Freddie Mac 2015 Annual Report Download - page 172

Management's Discussion and Analysis Contractual Obligations
Freddie Mac 2015 Form 10-K 170
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, 2015. 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, 2015 are based
on the contractual terms of our debt securities at that date. These amounts were determined using certain
assumptions, including that variable-rate debt continues to accrue interest at the contractual rates in
effect at December 31, 2015 until maturity and 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, 2015,
such as changes in interest rates, the call or retirement of any debt securities, and 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 purchase obligations that are enforceable and legally binding, and
exclude contracts that we may cancel 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 of principal and interest 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 remove loans from pools underlying our
PCs in certain circumstances, including when loans are 120 days or more delinquent, and retire the
associated PC debt;
• Future cash payments associated with the liquidation preference of the senior preferred stock, the
quarterly commitment fee (which has been suspended), and the dividends on the senior preferred
stock;
• Future cash settlements on derivative agreements not yet accrued, because the amount and timing of
such payments are dependent upon items such as changes in interest rates;
• Future dividends on outstanding preferred stock (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;
• Future cash payments related to the 4.2 basis points of each dollar of total new business purchases
that we are required by the GSE Act to allocate or transfer to certain housing funds, because the
amount and timing of such allocations or transfers is dependent on the volume of our new business
purchases; and