Freddie Mac 2011 Annual Report Download - page 282

Segment Allocations
The results of each reportable segment include directly attributable revenues and expenses. Administrative expenses
that are not directly attributable to a segment are allocated to our segments using various methodologies, depending on the
nature of the expense (i.e., semi-direct versus indirect). Net interest income for each segment includes allocated debt
funding costs related to certain assets of each segment. These allocations, however, do not include the effects of dividends
paid on our senior preferred stock. The tax credits generated by the LIHTC partnerships and any valuation allowance on
these tax credits are allocated to the Multifamily segment. The deferred tax asset valuation allowance associated with
previously recognized income tax credits carried forward is allocated to the “All Other” category. All remaining taxes are
calculated based on a 35% federal statutory rate as applied to pre-tax Segment Earnings.
The table below presents Segment Earnings by segment.
Table 14.1 — Summary of Segment Earnings and Total Comprehensive Income (Loss)
(1)
2011 2010 2009
Year Ended December 31,
(in millions)
Segment Earnings (loss), net of taxes:
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,366 $ 1,251 $ 6,476
Single-family Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,000) (16,256) (27,143)
Multifamily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,319 965 (511)
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 15 (4,240)
Total Segment Earnings (loss), net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,266) (14,025) (25,418)
Reconciliation to GAAP net income (loss) attributable to Freddie Mac:
Credit guarantee-related adjustments
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 5,948
Tax-related adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (2,083)
Total reconciling items, net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 3,865
Net income (loss) attributable to Freddie Mac . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (5,266) $(14,025) $(21,553)
Total comprehensive income (loss) of segments:
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,473 $ 11,477 $ 17,805
Single-family Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,970) (16,250) (27,124)
Multifamily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,218 5,040 6,781
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 15 (4,240)
Total comprehensive income (loss) of segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,230) 282 (6,778)
Reconciliation to GAAP net income (loss) attributable to Freddie Mac:
Credit guarantee-related adjustments
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 5,948
Tax-related adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (2,083)
Total reconciling items, net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 3,865
Total comprehensive income (loss) attributable to Freddie Mac . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1,230) $ 282 $ (2,913)
(1) Beginning January 1, 2010, the sum of Segment Earnings for each segment and the All Other category equals GAAP net income (loss) attributable
to Freddie Mac. Likewise, the sum of total comprehensive income (loss) for each segment and the All Other category equals GAAP total
comprehensive income (loss) attributable to Freddie Mac.
(2) Consists primarily of amortization and valuation adjustments related to the guarantee asset and guarantee obligation which are excluded from
Segment Earnings and cash compensation exchanged at the time of securitization, excluding buy-up and buy-down fees, which is amortized into
earnings. These reconciling items exist in periods prior to 2010 as the amendment to the accounting guidance for transfers of financial assets and
consolidation of VIEs was applied prospectively on January 1, 2010.
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