Freddie Mac 2005 Annual Report Download - page 135

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Table 5.5 presents the changes in AOCI, net of taxes, related to available-for-sale securities. The Net unrealized
holding (losses), net of tax, represents the net fair value adjustments recorded on available-for-sale securities throughout the
year, after the eÅects of our statutory tax rate of 35 percent. The Net reclassiÑcation adjustment for net realized (gains), net
of tax, represents the amount of those fair value adjustments, after the eÅects of our statutory tax rate of 35 percent, that
have been recognized in earnings due to a sale of an available-for-sale security or the recognition of an impairment loss. See
""NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES'' for further information regarding the
component of AOCI related to available-for-sale securities.
Table 5.5 Ì AOCI, Net of Taxes, Related to Available-For-Sale Securities
Year Ended December 31,
2005 2004 2003
(in millions)
Beginning balanceÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 4,339 $ 6,349 $12,217
Net unrealized holding (losses), net of tax(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (6,707) (1,709) (5,770)
Net reclassiÑcation adjustment for net realized (gains), net of tax(2)(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (117) (301) (98)
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(2,485) $ 4,339 $ 6,349
(1) Net of tax (beneÑt) of $(3,611) million, $(920) million and $(3,107) million for the years ended December 31, 2005, 2004 and 2003, respectively.
(2) Net of tax (expense) of $(63) million, $(162) million and $(53) million for the years ended December 31, 2005, 2004 and 2003, respectively.
(3) Includes the reversal of previously recorded unrealized losses that have been recognized as impairment losses on available-for-sale securities of
$234 million, $72 million and $438 million, net of taxes, for the years ended December 31, 2005, 2004 and 2003, respectively.
Table 5.6 summarizes the estimated fair values by major security type for trading securities held in our Retained
portfolio.
Table 5.6 Ì Trading Securities in the Retained Portfolio
December 31,
2005 2004
(in millions)
Retained portfolio
Mortgage-related securities issued by:
Freddie MacÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $8,156 $11,398
Fannie Mae ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 534 385
Ginnie Mae ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 204 59
Total trading securities in the Retained portfolioÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $8,894 $11,842
The net unrealized holding losses on trading securities we still hold that have been recognized in earnings for the years
ended December 31, 2005, 2004 and 2003 were $(261) million, $(240) million and $(402) million, respectively.
Collateral Pledged
Collateral Pledged to Freddie Mac
Our counterparties are required to pledge collateral for reverse repurchase transactions and most interest-rate swap
agreements, after giving consideration to collateral posting thresholds generally related to a counterparty's credit rating. Even
though it is our practice not to repledge assets held as collateral, based on master agreements a portion of the collateral may
be repledged. At December 31, 2005, we did not have collateral in the form of securities pledged to and held by us under
secured lending transactions and interest-rate swap agreements. At December 31, 2004, the fair value amount of collateral
pledged to and held by us, in the form of securities, was $466 million, of which approximately $3 million was available for
repledging.
Collateral Pledged by Freddie Mac
We are also required to pledge collateral for margin requirements with third-party custodians in connection with secured
Ñnancings, interest-rate swap agreements, futures and daily trade activities with some counterparties. We pledge collateral
to meet these requirements upon a demand by the respective counterparty. Based on agreements with our custodians, some
collateral may be permitted by contract to be repledged by the custodian. Table 5.7 summarizes all securities pledged as
collateral by us, including assets that the secured party may repledge and those that may not be repledged.
119 Freddie Mac