Freddie Mac 2012 Annual Report Download - page 324

QUARTERLY SELECTED FINANCIAL DATA
(UNAUDITED)
2012
1Q 2Q 3Q 4Q Full-Year
(in millions, except share-related amounts)
Net interest income ..................................................... $4,500 $ 4,386 $ 4,269 $ 4,456 $ 17,611
(Provision) benefit for credit losses .......................................... (1,825) (155) (610) 700 (1,890)
Non-interest income (loss) ................................................ (1,516) (751) (560) (1,256) (4,083)
Non-interest expense .................................................... (596) (536) (473) (588) (2,193)
Income tax benefit ...................................................... 14 76 302 1,145 1,537
Net income attributable to Freddie Mac ....................................... $ 577 $3,020 $ 2,928 $ 4,457 $ 10,982
Net income (loss) attributable to common stockholders(1) .......................... $(1,227) $ 1,212 $ 1,119 $(3,178) $ (2,074)
Net income (loss) per common share – basic and diluted(2) ......................... $ (0.38) $ 0.37 $ 0.35 $ (0.98) $ (0.64)
2011
1Q 2Q 3Q 4Q Full-Year
(in millions, except share-related amounts)
Net interest income ..................................................... $4,540 $ 4,561 $ 4,613 $ 4,683 $ 18,397
Provision for credit losses ................................................ (1,989) (2,529) (3,606) (2,578) (10,702)
Non-interest income (loss) ................................................ (1,252) (3,857) (4,798) (971) (10,878)
Non-interest expense .................................................... (697) (546) (687) (553) (2,483)
Income tax benefit ...................................................... 74 232 56 38 400
Net income (loss) attributable to Freddie Mac .................................. $ 676 $(2,139) $(4,422) $ 619 $ (5,266)
Net loss attributable to common stockholders .................................. $ (929) $(3,756) $(6,040) $(1,039) $(11,764)
Net loss per common share – basic and diluted(2) ................................ $ (0.29) $ (1.16) $ (1.86) $ (0.32) $ (3.63)
(1) For a discussion of how the change in the manner in which the senior preferred stock dividend is determined affects net income (loss) attributable to
common stockholders beginning in the fourth quarter of 2012, see “NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Earnings
Per Common Share.”
(2) Earnings (loss) per common share is computed independently for each of the quarters presented. Due to the use of weighted average common shares
outstanding when calculating earnings (loss) per share, the sum of the four quarters may not equal the full-year amount. Earnings (loss) per common
share amounts may not recalculate using the amounts shown in this table due to rounding.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that the
information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified by the SEC’s rules and forms and that such information is
accumulated and communicated to management of the company, including the company’s Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing our disclosure
controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives, and we must apply judgment in implementing
possible controls and procedures.
Management, including the company’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of
the effectiveness of our disclosure controls and procedures as of December 31, 2012. As a result of management’s
evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures
were not effective as of December 31, 2012, at a reasonable level of assurance, because we have not been able to update our
disclosure controls and procedures to provide reasonable assurance that information known by FHFA on an ongoing basis is
communicated from FHFA to Freddie Mac’s management in a manner that allows for timely decisions regarding our
required disclosure. Based on discussions with FHFA and the structural nature of this continuing weakness, we believe it is
likely that we will not remediate this material weakness while we are under conservatorship. As discussed below, we
consider this situation to be a material weakness in our internal control over financial reporting.
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