Net income (loss) (164) 7,367 2,991 788 10,982 — — — 10,982
Changes in unrealized gains
(losses) related to available-for-
sale securities — 3,666 1,103 — 4,769 — — — 4,769
Changes in unrealized gains
(losses) related to cash flow
hedge relationships — 414 — — 414 — — — 414
Changes in defined benefit
plans (63) (50) (13) — (126) — — — (126)
Total other comprehensive
income (loss), net of taxes (63) 4,030 1,090 — 5,057 — — — 5,057
Comprehensive income (loss) $ (227) $ 11,397 $ 4,081 $ 788 $ 16,039 $ — $ — $ — $ 16,039
(1) Management and guarantee income is included in other income on our GAAP consolidated statements of comprehensive income.
NOTE 14: FINANCIAL GUARANTEES
We provide financial guarantees to securitization trusts that issue mortgage-related securities backed by single-family
mortgage loans, which we consolidate. During the years ended December 31, 2014 and 2013, we issued approximately $257.2
billion and $425.6 billion, respectively, in UPB of Freddie Mac mortgage-related securities backed by single-family mortgage
loans (excluding those backed by HFA bonds). For guarantees to consolidated securitization trusts, our exposure to these
guarantees is generally the UPB of the loans recorded on our consolidated balance sheets.
We also provide guarantees to non-consolidated securitization trusts that issue mortgage-related securities as well as in
other guarantee commitments. If we are exposed to incremental credit risk by providing these guarantees, we charge a
management and guarantee fee and recognize a guarantee asset, guarantee obligation, and a reserve for guarantee losses, as
necessary.
The table below presents our maximum potential exposure, our recognized liability, and the maximum remaining term of
our financial guarantees that are not consolidated on our balance sheets.
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