Freddie Mac 2015 Annual Report Download - page 285

Financial Statements Notes to the Consolidated Financial Statements | Note 12
Freddie Mac 2015 Form 10-K 283
NOTE 12: SEGMENT REPORTING
We have three reportable segments, which are based on the type of business activities each performs -
Single-family Guarantee, Multifamily, and Investments. The chart below provides a summary of our three
reportable segments and the All Other category.
Segment Description Activities/Items Financial
Performance
Measurement
Basis
Single-family
Guarantee
The Single-family Guarantee segment
reflects results from our single-family
credit guarantee activities. In our
Single-family Guarantee segment, we
purchase, securitize, and guarantee
single-family loans originated by our
seller/servicers and manage our
seriously delinquent loans. In most
instances, we securitize the loan and
guarantee the payment of principal and
interest on the mortgage-related
securities in exchange for management
and guarantee fees.
Segment Earnings for this segment
consist primarily of management and
guarantee fee income, less credit-
related expenses, administrative
expenses, allocated funding costs, and
amounts related to net float income or
expenses.
Management and guarantee fees on PCs,
including those retained by us, and certain single-
family loans in the mortgage-related investments
portfolio, inclusive of upfront credit delivery and
buy-down fees
Adjustments to management and guarantee fees
for the price performance of our PCs relative to
comparable Fannie Mae securities
Costs and recoveries of risk transfer transactions
Credit losses on all single-family assets
Net float income or expense on the single-family
credit guarantee portfolio
Settlements, including legal settlements related to
representation and warranty claims
Gains (losses) on sale of non-performing loans
Tax expense/benefit and changes in the deferred
tax asset valuation allowance (if any)
Allocated debt costs and administrative expenses
Contribution to
GAAP net income
(loss)
Multifamily The Multifamily segment reflects results
from our investment, securitization, and
guarantee activities in multifamily loans
and securities. Our primary business
model is to purchase multifamily loans
for aggregation and then securitization
through issuance of multifamily K
Certificates. We also issue and
guarantee other securitization products
as well as provide other mortgage-
related guarantees.
Segment Earnings for this segment
consist primarily of returns on assets
related to multifamily investment
activities and management and
guarantee fee income, less credit-
related expenses, administrative
expenses, and allocated funding costs.
Multifamily loans held-for-sale and associated
securitization activities.
Investments in CMBS and multifamily loans held-
for-investment
Other mortgage-related guarantees
Other securitization products
Tax expense/benefit and changes in the deferred
tax asset valuation allowance (if any)
Allocated debt costs and administrative expenses
Contribution to
GAAP
comprehensive
income (loss)