Freddie Mac 2012 Annual Report Download - page 196

related securities in the event a loan underlying a security becomes delinquent. We also remove 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 (which has been suspended) 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, 2012, the aggregate
liquidation preference of the senior preferred stock was $72.3 billion. See “BUSINESS — Conservatorship and
Related Matters — Treasury Agreements” for additional information including changes to the quarterly commitment
fee and dividends on the senior preferred stock beginning in 2013;
• 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
2013.
Table 73 — Contractual Obligations by Year at December 31, 2012
Total 2013 2014 2015 2016 2017 Thereafter
(in millions)
Long-term debt(1) .................................... $434,542 $115,577 $85,798 $52,968 $38,882 $57,664 $83,653
Short-term debt(1) ................................... 117,930 117,930 ———— —
Interest payable(2) ................................... 48,230 14,363 6,614 5,352 4,266 3,089 14,546
Other liabilities reflected on our consolidated balance sheet:
Other contractual liabilities(3)(4) ........................ 900 623 16 13 14 14 220
Purchase obligations:
Purchase commitments(5) ............................ 13,985 13,985 ———— —
Other purchase obligations(6) .......................... 281 232 26 12 8 1 2
Operating lease obligations ............................ 32 12 11431 1
Total specified contractual obligations .................. $615,900 $262,722 $92,465 $58,349 $43,173 $60,769 $98,422
(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) Includes obligations related to our non-qualified defined benefit plan, qualified and non-qualified defined contribution plans, retiree medical plan, and
other benefit plans.
(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) 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.
(6) Primarily includes unconditional purchase obligations that are legally binding and that are subject to a cancellation penalty. Does not include contracts
that we may cancel at will without penalty.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in accordance 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.
191 Freddie Mac