Freddie Mac 2011 Annual Report Download - page 194

mortgages from pools underlying our PCs in certain circumstances, including when loans are 120 days or more
delinquent, and retire the associated PC debt;
• any future cash payments associated with the liquidation preference of the senior preferred stock, as well as the
quarterly commitment fee and the dividends on the senior preferred stock because the timing and amount of any
such future cash payments are uncertain. As of December 31, 2011, the aggregate liquidation preference of the
senior preferred stock was $72.2 billion and our annual dividend obligation was $7.22 billion. See “BUSINESS —
Conservatorship and Related Matters — Treasury Agreements” for additional information;
• future cash settlements on derivative agreements not yet accrued, because the amount and timing of such payments
are dependent upon changes in the underlying financial instruments in response to items such as changes in interest
rates and foreign exchange rates and are therefore uncertain;
• future dividends on the preferred stock we have issued (other than the senior preferred stock), because dividends on
these securities are non-cumulative;
• the guarantee arrangements pertaining to multifamily housing revenue bonds, where we provided commitments to
advance funds, commonly referred to as “liquidity guarantees,” because the amount and timing of such payments
are generally contingent upon the occurrence of future events and are therefore uncertain; and
• future cash contributions to our Pension Plan, as we have not yet determined whether to make a cash contribution
in 2012.
Table 72 — Contractual Obligations by Year at December 31, 2011
Total 2012 2013 2014 2015 2016 Thereafter
(in millions)
Long-term debt
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $512,871 $127,798 $142,943 $87,453 $33,897 $45,526 $75,254
Short-term debt
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161,443 161,443 ———— —
Interest payable
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,882 17,189 7,806 6,062 4,685 3,683 16,457
Other liabilities reflected on our consolidated balance
sheet:
Other contractual liabilities
(3)(4)(5)
. . . . . . . . . . . . . . . . 680 492 11 11 9 8 149
Purchase obligations:
Purchase commitments
(6)
. . . . . . . . . . . . . . . . . . . . . . 11,434 11,434 ———— —
Other purchase obligations . . . . . . . . . . . . . . . . . . . . . 545 461 50 17 9 6 2
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . 43 12 12 10 4 3 2
Total specified contractual obligations . . . . . . . . . . . . . $742,898 $318,829 $150,822 $93,553 $38,604 $49,226 $91,864
(1) Represents par value. Callable debt is included in this table at its contractual maturity. Excludes debt securities of consolidated trusts held by third
parties. For additional information about our debt, see “NOTE 8: DEBT SECURITIES AND SUBORDINATED BORROWINGS.”
(2) Includes estimated future interest payments on our short-term and long-term debt securities as well as the accrual of periodic cash settlements of
derivatives, netted by counterparty. Also includes accrued interest payable recorded on our consolidated balance sheet, which consists primarily of
the accrual of interest for our PCs and certain Other Guarantee Transactions, and the accrual of interest on short-term and long-term debt.
(3) Accrued obligations related to our defined benefit plans, defined contribution plans, and executive deferred compensation plan are included in the
Total and 2012 columns. However, the timing of payments due under these obligations is uncertain.
(4) Other contractual liabilities include future cash payments due under our contractual obligations to make delayed equity contributions to LIHTC
partnerships and payables to the consolidated trusts established for the administration of cash remittances received related to the underlying assets of
Freddie Mac mortgage-related securities.
(5) As of December 31, 2011, we have recorded tax liabilities for unrecognized tax benefits totaling $1.4 billion and allocated interest of $266 million.
These amounts have been excluded from this table because we cannot estimate the years in which these liabilities may be settled. See “NOTE 13:
INCOME TAXES” for additional information.
(6) Purchase commitments represent our obligations to purchase mortgage loans and mortgage-related securities from third parties. The majority of
purchase commitments included in this caption are accounted for as derivatives in accordance with the accounting guidance for derivatives and
hedging.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in conformity with GAAP requires us to make a number of judgments,
estimates and assumptions that affect the reported amounts within our consolidated financial statements. Certain of our
accounting policies, as well as estimates we make, are critical, as they are both important to the presentation of our
financial condition and results of operations and require management to make difficult, complex, or subjective judgments
and estimates, often regarding matters that are inherently uncertain. Actual results could differ from our estimates and the
use of different judgments and assumptions related to these policies and estimates could have a material impact on our
consolidated financial statements.
Our critical accounting policies and estimates relate to: (a) allowances for loan losses and reserve for guarantee
losses; (b) fair value measurements; (c) impairment recognition on investments in securities; and (d) realizability of net
deferred tax assets. For additional information about our critical accounting policies and estimates and other significant
accounting policies, including recently issued accounting guidance, including guidance that we have not yet adopted and
189 Freddie Mac