Freddie Mac 2011 Annual Report Download - page 275

Dividends Declared During 2011
No common dividends were declared in 2011. During 2011, we paid dividends of $6.5 billion in cash on the senior
preferred stock at the direction of our Conservator. We did not declare or pay dividends on any other series of Freddie
Mac preferred stock outstanding during 2011.
On March 30, 2010, our REIT subsidiaries paid preferred stock dividends for one quarter, consistent with approval
from Treasury and direction from FHFA. During 2010, each of our two REIT subsidiaries was eliminated via a merger
transaction and no other preferred or common stock dividends were paid by the REITs during the year ended
December 31, 2010.
Delisting of Common Stock and Preferred Stock from NYSE
On July 8, 2010, we delisted our common and 20 previously-listed classes of preferred securities from the NYSE
pursuant to a directive by FHFA, our Conservator.
Our common stock and the classes of preferred stock that were previously listed on the NYSE are traded exclusively
in the OTC market. Shares of our common stock now trade under the ticker symbol FMCC. We expect that our common
stock and the previously listed classes of preferred stock will continue to trade in the OTC market so long as market
makers demonstrate an interest in trading the common and preferred stock.
NOTE 13: INCOME TAXES
Income Tax Benefit
We are exempt from state and local income taxes. The table below presents the components of our income tax
benefit for 2011, 2010, and 2009.
Table 13.1 — Federal Income Tax Benefit
2011 2010 2009
Year Ended December 31,
(in millions)
Current income tax benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $283 $186 $160
Deferred income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 670 670
Total income tax benefit
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $400 $856 $830
(1) Does not reflect: (a) the deferred tax effects of unrealized (gains) losses on available-for-sale securities, the tax effects of net (gains) losses related to
the effective portion of derivatives designated in cash flow hedge relationships, and the tax effects of certain changes in our defined benefit plans
which are reported as part of AOCI; (b) certain stock-based compensation tax effects reported as part of additional paid-in capital; and (c) the tax
effect of the cumulative effect of change in accounting principles.
A reconciliation between our federal statutory income tax rate and our effective tax rate for 2011, 2010, and 2009 is
presented in the table below.
Table 13.2 — Reconciliation of Statutory to Effective Tax Rate
Amount Percent Amount Percent Amount Percent
2011 2010 2009
Year Ended December 31,
(dollars in millions)
Statutory corporate tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,983 35.0% $ 5,209 35.0% $ 7,834 35.0%
Tax-exempt interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 3.2 213 1.4 252 1.1
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566 10.0 585 3.9 594 2.7
Unrecognized tax benefits and related interest/contingency reserves . . . . . . . . . . (21) (0.4) (12) (0.1) (12) (0.1)
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,325) (41.0) (5,155) (34.6) (7,860) (35.1)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 0.3 16 0.1 22 0.1
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 400 7.1% $ 856 5.7% $ 830 3.7%
In 2011, 2010, and 2009, our effective tax rate differs from the statutory tax rate of 35% primarily due to the
establishment of a valuation allowance against a portion of our net deferred tax assets. Our income tax benefits recognized
in 2011, 2010, and 2009 represent amounts related to the amortization of net deferred losses on pre-2008 closed cash flow
hedges, as well as the current tax benefits associated with our ability to carry back net operating tax losses generated in
2008 and 2009.
270 Freddie Mac